<PAGE>
PRIVATE INVESTMENT CLASS
OF THE
TREASURY PORTFOLIO
OF
SHORT-TERM INVESTMENTS TRUST
Supplement dated June 28, 1995
to the Prospectus
dated December 21, 1994
Effective July 1, 1995, A I M Institutional Fund Services, Inc. ("AIFS"), a
wholly-owned subsidiary of A I M Advisors, Inc. and a registered transfer agent,
will become the exclusive transfer agent and dividend disbursing agent for the
Private Investment Class (the "Class") of the Treasury Portfolio (the
"Portfolio") of Short-Term Investments Trust (the "Fund"). Since September 16,
1994, AIFS has been acting as a transfer agent for the Class providing certain
limited transfer agency services for shares of the Class. The phone number of
AIFS is (800) 877-7748.
AIFS will provide such transfer agency services pursuant to a Transfer
Agency and Service Agreement, dated September 16, 1994, as amended July 1, 1995,
and the Administrative Services Agreement, dated September 16, 1994, between
A I M Advisors, Inc. and AIFS will terminate.
Effective July 17, 1995, purchase orders and redemption requests received
by the Fund after 4:00 p.m. Eastern Time on a business day of the Portfolio will
be effected at the net asset value determined on the next business day.
Also effective July 17, 1995: (1) the net asset value per share of the
Portfolio will be determined daily as of 4:00 p.m. Eastern Time, (2) dividends
from the net income of the Portfolio will be declared daily to shareholders of
record of the Class of the Portfolio immediately after 4:00 p.m. Eastern Time,
and (3) information concerning the amount of the dividends declared on any
particular day will normally be available by 5:00 p.m. Eastern Time on that day.
<PAGE>
PROSPECTUS
----------
PRIVATE INVESTMENT CLASS
OF THE
TREASURY PORTFOLIO
OF
SHORT-TERM INVESTMENTS TRUST
11 GREENWAY PLAZA, SUITE 1919
HOUSTON, TEXAS 77046-1173
(800) 877-7748
----------
The Treasury Portfolio is a money market fund whose investment objective is
the maximization of current income to the extent consistent with the
preservation of capital and the maintenance of liquidity. The Treasury Portfolio
seeks to achieve its objective by investing in direct obligations of the U.S.
Treasury and repurchase agreements secured by such obligations. The instruments
purchased by the Treasury Portfolio will have maturities of 397 days or less.
The Treasury Portfolio is a series portfolio of Short-Term Investments Trust
(the "Fund"), an open-end diversified, series, management investment company.
This Prospectus relates solely to the Private Investment Class of the Treasury
Portfolio, a class of shares designed to be a convenient vehicle in which
customers of banks, certain broker-dealers and other financial institutions can
invest short-term cash reserves.
The Fund also offers shares of other classes of the Treasury Portfolio
pursuant to separate prospectuses: the Institutional Class, Cash Management
Class and Personal Investment Class, as well as shares of classes of another
portfolio of the Fund, the Treasury TaxAdvantage Portfolio.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------
THIS PROSPECTUS SETS FORTH BASIC INFORMATION THAT A PROSPECTIVE INVESTOR
SHOULD KNOW BEFORE INVESTING IN SHARES OF THE PRIVATE INVESTMENT CLASS OF THE
TREASURY PORTFOLIO AND SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE. A
STATEMENT OF ADDITIONAL INFORMATION, DATED DECEMBER 21, 1994, HAS BEEN FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION AND IS HEREBY INCORPORATED BY
REFERENCE. FOR A COPY OF THE STATEMENT OF ADDITIONAL INFORMATION, WRITE TO THE
ADDRESS ABOVE OR CALL (800) 877-7748.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR
GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. THERE CAN BE NO ASSURANCE THAT
THE TREASURY PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF
$1.00 PER SHARE. SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
PROSPECTUS DATED: DECEMBER 21, 1994
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page Page
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<S> <C> <S> <C>
SUMMARY.......................... 2 DIVIDENDS........................ 11
TABLE OF FEES AND EXPENSES....... 4 TAXES............................ 12
FINANCIAL HIGHLIGHTS............. 5 NET ASSET VALUE.................. 13
SUITABILITY FOR INVESTORS........ 6 YIELD INFORMATION................ 13
INVESTMENT PROGRAM............... 6 REPORTS TO SHAREHOLDERS.......... 13
PURCHASE OF SHARES............... 9 MANAGEMENT OF THE FUND........... 14
REDEMPTION OF SHARES............. 10 GENERAL INFORMATION.............. 16
</TABLE>
SUMMARY
THE PORTFOLIO AND ITS INVESTMENT OBJECTIVE
The Fund is an open-end, diversified, series, management, investment company.
This Prospectus relates to the Private Investment Class (the "Class") of the
Treasury Portfolio (the "Portfolio"). The Portfolio is a money market fund which
invests in direct obligations of the U.S. Treasury and repurchase agreements
secured by such obligations. The instruments purchased by the Portfolio will
have maturities of 397 days or less. The investment objective of the Portfolio
is the maximization of current income to the extent consistent with the
preservation of capital and the maintenance of liquidity.
Pursuant to separate prospectuses, the Fund also offers other shares of other
classes of shares of beneficial interest of the Fund representing an interest in
the Portfolio. Such classes have different distribution arrangements and are
designed for institutional and other categories of investors. The Fund also
offers shares of two classes of another portfolio, the Treasury TaxAdvantage
Portfolio, each pursuant to a separate prospectus. The portfolios of the Fund
are referred to collectively as "Portfolios."
Because the Fund declares dividends on a daily basis, shares of each class of
the Portfolio have the same net asset value (proportionate interest in the net
assets of the Portfolio) and bear equally those expenses, such as the advisory
fee, that are allocated to the Portfolio as a whole. All classes of the
Portfolio share a common investment objective and portfolio of investments.
However, different classes of the Portfolio have different shareholder
qualifications, and are separately allocated certain class expenses, such as
those associated with the distribution of their shares. Therefore, each class
will have a different dividend payment and a different yield.
INVESTORS IN THE CLASS
The Class is designed to be a convenient vehicle in which customers of banks,
certain broker-dealers and other financial institutions can invest in a
diversified open-end money market fund.
PURCHASE OF SHARES
Shares of the Class that are offered hereby are sold at net asset value. The
minimum initial investment in the Class is $10,000. There is no minimum amount
for subsequent investments. Payment for shares of the Class purchased must be in
funds immediately available to the Fund. See "Purchase of Shares."
2
<PAGE>
REDEMPTION OF SHARES
Redemptions may be made without charge at net asset value. Payment for
redeemed shares of the Class for which redemption orders are received prior to
3:00 p.m. Eastern Time will normally be made on the same day. See "Redemption of
Shares."
DIVIDENDS
The net income of the Portfolio is declared as a dividend daily to
shareholders of record immediately after 3:00 p.m. Eastern Time. Dividends are
paid monthly by check or wire transfer unless the shareholder has previously
elected to have such dividends automatically reinvested in additional shares of
the Class. Information concerning the amount of the dividends declared on any
particular day will normally be available by 4:00 p.m. Eastern Time on that day.
See "Dividends."
CONSTANT NET ASSET VALUE
The Fund uses the amortized cost method of valuing the securities held by the
Portfolio and rounds the per share net asset value to the nearest whole cent.
Accordingly, the net asset value per share of the Portfolio will normally remain
constant at $1.00. AN INVESTMENT IN THE PORTFOLIO IS NOT INSURED OR GUARANTEED
BY THE U.S. GOVERNMENT, AND THERE IS NO ASSURANCE THAT THE PORTFOLIO WILL BE
ABLE TO MAINTAIN A STABLE NET ASSET VALUE. See "Net Asset Value."
INVESTMENT ADVISOR
A I M Advisors, Inc. ("AIM") serves as the Fund's investment advisor and
receives a fee based on the Fund's average daily net assets. During the fiscal
year ended August 31, 1994, the Fund paid AIM advisory fees with respect to the
Portfolio which represented 0.06% of the average daily net assets of the
Portfolio. AIM is primarily engaged in the business of acting as manager or
advisor to investment companies. Under an Administrative Services Agreement, AIM
may be reimbursed by the Fund for its costs of performing certain accounting and
other administrative services for the Fund. See "Management of the Fund --
Investment Advisor" "-- Administrative Services."
DISTRIBUTOR AND DISTRIBUTION PLAN
Fund Management Company ("FMC") acts as the exclusive distributor of the
shares of the Class. Pursuant to a plan of distribution adopted by the Fund's
Board of Trustees, the Fund may pay up to 0.50% of the average daily net asset
value of the Portfolio attributable to the Class to FMC as well as to certain
broker-dealers or other financial institutions. Of this amount, up to 0.25% may
be for continuing personal services to shareholders provided by broker-dealers
or institutions and the balance would be deemed an asset-based sales charge. See
"Purchase of Shares" and "Distribution Plan."
SPECIAL RISK CONSIDERATIONS
The Portfolio may borrow money and enter into reverse repurchase agreements.
The Portfolio may invest in repurchase agreements and purchase securities for
delayed delivery. Accordingly, an investment in the Portfolio may entail
somewhat different risks from an investment in an investment company that does
not engage in such practices. See "Investment Program."
3
<PAGE>
TABLE OF FEES AND EXPENSES
<TABLE>
<S> <C> <C>
Shareholder Transaction Expenses
Maximum sales load imposed on purchases
(as a percentage of offering price)................. None
Maximum sales load on reinvested dividends
(as a percentage of offering price)................. None
Deferred sales load (as a percentage of original
purchase price or redemption proceeds, as
applicable)......................................... None
Redemption fees (as a percentage of amount redeemed,
if applicable)...................................... None
Exchange fee......................................... None
Annual Portfolio Operating Expenses -- Private
Investment Class (as a percentage of average net
assets)
Management fees...................................... 0.06%
12b-1 fees (after fee waivers)(*).................... 0.30%(**)
Other expenses:
Custodian fees...................................... 0.01%
Other (after expense reimbursements)(*)............. 0.01%
-----
Total other expenses.............................. 0.02%
-----
Total portfolio operating expenses --
Private Investment Class............................ 0.38%
=====
</TABLE>
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* Had there been no fee waivers and no reimbursement of expenses, 12b-1 fees
and other expenses would have been 0.50% and 0.03%, respectively.
** It is possible that as a result of Rule 12b-1 fees, long-term shareholders
may pay more than the economic equivalent of the maximum front-end sales charges
permitted under rules of the National Association of Securities Dealers, Inc.,
Given the Rule 12b-1 fee of the Class, however, it is estimated that it would
take a substantial number of years for a shareholder to exceed such maximum
front-end sales charges.
EXAMPLE
An investor in the Class would pay the following expenses on a $1,000
investment, assuming (1) a 5% annual return and (2) redemption at the end of
each time period.
<TABLE>
<S> <C>
1 year................................. $ 4
3 years................................ $12
5 years................................ $21
10 years................................ $48
</TABLE>
The Table of Fees and Expenses is designed to assist an investor in
understanding the various costs and expenses that an investor in the Class will
bear directly or indirectly. (For more complete descriptions of the various
costs and expenses, see "Management of the Fund" below.) The expense figures are
based upon actual costs and fees charged to the Class. The Table of Fees and
Expenses reflects a voluntary waiver of 12b-1 fees for the Class. However, there
can be no assurance that any future waivers of 12b-1 fees (if any) will not vary
4
<PAGE>
from the figures reflected in the Table of Fees and Expenses. To the extent any
service providers assume additional expenses of the Class, such assumption of
additional expenses will have the effect of lowering the Class's overall expense
ratio and increasing its yield to investors. Beneficial owners of shares of the
Class should also consider the effect of any charges imposed by the institution
maintaining their accounts.
The example in the Table of Fees and Expenses assumes that all dividends and
distributions are reinvested and that the amounts listed under "Annual Portfolio
Operating Expenses -- Private Investment Class" remain the same in the years
shown. THE EXAMPLE SHOULD NOT BE CONSIDERED TO BE AN ACCURATE REPRESENTATION OF
PAST OR FUTURE PERFORMANCE AND ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN
THOSE SHOWN.
FINANCIAL HIGHLIGHTS
Shown below are the per share data, ratios and supplemental data for the
two-year period ended August 31, 1994 and the period November 25, 1991 (date
operations commenced) through August 31, 1992. The data have been audited by
KPMG Peat Marwick LLP, independent auditors, whose unqualified report thereon
appears in the Statement of Additional Information.
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- ------
<S> <C> <C> <C>
Net asset value, beginning of period....... $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income..................... 0.03 0.03 0.03
-------- -------- ------
Total from investment operations.......... 0.03 0.03 0.03
-------- -------- ------
Less distributions:
Dividends from net investment income...... (0.03) (0.03) (0.03)
-------- -------- ------
Net asset value, end of period............. $ 1.00 $ 1.00 $ 1.00
======== ======== ======
Total return............................... 3.22 % 2.91 % 3.92 %(a)
======== ======== ======
Ratios/supplemental data:
Net assets, end of period (000s omitted).. $412,716 $204,281 $ 525
======== ======== ======
Ratio of expenses to average net assets(b) 0.38 %(c) 0.38 % 0.40 %(a)
======== ======== ======
Ratio of net investment income to average
net assets(b)............................ 3.26 %(c) 2.81 % 3.68 %(a)
======== ======== ======
</TABLE>
- --------
(a) Annualized.
(b) Had there been no expense reimbursements, the ratios of expenses and net
investment income to average net assets would have been 0.40% and 3.25%,
respectively, for the year ended August 31, 1994 and 0.47% and 2.72%,
respectively, for the year ended August 31, 1993.
(c) Ratios are based on average net assets of $290,427,569.
5
<PAGE>
SUITABILITY FOR INVESTORS
The Class is intended for use primarily by customers of banks, certain broker-
dealers and other financial institutions who seek a convenient vehicle in which
to invest in an open-end diversified money market fund. The minimum initial
investment is $10,000.
Investors in the Class have the opportunity to receive a somewhat higher yield
than might be obtainable through direct investment in money market instruments,
and enjoy the benefits of diversification, economies of scale and same-day
liquidity. Generally, higher interest rates can be obtained on the purchase of
very large blocks of money market instruments. Of course, any such relative
increase in interest rates may be offset to some extent by the operating
expenses of the Class.
INVESTMENT PROGRAM
INVESTMENT OBJECTIVE
The investment objective of the Portfolio is the maximization of current
income to the extent consistent with the preservation of capital and the
maintenance of liquidity. The Portfolio seeks to achieve its objective by
investing in direct obligations of the U.S. Treasury and repurchase agreements
secured by such obligations. The money market instruments in which the Portfolio
invests are considered to carry very little risk and accordingly may not have as
high a yield as that available on money market instruments of lesser quality.
The Portfolio consists exclusively of money market instruments which have
maturities of 397 days or less from the date of purchase (except that securities
subject to repurchase agreements may have longer maturities).
INVESTMENT POLICIES
The Portfolio invests exclusively in direct obligations of the U.S. Treasury,
which include Treasury bills, notes and bonds, and repurchase agreements
relating to such securities. The Portfolio may also engage in certain investment
practices described below. The market values of the money market instruments
held by the Portfolio will be affected by changes in the yields available on
similar securities. If yields have increased since a security was purchased, the
market value of such security will generally have decreased. Conversely, if
yields have decreased, the market value of such security will generally have
increased.
REPURCHASE AGREEMENTS. The Portfolio intends to invest in repurchase
agreements with banks and broker-dealers pertaining to the securities described
above and which at the date of purchase are "First Tier" securities as defined
in Rule 2a-7 under the Investment Company Act of 1940, as amended (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 by that NRSRO or,
if unrated, are determined by A I M Advisors, Inc. ("AIM") (under the
supervision of and pursuant to guidelines established by the Fund's Board of
Trustees) to be of comparable quality to a rated security that meets the
foregoing quality standards. A repurchase agreement is an instrument under which
the Portfolio acquires ownership of a debt security and the seller agrees, at
the time of the sale, to repurchase the obligation at a mutually agreed-upon
time and price, thereby determining the yield during the Portfolio's holding
period. The Portfolio may enter into repurchase agreements only with
institutions believed by the Fund's Board of Trustees to present minimal credit
risk. With regard to repurchase transactions, in the event of a bankruptcy or
other default of a seller of a repurchase agreement (such as the seller's
failure to repurchase the obligation in accordance with the terms of the
agreement), the Portfolio could experience both delays in liquidating the
underlying securities and losses, including: (a) a possible decline in the value
of the underlying security during
6
<PAGE>
the period while the Portfolio seeks to enforce its rights thereto, (b) possible
subnormal levels of income and lack of access to income during this period, and
(c) expenses of enforcing its rights. Repurchase agreements are considered to be
loans by the Portfolio under the 1940 Act.
BORROWING MONEY/REVERSE REPURCHASE AGREEMENTS. The Portfolio may borrow money
and enter into reverse repurchase agreements with respect to its portfolio
securities in amounts up to 10% of the value of its total assets at the time of
borrowing or entering into a reverse repurchase agreement. Reverse repurchase
agreements involve the sale by the Portfolio of a portfolio security at an
agreed-upon price, date and interest payment. The Portfolio will borrow money or
enter into reverse repurchase agreements solely for temporary or defensive
purposes, such as to facilitate the orderly sale of portfolio securities or to
accommodate abnormally heavy redemption requests should they occur. The
Portfolio will use reverse repurchase agreements when the interest income to be
earned from the securities that would otherwise have to be liquidated to meet
redemption requests is greater than the interest expense of the reverse
repurchase transaction. Reverse repurchase agreements involve the risk that the
market value of securities retained by the Portfolio in lieu of liquidation may
decline below the repurchase price of the securities sold by the Portfolio which
it is obligated to repurchase. The risk, if encountered, could cause a reduction
in the net asset value of the Portfolio's shares. Reverse repurchase agreements
are considered to be borrowings by the Portfolios under the 1940 Act.
LENDING OF PORTFOLIO SECURITIES. The Portfolio may also lend its portfolio
securities in amounts up to 33 1/3% of its total assets to financial
institutions in accordance with the investment restrictions of the Portfolio.
Such loans would involve risks of delay in receiving additional collateral in
the event the value of the collateral decreased below the value of the
securities loaned or of delay in recovering the securities loaned or even loss
of rights in the collateral should the borrower of the securities fail
financially. However, loans will be made only to borrowers deemed by AIM to be
of good standing and only when, in AIM's judgment, the income to be earned from
the loans justifies the attendant risks.
PORTFOLIO TRANSACTIONS. The Portfolio does not seek profits through short-term
trading and will generally hold portfolio securities to maturity, but AIM may
seek to enhance the yield of the Portfolio by taking advantage of yield
disparities or other factors that occur in the money markets. For example,
market conditions frequently result in similar securities trading at different
prices. AIM may dispose of any portfolio security prior to its maturity if such
disposition and reinvestment of proceeds are expected to enhance yield
consistent with AIM's judgment as to desirable portfolio maturity structure or
if such disposition is believed to be advisable due to other circumstances or
conditions. Securities held by the Portfolio will be disposed of prior to
maturity if an earlier disposition is deemed desirable by AIM to meet redemption
requests. In addition, AIM will continually monitor the creditworthiness of
issuers whose securities are held by the Portfolio, and securities held by the
Portfolio may be disposed of prior to maturity as a result of a revised credit
evaluation of the issuer or other circumstances or considerations. The
Portfolio's policy of investing in securities with maturities of 397 days or
less will result in high portfolio turnover. Since brokerage commissions are not
normally paid on investments of the type made by the Portfolio, the high
turnover rate should not adversely affect the Portfolio's net income.
PURCHASING DELAYED DELIVERY SECURITIES. In managing the Portfolio's
investments, AIM may indicate to dealers or issuers its interest in acquiring
certain securities for the Portfolio for settlement beyond a customary
settlement date. In some cases, the Portfolio may agree to purchase such
securities at stated prices and yields. In such cases, such securities are
considered "delayed delivery" securities when traded in the secondary market.
Since this is done to facilitate the acquisition of portfolio securities and is
not for the purpose of investment leverage, the amount of delayed delivery
securities involved may not exceed the estimated amount of funds available for
investment on the settlement date. Until the settlement date, assets of the
Portfolio with
7
<PAGE>
a dollar value sufficient at all times to make payment for the delayed delivery
securities will be segregated. The total amount of segregated assets may not
exceed 25% of the Portfolio's total assets. The delayed delivery securities,
which will not begin to accrue interest until the settlement date, will be
recorded as an asset of the Portfolio and will be subject to the risks of market
value fluctuations. The purchase price of the delayed delivery securities will
be recorded as a liability of the Portfolio until settlement. Absent
extraordinary circumstances, the Portfolio's right to acquire delayed delivery
securities will not be divested prior to the settlement date.
ILLIQUID SECURITIES. The Portfolio will invest no more than 10% of its net
assets in illiquid securities.
The investment policies described above may be changed by the Board of
Trustees without the affirmative vote of a majority of the outstanding shares of
the Portfolio .
INVESTMENT RESTRICTIONS
The Portfolio's investment program is subject to a number of investment
restrictions which reflect self-imposed standards as well as federal and state
regulatory limitations. These restrictions are designed to minimize certain
risks associated with investing in specified types of securities or engaging in
certain transactions and to limit the amount of the Portfolio's assets which may
be concentrated in any specific industry or issuer. The most significant of
these restrictions provide that the Portfolio will not:
(1) purchase securities of any one issuer (other than obligations of the
U.S. Government, its agencies or instrumentalities) if, immediately after such
purchase, more than 5% of the value of the Portfolio's total assets would be
invested in such issuer, except as permitted by Rule 2a-7 under the 1940 Act,
as such rule may be amended from time to time; or
(2) borrow money or issue senior securities except (a) for temporary or
emergency purposes (e.g., in order to facilitate the orderly sale of portfolio
securities to accommodate abnormally heavy redemption requests), the Portfolio
may borrow money from banks or obtain funds by entering into reverse
repurchase agreements, and (b) to the extent that entering into commitments to
purchase securities in accordance with the Portfolio's investment program may
be considered the issuance of senior securities. The Portfolio will not
purchase securities while borrowings in excess of 5% of its total assets are
outstanding.
The foregoing investment restrictions of the Portfolio (as well as certain
others set forth in the Statement of Additional Information) are matters of
fundamental policy which may not be changed without the affirmative vote of a
majority of the outstanding shares of the Portfolio.
In addition to the restrictions described above, the Portfolio must also
comply with the requirements of Rule 2a-7 under the 1940 Act, as such rule may
be amended from time to time, which govern the operations of money market funds,
and may be more restrictive than the policies described herein. The Securities
and Exchange Commission (the "SEC") has proposed certain changes to Rule 2a-7.
While such proposed changes may have a prospective impact on the investments of
the Portfolio, the Portfolio anticipates no difficulty in complying with any
proposed change if adopted by the SEC. A description of further investment
restrictions applicable to the Portfolio is contained in the Statement of
Additional Information.
8
<PAGE>
PURCHASE OF SHARES
Shares of the Class are sold on a continuing basis at their net asset value
next determined after an order has been accepted by the Portfolio. Although
there is no sales charge imposed on the purchase of shares of the Class, banks
or other institutions may charge a recordkeeping, account maintenance or other
fee to their customers, and beneficial holders of the shares of the Class should
consult with the institutions maintaining their accounts to obtain a schedule of
applicable fees. To facilitate the investment of proceeds of purchase orders,
investors are urged to place their orders as early in the day as possible.
Purchase orders will be accepted for execution on the day the order is placed,
provided that the order is properly submitted and received by the Portfolio
prior to 3:00 p.m. Eastern Time on a business day of the Portfolio. Purchase
orders received after such time will be processed at the next day's net asset
value. Shares of the Class will earn the dividend declared on the effective date
of purchase.
A "business day of the Portfolio" is any day on which both the Federal Reserve
Bank of New York and The Bank of New York, the Fund's custodian, are open for
business. It is expected that The Bank of New York and the Federal Reserve Bank
of New York will be closed during the next twelve months on Saturdays and
Sundays, and on the observed holidays of New Year's Day, Martin Luther King
Jr.'s Birthday, Presidents' Day, Memorial Day, Independence Day, Labor Day,
Columbus Day, Veterans' Day, Thanksgiving Day and Christmas Day.
Shares of the Class are sold to customers of banks, certain broker-dealers and
other financial institutions (each, an Institution, and collectively,
"Institutions"). Individuals, corporations, partnerships and other businesses
that maintain qualified accounts at an Institution may invest in the shares of
the Class. Each Institution will render administrative support services to its
customers who are the beneficial owners of the shares of the Class. Such
services may include, among other things, establishment and maintenance of
shareholder accounts and records; assistance in processing purchase and
redemption transactions in shares of the Class; providing periodic statements
showing a customer's account balance in shares of the Class; distribution of
Fund proxy statements, annual reports and other communications to shareholders
whose accounts are serviced by the Institution; and such other services as the
Fund may reasonably request. Institutions will be required to certify to the
Fund that they comply with applicable state law regarding registration as
broker-dealers, or that they are exempt from such registration.
Prior to the initial purchase of shares of the Class, an Account Information
and Authorization Form, which can be obtained from Fund Management Company
("FMC"), must be completed and sent to FMC at 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046-1173. Any changes made to the information provided in the
Account Information and Authorization Form must be made in writing or by
completing a new form and providing it to FMC. An investor must open an account
in the shares of the Class through an Institution in accordance with procedures
established by such Institution. Each Institution separately determines the
rules applicable to accounts in the shares of the Class opened with it,
including minimum initial and subsequent investment requirements and the
procedures to be followed by investors to effect purchases of shares of the
Class. The minimum initial investment is $10,000, and there is no minimum amount
of subsequent purchases of shares of the Class by an Institution on behalf of
its customers. An Institution may have a "sweep" program under which a portion
of a customer's account with such Institution may be automatically invested in
shares of the Class. An investor who proposes to open a Portfolio account with
an Institution should consult with a representative of such Institution to
obtain a description of the rules governing such an account. The Institution
holds shares of the Class registered in its name, as agent for the customer, on
the books of the Institution. A statement with regard to the customer's shares
of the Class is supplied to the customer periodically, and confirmations of all
transactions for the account of the customer are provided by the
9
<PAGE>
Institution to the customer promptly upon request. In addition, the Institution
sends to each customer proxies, periodic reports and other information with
regard to the customer's shares of the Class. The customer's shares of the Class
are fully assignable and subject to encumbrance by the customer.
All agreements which relate to a customer's account with an Institution are
with the Institution. An investor may terminate his relationship with an
Institution at any time, in which case an account in the investor's name will be
established directly with the Portfolio and the investor will become a
shareholder of record. In such case, however, the investor will not be able to
purchase directly additional shares of the Class, except through reinvestment of
dividends and distributions.
Orders for the purchase of shares of the Class are placed by the investor with
the Institution. The Institution is responsible for the prompt transmission of
the order to the Fund. The Portfolio will normally be required to make immediate
settlement in federal funds (member bank deposits with a Federal Reserve Bank)
for portfolio securities purchased. Accordingly, payment for shares of the Class
purchased by Institutions on behalf of their customers must be in federal funds.
If an investor's order to purchase shares of the Class is paid for other than in
federal funds, the Institution, acting on behalf of the investor, completes the
conversion into federal funds (which may take two business days), or itself
advances federal funds prior to conversion, and promptly transmits the order and
payment in the form of federal funds to the Fund.
Subject to the conditions stated above and to the Portfolio's right to reject
any purchase order, orders will be accepted (i) when payment for the shares of
the Class purchased is received by the Portfolio in the form described above or
(ii) at the time the order is placed, if the Portfolio is assured of payment.
Shares of the Class purchased by orders which are accepted prior to 3:00 p.m.
Eastern Time will earn the dividend declared on the date of purchase.
Federal Reserve wires should be sent as early as possible in order to
facilitate crediting to the shareholder's account. Any funds received with
respect to an order which is not accepted by the Portfolio and any funds
received for which an order has not been received will be returned to the
sending Institution. An order must specify that it is for the purchase of Shares
of the "Private Investment Class of the Treasury Portfolio," otherwise any funds
received will be returned to the sending Institution.
In the interest of economy and convenience, certificates representing shares
of the Class will not be issued except upon written request to the Fund.
Certificates (in full shares only) will be issued without charge and may be
redeposited at any time.
The Fund reserves the right in its sole discretion to withdraw all or any part
of the offering made by this Prospectus or to reject any purchase order.
REDEMPTION OF SHARES
A shareholder may redeem any or all of its shares of the Class at the net
asset value next determined after receipt of the redemption request in proper
form by the Portfolio. Redemption requests with respect to the Class may also be
made via AIM LINK(TM), a personal computer application software product.
Normally, the net asset value per share of the Portfolio will remain constant at
$1.00. See "Net Asset Value." Redemption requests with respect to shares of the
Class for which certificates have not been issued are normally made through a
customer's Institution.
Payment for redeemed shares of the Class is normally made by Federal Reserve
wire to the commercial bank account designated in the Institution's Account
Information and Authorization Form, but may be
10
<PAGE>
remitted by check upon request by a shareholder. If a redemption request is
received by the Fund prior to 3:00 p.m. Eastern Time on a business day of the
Portfolio, the redemption will be effected at the net asset value next
determined on such day and the shares of the Class to be redeemed will not
receive the dividend declared on the effective date of the redemption. If a
redemption request is received by the Portfolio after 3:00 p.m. Eastern Time or
on other than a business day of the Portfolio, the redemption will be effected
at the net asset value of the Portfolio determined as of 3:00 p.m. Eastern Time
on the next business day of the Portfolio, and the proceeds of such redemption
will normally be wired on the effective day of the redemption.
A shareholder may change the bank account designated to receive redemption
proceeds by written notice to the Fund. The authorized signature on the notice
must be guaranteed by a commercial bank or a trust company. Additional
documentation may be required when deemed appropriate by the Fund, State Street
Bank and Trust Company, one of the Fund's transfer agents, or A I M
Institutional Fund Services, Inc., the other transfer agent of the Fund.
Payment for shares of the Class redeemed by mail and payment for telephone
redemptions in amounts of less than $1,000 will be made by check mailed within
seven days after receipt of the redemption request in proper form. The Fund may
make payment for telephone redemptions in excess of $1,000 by check when it is
considered to be in the Portfolio's best interest to do so.
In certain cases, the Fund may call for the redemption of, or refuse to
transfer or issue, shares of the Class in order to comply with law or to further
the purposes for which the Fund is formed. If a transfer or redemption of shares
of the Class causes the value of shares of the Class in an account to be less
than $500, the Fund may cause the remaining shares to be redeemed.
DIVIDENDS
Dividends from the net income of the Portfolio are declared daily to
shareholders of record of each class of the Portfolio as of immediately after
3:00 p.m. Eastern Time on the day of declaration. Net income for dividend
purposes is determined daily as of 3:00 p.m. Eastern Time. The dividend accrued
and paid for each class will consist of (a) income of the Portfolio, the
allocation of which is based upon such class's pro rata share of the total
outstanding shares representing an interest in the Portfolio, less (b) Fund
expenses accrued for the applicable dividend period attributable to the
Portfolio, such as custodian fees, trustees' fees, accounting and legal
expenses, based upon such class's pro rata share of the net assets of the
Portfolio, less (c) expenses directly attributable to such class that are
accrued for the applicable dividend period, such as distribution expenses, if
any, transfer agent fees or registration fees that may be unique to such class.
Although realized gains and losses on the assets of the Portfolio are reflected
in its net asset value, they are not expected to be of an amount which would
affect its $1.00 per share net asset value for purposes of purchases and
redemptions. See "Net Asset Value." Distributions from net realized short-term
gains may be declared and paid yearly or more frequently. See "Taxes." The
Portfolio does not expect to realize any long-term capital gains or losses.
All dividends declared during a month will be paid by check or wire transfer.
(Wire transfers may only be made in amounts of $1,000 or more.) Payment will
normally be made on the first business day of the following month. A shareholder
may elect to have all dividends automatically reinvested in additional full and
fractional shares of the Class at the net asset value as of 3:00 p.m. Eastern
Time on the last business day of the month. Such election, or any revocation
thereof, must be made either in writing by the Institution to FMC at 11 Greenway
Plaza, Suite 1919, Houston, TX 77046-1173 or transmitted via the version of AIM
LINK(TM) containing the subaccounting feature, and will become effective with
dividends paid after its receipt by FMC
11
<PAGE>
or, if such election is transmitted via AIM LINK(TM), FMC's affiliates. If a
shareholder redeems all the shares of the Class in its account at any time
during the month, all dividends declared through the date of redemption are paid
to the shareholder along with the proceeds of the redemption.
The Portfolio uses its best efforts to maintain the net asset value per share
at $1.00 for purposes of sales and redemptions. See "Net Asset Value." Should
the Fund incur or anticipate any unusual expense, loss or depreciation which
could adversely affect the income or net asset value of the Portfolio, the
Fund's Board of Trustees would at that time consider whether to adhere to the
present dividend policy described above or to revise it in light of the then
prevailing circumstances. For example, under such unusual circumstances, the
Board of Trustees might reduce or suspend the daily dividend in order to prevent
to the extent possible the net asset value per share of the Portfolio from being
reduced below $1.00. Thus, such expenses, losses or depreciation may result in a
shareholder receiving no dividends for the period during which it held its
shares of the Class and cause such a shareholder to receive upon redemption a
price per share lower than the shareholder's original cost.
TAXES
The policy of the Portfolio is to distribute to its shareholders at least 90%
of its investment company taxable income for each year and consistent therewith
to meet the distribution requirements of Part I of Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). The Portfolio also intends to
meet the distribution requirements imposed by the Code in order to avoid the
imposition of a 4% excise tax. The Portfolio intends to distribute at least 98%
of its net investment income for the calendar year and at least 98% of its net
realized capital gains, if any, for the period ending on October 31. The
Portfolio also intends to meet the other requirements of Subchapter M, including
the requirements with respect to diversification of assets and sources of
income, so that the Portfolio will pay no taxes on net investment income and net
realized capital gains paid to shareholders.
Dividends paid by the Portfolio are subject to taxation as of the date of
payment, whether received by shareholders in cash or shares of the Class. The
Code provides an exception to this general rule: if the Portfolio declares a
dividend in October, November or December to shareholders of record in such
months and pays the dividend during January of the next year, a shareholder will
be treated for tax purposes as having received the dividend on December 31 of
the year in which it is declared rather than in January when it is paid. It is
anticipated that no portion of distributions will be eligible for the dividends
received deduction for corporations. Dividends paid by the Portfolio from its
net investment income and short-term capital gains are taxable to shareholders
at ordinary income tax rates.
Each of the Portfolios, for purposes of determining taxable income,
distribution requirements and other requirements of Subchapter M, will be
treated as a separate corporation. Therefore, neither of the Portfolios may
offset its gains against the other's losses and each of the Portfolios must
specifically comply with all the provisions of the Code.
Distributions and transactions referred to in the preceding paragraphs may be
subject to state, local or foreign taxes, and the treatment thereof may differ
from the federal income tax consequences discussed herein. Shareholders are
advised to consult with their own tax advisers concerning the application of
state, local or foreign taxes.
The foregoing discussion of federal income tax consequences is based on tax
laws and regulations in effect on the date of this Prospectus which are subject
to change by legislation or administrative action.
12
<PAGE>
NET ASSET VALUE
The net asset value per share of the Portfolio is determined daily as of 3:00
p.m. Eastern Time on each business day of the Fund. Net asset value per share is
determined by dividing the value of the Portfolio's securities, cash and other
assets (including interest accrued but not collected) less all of its
liabilities (including accrued expenses and dividends payable), by the number of
shares outstanding of the Portfolio and rounding the resulting per share net
asset value to the nearest one cent.
The securities of the Portfolio are valued on the basis of amortized cost
pursuant to rules promulgated by the Securities and Exchange Commission
applicable to money market funds. 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 Portfolio would receive if
the security were sold. During such periods, the daily yield on shares of the
Portfolio, computed as described in "Purchases and Redemptions -- Performance
Information" in the Statement of Additional Information, may differ somewhat
from an identical computation made by an investment company with identical
investments utilizing available indications as to market value to value its
portfolio securities.
YIELD INFORMATION
Yield information for the Class can be obtained by calling the Fund at (800)
877-7748. Yields will fluctuate from time to time and are not necessarily
indicative of future results. Accordingly, the 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 is a function of the type and quality of a
Portfolio's investments, the Portfolio's maturity and the operating expense
ratio of the Class. A SHAREHOLDER'S INVESTMENT IN THE PORTFOLIO IS NOT INSURED
OR GUARANTEED BY THE U.S. GOVERNMENT OR BY ANY INSTITUTION. These factors should
be carefully considered by the investor before making an investment in the
Portfolio.
For the seven-day period ended August 31, 1994, the current yield and the
effective yield (which assumes the reinvestment of dividends for a 365-day year
and a return for the entire year equal to the annualized current yield for the
period) of the Class were 4.19% and 4.28%, respectively. These yields are quoted
for illustration purposes only. The yields for any other seven-day period may be
substantially different from the yields quoted above.
To assist banks and other institutions performing their own subaccounting,
same day information as to the daily dividend per share for the Portfolio to
eight decimal places and current yield normally will be available by 4:00 p.m.
Eastern time.
REPORTS TO SHAREHOLDERS
The Fund furnishes shareholders with semi-annual reports containing
information about the Portfolio and its operations, including a list of the
investments held in the Portfolio and financial statements. The annual financial
statements are audited by the Fund's independent auditors.
13
<PAGE>
Unless otherwise requested by the shareholder, each shareholder will be
provided with a written confirmation for each transaction by its Institution.
MANAGEMENT OF THE FUND
BOARD OF TRUSTEES
The overall management of the business and affairs of the Fund is vested with
its Board of Trustees. The Board of Trustees approves all significant agreements
between the Fund and persons or companies furnishing services to the Fund,
including agreements with the Fund's investment advisor, distributor, custodian
and transfer agent. The day-to-day operations of the Fund are delegated to the
Fund's officers and to AIM, subject always to the objectives and policies of the
Fund and to the general supervision of the Fund's Board of Trustees.
INVESTMENT ADVISOR
A I M Advisors, Inc., 11 Greenway Plaza, Suite 1919, Houston, Texas
77046-1173, acts as the investment advisor for the Portfolio pursuant to a
Master Investment Advisory Agreement dated as of October 18, 1993 (the "Advisory
Agreement"). AIM was organized in 1976 and, together with its affiliates,
manages or advises 37 investment company portfolios. As of November 3, 1994, the
total assets of the investment company portfolios managed or advised by AIM and
its affiliates were approximately $28.3 billion. All of the directors and
certain of the officers of AIM are also trustees or executive officers of the
Fund. AIM is a wholly owned subsidiary of A I M Management Group Inc. ("AIM
Management").
Pursuant to the terms of the Advisory Agreement, AIM manages the investment of
the Portfolio's assets and obtains and evaluates economic, statistical and
financial information to formulate and implement investment policies for the
Portfolio. The Advisory Agreement requires AIM to reduce its fee to the extent
required to satisfy any expense limitations imposed by the securities laws or
regulations thereunder of any state in which the Portfolio's shares are
qualified for sale.
For the fiscal year ended August 31, 1994, AIM received fees from the Fund
under an advisory agreement previously in effect, which provided for the same
level of compensation to AIM as the Advisory Agreement, with respect to the
Portfolio which represented 0.06% of such Portfolio's average daily net assets.
During such fiscal year, the expenses of the Class, including AIM's fees,
amounted to 0.38% of the Class's average daily net assets.
ADMINISTRATIVE SERVICES
The Fund has entered into a Master Administrative Services Agreement effective
October 18, 1993 with AIM (the "Administrative Services Agreement"), pursuant to
which AIM has agreed to provide or arrange for the provision of certain
accounting and other administrative services to the Portfolio, including the
services of a principal financial officer of the Fund and related staff. As
compensation to AIM for its services under the Administrative Services
Agreement, the Portfolio may reimburse AIM for expenses incurred by AIM in
connection with such services.
In addition, AIM and A I M Institutional Fund Services, Inc. ("AIFS") have
entered into an Administrative Services Agreement pursuant to which AIFS is
reimbursed by AIM for its costs in providing shareholder services for the Fund.
AIFS or its affiliates received reimbursement of shareholder services costs
14
<PAGE>
of $13,752 with respect to the Portfolio for the period June 1, 1994 through
August 31, 1994 which represented 0.0004% of the Portfolio's average daily net
assets.
FEE WAIVERS
AIM may in its discretion from time to time agree to waive voluntarily all or
any portion of its advisory fee and/or assume certain expenses of the Portfolio
but will retain its ability to be reimbursed prior to the end of the fiscal
year. FMC may in its discretion from time to time voluntarily agree to waive its
12b-1 fee, but will retain its ability to be reimbursed prior to the end of the
fiscal year.
DISTRIBUTOR
The Fund has entered into a Master Distribution Agreement dated as of October
18, 1993 (the "Distribution Agreement") with FMC, a registered broker-dealer and
a wholly-owned subsidiary of AIM, to act as the exclusive distributor of the
shares of the Class. The address of FMC is 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046-1173. Certain trustees and officers of the Fund are
affiliated with FMC and AIM. The Distribution Agreement provides that FMC has
the exclusive right to distribute shares of the Class either directly or through
other broker-dealers. FMC is the distributor of several of the mutual funds
managed or advised by AIM.
FMC may, from time to time, at its expense, pay a bonus or other consideration
or incentive to dealers or banks who sell a minimum dollar amount of the shares
of the Class during a specific period of time. In some instances, these
incentives may be offered only to certain dealers or institutions who have sold
or may sell significant amounts of shares. The total amount of such additional
bonus payments or other consideration shall not exceed 0.05% of the net asset
value of the shares of the Class sold. Any such bonus or incentive programs will
not change the price paid by investors for the purchase of shares of the Class
or the amount received as proceeds from such sales. Dealers or institutions may
not use sales of the shares of the Class to qualify for any incentives to the
extent that such incentives may be prohibited by the laws of any jurisdiction.
DISTRIBUTION PLAN
The Fund has adopted a Master Distribution Plan (the "Plan") pursuant to Rule
12b-1 under the 1940 Act. The Plan provides that the Fund may compensate FMC in
connection with the distribution of shares of the Class in an amount equal to
0.50% on an annualized basis of the average daily net assets of the Portfolio
attributable to the Class. Such amounts may be expended when and if authorized
by the Board of Trustees and may be used to finance such distribution-related
services as expenses of organizing and conducting sales seminars, 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 and costs of administering the
Plan.
Of the compensation paid to FMC under the Plan, a service fee may be paid to
dealers and other financial institutions that provide continuing personal
shareholder services to their customers who purchase and own shares of the
Class, in amounts of up to 0.25% of the average net assets of the Portfolio
attributable to the Class which are attributable to the customers of such
dealers or financial institutions. Payments to dealers and other financial
institutions in excess of such amount and payments retained by FMC would be
characterized as an asset-based sales charge pursuant to the Plan. The Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Portfolio with respect to the Class. The Plan
does not obligate the Fund to reimburse FMC for the actual expenses FMC may
incur in fulfilling its
15
<PAGE>
obligations under the Plan on behalf of the Class. Thus, under the Plan, even if
FMC's actual expenses exceed the fee payable to FMC thereunder at any given
time, the Fund will not be obligated to pay more than that fee. If FMC's
expenses are less than the fee it receives, FMC will retain the full amount of
the fee.
The Plan requires the officers of the Fund to provide the Board of Trustees at
least quarterly with a written report of the amounts expended pursuant to each
Plan and the purposes for which such expenditures were made. The Board of
Trustees shall review these reports in connection with their decisions with
respect to the Plan.
As required by Rule 12b-1 under the 1940 Act, the Plan was initially 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 Fund and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreements related to the Plan ("Qualified Trustees") on July 19, 1993. In
approving the continuance of the Plan in accordance with the requirements of
Rule 12b-1, the trustees considered various factors and determined that there is
a reasonable likelihood that the Plan will benefit the Fund and the shareholders
of the Class.
The Plan may be terminated by a vote of a majority of the Qualified Trustees,
or by a vote of a majority of the holders of the outstanding voting securities
of the shares of the Class. Any change in the Plan that would increase
materially the distribution expenses paid by the Class requires shareholder
approval; otherwise the Plan may be amended by the trustees, including a
majority of the Qualified Trustees, by vote cast in person at a meeting called
for the purpose of voting upon such amendment. As long as the Plan is in effect,
the selection or nomination of the Qualified Trustees is committed to the
discretion of the Qualified Trustees.
PORTFOLIO TRANSACTIONS AND BROKERAGE
AIM is responsible for decisions to buy and sell securities for the Portfolio,
broker-dealer selection and negotiation of commission rates. Since purchases and
sales of portfolio securities by the Portfolio are usually principal
transactions, the Portfolio incurs little or no brokerage commissions. Portfolio
securities are normally purchased directly from the issuer or from a market
maker for the securities. The purchase price paid to dealers serving as market
makers may include a spread between the bid and asked prices. The Portfolio may
also purchase securities from underwriters at prices which include a concession
paid by the issuer to the underwriter.
AIM's primary consideration in effecting a security transaction is to obtain
the best net price and the most favorable execution of the order. To the extent
that the executions and prices offered by more than one dealer are comparable,
AIM may, in its discretion, effect transactions with dealers that furnish
statistical, research or other information or services which are deemed by AIM
to be beneficial to the Portfolio's investment programs. Certain research
services furnished by dealers may be useful to clients of AIM other than the
Portfolio. Similarly, any research services received by AIM through placement of
portfolio transactions of other clients may be of value to AIM in fulfilling its
obligations to the Portfolio.
GENERAL INFORMATION
ORGANIZATION AND DESCRIPTION OF SHARES
The Fund is a Delaware business trust. The Fund was originally incorporated in
Maryland on January 24, 1977, but had no operations prior to November 10, 1980.
Effective December 31, 1986, the Fund was reorganized as a Massachusetts
business trust; and effective October 15, 1993, the Fund was reorganized as a
Delaware business trust. On October 15, 1993, the Portfolio succeeded to the
assets and assumed the liabilities
16
<PAGE>
of the Treasury Portfolio (the "Predecessor Portfolio") of Short-Term
Investments Co., a Massachusetts business trust ("STIC"), pursuant to an
Agreement and Plan of Reorganization between the Fund and STIC. All historical
financial and other information contained in this Prospectus for periods prior
to October 15, 1993 relating to the Portfolio (or a class thereof) is that of
the Predecessor Portfolio (or the corresponding class thereof). The Fund has
filed an amendment to the Registration Statement on Form N-1A, as amended, of
Short-Term Investments Co. (File No. 2-58287), pursuant to which the Fund has
expressly adopted such Registration Statement as its own Registration Statement
for all purposes of the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, and the 1940 Act. Shares of beneficial
interest of the Fund are divided into six classes. Four classes, including the
Class, represent interests in the Portfolio, and two classes represent interests
in the Treasury TaxAdvantage Portfolio. Each class of shares has a par value of
$.01 per share. All shares of the Fund have equal rights with respect to voting,
except that the holders of shares of a particular portfolio or class will have
the exclusive right to vote on matters pertaining solely to that portfolio or
class. For example, holders of shares of a particular portfolio will have the
exclusive right to vote on any investment advisory agreement or investment
restriction that relates only to such portfolio. In addition, if a portfolio is
divided into various classes, holders of shares of a particular class will have
the exclusive right to vote on any matter, such as distribution arrangements,
which relates solely to such class. The shareholders of the Class have
distinctive rights with respect to dividends and redemption which are more fully
described in this Prospectus. In the event of liquidation or termination of the
Fund, holders of shares of each portfolio will receive pro rata, subject to the
rights of creditors, (a) the proceeds of the sale of the assets held in the
respective portfolio to which such shares relate, less (b) the liabilities of
the Fund attributable to the respective portfolio or allocated to the respective
portfolio based on the liquidation value of such portfolio. Fractional shares of
each portfolio have the same rights as full shares to the extent of their
proportionate interest.
There will not normally be annual shareholders' meetings. Shareholders may
remove trustees from office by votes cast at a meeting of shareholders called
solely for such purpose or by written consent. A meeting of shareholders for the
sole purpose of considering removal of a trustee shall be called at the request
of the holders of 10% or more of the Fund's outstanding shares.
There are no preemptive or conversion rights applicable to any of the Fund's
shares. The Fund's shares, when issued, will be fully paid and non-assessable.
The Board of Trustees may create additional portfolios and classes of the Fund
without shareholder approval.
TRANSFER AGENTS AND CUSTODIAN
The Bank of New York, 110 Washington Street, 8th Floor, New York, New York
10286, acts as custodian for the portfolio securities and cash of the Portfolio.
State Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts
02110, acts as a transfer agent for the shares of the Class. A I M Institutional
Fund Services, Inc., 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173,
also acts as a transfer agent for the shares of the Class.
LEGAL COUNSEL
The law firm of Ballard Spahr Andrews & Ingersoll, Philadelphia, Pennsylvania,
serves as counsel to the Fund and has passed upon the legality of the shares of
the Portfolio.
17
<PAGE>
SHAREHOLDER INQUIRIES
Shareholder inquiries concerning the status of an account should be directed
to an investor's Institution, or to the Fund at 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046-1173, or may be made by calling (800) 877-7748.
OTHER INFORMATION
This Prospectus sets forth basic information that investors should know about
the Fund and the Portfolio prior to investing. A Statement of Additional
Information has been filed with the Securities and Exchange Commission. Copies
of the Statement of Additional Information are available upon request and
without charge by writing or calling the Fund or FMC. This Prospectus omits
certain information contained in the registration statement filed with the
Securities and Exchange Commission. Copies of the registration statement,
including items omitted herein, may be obtained from the Securities and Exchange
Commission by paying the charges prescribed under its rules and regulations.
18
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
INVESTMENT ADVISOR SHORT-TERM
A I M ADVISORS, INC. INVESTMENTS TRUST
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
(713) 626-1919
DISTRIBUTOR
FUND MANAGEMENT COMPANY
11 Greenway Plaza, Suite 1919 PRIVATE
Houston, Texas 77046-1173 INVESTMENT CLASS
(800) 877-7748 OF THE
-----------------------------------
AUDITORS TREASURY
KPMG PEAT MARWICK LLP PORTFOLIO PROSPECTUS
NationsBank Building
700 Louisiana
Houston, Texas 77002
CUSTODIAN
THE BANK OF NEW YORK
110 Washington Street, 8th Floor
New York, New York 10286 December 21, 1994
TRANSFER AGENTS
STATE STREET BANK AND TRUST
COMPANY
225 Franklin Street
Boston, Massachusetts 02110
A I M INSTITUTIONAL FUND
SERVICES, INC.
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
NO PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS, AND
IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE
FUND OR THE DISTRIBUTOR. THIS
PROSPECTUS DOES NOT CONSTITUTE AN
OFFER IN ANY JURISDICTION TO ANY [AIM LOGO APPEARS HERE]
PERSON TO WHOM SUCH OFFERING MAY NOT
LAWFULLY BE MADE. FUND MANAGEMENT COMPANY
<PAGE>
PRIVATE INVESTMENT CLASS
OF THE
TREASURY PORTFOLIO
OF
SHORT-TERM INVESTMENTS TRUST
Supplement dated June 28, 1995
to the Statement of Additional Information
dated December 21, 1994
Effective July 1, 1995, A I M Institutional Fund Services, Inc. ("AIFS"), a
wholly-owned subsidiary of A I M Advisors, Inc. and a registered transfer agent,
will become the exclusive transfer agent and dividend disbursing agent for the
Private Investment Class (the "Class") of the Treasury Portfolio of Short-Term
Investments Trust (the "Fund"). Since September 16, 1994, AIFS has been acting
as a transfer agent for the Class providing certain limited transfer agency
services for shares of the Class. The phone number of AIFS is (800) 877-7748.
AIFS will provide such transfer agency services pursuant to a Transfer
Agency and Service Agreement, dated September 16, 1994, as amended July 1, 1995,
and the Administrative Services Agreement, dated September 16, 1994, between
A I M Advisors, Inc. and AIFS will terminate.
<PAGE>
STATEMENT OF
ADDITIONAL INFORMATION
PRIVATE INVESTMENT CLASS
OF THE
TREASURY PORTFOLIO
OF
SHORT-TERM INVESTMENTS TRUST
11 GREENWAY PLAZA
SUITE 1919
HOUSTON, TEXAS 77046-1173
(800) 877-7748
----------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS.
IT SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS, COPIES OF WHICH
MAY BE OBTAINED BY WRITING
FUND MANAGEMENT COMPANY, 11 GREENWAY PLAZA,
SUITE 1919, HOUSTON, TEXAS 77046-1173
OR CALLING (800) 877-7748
----------------------
STATEMENT OF ADDITIONAL INFORMATION DATED DECEMBER 21, 1994
RELATING TO THE PROSPECTUS DATED DECEMBER 21, 1994
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
INTRODUCTION................................................. 1
GENERAL INFORMATION ABOUT THE FUND........................... 1
The Fund and Its Shares................................. 1
Trustees and Officers................................... 3
Investment Advisor...................................... 7
Administrative Services................................. 8
Expenses................................................ 9
Banking Regulations..................................... 9
Transfer Agents and Custodian........................... 10
Reports................................................. 10
Principal Holders of Securities......................... 10
PURCHASES AND REDEMPTIONS.................................... 15
Net Asset Value Determination........................... 15
Distribution Agreement.................................. 15
Distribution Plan....................................... 15
Performance Information................................. 16
Suspension of Redemption Rights......................... 17
INVESTMENT PROGRAM AND RESTRICTIONS.......................... 17
Investment Program...................................... 17
Investment Restrictions................................. 18
Other Investment Policies............................... 19
PORTFOLIO TRANSACTIONS....................................... 20
TAX MATTERS.................................................. 21
Qualification as a Regulated Investment Company......... 21
Excise Tax on Regulated Investment Companies............ 22
Portfolio Distributions................................. 22
Effect of Future Legislation; Local Tax Considerations.. 23
FINANCIAL STATEMENTS......................................... FS
</TABLE>
i
<PAGE>
INTRODUCTION
The Treasury Portfolio (the "Portfolio") is an investment portfolio of
Short-Term Investments Trust (the "Fund"), a 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 the fund being considered for investment. This information is
included in a Prospectus dated December 21, 1994 (the "Prospectus"). Copies of
the Prospectus and additional copies of this Statement of Additional Information
may be obtained without charge by writing the principal distributor of the
Fund's shares, Fund Management Company ("FMC"), 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046-1173 or by calling (800) 877-7748. Investors must receive
a Prospectus before they invest.
This Statement of Additional Information is intended to furnish prospective
investors with additional information concerning the Private Investment Class of
the Portfolio. Some of the information required to be in this Statement of
Additional Information is also included in the Prospectus; and, in order to
avoid repetition, reference will be made to sections of the Prospectus.
Additionally, the Prospectus and this Statement of Additional Information omit
certain information contained in the registration statement filed with the SEC.
Copies of the registration statement, including items omitted from the
Prospectus and this Statement of Additional Information, may be obtained from
the SEC by paying the charges prescribed under its rules and regulations.
GENERAL INFORMATION ABOUT THE FUND
THE FUND AND ITS SHARES
The Fund is an open-end diversified series management investment company
which was originally organized as a corporation under the laws of the State of
Maryland on January 24, 1977, but which had no operations prior to November 10,
1980. The Fund was reorganized as a business trust under the laws of the
Commonwealth of Massachusetts on December 31, 1986. The Fund was again
reorganized as a business trust under the laws of the State of Delaware on
October 15, 1993. On October 15, 1993, the Portfolio succeeded to the assets
and assumed the liabilities of the Treasury Portfolio (the "Predecessor
Portfolio") of Short-Term Investments Co., a Massachusetts business trust
("STIC"), pursuant to an Agreement and Plan of Reorganization between the Fund
and STIC. All historical financial and other information contained in this
Prospectus for periods prior to October 15, 1993 relating to the Portfolio (or a
class thereof) is that of the Predecessor Portfolio (or the corresponding class
thereof). Similarly, the information set forth under "Principal Holders of
Securities" relates to the Predecessor Portfolio (or the corresponding class
thereof). A copy of the Agreement and Declaration of Trust (the "Declaration of
Trust") establishing the Fund is on file with the SEC. The Fund has filed an
amendment to the Registration Statement on Form N-1A, as amended, of Short-Term
Investments Co. (File No. 2-58287), pursuant to which the Fund has expressly
adopted such Registration Statement as its own Registration Statement for all
purposes of the Securities Act of 1933, as amended, the Securities Exchange Act
of 1934, as amended, and the Investment Company Act of 1940, as amended (the
"1940 Act"). Shares of beneficial interest of the Fund are redeemable at the
net asset value thereof at the option of the shareholder or at the option of the
Fund in certain circumstances. For information concerning the methods of
redemption and the rights of share ownership, investors should consult the
Prospectus under the captions "General Information" and "Redemption of Shares."
The Fund offers on a continuous basis shares representing an interest in
one of two portfolios: the Portfolio and the Treasury TaxAdvantage Portfolio
(together, the "Portfolios"). The Portfolio consists of the following four
classes of shares: Private Investment Class, Personal Investment Class,
Institutional Class and Cash Management Class. Each such class has different
shareholder qualifications and bears
1
<PAGE>
expenses differently. This Statement of Additional Information and the
Prospectus relate solely to shares of the Private Investment Class (the "Class")
of the Portfolio. Shares of the other classes of the Portfolio and the classes
of the Treasury TaxAdvantage Portfolio are offered pursuant to separate
prospectuses and statements of additional information.
Shares of beneficial interest of the Fund will be redeemable at the net
asset value thereof at the option of the shareholder or at the option of the
Fund in certain circumstances. For information concerning the methods of
redemption and the rights of share ownership, investors should consult the
Prospectus under the caption "Redemption of Shares."
As used in the Prospectus, the term "majority of the outstanding shares" of
the Fund, a particular portfolio or a particular class means, respectively, the
vote of the lesser of (i) 67% or more of the shares of the Fund, such portfolio
or such class present at a meeting of the Fund's shareholders, if the holders of
more than 50% of the outstanding shares of the Fund, such portfolio or such
class are present or represented by proxy, or (ii) more than 50% of the
outstanding shares of the Fund, such portfolio or such class.
Shareholders of the Fund do not have cumulative voting rights. Therefore,
the holders of more than 50% of the outstanding shares of all series or classes
voting together for election of trustees may elect all of the members of the
Board of Trustees and, in such event, the remaining holders cannot elect any
members of the Board of Trustees.
The Declaration of Trust provides for the perpetual existence of the Fund.
The Fund, either of the Portfolios and any class thereof, however, may be
terminated at any time, upon the recommendation of the Fund's Board of Trustees,
by vote of a majority of the outstanding shares of the Fund, such Portfolio and
such class, respectively; provided, however that the Board of Trustees may
terminate, without such shareholder approval, the Fund, either Portfolio and any
class thereof with respect to which there are fewer than 100 shares outstanding.
The Declaration of Trust permits the trustees to issue an unlimited number
of full and fractional shares, $.01 par value, of each class of shares of
beneficial interest of the Fund. The Board of Trustees may establish additional
series or classes of shares from time to time without shareholder approval.
Additional information concerning the rights of share ownership is set forth in
the prospectus applicable to each such class or series of shares of the Fund.
The assets received by the Fund for the issue or sale of shares of each
class relating to a portfolio and all income, earnings, profits, losses and
proceeds therefrom, subject only to the rights of creditors, will be allocated
to that portfolio, and constitute the underlying assets of that portfolio. The
underlying assets of each portfolio will be segregated and will be charged with
the expenses with respect to that portfolio and with a share of the general
expenses of the Fund. While certain expenses of the Fund will be allocated to
the separate books of account of each portfolio, certain other expenses may be
legally chargeable against the assets of the entire Fund.
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. There is a remote possibility that
shareholders could, under certain circumstances, be held liable for the
obligations of the Fund 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 Declaration of Trust
disclaims shareholder liability for acts or obligations of the Fund and requires
that notice of such disclaimer be given in each agreement, obligation or
instrument entered into or executed by the Fund or the trustees to all parties,
and each party thereto must expressly waive all rights of action directly
against shareholders of the Fund. The Declaration of Trust provides for
indemnification out of the Fund's property for all losses and expenses of any
shareholder of the Fund held liable on account of being or having been a
shareholder.
2
<PAGE>
Thus, the risk of a shareholder incurring financial loss due to shareholder
liability is limited to circumstances in which the Fund would be unable to meet
its obligations and wherein the complaining party was held not to be bound by
the disclaimer.
The Declaration of Trust further provides that the trustees will not be
liable for errors of judgment or mistakes of fact or law. However, nothing in
the Declaration of Trust protects a trustee against any liability to which a
trustee 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 Declaration of Trust provides for indemnification by the Fund
of the trustees and the officers of the Fund except with respect to any matter
as to which any such person did not act in good faith in the reasonable belief
that his action was in or not opposed to the best interests of the Fund. Such
person may not be indemnified against any liability to the Fund or to the Fund'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 Declaration of Trust also authorizes
the purchase of liability insurance on behalf of trustees and officers.
As described in the Prospectus, the Fund will not normally hold annual
shareholders' meetings. At such time as less than a majority of the trustees
have been elected by the shareholders, the trustees then in office will call a
shareholders' meeting for the election of trustees. In addition, trustees may
be removed from office by a written consent signed by the holders of two-thirds
of the outstanding shares of the Fund and filed with the Fund's custodian or by
a vote of the holders of two-thirds of the outstanding shares at a meeting duly
called for the purpose, which meeting shall be held upon written request of the
holders of not less than 10% of the outstanding shares of the Fund.
TRUSTEES AND OFFICERS
The trustees and officers of the Fund and their principal occupations
during the last five years are set forth below. Unless otherwise indicated, the
address of each trustee and officer is 11 Greenway Plaza, Suite 1919, Houston,
Texas 77046-1173.
*CHARLES T. BAUER, Trustee and Chairman
Director and Chairman and Chief Executive Officer, A I M Management Group
Inc.; and Chairman of the Board of Directors, A I M Advisors, Inc., A I M
Capital Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc.,
A I M Institutional Fund Services, Inc. and Fund Management Company.
BRUCE L. CROCKETT, Trustee
COMSAT Corporation
6560 Rock Spring Drive
Bethesda, MD 20817
Director, President and Chief Executive Officer, COMSAT Corporation
(Includes COMSAT World Systems, COMSAT Mobile Communications, COMSAT Video
Enterprises, COMSAT RSI and COMSAT International Ventures). Previously,
President and Chief Operating Officer, COMSAT Corporation; President, World
Systems Division, COMSAT Corporation; and Chairman, Board of Governors of
INTELSAT (each of the COMSAT companies listed above is an international
communication, information and entertainment-distribution services company).
- --------
* A trustee who is an "interested person" of the Fund and AIM, as defined in
the 1940 Act.
3
<PAGE>
OWEN DALY II, Trustee
Six Blythewood Road
Baltimore, MD 21210
Director, Cortland Trust Inc. (investment company). Formerly, Director, CF
& I Steel Corp., Monumental Life Insurance Company and Monumental General
Insurance Company; and Chairman of the Board of Equitable Bancorporation.
*CARL FRISCHLING, Trustee
919 Third Avenue
New York, NY 10022
Partner, Kramer, Levin, Naftalis, Nessen, Kamin & Frankel (law firm).
Formerly, Partner, Reid & Priest (law firm); and, prior thereto, Partner,
Spengler Carlson Gubar Brodsky & Frischling (law firm).
**ROBERT H. GRAHAM, Trustee and President
Director, President and Chief Operating Officer, A I M Management Group
Inc.; Director and President, A I M Advisors, Inc.; Director and Executive Vice
President, A I M Distributors, Inc.; Director and Senior Vice President, A I M
Institutional Fund Services, Inc. and Fund Management Company; and Director and
Vice President, A I M Capital Management, Inc. and A I M Fund Services, Inc.
JOHN F. KROEGER, Trustee
Box 464
24875 Swan Road - Martingham
St. Michaels, MD 21663
Trustee, Flag Investors International Trust; and Director, Flag Investors
Emerging Growth Fund, Inc., Flag Investors Telephone Income Fund, Inc., Flag
Investors Quality Growth Fund, Inc., Flag Investors Total Return U.S. Treasury
Fund, Inc., Flag Investors Intermediate Term Income Fund, Inc., Managed
Municipal Fund, Inc., Flag Investors Value Builder Fund, Inc., Flag Investors
Maryland Intermediate Tax-Free Income Fund, Inc., Alex. Brown Cash Reserve Fund,
Inc. and North American Government Bond Fund, Inc. (investment companies).
Formerly, Consultant, Wendell & Stockel Associates, Inc. (consulting firm).
LEWIS F. PENNOCK, Trustee
8955 Katy Freeway, Suite 204
Houston, TX 77024
Attorney in private practice in Houston, Texas.
- --------
* A trustee who is an "interested person" of the Fund, as defined in the 1940
Act.
** A trustee who is an "interested person" of the Fund and AIM, as defined in
the 1940 Act.
4
<PAGE>
IAN W. ROBINSON, Trustee
183 River Drive
Tequesta, FL 33469
Formerly, Executive Vice President and Chief Financial Officer, Bell
Atlantic Management Services, Inc. (provider of centralized management services
to telephone companies); Executive Vice President, Bell Atlantic Corporation
(parent of seven telephone companies); and Vice President and Chief Financial
Officer, Bell Telephone Company of Pennsylvania and Diamond State Telephone
Company.
LOUIS S. SKLAR, Trustee
Transco Tower, 50th Floor
2800 Post Oak Blvd.
Houston, TX 77056
Executive Vice President, Development and Operations, Hines Interests
Limited Partnership (real estate development).
WILLIAM H. KLEH, Senior Vice President
Director and Senior Vice President, A I M Advisors, Inc.; Director and Vice
President, Fund Management Company; Senior Vice President, A I M Management
Group Inc.; and Vice President, A I M Capital Management, Inc., A I M
Distributors, Inc. and A I M Fund Services, Inc.
JOHN J. ARTHUR, Senior Vice President and Treasurer
Senior Vice President and Treasurer, A I M Advisors, Inc.; and Vice
President and Treasurer, A I M Management Group Inc., A I M Capital Management,
Inc., A I M Distributors, Inc., A I M Fund Services, Inc., A I M Institutional
Fund Services, Inc. and Fund Management Company.
GARY T. CRUM, Senior Vice President
Director and President, A I M Capital Management, Inc.; Director and Senior
Vice President, A I M Management Group Inc. and A I M Advisors, Inc.; and
Director, A I M Distributors, Inc.
CAROL F. RELIHAN, Vice President and Secretary
Vice President, General Counsel and Secretary, A I M Advisors, Inc., A I M
Distributors, Inc., A I M Institutional Fund Services, Inc., A I M Fund
Services, Inc., A I M Management Group Inc. and Fund Management Company; and
General Counsel and Secretary, A I M Capital Management, Inc.
DANA R. SUTTON, Vice President and Assistant Treasurer
Vice President and Fund Controller, A I M Advisors, Inc.; and Assistant
Vice President and Assistant Treasurer, Fund Management Company.
POLLY A. AHRENDTS, Vice President
Vice President, A I M Capital Management, Inc.
GARY V. BEAUCHAMP, Vice President
Vice President, A I M Capital Management, Inc.
5
<PAGE>
MELVILLE B. COX, Vice President
Vice President, A I M Advisors, Inc., A I M Capital Management, Inc., A I M
Institutional Fund Services, Inc., and A I M Fund Services, Inc.; and Assistant
Vice President, A I M Distributors, Inc. and Fund Management Company. Formerly,
Vice President, Charles Schwab & Co., Inc.; Assistant Secretary, Charles Schwab
Family of Funds and Schwab Investments; Chief Compliance Officer, Charles Schwab
Investment Management, Inc.; and Vice President, Integrated Resources Life
Insurance Co. and Capitol Life Insurance Co.
KAREN DUNN KELLEY, Vice President
Senior Vice President, A I M Capital Management, Inc.; and Vice President,
A I M Advisors, Inc.
J. ABBOTT SPRAGUE, Vice President
Director and President, A I M Institutional Fund Services, Inc. and Fund
Management Company; Director and Senior Vice President, A I M Advisors, Inc.;
and Senior Vice President, A I M Fund Services, Inc. and A I M Management Group
Inc.
The Board of Trustees has an Audit Committee, an Investments Committee, and
a Nominating and Compensation Committee.
The members of the Audit Committee are Messrs. Daly, Kroeger (Chairman),
Pennock and Robinson. The Audit Committee is responsible for meeting with the
Fund's 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 Fund's fund accounting or its internal accounting
controls, or for considering such matters as may from time to time be set forth
in a charter adopted by the Boards of Trustees and such committee.
The members of the Investments Commitee are Messrs. Bauer, Crocket, Daly
(Chairman), Kroeger and Pennock. The Investments Committee is responsible for
reviewing portfolio compliance, brokerage allocation, portfolio investment
pricing issues, interim dividend and distribution issues, or considering such
matters as may from time to time be set forth in a charter adopted by the board
and such committee.
The members of the Nominating and Compensation Committee are Messrs.
Crockett, Daly, Kroeger, Pennock (Chairman) and Sklar. The Nominating and
Compensation Committee is responsible for considering and nominating individuals
to stand for election as trustees who are not interested persons as long as the
Fund maintains a distribution plan pursuant to Rule 12b-1 under the 1940 Act,
reviewing from time to time the compensation payable to be disinterested
trustees or considering such matters as may from time to time be set forth in a
charter adopted by the board and such committee.
All of the Fund's trustees also serve as directors or trustees of some or
all of the other investment companies managed or advised by A I M or distributed
and administered by FMC. All of the Fund's executive officers hold similar
offices with some or all of such investment companies.
Each trustee is reimbursed for expenses incurred in connection with each
meeting of the Board of Trustees or any committee attended. The trustees of the
Trust who do not serve as officers of the Trust are compensated for their
services according to a fee schedule which recognizes the fact that they also
serve as directors or trustees of certain other investment companies advised or
managed by AIM. Each such trustee receives a fee, allocated among the investment
companies for which he serves as a director or trustee, which consists of two
components: (i) an annual retainer, based on the number of series portfolios of
the investment companies for which such trustee serves as director/trustee
("Series"), which annual retainer shall equal the sum of $7,500 for the first
Series, $5,000 for the second Series, $2,500 for
6
<PAGE>
the third Series, $1,000 for each of the fourth through tenth Series, and $750
for each additional Series, with 50% of such annual retainer being allocated
equally among the Series for which the trustee serves as director/trustee, and
50% of such annual retainer being allocated among the Series based upon their
relative net assets; and (ii) a meeting fee of $250 per Series, up to a maximum
of $1,000 per meeting, for each board meeting attended in person by such
trustee, with 50% of such meeting fee being allocated equally among the Series
for which the trustee serves as director/trustee, and 50% allocated among the
Series based upon their relative net assets.
During the fiscal year ended August 31, 1994, the Fund paid $32,987 and
$8,407 in trustees' fees and expenses allocated to the Portfolio and the
Treasury TaxAdvantage Portfolio, respectively.
The Fund paid Reid & Priest $27,379 in legal fees for services provided to
the Portfolio during the fiscal year ended August 31, 1994. Mr. Carl
Frischling, a trustee of the Fund, was a partner in such firm.
INVESTMENT ADVISOR
A I M Advisors, Inc., 11 Greenway Plaza, Suite 1919, Houston, Texas
77046-1173, acts as the investment advisor of the Portfolio pursuant to a Master
Investment Advisory Agreement dated as of October 18, 1993 (the "Agreement").
AIM was organized in 1976, and together with its affiliates advises or manages
37 investment company portfolios. As of November 3, 1994, the total assets of
the investment company portfolios managed or advised by AIM and its affiliates
were approximately $28.3 billion.
Pursuant to the terms of the Agreement, AIM manages the investment of the
assets of the Portfolio. AIM obtains and evaluates economic, statistical and
financial information to formulate and implement investment policies for the
Portfolio. Any investment program undertaken by AIM will at all times be subject
to the policies and control of the Fund's Board of Trustees. AIM shall not be
liable to the Fund or to its shareholders for any act or omission by AIM or for
any loss sustained by the Fund or its shareholders except in the case of willful
misfeasance, bad faith, gross negligence or reckless disregard of duty.
As compensation for its services with respect to the Portfolio, AIM
receives a monthly fee which is calculated by applying the following annual
rates to the average daily net assets of the Portfolio:
<TABLE>
<CAPTION>
Net Assets Rate
---------- ----
<S> <C>
First $300 million 0.15%
Over $300 million to $1.5 billion 0.06%
Over $1.5 billion 0.05%
</TABLE>
The Agreement requires AIM to reduce its fee to the extent required to
satisfy any expense limitations imposed by the securities laws or regulations
thereunder of any state in which the Fund's shares are qualified for sale.
The Agreement provides that, upon the request of the Fund's Board of
Trustees, AIM may perform certain additional services on behalf of the Portfolio
which are not required by the Agreement. AIM may receive reimbursement or
reasonable compensation for such additional services, as may be agreed upon by
AIM and the Board of Trustees, based upon a finding by the Board of Trustees
that the provision of such services would be in the best interest of the
Portfolio and its shareholders. The Board of Trustees has made such a finding
and, accordingly, has entered into the Master Administrative Services Agreement
under which AIM will provide the additional services described below under the
caption "Administrative Services."
Pursuant to an investment advisory agreement between the Fund and AIM
previously in effect with respect to the Portfolio (the "Prior Advisory
Agreement"), which provided for the same level of
7
<PAGE>
compensation to AIM as the Agreement, AIM received fees from the Fund for the
fiscal years ended August 31, 1994, 1993 and 1992, in the amounts of $2,337,627,
$2,211,262 and $1,986,652, respectively.
The Agreement was approved for its initial term by the Board of
Trustees on July 19, 1993. The Agreement will continue in effect until June 30,
1995 and from year to year thereafter provided that it is specifically approved
at least annually by the Fund's Board of Trustees and 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 Fund or AIM may terminate the Agreement on 60 days' notice without
penalty. The Agreement terminates automatically in the event of its assignment,
as defined in the 1940 Act.
AIM is a wholly-owned subsidiary of A I M Management Group Inc. ("AIM
Management"), 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173. All of
the directors and certain of the officers of AIM are also executive officers of
the Fund and their affiliations are shown under "Trustees and Officers." The
address of each director and officer of AIM is 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046-1173.
A I M Capital Management, Inc., a wholly-owned subsidiary of AIM, is
engaged in the business of providing investment advisory services to investment
companies, corporations, institutions and other accounts. A I M Distributors,
Inc. and FMC are registered broker-dealers and wholly owned subsidiaries of AIM.
FMC acts as distributor of the Shares.
ADMINISTRATIVE SERVICES
AIM also acts as the Portfolio's administrator pursuant to a Master
Administrative Services Agreement dated as of October 18, 1993 between AIM and
the Fund (the "Administrative Services Agreement"). In addition, AIM and A I M
Institutional Fund Services, Inc. ("AIFS") have entered into an Administrative
Services Agreement, dated as of September 16, 1994 (the "AIFS Administrative
Services Agreement").
The Administrative Services Agreement was initially approved by the
Board of Trustees on July 19, 1993. Under the Administrative Services
Agreement, AIM has agreed to perform accounting, shareholder servicing and other
administrative services for the Portfolio. As full compensation for the
performance of such services, AIM is reimbursed for any personnel and other
costs (including the cost of applicable office space, facilities and equipment)
of furnishing the services of a principal financial officer of the Fund and of
persons working under his supervision for maintaining the financial accounts and
books and records of the Fund, including calculation of the Portfolio's daily
net asset value, and preparing tax returns and financial statements for the
Portfolio. The method of calculating such reimbursements must be annually
approved, and the amounts paid will be periodically reviewed, by the Fund's
Board of Trustees.
Under the terms of the Prior Advisory Agreement, AIM was reimbursed for
the fiscal years ended August 31, 1993 and 1992 in the amounts of $82,419 and
$70,144, respectively, for performing additional services for the Portfolio.
Under the Administrative Services Agreement, AIM was reimbursed for the
fiscal year ended August 31, 1994, $97,055 for fund accounting services and
$13,752 for shareholder services, for the Portfolio.
The AIFS Administrative Services Agreement between AIM and AIFS, a
registered transfer agent and wholly-owned subsidiary of AIM, provides that AIFS
may perform certain shareholder services for the Fund. For such services, AIFS
is entitled to receive from AIM such reimbursement of its costs associated with
each such Fund as may be approved by the Fund's Board of Trustees. For the
period from June 1,
8
<PAGE>
1994 through August 31, 1994, AIFS or its affiliates received shareholder
services fees with respect to the Portfolio in the amount of $13,752.
EXPENSES
In addition to fees paid to AIM pursuant to the Agreement and the
expenses reimbursed to AIM under the Administrative Services Agreement, the Fund
also pays or causes to be paid all other expenses of the Fund, including,
without limitation: the charges and expenses of any registrar, any custodian or
depository appointed by the Fund for the safekeeping of its cash, portfolio
securities and other property, and any transfer, dividend or accounting agent or
agents appointed by the Fund; brokers' commissions chargeable to the Fund in
connection with portfolio securities transactions to which the Fund is a party;
all taxes, including securities issuance and transfer taxes, and fees payable by
the Fund to federal, state or other governmental agencies; the costs and
expenses of engraving or printing of certificates representing shares of the
Fund; all costs and expenses in connection with the registration and maintenance
of registration of the Fund and its shares with the SEC and various states and
other jurisdictions (including filing and legal fees and disbursements of
counsel); the costs and expenses of printing, including typesetting, and
distributing prospectuses and statements of additional information of the Fund
and supplements thereto to the Fund's shareholders; all expenses of
shareholders' and trustees' meetings and of preparing, printing and mailing of
prospectuses, proxy statements and reports to shareholders; fees and travel
expenses of trustees and trustee members of any advisory board or committee; all
expenses incident to the payment of any dividend, distribution, withdrawal or
redemption, whether in shares or in cash; charges and expenses of any outside
service used for pricing of the Fund's shares; charges and expenses of legal
counsel, including counsel to the trustees of the Fund who are not "interested
persons" (as defined in the 1940 Act) of the Fund or AIM, and of independent
accountants in connection with any matter relating to the Fund; membership dues
of industry associations; interest payable on Fund borrowings; postage;
insurance premiums on property or personnel (including officers and trustees) of
the Fund which inure to its benefit; and extraordinary expenses (including, but
not limited to, legal claims and liabilities and litigation costs and any
indemnification related thereto). Except as disclosed under the caption
"Distribution Plan," FMC bears the expenses of printing and distributing
prospectuses and statements of additional information (other than those
prospectuses and statements of additional information distributed to existing
shareholders of the Fund) and any other promotional or sales literature used by
FMC or furnished by FMC to purchasers or dealers in connection with the public
offering of the Fund's shares.
Expenses of the Fund which are not directly attributable to the
operations of any class of shares or portfolio of the Fund are prorated among
all classes of the Fund based upon the relative net assets of each class.
Expenses of the Fund which are not directly attributable to a specific class of
shares but are directly attributable to a specific portfolio are prorated among
all classes of such Portfolio based upon the relative net assets of each such
class. Expenses of the Fund which are directly attributable to a specific class
of shares are charged against the income available for distribution as dividends
to the holders of such shares.
BANKING REGULATIONS
The Glass-Steagall Act and other applicable laws and regulations, among
other things, generally prohibit federally chartered or supervised banks from
engaging in the business of underwriting, selling or distributing securities,
but permit banks to make shares of mutual funds available to their customers and
to perform administrative and shareholder servicing functions. However,
judicial or administrative decisions or interpretations of such laws, as well as
changes in either federal or state statutes or regulations relating to the
permissible activities of banks or their subsidiaries or affiliates, could
prevent a bank from continuing to perform all or a part of its servicing
activities. If a bank were prohibited from so acting, shareholder clients of
such bank would be permitted to remain shareholders of the Fund and alternate
means for continuing the servicing of such shareholders would be sought. In
such event, changes in the operation
9
<PAGE>
of the Fund might occur and shareholders serviced by such bank might no longer
be able to avail themselves of any automatic investment or other services then
being provided by such bank. It is not expected that shareholders would suffer
any adverse financial consequences as a result of any of these occurrences. In
addition, state securities laws on this issue may differ from the
interpretations of federal law expressed herein and certain banks and financial
institutions may be required to register as dealers pursuant to state law.
TRANSFER AGENTS AND CUSTODIAN
The Bank of New York acts as custodian for the portfolio securities and
cash of the Portfolio. The Bank of New York receives such compensation from the
Fund for its services in such capacity as is agreed to from time to time by The
Bank of New York and the Fund. The address of The Bank of New York is 110
Washington Street, 8th Floor, New York, New York 10286.
State Street Bank and Trust Company serves as a transfer agent for the
shares of the Class and receives such compensation from the Fund for its
services in such capacity as is agreed to from time to time by State Street Bank
and Trust Company and the Fund. The address of State Street Bank and Trust
Company is 225 Franklin Street, Boston, Massachusetts 02110. A I M
Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 1919, Houston, Texas
77046-1173, also acts as a transfer agent for the shares of the Class and
receives no compensation from the Fund for its services.
REPORTS
The Fund furnishes shareholders with semi-annual reports containing
information about the Fund and its operations, including a schedule of
investments held in the Fund's Portfolios and its financial statements. The
annual financial statements are audited by the Fund's independent auditors. The
Fund's Board of Trustees has selected KPMG Peat Marwick LLP, NationsBank
Building, 700 Louisiana, Houston, Texas 77002, as the independent auditors to
audit the financial statements and review the tax returns of the Portfolio and
the Treasury TaxAdvantage Portfolio.
PRINCIPAL HOLDERS OF SECURITIES
TREASURY PORTFOLIO
To the best of the knowledge of the Fund, the names and addresses of
the holders of 5% or more of the outstanding shares of any class of the Treasury
Portfolio as of October 31, 1994, and the percentage of such shares owned by
such shareholders as of such date are as follows:
INSTITUTIONAL CLASS
- -------------------
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- -----------------
<S> <C>
NationsBank of Texas, N.A. 20.71%
1401 Elm Street, 11th Floor
Dallas, TX 75202-2911
</TABLE>
- --------
(a) The Fund has no knowledge as to whether all or any portion of the shares
owned of record only are also owned beneficially.
10
<PAGE>
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- -----------------
<S> <C>
Wachovia Bank of North Carolina 11.77%
Trust Operations
P.O. Box 3075 MC
Winston-Salem, NC 31051
Trust Company of Georgia 11.70%
P.O. Box 105213
Atlanta, GA 30348
Texas Commerce Bank 7.39%
601 Travis
Houston, TX 77002
Victoria & Co. 6.27%
Trust Operations
P.O. Box 1698
Victoria, TX 77902
U.S.Bank of Washington 6.26%
Trust Securities
1414 Fourth Avenue
Seattle, WA 98111
PERSONAL INVESTMENT CLASS
- -------------------------
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY
--------------- -------------
Republic National Bank of New York 48.59%(a,b)
1 Hanson Place, Lower
Brooklyn, NY 11243
Frost National Bank 47.41%(b,c)
P.O. Box 1600
San Antonio, TX 78296
</TABLE>
- --------
(a) The Fund has no knowledge as to whether all or any portion of the shares
owned of record only are also owned beneficially.
(b) A shareholder who holds 25% or more of the outstanding shares of a class
may be presumed to be in "control" of such class of shares, as defined in
the 1940 Act.
(c) The Fund has knowledge as to certain shares beneficially owned, however to
the best knowledge of the Fund, no one beneficially owns 5% or more of the
outstanding shares of the class.
11
<PAGE>
PRIVATE INVESTMENT CLASS
- ------------------------
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY
--------------- -------------
<S> <C>
VAR & Co. 32.17%(a,b)
180 East 5th Street
St. Paul, MN 55101
Liberty Bank and Trust Company 31.70%(a,b)
of Tulsa, N.A.
P.O. Box 25848
Tulsa, OK 74101
Huntington Capital 19.35%(c)
41 South High Street
Columbus, OH 43287
CoreStates Bank, N.A. 11.22%(a)
Penn Mutual Insurance Bldg.
530 Walnut Street
Philadelphia, PA 19106
</TABLE>
CASH MANAGEMENT CLASS
- ---------------------
<TABLE>
<CAPTION>
PERCENT PERCENT
NAME AND ADDRESS OWNED OWNED OF
OF RECORD OWNER BENEFICIALLY ONLY RECORD ONLY
- --------------------------------- ----------------- -----------
<S> <C> <C>
United Counties Trust Company -0- 25.16%(a,b)
30 Maple Street
Summit, NJ 07901
City of Burbank 9.44% -0-
333 South Beaudry Avenue
25th Floor
Los Angeles, CA 95691
</TABLE>
- --------
(a) The Fund has no knowledge as to whether all or any portion of the shares
owned of record only are also owned beneficially.
(b) A shareholder who holds 25% or more of the outstanding shares of a class
may be presumed to be in "control" of such class of shares, as defined in
the 1940 Act.
(c) The Fund has knowledge as to certain shares beneficially owned, however to
the best knowledge of the Fund, no one beneficially owns 5% or more of the
outstanding shares of the class.
12
<PAGE>
<TABLE>
<CAPTION>
PERCENT PERCENT
NAME AND ADDRESS OWNED OWNED OF
OF RECORD OWNER BENEFICIALLY ONLY RECORD ONLY
- --------------------------------- ----------------- -----------
<S> <C> <C>
Montgomery County 7.80% -0-
101 Monrose Street
15th Floor
Rockville, MD 20850
City of Ontario 6.07% -0-
303 East "B" Street
Ontario, CA 91764
City of Beaumont-Meridian Trust 5.86% -0-
Company of California
35 North 6th Street
Reading, PA 19603
City of West Sacramento 5.80% -0-
2101 Stone Blvd.
West Sacramento, CA 95691
</TABLE>
TREASURY TAXADVANTAGE PORTFOLIO
To the best of the knowledge of the Fund, the names and addresses of the
holders of 5% or more of the outstanding shares of any class of the Treasury
TaxAdvantage Portfolio as of October 31, 1994, and the percentage of such shares
owned by such shareholders as of such date are as follows:
INSTITUTIONAL CLASS
- -------------------
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- -------------
<S> <C>
FirsTier Bank Omaha 26.87%(b)
1700 Farnam Street
Omaha, NE 68102
Muchmore & Co. 19.03%
P.O. Box 1205
Cranford, NJ 07016
</TABLE>
- --------
(a) The Fund has no knowledge as to whether all or any portion of the shares
owned of record only are also owned beneficially.
(b) A shareholder who holds 25% or more of the outstanding shares of a class
may be presumed to be in "control" of such class of shares, as defined in
the 1940 Act.
13
<PAGE>
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- -------------
<S> <C>
First National Bank of
Maryland 8.69%
P.O. Box 1596
Baltimore, MD 21203
Sanwa Bank 5.75%
P.O. Box 60078
Los Angeles, CA 90060
Wachovia Bank of North Carolina
Carolina 5.21%
P.O. Box 3075
Winston-Salem, NC 27150
Liberty Bank and 5.09%
Trust Company, N.A.
P.O. Box 25848
Oklahoma City, OK 73125
Boatmen's Trust Co. 5.03%
100 North Broadway
St. Louis, MO 63101
</TABLE>
PRIVATE INVESTMENT CLASS
- ------------------------
AIM provided the initial capitalization of the Private Investment Class of
the Treasury TaxAdvantage Portfolio and, accordingly, as of the date of this
Statement of Additional Information, owned all the outstanding shares of
beneficial interest of the Private Investment Class of the Treasury TaxAdvantage
Portfolio. Although the Private Investment Class of the Treasury TaxAdvantage
Portfolio expects that the sale of its shares to the public pursuant to the
Prospectus will promptly reduce the percentage of such shares owned by AIM to
less than 1% of the total shares outstanding, as long as AIM owns over 25% of
the shares of the Private Investment Class of the Treasury TaxAdvantage
Portfolio that are outstanding, it may be presumed to be in "control" of the
Private Investment Class of the Treasury TaxAdvantage Portfolio, as defined in
the 1940 Act.
Shares shown as beneficially owned by the above institutions are those
shares for which the institutions possessed or shared voting or investment power
with respect to such shares on behalf of their underlying accounts.
To the best of the knowledge of the Fund, as of October 31, 1994, the
trustees and officers of the Fund beneficially owned less than 1% of each class
of the Fund's outstanding shares.
- --------
(a) The Fund has no knowledge as to whether all or any portion of the shares
owned of record only are also owned beneficially.
14
<PAGE>
PURCHASES AND REDEMPTIONS
NET ASSET VALUE DETERMINATION
Shares of the Portfolio are sold at the net asset value of such shares.
Shareholders may at any time redeem all or a portion of their shares at net
asset value. The investor's price for purchases and redemptions will be the net
asset value next determined following the receipt of an order to purchase or a
request to redeem shares.
The valuation of the portfolio instruments based upon their amortized
cost and the concomitant maintenance of the net asset value per share of $1.00
for the Portfolio is permitted in accordance with applicable rules and
regulations of the SEC, including Rule 2a-7 under the 1940 Act. These rules
require that the Fund maintain a dollar-weighted average portfolio maturity of
90 days or less for the Portfolio, purchase only instruments having remaining
maturities of 397 days or less and invest only in securities determined by the
Board of Trustees to be of high quality with minimal credit risk.
DISTRIBUTION AGREEMENT
The Fund has entered into a Master Distribution Agreement dated as of
October 18, 1993 (the "Distribution Agreement") with FMC, a registered broker-
dealer and a wholly-owned subsidiary of AIM, to act as the exclusive distributor
of the shares of the Class. See "General Information About the Fund - Trustees
and Officers" and "- Investment Advisor" for information as to the affiliation
of certain trustees and officers of the Fund with FMC, AIM and AIM Management.
The Distribution Agreement provides that FMC has the exclusive right
to distribute shares of the class either directly or through other broker-
dealers. The Distribution Agreement also provides that FMC will pay promotional
expenses, including the incremental costs of printing prospectuses and
statements of additional information, annual reports and other periodic reports
for distribution to persons who are not shareholders of the Fund and the costs
of preparing and distributing any other supplemental sales literature, except as
may otherwise be provided in a distribution plan adopted by the Fund's Board of
Trustees pursuant to Rule 12b-1. FMC has not undertaken to sell any specified
number of Shares.
On July 19, 1993, the Board of Trustees (including all the trustees who are
not parties to the Distribution Agreement or "interested persons" of any such
party) initially approved the Distribution Agreement for its initial term. The
Distribution Agreement will remain in effect until June 30, 1995 and it will
continue in effect from year to year thereafter only if such continuation is
specifically approved at least annually by the Fund's Board of Trustees and the
affirmative vote of the trustees who are not parties to the Distribution
Agreement or "interested persons" of any such party by votes cast in person at a
meeting called for such purpose. A prior distribution agreement between the Fund
and FMC, with terms substantially the same as those of the Distribution
Agreement, was in effect through October 17, 1993. The Fund or FMC may terminate
the Distribution Agreement on 60 days' written notice without penalty. The
Distribution Agreement will terminate automatically in the event of its
"assignment," as defined in the 1940 Act.
DISTRIBUTION PLAN
The Fund has adopted a Master Distribution Plan (the "Plan") pursuant
to Rule 12b-1 under the 1940 Act. Pursuant to the Plan, the Fund may enter into
Shareholder Service Agreements ("Service Agreements") with selected broker-
dealers, banks, other financial institutions or their affiliates. Such firms may
receive from the Portfolio compensation for servicing investors as beneficial
owners of the shares of the Class of the Portfolio. These services may include
among other things: (i) answering customer inquiries regarding the shares of the
Class and the Portfolio; (ii) assisting customers in changing dividend options,
account designations and addresses; (iii) performing sub-accounting; (iv)
establishing and maintaining
15
<PAGE>
shareholder accounts and records; (v) processing purchase and redemption
transactions; (vi) automatic investment in the shares of the class of customer
cash account balances; (vii) providing periodic statements showing a customer's
account balance and integrating such statements with those of other transactions
and balances in the customer's other accounts serviced by such firm; (viii)
arranging for bank wires; and (ix) such other services as the Fund may request
on behalf of the shares of the class, to the extent such firms are permitted to
engage in such services by applicable statute, rule or regulation. The Plan may
only be used for the purposes specified above and as stated in the Plan.
Expenses may not be carried over from year to year.
For the fiscal year ended August 31, 1994, FMC received compensation
pursuant to the Plan in the amount of $871,283, or an amount equal to 0.30% of
the average daily net assets of the Class. All of such amounts were paid to
dealers and financial institutions pursuant to the Service Agreements.
FMC is a wholly-owned subsidiary of AIM, a wholly-owned subsidiary of
AIM Management. Charles T. Bauer, a Trustee and Chairman of the Fund, owns
shares of AIM Management and Robert H. Graham, a Trustee and President of the
Fund, also owns shares of AIM Management.
PERFORMANCE INFORMATION
As stated under the caption "Yield Information" in the Prospectus,
yield information for the Shares may be obtained by calling the Fund at (800)
877-7748. The current yield quoted will be the net average annualized yield for
an identified period, usually seven consecutive calendar days. Current yield
will be computed by assuming that an account was established with a single share
(the "Single Share Account") on the first day of the period. To arrive at the
quoted yield, the net change in the value of that Single Share Account for the
period (which would include dividends accrued with respect to the share, and
dividends declared on shares purchased with dividends accrued and paid, if any,
but would not include realized gains and losses or unrealized appreciation or
depreciation) will be multiplied by 365 and then divided by the number of days
in the period, with the resulting figure carried to the nearest hundredth of one
percent. The Fund may also furnish a quotation of effective yield that assumes
the reinvestment of dividends for a 365-day year and a return for the entire
year equal to the average annualized yield for the period, which will be
computed by compounding the unannualized current yield for the period by adding
1 to the unannualized current yield, raising the sum to a power equal to 365
divided by the number of days in the period, and then subtracting 1 from the
result.
For the seven-day period ended August 31, 1994, the current yield and
the effective yield (which assumes the reinvestment of dividends for a 365-day
year and a return for the entire year equal to the annualized current yield for
the period) for the Class were 4.19% and 4.28%, respectively. These yields are
quoted for illustration purposes only. The yields for any other seven-day period
may be substantially different from the yields quoted above.
The Fund may compare the performance of the Class or the performance of
securities in which it may invest to:
. IBC/Donoghue's Money Fund Averages, which are average yields of
various types of money market funds that include the effect of compounding
distributions;
. other mutual funds, especially those with similar investment
objectives. These comparisons may be based on data published by
IBC/Donoghue's Money Fund Report/(R)/ of Holliston, Massachusetts or by
Lipper Analytical Services, Inc., a widely recognized independent service
located in Summit, New Jersey, which monitors the performance of mutual
funds;
16
<PAGE>
. yields on other money market securities or averages of other money market
securities as reported by the Federal Reserve Bulletin, by TeleRate,
a financial information network, or by Bloomberg, a financial information
firm; and
. other fixed-income investments such as Certificates of Deposit ("CDs").
The principal value and interest rate of CDs and money market securities
are fixed at the time of purchase, whereas the Class's yield will fluctuate.
Unlike some CDs and certain other money market securities, money market mutual
funds are not insured by the FDIC. Investors should give consideration to the
quality and maturity of the portfolio securities of the respective investment
companies when comparing investment alternatives.
The Fund may reference the growth and variety of money market mutual funds
and AIM's innovation and participation in the industry.
SUSPENSION OF REDEMPTION RIGHTS
The right of redemption may be suspended or the date of payment upon
redemption may be postponed when (a) trading on the New York Stock Exchange is
restricted, as determined by applicable rules and regulations of the SEC, (b)
the New York Stock Exchange is closed for other than customary weekend or
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 the Portfolio not reasonably
practicable.
INVESTMENT PROGRAM AND RESTRICTIONS
INVESTMENT PROGRAM
Rule 2a-7 under the 1940 Act, which governs the operations of money market
funds, defines an "Eligible Security" as follows:
(i) a security with a remaining maturity of 397 days or less that is
rated (or that has been issued by an issuer that is rated with respect to a
class of short-term debt obligations, or any security within that class,
that is comparable in priority and security with the security) by the
Requisite NRSROs(1) in one of the two highest rating categories for short-
term debt obligations (within which there may be sub-categories or
gradations indicating relative standing); or
(ii) a security:
(A) that at the time of issuance was a long-term security but that has a
remaining maturity of 397 calendar days or less, and
- --------
(1) "Requisite NRSRO" shall mean (a) any two nationally recognized statistical
rating organizations that have issued a rating with respect to a security
or class of debt obligations of an issuer, or (b) if only one NRSRO has
issued a rating with respect to such security or issuer of such security,
that NRSRO. At present the NRSROs are: Standard & Poor's Corp. ("S & P"),
Moody's Investors Service, Inc. ("Moody's"), Duff and Phelps, Inc., Fitch
Investors Services, Inc. and, with respect to certain types of securities,
IBCA Limited and its affiliate, IBCA Inc. Subcategories or gradations in
ratings (such as a "+" or "-") do not count as rating categories.
17
<PAGE>
(B) whose issuer has received from the Requisite NRSROs, a
rating, with respect to a class of short-term debt obligations (or any
security within that class) that is now comparable in priority and
security with the security, in one of the two highest rating
categories for short-term debt obligations (within which there may be
sub-categories or gradations indicating relative standing); or
(iii) an unrated security(2) that is of comparable quality to a
security meeting the requirements of paragraphs (a)(5)(i) or (ii) of this
section, as determined by the money market fund's board of directors;
provided, however, that:
(A) the board of directors may base its determination that a Standby
Commitment is an Eligible Security upon a finding that the issuer of the
commitment presents a minimal risk of default; and
(B) a security that at the time of issuance was a long-term security but
that has a remaining maturity of 397 calendar days or less and that is an
unrated security is not an Eligible Security if the security has a long-term
rating from any NRSRO that is not within the NRSRO's two highest categories
(within which there may be sub-categories or gradations indicating relative
standing).
The Fund's 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 for the Portfolio as computed for the purpose of sales and redemptions.
Such procedures include review of the Portfolio's portfolio 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 Portfolio 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 Portfolio's shares. In the event the Board of
Trustees determines that such a deviation exists for the Portfolio, it will take
such corrective action as the Board of Trustees deems necessary and appropriate
with respect to the Portfolio, including the sales 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.
INVESTMENT RESTRICTIONS
As a matter of fundamental policy which may not be changed without a
majority vote of the shareholders of the Portfolio (as that term is defined
under "General Information about the Fund -- The Fund and its Shares"), the
Portfolio may not:
(1) purchase securities of any one issuer (other than obligations of the
U.S. Government, its agencies and instrumentalities) if, immediately after
such purchase more than 5% of the value of the Portfolio's total assets would
be invested in such issuer, except as permitted by Rule 2a-7 under the 1940
Act, as such Rule may be amended from time to time;
- ---------
(2) An "unrated security" is a security (i) issued by an issuer that does not
have a current short-term rating from any NRSRO, either as to the
particular security or as to any other short-term obligations of comparable
priority and security; (ii) that was a long-term security at the time of
issuance and whose issuer has not received from any NRSRO a rating with
respect to a class of short-term debt obligations now comparable in
priority and security; or (iii) a security that is rated but which is the
subject of an external credit support agreement not in effect when the
security was assigned its rating, provided that a security is not an
unrated security if any short-term debt obligation issued by the issuer and
comparable in priority and security is rated by any NRSRO.
18
<PAGE>
(2) borrow money or issue senior securities except (a) for temporary or
emergency purposes (e.g., in order to facilitate the orderly sale of portfolio
securities to accommodate abnormally heavy redemption requests), the Portfolio
may borrow money from banks or obtain funds by entering into reverse
repurchase agreements, and (b) to the extent that entering into commitments to
purchase securities in accordance with the Portfolio's investment program may
be considered the issuance of senior securities; provided that the Portfolio
will not purchase portfolio securities while borrowings in excess of 5% of its
total assets are outstanding;
(3) mortgage, pledge or hypothecate any assets except to secure permitted
borrowings and except for reverse repurchase agreements and then only in an
amount up to 33 1/3% of the value of its total assets at the time of borrowing
or entering into a reverse repurchase agreement;
(4) make loans of money or securities other than (a) through the purchase
of debt securities in accordance with the Portfolio's investment program, (b)
by entering into repurchase agreements and (c) by lending portfolio securities
to the extent permitted by law or regulation;
(5) underwrite securities issued by any other person, except to the extent
that the purchase of securities and the later disposition of such securities
in accordance with the Portfolio's investment program may be deemed an
underwriting;
(6) invest in real estate, except that the Portfolio may purchase and sell
securities secured by real estate or interests therein or issued by issuers
which invest in real estate or interests therein;
(7) purchase or sell commodities or commodity futures contracts, purchase
securities on margin, make short sales or invest in puts or calls;
(8) invest in any obligation not payable as to principal and interest in
United States currency; or
(9) acquire for value the securities of any other investment company,
except in connection with a merger, consolidation, reorganization or
acquisition of assets.
OTHER INVESTMENT POLICIES
The Portfolio does not intend to invest in companies for the purpose of
exercising control or management. The Portfolio may also lend its portfolio
securities in amounts up to 33 1/3% of its total assets to financial
institutions in accordance with the investment restrictions of the Portfolio.
Such loans would involve risks of delay in receiving additional collateral in
the event the value of the collateral decreased below the value of the
securities loaned or of delay in recovering the securities loaned or even loss
of rights in the collateral should the borrower of the securities fail
financially. However, loans will be made only to borrowers deemed by AIM to be
of good standing and only when, in AIM's judgment, the income to be earned from
the loans justifies the attendant risks. None of the foregoing policies is
fundamental.
The Fund may, from time to time in order to qualify shares of the
Portfolio for sale in a particular state, agree to certain investment
restrictions in addition to or more stringent than those set forth above. Such
restrictions are not fundamental and may be changed without the approval of
shareholders. For example, the Portfolio will not invest in oil, gas or other
mineral leases, rights, royalty contracts or exploration or development programs
(Texas). This restriction, however, does not prevent the Portfolio from
purchasing and selling securities of companies engaged in the exploration,
development, production, refining, transporting and marketing of oil, gas or
minerals. In addition, the Portfolio will not purchase or retain securities of
any issuer if the officers or trustees of the Fund or the officers or directors
of AIM owning beneficially more than one-half of one percent of the securities
of an issuer together own beneficially more than five percent of the securities
of that issuer. The Portfolio also will not invest in illiquid
19
<PAGE>
securities or enter into reverse repurchase agreements. The Fund will notify
the appropriate shareholder(s) if, upon the advice of AIM, the Portfolio intends
to begin investing in illiquid securities or entering into reverse repurchase
agreements.
PORTFOLIO TRANSACTIONS
AIM is responsible for decisions to buy and sell securities for the Portfolio,
broker-dealer selection and negotiation of commission rates. Since purchases and
sales of portfolio securities by the Portfolio are usually principal
transactions, the Portfolio incurs little or no brokerage commissions. Portfolio
securities are normally purchased directly from the issuer or from a market
maker for the securities. The purchase price paid to dealers serving as market
makers may include a spread between the bid and asked prices. The Portfolio may
also purchase securities from underwriters at prices which include a commission
paid by the issuer to the underwriter.
The Portfolio does not seek to profit from short-term trading, and will
generally (but not always) hold portfolio securities to maturity, but AIM may
seek to enhance the yield of the Portfolio by taking advantage of yield
disparities or other factors that occur in the money market. For example, market
conditions frequently result in similar securities trading at different prices.
AIM may dispose of any portfolio security prior to its maturity if such
disposition and reinvestment of proceeds are expected to enhance yield
consistent with AIM's judgment as to desirable portfolio maturity structure or
if such disposition is believed to be advisable due to other circumstances or
conditions. The amortized cost method of valuing portfolio securities requires
that the Portfolio maintain an average weighted portfolio maturity of ninety
days or less. Thus, there is likely to be relatively high portfolio turnover,
but since brokerage commissions are not normally paid on money market
instruments, the high rate of portfolio turnover is not expected to have a
material effect on the net income or expenses of the Portfolio.
AIM's primary consideration in effecting a security transaction is to obtain
the best net price and the most favorable execution of the order. To the extent
that the execution and prices offered by more than one dealer are comparable,
AIM may, in its discretion, effect transactions with dealers that furnish
statistical, research or other information or services which are deemed by AIM
to be beneficial to the Portfolio's investment program. Certain research
services furnished by dealers may be useful to AIM with respect to clients other
than the Portfolio. Similarly, any research services received by AIM through
placement of portfolio transactions of other clients may be of value to AIM in
fulfilling its obligations to the Portfolio. AIM is of the opinion that the
material received is beneficial in supplementing AIM's research and analysis;
and, therefore, it may benefit the Portfolio by improving the quality of AIM's
investment advice. The advisory fees paid by the Portfolio are not reduced
because AIM receives such services.
Provisions of the 1940 Act and rules and regulations thereunder have also
been construed to prohibit the Fund from purchasing securities or instruments
from, or selling securities or instruments to, any holder of 5% or more of the
voting securities of any investment company managed or advised by AIM. The Fund
has obtained an order of exemption from the SEC which permits the Fund to engage
in certain transactions with such 5% holder, if the Fund complies with
conditions and procedures designed to ensure that such transactions are executed
at fair market value and present no conflicts of interest.
AIM and its affiliates manage several other investment accounts, some of
which may have objectives similar to the Portfolio's. It is possible that at
times identical securities will be acceptable for one or more of such investment
accounts. However, the position of each account in the securities of the same
issue may vary and the length of time that each account may choose to hold its
investment in the securities of the same issue may likewise 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 Portfolio and one or more of these accounts and is
considered at or about the same time,
20
<PAGE>
transactions in such securities will be allocated in good faith among such
accounts, in accordance with applicable laws and regulations, in order to obtain
the best net price and most favorable execution. The allocation and combination
of simultaneous securities purchases on behalf of the Portfolio will be made in
the same way that such purchases are allocated among or combined with those of
other AIM accounts. Simultaneous transactions could adversely affect the ability
of the Portfolio to obtain or dispose of the full amount of a security which it
seeks to purchase or sell.
Under the 1940 Act, persons affiliated with the Fund are prohibited from
dealing with the Portfolios as principal in any purchase or sale of securities
unless an exemptive order allowing such transactions is obtained from the SEC.
The Board of Trustees has adopted procedures pursuant to Rule 17a-7 under the
1940 Act relating to portfolio transactions among the Portfolios and the AIM
Funds and each of the Portfolios may from time to time enter into transactions
in accordance with such Rule and procedures.
TAX MATTERS
The following is only a summary of certain additional tax considerations
generally affecting the Fund and its shareholders that are not described in the
Prospectus. No attempt is made to present a detailed explanation of the tax
treatment of the Fund or its shareholders, and the discussion here and in the
Prospectus is not intended as a substitute for careful planning.
QUALIFICATION AS A REGULATED INVESTMENT COMPANY
The Fund has elected to be taxed as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). As
a regulated investment company, the Fund is not subject to federal income tax on
the portion of its net investment income (i.e., taxable interest, dividends and
other taxable ordinary income, net of expenses) and capital gain net income
(i.e., the excess of capital gains over capital losses) that it distributes to
shareholders, provided that it distributes at least 90% of its investment
company taxable income (i.e., net investment income and the excess of net short-
term capital gain over net long-term capital loss) for the taxable year (the
"Distribution Requirement"), and satisfies certain other requirements of the
Code that are described below. Distributions by the Fund made during the
taxable year or, under specified circumstances, within twelve months after the
close of the taxable year, will be considered distributions of income and gains
for the taxable year and can therefore satisfy the Distribution Requirement.
In addition to satisfying the Distribution Requirement, a regulated
investment company must (1) derive at least 90% of its gross income from
dividends, interest, certain payments with respect to securities loans, gains
from the sale or other disposition of stock or securities or foreign currencies
(to the extent such currency gains are directly related to the regulated
investment company's principal business of investing in stock or securities) and
other income (including but not limited to gains from options, futures or
forward contracts) derived with respect to its business of investing in such
stock, securities or currencies (the "Income Requirement"); and (2) derive less
than 30% of its gross income (exclusive of certain gains on designated hedging
transactions that are offset by realized or unrealized losses on offsetting
positions) from the sale or other disposition of stock, securities or foreign
currencies (or of options, futures or forward contracts thereon) held for less
than three months (the "Short-Short Gain Test"). However, foreign currency
gains, including those derived from options, futures and forward contracts, will
not be characterized as Short-Short Gain if they are directly related to the
regulated investment company's principal business of investing in stock or
securities (or in options or futures thereon). Because of the Short-Short Gain
Test, a fund may have to limit the sale of appreciated securities that it has
held for less than three months. However, the Short-Short Gain Test will not
prevent a fund from disposing of investments at a loss, since the recognition of
a loss before the expiration of the three-month holding period is disregarded.
Interest (including original issue discount) received by a fund at maturity or
upon the disposition of a security held for less than three months will not be
treated as gross income derived from the sale or other disposition of a security
within the meaning of the Short-Short Gain Test. However, income that is
attributable to
21
<PAGE>
realized market appreciation will be treated as gross income from the sale or
other disposition of securities for this purpose.
In addition to satisfying the requirements described above, a regulated
investment company must satisfy an asset diversification test in order to
qualify for tax purposes as a regulated investment company. Under this test, at
the close of each quarter of a fund's taxable year, at least 50% of the value of
a fund's assets must consist of cash and cash items, U.S. Government securities,
securities of other regulated investment companies, and securities of other
issuers (as to which a fund has not invested more than 5 % of the value of a
fund's total assets in securities of such issuer and as to which a fund does not
hold more than 10% of the outstanding voting securities of such issuer), and no
more than 25% of the value of its total assets may be invested in the securities
of any other issuer (other than U.S. Government securities and securities of
other regulated investment companies), or in two or more issuers which a fund
controls and which are engaged in the same or similar trades or businesses.
If, for any taxable year the Portfolio does not qualify as a regulated
investment company, all of its taxable income (including its net capital gain)
will be subject to tax at regular corporate rates without any deduction for
distributions to shareholders, and such distributions will be taxable as
ordinary dividends to the extent of the Portfolio's current and accumulated
earnings and profits. Such distributions generally will be eligible for the
dividends received deduction in the case of corporate shareholders.
EXCISE TAX ON REGULATED INVESTMENT COMPANIES
A 4% non-deductible excise tax is imposed on a regulated investment company
that fails to distribute in each calendar year an amount equal to 98% of
ordinary taxable income for the calendar year and 98% of capital gain net income
for the one-year period ended on October 31 of such calendar year (or, at the
election of a regulated investment company having a taxable year ending November
30 or December 31, for its taxable year). The balance of such income must be
distributed during the next calendar year. For the foregoing purposes, a
regulated investment company is treated as having distributed any amount on
which it is subject to income tax for any taxable year ending in such calendar
year.
The Portfolio intends to make sufficient distributions or deemed
distributions of its ordinary taxable income and capital gain net income prior
to the end of each calendar year to avoid liability for the excise tax.
However, investors should note that the Portfolio may in certain circumstances
be required to liquidate portfolio investments to make sufficient distributions
to avoid excise tax liability.
PORTFOLIO DISTRIBUTIONS
The Portfolio anticipates distributing substantially all of its investment
company taxable income for each taxable year. Such distributions will be
taxable to shareholders as ordinary income and treated as dividends for federal
income tax purposes, but they will not qualify for the 70% dividends received
deduction for corporations.
Distributions by the Portfolio will be treated in the manner described
above regardless of whether such distributions are paid in cash or reinvested in
additional shares of the Portfolio. Shareholders receiving a distribution in
the form of additional shares will be treated as receiving a distribution in an
amount equal to the fair market value of the shares received, determined as of
the reinvestment date.
Ordinarily, shareholders are required to take distributions by the Portfolio
into account in the year in which the distributions are made. However, dividends
declared in October, November or December of any year and payable to
shareholders of record on a specified date in such a month will be deemed to
have been received by the shareholders (and made by the Portfolio) on December
31 of such calendar year if such dividends are actually paid in January of the
following year. Shareholders will be advised
22
<PAGE>
annually as to the U.S. federal income tax consequences of distributions made
(or deemed made) during the year.
The Portfolio will be required in certain cases to withhold and remit to
the U.S. Treasury 31% of the ordinary income dividends and capital gain
dividends, and, in certain cases, of the proceeds of redemption of shares, paid
to any shareholder (1) who has provided either an incorrect tax identification
number or no number at all, (2) who is subject to backup withholding by the
Internal Revenue Service for failure to report the receipt of interest or
dividend income properly, or (3) who has failed to certify to the Fund that it
is not subject to backup withholding or that it is a corporation or other
"exempt recipient."
EFFECT OF FUTURE LEGISLATION; LOCAL TAX CONSIDERATIONS
The foregoing general discussion of U.S. federal income tax consequences is
based on the Code and the regulations issued thereunder as in effect on the date
of this Statement of Additional Information. Future legislative or
administrative changes or court decisions may significantly change the
conclusions expressed herein, and any such changes or decisions may have a
retroactive effect with respect to the transactions contemplated herein.
Rules of state and local taxation of ordinary income dividends and capital
gain dividends from regulated investment companies often differ from the rules
for U.S. federal income taxation described above. Shareholders are urged to
consult their tax advisers as to the consequences of these and other state and
local tax rules affecting investment in the Fund.
23
<PAGE>
FINANCIAL STATEMENTS
FS
<PAGE>
INDEPENDENT To the Board of Trustees and Shareholders
AUDITORS' REPORT Short-Term Investments Trust:
We have audited the accompanying statement of assets and
liabilities of the Treasury Portfolio (a series portfolio
of Short-Term Investments Trust), including the schedule of
investments, as of August 31, 1994, and the related
statement of operations for the year then ended, the
statement of changes in net assets for each of the years in
the two-year period then ended, and the financial
highlights for each of the years in the ten-year period
then ended. These financial statements and financial
highlights are the responsibility of the Fund's management.
Our responsibility is to express an opinion on these
financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and
financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of
securities owned as of August 31, 1994 by correspondence
with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of the Treasury
Portfolio as of August 31, 1994, the results of its
operations for the year then ended, the changes in its net
assets for each of the years in the two-year period then
ended, and the financial highlights for each of the years
in the ten-year period then ended, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
Houston, Texas
October 7, 1994
FS-1
<PAGE>
<TABLE>
<CAPTION>
MATURITY PAR(000) VALUE
------------------------------------
<S> <C> <C> <C> <C>
SCHEDULE OF U.S. TREASURY SECURITIES -- 18.52%
INVESTMENTS
August 31, 1994 U.S. TREASURY BILLS(a)
3.26%.............................. 10/20/94 $ 50,000 $ 49,778,140
U.S. TREASURY NOTES
9.50%.............................. 10/15/94 166,000 167,203,065
6.00%.............................. 11/15/94 20,000 20,095,730
8.25%.............................. 11/15/94 115,000 116,105,009
4.625%............................. 12/31/94 69,900 69,841,401
7.625%............................. 12/31/94 18,200 18,360,544
3.875%............................. 02/28/95 60,000 59,653,126
U.S. TREASURY STRIPS(a)
3.37%.............................. 11/15/94 60,000 59,584,968
------------
Total U.S. Treasury Securities.......... 560,621,983
------------
Total Investments (excluding repurchase
agreements) -- 18.52%(b).............. $560,621,983(c)
============
</TABLE>
(a) U.S. Treasury Bills and STRIPS are traded on a discount
basis. In such cases the interest rate shown represents
the rate of discount paid or received at the time of
purchase by the Portfolio.
(b) Percentage of Net Assets.
(c) Also represents cost for federal income tax purposes.
FS-2
<PAGE>
<TABLE>
<CAPTION>
MATURITY PAR(000) VALUE
--------------------------------------
<S> <C> <C> <C> <C>
SCHEDULE OF REPURCHASE AGREEMENTS(a) -- 83.45%
INVESTMENTS
August 31, 1994 BT Securities Corp.
4.78%(b)............................. -- $140,000 $ 140,000,000
Bear, Stearns & Co. Inc.
4.85%(c)............................. -- 140,000 140,000,000
Daiwa Securities America Inc.
4.90%(d)............................. 09/01/94 145,000 145,000,000
Deutsche Bank Government Securities,
Inc.
4.82%(e)............................. -- 560,000 560,000,000
First Boston Corp. (The)
4.83%(f)............................. 09/01/94 140,000 140,000,000
Fuji Securities Inc.
4.85%(g)............................. -- 150,000 150,000,000
Goldman, Sachs & Co.
4.83%(h)............................. 09/01/94 290,308 290,308,138
Morgan (J.P.) Securities, Inc.
4.85%(i)............................. -- 140,000 140,000,000
Kidder, Peabody & Co. Inc.
4.87%(j)............................. -- 400,000 400,000,000
Nikko Securities Co., Ltd.
4.85%(k)............................. -- 81,000 81,000,000
Sanwa-BGK Securities Co., L.P.
4.90%(l)............................. 09/01/94 100,000 100,000,000
Smith Barney Inc.
4.85%(m)............................. 09/01/94 140,000 140,000,000
UBS Securities Inc.
4.83%(n)............................. 09/01/94 100,000 100,000,000
--------------
Total Repurchase
Agreements--83.45%(o)................ $2,526,308,138(p)
===============
</TABLE>
(a) Collateral on repurchase agreements is taken into
possession by the Fund upon entering into the
repurchase agreement. The collateral is marked to
market daily to ensure its market value as being 102
percent of the sales price of the repurchase
agreement.
(b) Open repurchase agreement entered into 07/05/94;
however, either party may terminate the agreement as
of any business day not less than one business day
after receipt of written notice from the terminating
party. Interest rates are redetermined daily.
Collateralized by $114,150,000 U.S. Treasury Bonds,
10.75% due 08/15/05.
(c) Open repurchase agreement entered into 07/05/94;
however, either party may terminate the agreement as
of any business day not less than one business day
after receipt of written notice from the terminating
party. Interest rates are redetermined daily.
Collateralized by $291,220,000 U.S. Treasury STRIPS,
due 11/15/00 to 08/15/05.
(d) Entered into 08/31/94 with a maturing value of
$145,019,736. Collateralized by $128,850,000 U.S.
Treasury Bonds, 8.125% to 10.375% due 11/15/12 to
08/15/19.
(e) Open repurchase agreement entered into 04/13/94;
however, either party may terminate the agreement as
of any business day not less than one business day
after receipt of written notice from the terminating
party. Interest rates are redetermined daily.
Collateralized by $568,442,000 U.S. Treasury
Obligations, 0% to 8.50% due 12/01/94 to 08/15/19.
FS-3
<PAGE>
(f) Entered into 08/31/94 with a maturing value of
$140,018,783. Collateralized by $145,826,000 U.S.
Treasury Bills, due 10/13/94 to 05/04/95.
(g) Open repurchase agreement entered into 07/25/94;
however, either party may terminate the agreement as
of any business day not less than one business day
after receipt of written notice from the terminating
party. Interest rates are redetermined daily.
Collateralized by $348,710,000 U.S. Treasury STRIPS,
due 05/15/95 to 05/15/16.
(h) Joint repurchase agreement entered into 08/31/94 with
a maturing value of $554,131,782 with the Fund's
pro-rata interest being $290,347,088. Collateralized
by $562,755,000 U.S. Treasury Notes, 4.375% to 8.875%
due 05/15/95 to 01/15/00.
(i) Open repurchase agreement entered into 07/19/94;
however, either party may terminate the agreement as
of any business day not less than one business day
after receipt of written notice from the terminating
party. Interest rates are redetermined daily.
Collateralized by $318,314,000 U.S. Treasury STRIPS,
due 11/15/04 to 05/15/06.
(j) Open repurchase agreement entered into 06/15/94;
however, either party may terminate the agreement as
of any business day not less than one business day
after receipt of written notice from the terminating
party. Interest rates are redetermined daily.
Collateralized by $846,176,000 U.S. Treasury
Obligations, 0% to 8.25% due 11/10/94 to 08/15/20.
(k) Open repurchase agreement entered into 04/14/94;
however, either party may terminate the agreement as
of any business day not less than one business day
after receipt of written notice from the terminating
party. Interest rates are redetermined daily.
Collateralized by $143,760,000 U.S. Treasury
Obligations, 0% to 6.50% due 03/09/95 to 04/30/99.
(l) Entered into 08/31/94 with a maturing value of
$100,013,611. Collateralized by $129,346,000 U.S.
Treasury STRIPS, due 02/15/98 to 05/15/06.
(m) Entered into 08/31/94 with a maturing value of
$140,018,861. Collateralized by $141,693,000 U.S.
Treasury Obligations, 0% to 13.875% due 09/29/94 to
05/15/11.
(n) Entered into 08/31/94 with a maturing value of
$100,013,417. Collateralized by $145,455,000 U.S.
Treasury STRIPS, due 11/15/99.
(o) Percentage of Net Assets.
(p) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
FS-4
<PAGE>
<TABLE>
<C> <S> <C>
STATEMENT OF ASSETS ASSETS:
AND LIABILITIES
August 31, 1994 Investments, excluding repurchase agreements, at value
(amortized cost).......................................... $ 560,621,983
Repurchase agreements....................................... 2,526,308,138
Interest receivable......................................... 10,350,449
Investment for deferred compensation plan................... 14,334
Other assets................................................ 213,998
--------------
Total assets...................................... 3,097,508,902
--------------
LIABILITIES:
Payable for investments purchased........................... 59,659,548
Deferred compensation payable............................... 14,334
Dividends payable........................................... 10,223,671
Accrued advisory fees....................................... 153,502
Accrued distribution fees................................... 138,135
Accrued trustees' fees...................................... 258
Accrued administrative fees................................. 1,279
Accrued custodian fees...................................... 6,496
Accrued operating expenses.................................. 5,439
--------------
Total liabilities................................. 70,202,662
--------------
NET ASSETS.................................................. $3,027,306,240
==============
NET ASSET VALUE PER SHARE:
Shares of beneficial interest, $.01 par value per share..... 3,027,151,729
==============
Net asset value, offering and redemption price per share.... $1.00
</TABLE>
See Notes to Financial Statements.
FS-5
<PAGE>
<TABLE>
<C> <S> <C>
STATEMENT OF INVESTMENT INCOME:
OPERATIONS
For the year ended Interest income............................................... $133,977,139
August 31, 1994 ------------
EXPENSES:
Advisory fees................................................. 2,337,627
Custodian fees................................................ 311,038
Administrative service fees................................... 110,807
Trustees' fees and expenses................................... 32,987
Transfer agent fees........................................... 34,793
Filing fees................................................... 153,443
Professional fees............................................. 130,166
Printing expenses............................................. 46,966
Distribution fees (Note 2).................................... 1,320,280
Other......................................................... 145,678
------------
Total expenses...................................... 4,623,785
Less expenses assumed by advisor.............................. (97,500)
------------
Net expenses........................................ 4,526,285
------------
Net investment income......................................... 129,450,854
Net realized gain on sales of investments..................... 63,526
------------
Net increase in net assets resulting from operations.......... $129,514,380
============
</TABLE>
See Notes to Financial Statements.
FS-6
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF 1994 1993
CHANGES IN -------------- --------------
NET ASSETS <S> <C> <C>
For the years OPERATIONS:
ended August 31,
1994 and 1993 Net investment income................... $ 129,450,854 $ 113,178,558
Net realized gain on sales of
investments........................... 63,526 36,003
-------------- --------------
Net increase in net assets resulting
from operations....................... 129,514,380 113,214,561
Distributions to shareholders from net
investment income.......................... (129,450,854) (113,178,558)
Share transactions -- net.................... (908,258,039) 75,699,799
-------------- --------------
Net increase (decrease) in net assets... (908,194,513) 75,735,802
NET ASSETS:
Beginning of period..................... 3,935,500,753 3,859,764,951
-------------- --------------
End of period........................... $3,027,306,240 $3,935,500,753
=============== ===============
NET ASSETS CONSIST OF:
Shares of beneficial interest........... $3,027,151,729 $3,935,409,768
Undistributed net realized gain on sales
of investments........................ 154,511 90,985
-------------- --------------
$3,027,306,240 $3,935,500,753
=============== ===============
</TABLE>
See Notes to Financial Statements.
FS-7
<PAGE>
NOTES TO NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
FINANCIAL
STATEMENTS Short-Term Investments Trust (the "Fund") is registered
August 31, 1994 under the Investment Company Act of 1940, as amended, as
an open-end series diversified management investment
company. The Fund is organized as a Delaware business trust
consisting of two different portfolios, each of which
offers separate series of shares: the Treasury Portfolio
and the Treasury TaxAdvantage Portfolio. Information
presented in these financial statements pertains only to
the Treasury Portfolio (the "Portfolio"), with assets,
liabilities and operations of each portfolio being
accounted for separately. The Portfolio consists of four
different classes of shares: the Institutional Class, the
Private Investment Class, the Personal Investment Class,
and the Cash Management Class.
The following is a summary of the significant accounting
policies followed by the Portfolio in the preparation of
its financial statements.
A. Security Valuations - The Portfolio invests only in
securities which have maturities of 397 days or less.
The securities are valued on the basis of amortized cost
which approximates market value. This method values a
security at its cost on the date of purchase and
thereafter assumes a constant amortization to maturity
of any discount or premium.
B. Securities Transactions, Investment Income and
Distributions - Securities transactions are accounted
for on a trade date basis. Realized gains or losses are
computed on the basis of specific identification of the
securities sold. Interest income, adjusted for
amortization of premiums and discounts on investments,
is accrued daily. Dividends to shareholders are declared
daily and are paid on the first business day of the
following month.
C. Federal Income Taxes - The Portfolio intends to comply
with the requirements of the Internal Revenue Code
necessary to qualify as a regulated investment company
and, as such, will not be subject to federal income
taxes on otherwise taxable income (including net
realized capital gains) which is distributed to
shareholders. Therefore, no provision for federal income
taxes is recorded in the financial statements.
D. Expenses - Operating expenses directly attributable to a
specific class of shares are charged to that class'
operations. Expenses which are applicable to all
classes, e.g. advisory fees, are allocated among them.
Expenses of the Fund which are not directly attributable
to a specific class are prorated among the classes to
which the expense relates based on the relative net
assets of each class.
FS-8
<PAGE>
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund has entered into a master investment advisory
agreement with A I M Advisors, Inc. ("AIM"). Under the
terms of the master advisory agreement, AIM receives a
monthly fee with respect to the Portfolio calculated by
applying a monthly rate, based upon the following annual
rates, to the average daily net assets of the Portfolio:
<TABLE>
<CAPTION>
NET ASSETS RATE
<S> <C>
---------------------------------------------------
First $300 million............................ .15%
Over $300 million to $1.5 billion............. .06%
Over $1.5 billion............................. .05%
</TABLE>
AIM will, if necessary, reduce its fee for any fiscal
year to the extent required so that the amount of ordinary
expenses of the Portfolio (excluding interest, taxes,
brokerage commissions and extraordinary expenses) paid or
incurred by the Portfolio for such fiscal year does not
exceed the applicable expense limitations imposed by the
state securities regulations in any state in which the
Portfolio's shares are qualified for sale. AIM voluntarily
reimbursed expenses of $20,000 on the Treasury Portfolio
Private Investment Class, $56,500 on the Treasury Portfolio
Personal Investment Class and $21,000 on the Treasury
Portfolio Cash Management Class during the year ended
August 31, 1994.
The Portfolio, pursuant to a master administrative
services agreement with AIM, has agreed to reimburse AIM
for certain costs incurred in providing accounting and
shareholder services to the Portfolio. During the year
ended August 31, 1994, the Portfolio reimbursed AIM
$110,807 for such services.
Under the terms of a master distribution agreement
between Fund Management Company ("FMC") and the Fund, FMC
acts as the exclusive distributor of the Fund's shares. The
Fund has adopted a master distribution plan (the "Plan")
pursuant to Rule 12b-1 under the 1940 Act with respect to
the Private Investment Class, Personal Investment Class and
the Cash Management Class of the Portfolio. The Plan
provides that the Treasury Portfolio's Private Investment
Class, Personal Investment Class and Cash Management Class
may pay up to a 0.50%, 0.75% and 0.10%, respectively,
maximum annual rate of the average daily net assets
attributable to such class. Of this amount, the Fund may
pay an asset-based sales charge to FMC and the Fund may pay
a service fee of (a) 0.25% of the average daily net assets
of each of the Private Investment Class and the Personal
Investment Class and (b) 0.10% of the average daily net
assets of the Cash Management Class, to selected banks,
broker-dealers and other financial institutions who offer
continuing personal shareholder services to their customers
who purchase and own shares of the Private Investment
Class, the Personal Investment Class or the Cash Management
Class. Any amounts not paid as a service fee under such
Plan would constitute an asset-based sales charge. During
the year ended August 31, 1994, the Treasury Portfolio
Private Investment Class, the Treasury Portfolio Personal
Investment Class and the Treasury Portfolio Cash Management
Class accrued for compensation to FMC amounts of $871,283,
$393,582 and $55,415, respectively, under the Plan. Certain
officers and trustees of the Trust are officers of AIM and
FMC.
The Fund paid legal fees of $27,379 for the year ended
August 31, 1994 for services rendered by Reid & Priest as
counsel to the Board of Trustees. In September 1994,
Kramer, Levin, Naftalis, Nessen, Kamin & Frankel was
appointed as counsel to the Board of Trustees. A member of
that firm is a trustee of the Trust.
NOTE 3-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to
each trustee who is not an "interested person" of the Fund.
The Fund invests trustees' fees, if so elected by a
trustee, in mutual fund shares in accordance with a
deferred compensation plan.
FS-9
<PAGE>
NOTE 4-SHARE INFORMATION
As of August 31, 1994, shares outstanding of the Treasury Portfolio are:
Institutional Class -- 2,452,263,604, Private Investment Class -- 412,695,183,
Personal Investment Class -- 88,577,788 and Cash Management Class -- 73,615,154.
Changes in shares outstanding during the years ended August 31, 1994 and 1993
were as follows:
<TABLE>
<CAPTION>
August 31, 1994 August 31, 1993
----------------------------------- ------------------------------------
Shares Amount Shares Amount
--------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
TREASURY PORTFOLIO:
Sold:
Institutional Class............................ 26,026,026,543 $ 26,026,026,543 26,079,743,609 $ 26,079,743,609
Private Investment Class....................... 827,921,059 827,921,059 310,527,892 310,527,892
Personal Investment Class...................... 343,375,963 343,375,963 178,186,012 178,186,012
Cash Management Class(*)....................... 142,326,763 142,326,763 8,755,500 8,755,500
Issued as reinvestment of dividends:
Institutional Class............................ 11,688,081 11,688,081 2,055,129 2,055,129
Private Investment Class....................... 361,516 361,516 299,756 299,756
Personal Investment Class...................... 1,153,701 1,153,701 656,310 656,310
Cash Management Class*......................... 1,883,744 1,883,744 -- --
Reacquired:
Institutional Class............................ (27,238,038,910) (27,238,038,910) (26,264,542,910) (26,264,542,910)
Private Investment Class....................... (619,863,560) (619,863,560) (107,076,872) (107,076,872)
Personal Investment Class...................... (325,817,071) (325,817,071) (132,829,643) (132,829,643)
Cash Management Class(*)....................... (79,275,868) (79,275,868) (74,984) (74,984)
--------------- ---------------- --------------- ----------------
Net increase (decrease)............................ (908,258,039) $ (908,258,039) 75,699,799 $ 75,699,799
================ ================ =============== ================
</TABLE>
(*) The Treasury Portfolio Cash Management Class commenced operations on August
17, 1993.
NOTE 5-FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share outstanding of
the Treasury Portfolio Private Investment Class during the two-year period ended
August 31, 1994 and the November 25, 1991 (date operations commenced) through
August 31, 1992.
<TABLE>
<CAPTION>
1994 1993 1992
------- ------- --------
<S> <C> <C> <C>
Net asset value, beginning of period................ $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income............................. 0.032 0.029 0.029
-------- -------- -------
Total from investment operations.......... 0.032 0.029 0.029
-------- -------- -------
Less distributions:
Dividends from net investment income.............. (0.032) (0.029) (0.029)
-------- -------- -------
Net asset value, end of period...................... $ 1.00 $ 1.00 $ 1.00
======== ======== =======
Total return........................................ 3.22% 2.91% 3.92%(a)
======== ======== =======
Ratios/supplemental data:
Net assets, end of period (000s omitted)............ $412,716 $204,281 $ 525
======== ======== =======
Ratio of expenses to average net assets(b).......... 0.38%(c) 0.38% 0.40%(a)
======== ======== =======
Ratio of net investment income to average net
assets(b)......................................... 3.26%(b) 2.81% 3.68%(a)
======== ======== =======
</TABLE>
- ---------------
(a) Annualized.
(b) Had there been no reimbursements, the ratios of expenses and net investment
income to average net assets would have been 0.40% and 3.25%, respectively,
for the year ended August 31, 1994 and 0.47% and 2.72%, respectively, for
the year ended August 31, 1993.
(c) Ratios are based on average net assets of $290,427,569.
FS-10
