<PAGE> 1
As filed with the Securities and Exchange Commission on November 13, 1995
Registration No. 2-58287
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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Pre-Effective Amendment No.
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Post-Effective Amendment No. 28 X
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
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Amendment No. 29 X
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(Check appropriate box or boxes.)
SHORT-TERM INVESTMENTS TRUST
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(Exact Name of Registrant as Specified in Charter)
11 Greenway Plaza, Suite 1919, Houston, TX 77046-1173
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code (713) 626-1919
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Charles T. Bauer
11 Greenway Plaza, Suite 1919, Houston, TX 77046-1173
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(Name and Address of Agent for Service)
Copy to:
Stephen I. Winer, Esquire Martha J. Hays, Esquire
A I M Advisors, Inc. Ballard Spahr Andrews & Ingersoll
11 Greenway Plaza, Suite 1919 1735 Market Street, 51st Floor
Houston, Texas 77046-1173 Philadelphia, Pennsylvania 19103-7599
Approximate Date of Proposed As soon as practicable after
Public Offering: effective date of this Amendment
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b)
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on (date) pursuant to paragraph (b)
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60 days after filing pursuant to paragraph (a)(1)
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X on December 14, 1995 pursuant to paragraph (a)(1)
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75 days after filing pursuant to paragraph (a)(2)
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on (date) pursuant to paragraph (a)(2) of rule 485.
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If appropriate, check the following box:
This post-effective amendment designates a new effective date for a
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previously filed post-effective amendment.
<PAGE> 2
SHORT-TERM INVESTMENTS TRUST
Registration Statement on Form N-1A
CROSS REFERENCE SHEET
(as required by Rule 495)
Note: The Registrant currently offers two portfolios of investments, the
Treasury Portfolio and the Treasury TaxAdvantage Portfolio. The Treasury
Portfolio is composed of five classes of Shares. The Treasury Portfolio offers
a Personal Investment Class to customers of certain institutions pursuant to a
separate Prospectus and Statement of Additional Information; a Private
Investment Class to customers of certain institutions pursuant to a separate
Prospectus and Statement of Additional Information; an Institutional Class to
certain institutions pursuant to a combined Prospectus and Statement of
Additional Information; a Cash Management Class offered to customers of certain
institutions pursuant to a separate Prospectus and Statement of Additional
Information; and a Resource Class offered to customers of certain institutions
pursuant to a separate Prospectus and Statement of Additional Information. The
Treasury TaxAdvantage Portfolio consists of two classes of shares. The
Treasury TaxAdvantage Portfolio offers an Institutional Class to customers of
certain institutions pursuant to a combined Prospectus and Statement of
Additional Information; and a Private Investment Class offered to customers of
certain institutions pursuant to a separate Prospectus and Statement of
Additional Information.
Form N-1A
Item Number
I. TREASURY PORTFOLIO - INSTITUTIONAL CLASS
Part A - Prospectus
<TABLE>
<CAPTION>
Item No. Prospectus Location
- -------- -------------------
<S> <C>
1. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page
2. Synopsis . . . . . . . . . . . . . . . . . . . . . . Summary; Table of Fees and Expenses
3. Condensed Financial Information . . . . . . . . . . . Financial Highlights
4. General Description of Registrant . . . . . . . . . . Cover Page; Investment Program; General Information
5. Management of the Fund . . . . . . . . . . . . . . . Management; General Information
5A. Management's Discussion of Fund Performance . . . . . [included in annual report]
6. Capital Stock and Other Securities . . . . . . . . . General Information; Dividends; Taxes
7. Purchase of Securities Being Offered . . . . . . . . Purchase of Shares; Net Asset Value
8. Redemption or Repurchase . . . . . . . . . . . . . . Redemption of Shares
9. Pending Legal Proceedings . . . . . . . . . . . . . . Not Applicable
</TABLE>
1
<PAGE> 3
Part B - Statement of Additional Information
<TABLE>
<CAPTION>
Item No. Statement of Additional
- -------- -----------------------
Information Location
--------------------
<S> <C> <C>
10. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page
11. Table of Contents . . . . . . . . . . . . . . . . . . Table of Contents
12. General Information and History . . . . . . . . . . . General Information About the Fund
13. Investment Objectives and Policies . . . . . . . . . Investment Program and Restrictions
14. Management of the Fund . . . . . . . . . . . . . . . General Information About the Fund - Trustees and
Officers
15. Control Persons and Principal Holders
of Securities . . . . . . . . . . . . . . . . . . . . General Information About the Fund - Principal
Holders of Securities
16. Investment Advisory and Other
Services . . . . . . . . . . . . . . . . . . . . . . General Information About the Fund - Investment
Advisor
17. Brokerage Allocation and Other Practices . . . . . . Portfolio Transactions
18. Capital Stock and Other Securities . . . . . . . . . General Information About the Fund
19. Purchase, Redemption and Pricing of
Securities Being Offered . . . . . . . . . . . . . . Purchases and Redemptions
20. Tax Status . . . . . . . . . . . . . . . . . . . . . See Part A - Taxes
21. Underwriters . . . . . . . . . . . . . . . . . . . . Purchases and Redemptions; Distribution Agreement
22. Calculation of Performance Data . . . . . . . . . . . Performance Information
23. Financial Statements . . . . . . . . . . . . . . . . Financial Statements
</TABLE>
II. TREASURY PORTFOLIO - PERSONAL INVESTMENT CLASS
Part A - Prospectus
<TABLE>
<CAPTION>
Item No. Prospectus Location
- -------- -------------------
<S> <C> <C>
1. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page
2. Synopsis . . . . . . . . . . . . . . . . . . . . . . Summary; Table of Fees and Expenses
3. Condensed Financial Information . . . . . . . . . . . Financial Highlights
</TABLE>
2
<PAGE> 4
<TABLE>
<S> <C>
4. General Description of Registrant . . . . . . . . . . Cover Page; Investment Program; General Information
5. Management of the Fund . . . . . . . . . . . . . . . Management of the Fund; General Information
5A. Management's Discussion of Fund Performance . . . . . [included in annual report]
6. Capital Stock and Other Securities . . . . . . . . . General Information; Dividends; Taxes
7. Purchase of Securities Being Offered . . . . . . . . Purchase of Shares; Net Asset Value; Management of
the Fund - Distribution Plan
8. Redemption or Repurchase . . . . . . . . . . . . . . Redemption of Shares
9. Pending Legal Proceedings . . . . . . . . . . . . . . Not Applicable
</TABLE>
Part B - Statement of Additional Information
<TABLE>
<CAPTION>
Item No. Statement of Additional
- -------- -----------------------
Information Location
--------------------
<S> <C> <C>
10. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page
11. Table of Contents . . . . . . . . . . . . . . . . . . Table of Contents
12. General Information and History . . . . . . . . . . . General Information About the Fund
13. Investment Objectives and Policies . . . . . . . . . Investment Program and Restrictions
14. Management of the Fund . . . . . . . . . . . . . . . General Information About the Fund - Trustees and
Officers
15. Control Persons and Principal Holders
of Securities . . . . . . . . . . . . . . . . . . . . General Information About the Fund - Principal
Holders of Securities
16. Investment Advisory and Other Services . . . . . . . General Information About the Fund - Investment
Advisor
17. Brokerage Allocation and Other Practices . . . . . . Portfolio Transactions
18. Capital Stock and Other Securities . . . . . . . . . General Information About the Fund - The Fund and Its
Shares
19. Purchase, Redemption and Pricing of
Securities Being Offered . . . . . . . . . . . . . . Purchases and Redemptions
20. Tax Status . . . . . . . . . . . . . . . . . . . . . Dividend and Tax Matters
21. Underwriters . . . . . . . . . . . . . . . . . . . . Purchases and Redemptions; Distribution Agreement;
Distribution Plan
</TABLE>
3
<PAGE> 5
<TABLE>
<S> <C> <C>
22. Calculation of Performance Data . . . . . . . . . . . Performance Information
23. Financial Statements . . . . . . . . . . . . . . . . Financial Statements
</TABLE>
III. TREASURY PORTFOLIO - PRIVATE INVESTMENT CLASS
Part A - Prospectus
<TABLE>
<CAPTION>
Item No. Prospectus Location
- -------- -------------------
<S> <C>
1. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page
2. Synopsis . . . . . . . . . . . . . . . . . . . . . . Summary; Table of Fees and Expenses
3. Condensed Financial Information . . . . . . . . . . Financial Highlights
4. General Description of Registrant . . . . . . . . . . Cover Page; Investment Program; General Information
5. Management of the Fund . . . . . . . . . . . . . . . Management of the Fund; General Information
5A. Management's Discussion of Fund Performance . . . . . [included in annual report]
6. Capital Stock and Other Securities . . . . . . . . . General Information; Dividends; Taxes
7. Purchase of Securities Being Offered . . . . . . . . Purchase of Shares; Net Asset Value; Management of
the Fund - Distribution Plan
8. Redemption or Repurchase . . . . . . . . . . . . . . Redemption of Shares
9. Pending Legal Proceedings . . . . . . . . . . . . . . Not Applicable
</TABLE>
Part B - Statement of Additional Information
<TABLE>
<CAPTION>
Item No. Statement of Additional
- -------- -----------------------
Information Location
--------------------
<S> <C> <C>
10. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page
11. Table of Contents . . . . . . . . . . . . . . . . . . Table of Contents
12. General Information and History . . . . . . . . . . . General Information About the Fund
13. Investment Objectives and Policies . . . . . . . . . Investment Program and Restrictions
14. Management of the Fund . . . . . . . . . . . . . . . General Information About the Fund - Trustees and
Officers
</TABLE>
4
<PAGE> 6
<TABLE>
<S> <C> <C>
15. Control Persons and Principal Holders
of Securities . . . . . . . . . . . . . . . . . . . . General Information About the Fund - Principal
Holders of Securities
16. Investment Advisory and Other Services . . . . . . . General Information About the Fund - Investment
Advisor
17. Brokerage Allocation and Other Practices . . . . . . Portfolio Transactions
18. Capital Stock and Other Securities . . . . . . . . . General Information About the Fund - The Fund and its
Shares
19. Purchase, Redemption and Pricing of
Securities Being Offered . . . . . . . . . . . . . . Purchases and Redemptions
20. Tax Status . . . . . . . . . . . . . . . . . . . . . Dividends and Tax Matters
21. Underwriters . . . . . . . . . . . . . . . . . . . . Purchases and Redemptions; Distribution Agreement;
Distribution Plan
22. Calculation of Performance Data . . . . . . . . . . . Performance Information
23. Financial Statements . . . . . . . . . . . . . . . . Financial Statements
</TABLE>
IV. TREASURY PORTFOLIO - CASH MANAGEMENT CLASS
Part A - Prospectus
<TABLE>
<CAPTION>
Item No. Prospectus Location
- -------- -------------------
<S> <C>
1. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page
2. Synopsis . . . . . . . . . . . . . . . . . . . . . . Summary; Table of Fees and Expenses
3. Condensed Financial Information . . . . . . . . . . . Financial Highlights
4. General Description of Registrant . . . . . . . . . . Cover Page; Summary; Investment Program; General
Information
5. Management of the Fund . . . . . . . . . . . . . . . Management of the Fund; General Information
5A. Management's Discussion of Fund Performance . . . . . [included in annual report]
6. Capital Stock and Other Securities . . . . . . . . . General Information; Dividends; Taxes
7. Purchase of Securities Being Offered . . . . . . . . Purchase of Shares; Net Asset Value; Management of
the Fund - Distribution Plan
8. Redemption or Repurchase . . . . . . . . . . . . . . Redemption of Shares
9. Pending Legal Proceedings . . . . . . . . . . . . . . Not Applicable
</TABLE>
5
<PAGE> 7
Part B - Statement of Additional Information
<TABLE>
<CAPTION>
Item No. Statement of Additional
- -------- -----------------------
Information Location
--------------------
<S> <C> <C>
10. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page
11. Table of Contents . . . . . . . . . . . . . . . . . . Table of Contents
12. General Information and History . . . . . . . . . . . General Information About the Fund
13. Investment Objectives and Policies . . . . . . . . . Investment Program and Restrictions
14. Management of the Fund . . . . . . . . . . . . . . . General Information About the Fund - Trustees and
Officers
15. Control Persons and Principal Holders
of Securities . . . . . . . . . . . . . . . . . . . . General Information About the Fund - Principal
Holders of Securities
16. Investment Advisory and Other Services . . . . . . . General Information About the Fund - Investment
Advisor
17. Brokerage Allocation and Other Practices . . . . . . Portfolio Transactions
18. Capital Stock and Other Securities . . . . . . . . . General Information About the Fund - The Fund and its
Shares
19. Purchase, Redemption and Pricing of
Securities Being Offered . . . . . . . . . . . . . . Purchases and Redemptions
20. Tax Status . . . . . . . . . . . . . . . . . . . . . Tax Matters
21. Underwriters . . . . . . . . . . . . . . . . . . . . Purchases and Redemptions; Distribution Agreement
22. Calculation of Performance Data . . . . . . . . . . . Performance Information
23. Financial Statements . . . . . . . . . . . . . . . . Financial Statements
</TABLE>
V. TREASURY PORTFOLIO - RESOURCE CLASS
Part A - Prospectus
<TABLE>
<CAPTION>
Item No. Prospectus Location
- -------- -------------------
<S> <C> <C>
1. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page
2. Synopsis . . . . . . . . . . . . . . . . . . . . . . Summary; Table of Fees and Expenses
3. Condensed Financial Information . . . . . . . . . . . Not Applicable
</TABLE>
6
<PAGE> 8
<TABLE>
<S> <C>
4. General Description of Registrant . . . . . . . . . . Cover Page; Summary; Investment Program; General
Information
5. Management of the Fund . . . . . . . . . . . . . . . Management of the Fund; General Information
5A. Management's Discussion of Fund Performance . . . . . [included in annual report]
6. Capital Stock and Other Securities . . . . . . . . . General Information; Dividends; Taxes
7. Purchase of Securities Being Offered . . . . . . . . Purchase of Shares; Net Asset Value; Management of
the Fund - Distribution Plan
8. Redemption or Repurchase . . . . . . . . . . . . . . Redemption of Shares
9. Pending Legal Proceedings . . . . . . . . . . . . . . Not Applicable
</TABLE>
Part B - Statement of Additional Information
<TABLE>
<CAPTION>
Item No. Statement of Additional
- -------- -----------------------
Information Location
--------------------
<S> <C> <C>
10. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page
11. Table of Contents . . . . . . . . . . . . . . . . . . Table of Contents
12. General Information and History . . . . . . . . . . . General Information About the Fund
13. Investment Objectives and Policies . . . . . . . . . Investment Program and Restrictions
14. Management of the Fund . . . . . . . . . . . . . . . General Information About the Fund - Trustees and
Officers
15. Control Persons and Principal Holders
of Securities . . . . . . . . . . . . . . . . . . . . General Information About the Fund - Principal
Holders of Securities
16. Investment Advisory and Other Services . . . . . . . General Information About the Fund - Investment
Advisor
17. Brokerage Allocation and Other Practices . . . . . . Portfolio Transactions
18. Capital Stock and Other Securities . . . . . . . . . General Information About the Fund - The Fund and its
Shares
19. Purchase, Redemption and Pricing of
Securities Being Offered . . . . . . . . . . . . . . Purchases and Redemptions
20. Tax Status . . . . . . . . . . . . . . . . . . . . . Tax Matters
21. Underwriters . . . . . . . . . . . . . . . . . . . . Purchases and Redemptions; Distribution Agreement
</TABLE>
7
<PAGE> 9
<TABLE>
<S> <C> <C>
22. Calculation of Performance Data . . . . . . . . . . . Performance Information
23. Financial Statements . . . . . . . . . . . . . . . . Not Applicable
</TABLE>
VI. TREASURY TAXADVANTAGE PORTFOLIO - INSTITUTIONAL CLASS
Part A - Prospectus
<TABLE>
<CAPTION>
Item No. Prospectus Location
- -------- -------------------
<S> <C>
1. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page
2. Synopsis . . . . . . . . . . . . . . . . . . . . . . Summary; Table of Fees and Expenses
3. Condensed Financial Information . . . . . . . . . . . Financial Highlights
4. General Description of Registrant . . . . . . . . . . Cover Page; Summary; Investment Program; General
Information
5. Management of the Fund . . . . . . . . . . . . . . . Management of the Fund; General Information
5A. Management's Discussion of Fund Performance . . . . . [included in annual report]
6. Capital Stock and Other Securities . . . . . . . . . General Information; Dividends; Taxes
7. Purchase of Securities Being Offered . . . . . . . . Purchase of Shares; Net Asset Value; Suitability for
Investors
8. Redemption or Repurchase . . . . . . . . . . . . . . Redemption of Shares
9. Pending Legal Proceedings . . . . . . . . . . . . . . Not Applicable
</TABLE>
Part B - Statement of Additional Information
<TABLE>
<CAPTION>
Item No. Statement of Additional
- -------- -----------------------
Information Location
--------------------
<S> <C> <C>
10. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page
11. Table of Contents . . . . . . . . . . . . . . . . . . Table of Contents
12. General Information and History . . . . . . . . . . . General Information About the Fund
13. Investment Objectives and Policies . . . . . . . . . Investment Program and Restrictions
14. Management of the Fund . . . . . . . . . . . . . . . General Information About the Fund - Trustees and
Officers
15. Control Persons and Principal Holders
</TABLE>
8
<PAGE> 10
<TABLE>
<S> <C> <C>
of Securities . . . . . . . . . . . . . . . . . . . . General Information About the Fund - Principal
Holders of Securities
16. Investment Advisory and Other Services . . . . . . . General Information About the Fund - Investment
Advisor
17. Brokerage Allocation and Other Practices . . . . . . Portfolio Transactions
18. Capital Stock and Other Securities . . . . . . . . . General Information About the Fund - The Fund and its
Shares
19. Purchase, Redemption and Pricing of
Securities Being Offered . . . . . . . . . . . . . . Purchases and Redemptions
20. Tax Status . . . . . . . . . . . . . . . . . . . . . Tax Matters
21. Underwriters . . . . . . . . . . . . . . . . . . . . Purchases and Redemptions; Distribution Agreement
22. Calculation of Performance Data . . . . . . . . . . . Performance Information
23. Financial Statements . . . . . . . . . . . . . . . . Financial Statements
</TABLE>
VII. TREASURY TAX-ADVANTAGE PORTFOLIO - PRIVATE INVESTMENT CLASS
Part A - Prospectus
<TABLE>
<CAPTION>
Item No. Prospectus Location
- -------- -------------------
<S> <C>
1. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page
2. Synopsis . . . . . . . . . . . . . . . . . . . . . . Summary; Table of Fees and Expenses
3. Condensed Financial Information . . . . . . . . . . Financial Highlights
4. General Description of Registrant . . . . . . . . . . Cover Page; Investment Program; General Information
5. Management of the Fund . . . . . . . . . . . . . . . Management of the Fund; General Information
5A. Management's Discussion of Fund Performance . . . . . [included in annual report]
6. Capital Stock and Other Securities . . . . . . . . . General Information; Dividends; Taxes
7. Purchase of Securities Being Offered . . . . . . . . Purchase of Shares; Net Asset Value; Management of
the Fund - Distribution Plan
8. Redemption or Repurchase . . . . . . . . . . . . . . Redemption of Shares
9. Pending Legal Proceedings . . . . . . . . . . . . . . Not Applicable
</TABLE>
9
<PAGE> 11
Part B - Statement of Additional Information
<TABLE>
<CAPTION>
Item No. Statement of Additional
- -------- -----------------------
Information Location
--------------------
<S> <C> <C>
10. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page
11. Table of Contents . . . . . . . . . . . . . . . . . . Table of Contents
12. General Information and History . . . . . . . . . . . General Information About the Fund
13. Investment Objectives and Policies . . . . . . . . . Investment Program and Restrictions
14. Management of the Fund . . . . . . . . . . . . . . . General Information About the Fund - Trustees and
Officers
15. Control Persons and Principal Holders
of Securities . . . . . . . . . . . . . . . . . . . . General Information About the Fund - Principal
Holders of Securities
16. Investment Advisory and Other Services . . . . . . . General Information About the Fund - Investment
Advisor
17. Brokerage Allocation and Other Practices . . . . . . Portfolio Transactions
18. Capital Stock and Other Securities . . . . . . . . . General Information About the Fund - The Fund and its
Shares
19. Purchase, Redemption and Pricing of
Securities Being Offered . . . . . . . . . . . . . . Purchases and Redemptions
20. Tax Status . . . . . . . . . . . . . . . . . . . . . Dividends and Tax Matters
21. Underwriters . . . . . . . . . . . . . . . . . . . . Purchases and Redemptions; Distribution Agreement;
Distribution Plan
22. Calculation of Performance Data . . . . . . . . . . . Performance Information
23. Financial Statements . . . . . . . . . . . . . . . . Financial Statements
</TABLE>
VIII. ALL CLASSES OF REGISTRANT
Part C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C to this Registration Statement.
10
<PAGE> 12
SHORT-TERM
INVESTMENTS TRUST
Prospectus
- --------------------------------------------------------------------------------
TREASURY
PORTFOLIO
The Treasury Portfolio is a money market fund
INSTITUTIONAL whose investment objective is the maximization of
CLASS current income to the extent consistent with the
preservation of capital and the maintenance of
liquidity. The Treasury Portfolio seeks to achieve its
DECEMBER 14, 1995 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 Institutional Class
of the Treasury Portfolio, a class of shares designed
to be a convenient vehicle in which institutions,
particularly banks, acting for themselves or in a
fiduciary, advisory, agency, custodial or other
similar capacity can invest in a diversified money
market fund.
The Fund also offers shares of other classes of
the Treasury Portfolio pursuant to separate
prospectuses: the Personal Investment Class, Private
Investment Class, Cash Management Class and Resource
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 INSTITUTIONAL CLASS OF THE TREASURY
PORTFOLIO AND SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE. A STATEMENT OF ADDITIONAL INFORMATION,
DATED DECEMBER 14, 1995, HAS BEEN FILED WITH THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION AND
IS HEREBY INCORPORATED BY REFERENCE. A COPY OF THE
STATEMENT OF ADDITIONAL INFORMATION IS ATTACHED HERETO
AS AN APPENDIX TO THIS PROSPECTUS.
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.
[AIM LOGO APPEARS HERE]
Fund Management Company
11 Greenway Plaza
Suite 1919
Houston, Texas 77046-1173
(800) 659-1005
<PAGE> 13
SUMMARY
THE PORTFOLIO AND ITS INVESTMENT OBJECTIVE
The Fund is an open-end diversified series management investment company. This
Prospectus relates to the Institutional 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 preservations
of capital and the maintenance of liquidity.
Pursuant to separate prospectuses, the Fund also offers shares of other
classes 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 the
"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 and economical vehicle in which
institutions, particularly banks, acting for themselves or in a fiduciary,
advisory, agency, custodial or other similar capacity can invest short-term cash
reserves. Although shares of the Class may not be purchased by individuals
directly, institutions may purchase shares for accounts maintained by
individuals. See "Suitability for Investors." For the fiscal year ended August
31, 1995, the expenses of operation for the Class represented 0.10% of the
average daily net assets of the Class.
PURCHASE OF SHARES
Shares of the Class are sold at net asset value without a sales charge. The
minimum initial investment in the Class is $1,000,000. There is no minimum
amount for subsequent investments. Payment for shares of the Class purchased
must be in federal funds or other funds immediately available to the Portfolio.
See "Purchase of Shares."
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
4:00 p.m. Eastern Time will normally be made in federal funds on the same day.
See "Redemption of Shares."
DIVIDENDS
The net income of each Portfolio is declared as a dividend daily to
shareholders of record immediately after 4:00 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 5:00 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 Portfolio's investment advisor and
receives a fee based on the Portfolio's average daily net assets. During the
fiscal year ended August 31, 1995, the Fund paid AIM 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
2
<PAGE> 14
costs of performing certain accounting and other administrative services for the
Fund. See "Management of the Fund -- Investment Advisor" and "-- Administrative
Services."
DISTRIBUTOR
Fund Management Company ("FMC") acts as the exclusive distributor of the
Fund's shares. FMC does not receive any fee from the Fund. See "Purchase of
Shares."
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."
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK AND AIM INSTITUTIONAL FUNDS ARE REGISTERED
SERVICE MARKS OF A I M MANAGEMENT GROUP INC.
3
<PAGE> 15
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 -- INSTITUTIONAL CLASS
(as a percentage of average net assets)
Management fees................................................... 0.06%
12b-1 fees........................................................ none
Other expenses:
Custodian fees................................................. 0.01%
Other.......................................................... 0.03%
----
Total other expenses......................................... 0.04%
-----
Total portfolio operating expenses -- Institutional Class......... 0.10%
============
</TABLE>
EXAMPLE
An investor would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period.
<TABLE>
<S> <C>
1 year............................................................... $ 1
3 years.............................................................. $ 3
5 years.............................................................. $ 6
10 years.............................................................. $13
</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 for the fiscal year ended
August 31, 1995. To the extent any service providers assume expenses of the
Class, such assumption of 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 -- Institutional 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.
4
<PAGE> 16
FINANCIAL HIGHLIGHTS
Shown below are the per share data, ratios and supplemental data
(collectively, "data") for each of the years in the ten-year period ended August
31, 1995. The data has been audited by KPMG Peat Marwick LLP, independent
auditors, whose unqualified report on the financial statements and the related
notes appears in the Statement of Additional Information.
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment
operations:
Net investment income....... 0.06 0.04 0.03 0.05 0.07 0.08 0.09
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total from investment
operations............ 0.06 0.04 0.03 0.05 0.07 0.08 0.09
---------- ---------- ---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net
investment
income.................... (0.06) (0.04) (0.03) (0.05) (0.07) (0.08) (0.09)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of
period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ========== ========== ==========
Total return................. 5.66% 3.53% 3.22% 4.56% 7.04% 8.52% 9.03%
========== ========== ========== ========== ========== ========== ==========
Ratios/supplemental data:
Net assets, end of period
(000s omitted)............ $2,669,637 $2,452,389 $3,652,672 $3,835,387 $2,437,902 $1,703,460 $1,189,822
========== ========== ========== ========== ========== ========== ==========
Ratio of expenses to average
net assets.................. 0.10%(a) 0.08% 0.08% 0.09% 0.10% 0.12% 0.11%
========== ========== ========== ========== ========== ========== ==========
Ratio of net investment
income to average net
assets...................... 5.53%(a) 3.39% 3.17% 4.38% 6.73% 8.19% 8.69%
========== ========== ========== ========== ========== ========== ==========
<CAPTION>
1988 1987 1986
---------- -------- --------
<S> <C<C> <C> <C>
Net asset value, beginning of
period...................... $ 1.00 $ 1.00 $ 1.00
Income from investment
operations:
Net investment income....... 0.07 0.06 0.07
---------- -------- --------
Total from investment
operations............ 0.07 0.06 0.07
---------- -------- --------
Less distributions:
Dividends from net
investment
income.................... (0.07) (0.06) (0.07)
---------- -------- --------
Net asset value, end of
period...................... $ 1.00 $ 1.00 $ 1.00
========== ======== ========
Total return................. 6.98% 6.17% 7.28%
========== ======== ========
Ratios/supplemental data:
Net assets, end of period
(000s omitted)............ $1,121,144 $650,547 $488,239
========== ======== ========
Ratio of expenses to average
net assets.................. 0.13% 0.14% 0.19%
========== ======== ========
Ratio of net investment
income to average net
assets...................... 6.76% 6.01% 6.89%
========== ======== ========
</TABLE>
- ---------------
(a) Ratios are based on average net assets of $2,432,714,207.
5
<PAGE> 17
SUITABILITY FOR INVESTORS
The Class is intended for use primarily by institutions, particularly banks,
acting for themselves or in a fiduciary, advisory, agency, custodial or other
similar capacity. They are designed to be a convenient and economical vehicle in
which such institutions can invest short-term cash reserves. Shares of the Class
may not be purchased directly by individuals, although institutions may purchase
shares for accounts maintained by individuals. Prospective investors should
determine if an investment in the Class is consistent with the objectives of an
account and with applicable state and federal laws and regulations.
An investment in the Class may relieve the institution of many of the
investment and administrative burdens encountered when investing in money market
instruments directly. These include: selection of portfolio investments;
surveying the market for the best price at which to buy and sell; valuation of
portfolio securities; selection and scheduling of maturities; receipt, delivery
and safekeeping of securities; and portfolio recordkeeping. It is anticipated
that most investors will perform their own sub-accounting. To assist these
institutions, information concerning the dividends declared by the Portfolios on
any particular day will normally be available by 5:00 p.m. Eastern Time on that
day.
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 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. However, these
expenses are expected to be relatively small due primarily to the following
factors: the Class will have a small number of shareholders who do not need many
of the services provided by other money market investment companies, thereby
resulting in lower transfer agent fees and costs for printing reports and proxy
statements; sales of the shares of the Class to institutions acting for
themselves or in a fiduciary capacity are exempt from the registration
requirements of most state securities laws, thereby resulting in reduced state
registration fees; and the relatively low investment advisory fee paid to AIM.
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 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 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 under the 1940 Act.
6
<PAGE> 18
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 Portfolio 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.
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 a dollar value sufficient at all times to make payment for the
delayed delivery securities will be set 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.
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.
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 in-
7
<PAGE> 19
vested 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, or 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 United
States 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.
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 record keeping, 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,
the 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 4:00 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.
Subject to the conditions stated above and 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 Bank of New York, the Portfolio's custodian
bank, in the form described below and notice of such order is provided to A I M
Institutional Fund Services, Inc. ("AIFS") (the Fund's transfer agent), 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 4:00 p.m. Eastern
Time will earn the dividend declared on the date of purchase.
Payments for shares of the Class purchased must be in the form of federal
funds or other funds immediately available to the Portfolio. 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 to purchase
shares must specify that it is for the purchase of "Shares of the Institutional
Class of the Treasury Portfolio," otherwise any funds received will be returned
to the sending institution.
The minimum initial investment in the Class is $1,000,000. Institutions may be
requested to maintain separate Master Accounts in the shares of the Class held
by the institution (i) for its own account, for the account of other
institutions and for accounts for which the institution acts as a fiduciary, and
(ii) for accounts for which the institution acts in some other capacity. An
institution's Master Account(s) and sub-accounts in the shares of the Class may
be aggregated for the purpose of the minimum investment requirement. No minimum
amount is required for subsequent investments in the Portfolio nor are minimum
balances required. Prior to the initial purchase of shares of the Class, an
Account Application must be completed and sent to A I M Institutional Fund
Services, Inc., 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173.
Account Applications may be obtained from AIFS. Any changes made to the
information provided in the Account Application must be made in writing or by
completing a new form and providing it to AIFS.
8
<PAGE> 20
Banks 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.
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(R), 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 by calling
the Fund.
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
Application, but may be remitted by check upon request by a shareholder. If a
redemption request is received by AIFS prior to 4:00 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 AIFS after 4:00 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 4:00 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 or AIFS, the
Fund's transfer agent.
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.
The shares of the Class are not redeemable at the option of the Fund unless
the Board of Trustees of the Fund determines in its sole discretion that failure
to so redeem may have materially adverse consequences to the shareholders of the
Fund.
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
4:00 p.m. Eastern Time on the day of declaration. Net income for dividend
purposes is determined daily as of 4:00 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, such as custodian fees, trustees' fees, accounting and legal expenses,
based upon such class' pro rata share of the net assets of the Portfolio, less
(c) expenses directly attributable to such class, 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 normally be paid by wire transfer.
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
4:00 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
AIFS, 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173 and will become
effective with dividends paid after its receipt by AIFS. 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.
9
<PAGE> 21
The Fund uses its best efforts to maintain its net asset value per share of
the Portfolio 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.
The Portfolio will be treated as a separate corporation for purposes of
determining taxable income, distribution requirements and other requirements of
Subchapter M. Therefore, the Portfolio may not offset its gains against the
losses of the other portfolio of the Fund and each portfolio of the Fund 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 November 1, 1995, which are subject to change
by legislation or administrative action.
NET ASSET VALUE
The net asset value per share of the Portfolio is determined daily as of 4:00
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 SEC 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)
659-1005. 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
10
<PAGE> 22
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 the 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, 1995, the current yield and the
effective yield of the Class (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) were 5.71% and 5.87%, respectively, excluding capital
gains distributions. For the seven-day period ended August 31, 1995, the current
distribution rate and the effective distribution rate of the Class, including
capital gains distributions, (which assumes the reinvestment of dividends for a
365-day year and a return for the entire year equal to the annualized current
distribution rate for the period) were 5.74% and 5.91%, respectively. These
performance numbers are quoted for illustration purposes only. The performance
numbers for any other seven-day period may be substantially different from those
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 5:00 p.m.
Eastern Time.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Portfolio. Such a practice
will have the effect of increasing the Portfolios' yield and total return.
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 by the Portfolio and financial statements. The annual financial
statements are audited by the Fund's independent auditors.
Unless otherwise requested by the shareholder, each shareholder will be
provided with a written confirmation for each transaction. Institutions
establishing sub-accounts will receive a written confirmation for each
transaction in a sub-account. Duplicate confirmations may be transmitted to the
beneficial owner of the sub-account if requested by the institution. The
institution will receive a periodic statement setting forth, for each
sub-account, the share balance, income earned for the month, income earned for
the year to date and the total current value of the account.
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 October 31, 1995, the
total assets of the investment company managed, advised or administered by AIM
and its affiliates were approximately $39.3 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"). AIM Management is a holding company engaged in the financial
services business.
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, 1995, 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 the Portfolio's average daily net assets.
During such fiscal year, the expenses of the Class, including AIM's fees,
amounted to 0.10% of the Class' average daily net assets.
11
<PAGE> 23
ADMINISTRATIVE SERVICES
The Fund has entered into a Master Administrative Services Agreement dated as
of 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") entered
into an Administrative Services Agreement pursuant to which AIFS was reimbursed
by AIM for its costs in providing shareholder services for the Fund. AIFS or its
affiliates received reimbursement of shareholder services costs of $73,366 with
respect to the Portfolio for the year ended August 31, 1995 which represented
0.002% of the Portfolio's average daily net assets. The Administrative Services
Agreement between AIM and AIFS was terminated July 1, 1995. Beginning July 1,
1995, AIFS received fees with respect to the Portfolio for its provision of
shareholder services pursuant to a Transfer Agency and Service Agreement with
the Fund. For the period July 1, 1995 through August 31, 1995, AIFS received
transfer agency fees from AIM with respect to the Portfolio in the amount of
$40,813.
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.
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 Fund either directly or through
other broker-dealers. FMC is the distributor of several of the mutual funds
managed or advised by AIM.
PORTFOLIO TRANSACTIONS AND BROKERAGE
AIM is responsible for decisions to buy and sell securities for the
Portfolios, 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 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). Shares of beneficial interest of the Fund are divided into seven
classes of which five, 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
12
<PAGE> 24
share. The other classes of the Fund may have different sales charges and other
expenses which may affect performance. An investor may obtain information
concerning the Fund's other classes by contacting FMC.
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 holders of shares of the Portfolio 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 or allocated to the respective portfolio based on the liquidation
value of the 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 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 of the Fund without
shareholder approval.
TRANSFER AGENT 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.
A I M Institutional Fund Services Inc., 11 Greenway Plaza, Suite 1919, Houston,
Texas 77046-1173, acts as 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.
SHAREHOLDER INQUIRIES
Shareholder inquiries concerning the status of an account should be directed
to the Fund at 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173, or may
be made by calling (800) 659-1005.
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 SEC and is attached as an Appendix to this
Prospectus. Additional 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 SEC. Copies of the registration statement, including
items omitted herein, may be obtained from the SEC by paying the charges
prescribed under its rules and regulations.
13
<PAGE> 25
APPENDIX
STATEMENT OF
ADDITIONAL INFORMATION
SHORT-TERM INVESTMENTS TRUST
TREASURY PORTFOLIO
(INSTITUTIONAL CLASS)
11 GREENWAY PLAZA
SUITE 1919
HOUSTON, TEXAS 77046-1173
(800) 659-1005
---------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS.
IT SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS,
THAT PRECEDES THIS APPENDIX, ADDITIONAL
COPIES OF WHICH MAY BE OBTAINED BY WRITING
FUND MANAGEMENT COMPANY, 11 GREENWAY PLAZA,
SUITE 1919, HOUSTON, TEXAS 77046-1173
OR CALLING (800) 659-1005
---------------------
STATEMENT OF ADDITIONAL INFORMATION DATED DECEMBER 14, 1995
RELATING TO THE PROSPECTUS DATED DECEMBER 14, 1995
A-1
<PAGE> 26
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Appendix.......................................................... A-1
Introduction...................................................... A-3
General Information about the Fund................................ A-3
The Fund and Its Shares...................................... A-3
Trustees and Officers........................................ A-4
Investment Advisor........................................... A-8
Administrative Services...................................... A-9
Expenses..................................................... A-10
Banking Regulations.......................................... A-10
Transfer Agent and Custodian................................. A-10
Reports...................................................... A-11
Principal Holders of Securities.............................. A-11
Purchases and Redemptions......................................... A-14
Net Asset Value Determination................................ A-14
Distribution Agreement....................................... A-14
Performance Information...................................... A-15
Suspension of Redemption Rights.............................. A-15
Investment Program and Restrictions............................... A-15
Investment Program........................................... A-15
Eligible Securities.......................................... A-16
Investment Restrictions...................................... A-16
Other Investment Policies.................................... A-17
Portfolio Transactions............................................ A-17
Tax Matters....................................................... A-18
Qualification as a Regulated Investment Company.............. A-18
Excise Tax on Regulated Investment Companies................. A-19
Portfolio Distributions...................................... A-19
Sale or Redemption of Shares................................. A-20
Foreign Shareholders......................................... A-20
Effect of Future Legislation; Local Tax Considerations....... A-20
Financial Statements.............................................. FS-1
</TABLE>
A-2
<PAGE> 27
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 United States 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 the Prospectus dated December 14, 1995 (the
"Prospectus") that precedes this Statement of Additional Information. Additional
copies of the Prospectus and 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) 659-1005. Investors must receive a Prospectus
before they invest.
This Statement of Additional Information is intended to furnish prospective
investors with additional information concerning the Institutional 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 management series 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. A copy of the Agreement and Declaration of Trust (the
"Declaration of Trust") establishing the Fund is on file with the SEC. 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 Statement of
Additional Information 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). 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 five
classes of shares: Private Investment Class, Personal Investment Class,
Institutional Class, Cash Management Class and Resource Class. Each such class
has different shareholder qualifications and bears expenses differently. This
Statement of Additional Information and the Prospectus relate solely to the
Institutional 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
captions "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 Portfolio and any class thereof, however, may be terminated at any
time, upon the recommendation of the 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 ter-
A-3
<PAGE> 28
minate, 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, of $.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, however, 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. 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 that 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 (76)
Director, Chairman and Chief Executive Officer, A I M Management Group
Inc.; 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 Global Associates, Inc., A I M Global Holdings, Inc., A I M
Institutional Fund Services, Inc. and Fund Management Company; and
Director, AIM Global Advisors Limited, A I M Global Management Company
Limited and AIM Global Ventures Co.
- ---------------
* A trustee who is an "interested person" of the Fund and A I M Advisors, Inc.,
as defined in the Investment Company Act of 1940, as amended (the "1940 Act").
A-4
<PAGE> 29
BRUCE L. CROCKETT, Trustee (51)
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).
OWEN DALY II, Trustee (71)
6 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 (58)
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 (49)
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 Capital Management, Inc., A I M Fund Services, Inc.,
A I M Global Associates, Inc., A I M Global Holdings, Inc., AIM Global
Ventures Co., A I M Institutional Fund Services, Inc. and Fund Management
Company; and Senior Vice President, AIM Global Advisors Limited.
JOHN F. KROEGER, Trustee (71)
24875 Swan Road-Martingham
Box 464
St. Michaels, MD 21663
Director, Flag Investors International Fund, Inc., Flag Investors
Emerging Growth Fund, Inc., Flag Investors Telephone Income Fund, Inc.,
Flag Investors Equity Partners Fund, Inc., Total Return U.S. Treasury Fund,
Inc., Flag Investors Intermediate Term Income Fund, Inc., Managed Municipal
Fund, Inc., Flag Investors Value Builder Fund, Inc., Flag Investors
Maryland Intermediate Tax-Free Income Fund, Inc., Flag Investors Real
Estate Securities Fund, Inc., Alex. Brown Cash Reserve Fund, Inc. and North
American Government Bond Fund, Inc. (investment companies). Formerly,
Consultant, Wendell & Stockel Associates, Inc. (consulting firm).
LEWIS F. PENNOCK, Trustee (53)
6363 Woodway, Suite 825
Houston, TX 77057
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 A I M Advisors, Inc.,
as defined in the 1940 Act.
A-5
<PAGE> 30
IAN W. ROBINSON, Trustee (72)
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 (56)
Transco Tower, 50th Floor
2800 Post Oak Blvd.
Houston, TX 77056
Executive Vice President, Development and Operations, Hines Interests
Limited Partnership (real estate development).
*JOHN J. ARTHUR, Senior Vice President and Treasurer (51)
Senior Vice President and Treasurer, A I M Advisors, Inc.; 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; and
Vice President, AIM Global Advisors Limited, A I M Global Associates, Inc.,
A I M Global Holdings, Inc., and AIM Global Ventures Co.
GARY T. CRUM, Senior Vice President (48)
Director and President, A I M Capital Management, Inc.; Director and
Senior Vice President, A I M Management Group Inc., A I M Advisors, Inc.,
A I M Global Associates, Inc., A I M Global Holdings, Inc. and AIM Global
Ventures Co.; Director, A I M Distributors, Inc.; and Senior Vice
President, AIM Global Advisors Limited.
*CAROL F. RELIHAN, Vice President and Secretary (41)
Vice President, General Counsel and Secretary, A I M Management Group
Inc., A I M Advisors, Inc., A I M Fund Services, Inc., A I M Institutional
Fund Services, Inc. and Fund Management Company; Vice President and
Secretary, A I M Distributors, Inc., A I M Global Associates, Inc. and
A I M Global Holdings, Inc.; Vice President and Assistant Secretary, AIM
Global Advisors Limited and AIM Global Ventures Co.; and Secretary, A I M
Capital Management, Inc.
DANA R. SUTTON, Vice President and Assistant Treasurer (36)
Vice President and Fund Controller, A I M Advisors, Inc.; and
Assistant Vice President and Assistant Treasurer, Fund Management Company.
MELVILLE B. COX, Vice President (52)
Vice President, A I M Advisors, Inc., A I M Capital Management, Inc.,
A I M Fund Services, Inc. and A I M Institutional 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 (35)
Director, A I M Global Management Company Limited; Senior Vice
President, A I M Capital Management, Inc. and AIM Global Advisors Limited;
and Vice President, A I M Advisors, Inc. and AIM Global Ventures Co.
J. ABBOTT SPRAGUE, Vice President (40)
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 Management Group Inc.
The standing committees of the Board of Trustees are the Audit Committee, the
Investments Committee and the Nominating and Compensation Committee.
- ---------------
*Mr. Arthur and Ms. Relihan are married to each other.
A-6
<PAGE> 31
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 Board of Trustees and such committee.
The members of the Investments Committee are Messrs. Bauer, Crockett, 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
of Trustees 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 the disinterested
trustees, or considering such matters as may from time to time be set forth in a
charter adopted by the Board of Trustees and such committee.
All of the 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 Advisors, Inc.
("AIM") or distributed and administered by FMC. All of the Fund's executive
officers hold similar offices with some or all of such investment companies.
REMUNERATION OF TRUSTEES
Set forth below is information regarding compensation paid or accrued during
the fiscal year ended August 31, 1995 for each trustee of the Fund:
<TABLE>
<CAPTION>
===========================================================================================
DIRECTOR AGGREGATE RETIREMENT TOTAL
COMPENSATION BENEFITS COMPENSATION
FROM FUND(1) ACCRUED FROM ALL AIM
BY ALL AIM FUNDS(3)
FUNDS(2)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Charles T. Bauer $ -0- $ -0- $ -0-
- -------------------------------------------------------------------------------------------
Bruce L. Crockett 3,281 2,814 45,094
- -------------------------------------------------------------------------------------------
Owen Daly II 3,298 14,375 45,844
- -------------------------------------------------------------------------------------------
Carl Frischling 3,281 7,542 45,094
- -------------------------------------------------------------------------------------------
Robert H. Graham -0- -0- -0-
- -------------------------------------------------------------------------------------------
John F. Kroeger 3,298 20,517 45,844
- -------------------------------------------------------------------------------------------
Lewis F. Pennock 3,298 5,093 45,844
- -------------------------------------------------------------------------------------------
Ian W. Robinson 3,249 10,396 45,094
- -------------------------------------------------------------------------------------------
Louis S. Sklar 3,249 4,682 45,094
===========================================================================================
</TABLE>
- ---------------
(1) The total amount of compensation deferred by all Trustees of the Fund during
the fiscal year ended August 31, 1995, including interest earned thereon,
was $13,735.
(2) During the fiscal year ended August 31, 1995, the total amount of expenses
allocated to the Fund in respect of such retirement benefits was $8,673.
Data reflects compensation earned for the calendar year ended December 31,
1994.
(3) Messrs. Bauer, Daly, Graham, Kroeger and Pennock each serves as a Director
or Trustee of a total of 11 AIM Funds. Messrs. Crockett, Frischling,
Robinson and Sklar each serves as a Director or Trustee of a total of 10 AIM
Funds. Data reflects compensation earned for the calendar year ended
December 31, 1994.
AIM Funds Retirement Plan for Eligible Directors/Trustees
Under the terms of the AIM Funds Retirement Plan for Eligible
Directors/Trustees (the "Plan"), each director (who is not an employee of any of
the AIM Funds, A I M Management Group Inc. or any of their affiliates) may be
entitled to certain benefits upon retirement from the Board of Directors.
Pursuant to the Plan, the normal retirement date is the date on which the
eligible director has attained age 65 and has completed at least five years of
continuous service with one or more of the regulated investment companies
managed, administered or distributed by AIM or its affiliates (the "AIM Funds").
Each eligible director is entitled to receive an annual benefit from the AIM
Funds commencing on the first day of the calendar quarter coincident with or
following his date of retirement equal to 5% of such Trustees' compensation paid
by the AIM Funds multiplied by the number of such Trustee's years of service
(not in excess of 10 years of service) completed with respect to any of the AIM
Funds. Such benefit is payable to each eligible trustee in quarterly
installments for a period of no more than five years. If an eligible trustee
dies after attaining the normal retirement date but before receipt of any
benefits under the Plan commences, the
A-7
<PAGE> 32
trustee's surviving spouse (if any) shall receive a quarterly survivor's benefit
equal to 50% of the amount payable to the deceased trustee, for no more than
five years beginning the first day of the calendar quarter following the date of
the director's death. Payments under the Plan are not secured or funded by any
AIM Fund.
Set forth below is a table that shows the estimated annual benefits payable to
an eligible director upon retirement assuming various compensation and years of
service classifications. The estimated credited years of service as of December
31, 1994 for Messrs. Crockett, Daly, Frischling, Kroeger, Pennock, Robinson and
Sklar are 7, 8, 17, 17, 13, 7, and 5 years, respectively.
<TABLE>
<CAPTION>
Annual Compensation Paid
By All AIM Funds
<S> <C> <C> <C>
$60,000 $65,000
======================================
Number of Years of 10 $30,000 $32,500
Service With the --------------------------------------
AIM Funds 9 $27,000 $29,250
--------------------------------------
8 $24,000 $26,000
--------------------------------------
7 $21,000 $22,750
--------------------------------------
6 $18,000 $19,500
--------------------------------------
5 $15,000 $16,250
======================================
</TABLE>
Deferred Compensation Agreements
Messrs. Daly, Frischling, Kroeger, Robinson and Sklar (for purposes of this
paragraph only, the "deferring directors") have each executed a Deferred
Compensation Agreement (collectively, the "Agreements"). Pursuant to the
Agreements, the deferring directors may elect to defer receipt of up to 100% of
their compensation payable by the Fund, and such amounts are placed into a
deferral account. Currently, the deferring directors may select various AIM
Funds in which all or part of his deferral account shall be deemed to be
invested. Distributions from the deferring directors' deferral accounts will be
paid in cash, in generally equal quarterly installments over a period of five
years beginning on the date the deferring director's retirement benefits
commence under the Plan. The Fund's Board of Trustees, in its sole discretion,
may accelerate or extend the distribution of such deferral accounts after the
deferring director's termination of service as a director of the Fund. If a
deferring director dies prior to the distribution of amounts in his deferral
account, the balance of the deferral account will be distributed to his
designated beneficiary in a single lump sum payment as soon as practicable after
such deferring director's death. The Agreements are not funded and, with respect
to the payments of amounts held in the deferral accounts, the deferring
directors have the status of unsecured creditors of the Fund and of each other
AIM Fund from which they are deferring compensation.
The Portfolio paid legal fees of $9,818 for the year ended August 31, 1995 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 and the Portfolio paid legal fees of $8,687
for services rendered by that firm as counsel to the Board of Trustees. A
trustee of the Fund was a member of the firm of Reid & Priest until September
1994, when he became a member of Kramer, Levin, Naftalis, Nessen, Kamin &
Frankel.
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 "Advisory
Agreement"). AIM was organized in 1976, and together with its affiliates advises
or manages 37 investment company portfolios. As of October 31, 1995, the total
assets of the investment company portfolios managed or advised by AIM and its
affiliates were approximately $39.3 billion.
Pursuant to the terms of the Advisory 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 and the Fund have adopted a Code of Ethics which requires investment
personnel (a) to pre-clear all personal securities transactions, (b) to file
reports regarding such transactions, and (c) to refrain from personally engaging
in (i) short-term trading of a security, (ii) transactions involving a security
within seven days of an AIM Fund transaction involving the same security, and
(iii) transactions involving securities being considered for investment by an
AIM Fund. The Code also prohibits investment personnel from purchasing
securities in an initial public offering. Personal trading reports are reviewed
periodically by AIM, and the Board of Trustees reviews annually such reports
(including information on any substantial violations of the Code). Violations of
the Code may result in censure, monetary penalties, suspension or termination of
employment.
A-8
<PAGE> 33
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............................................ .15%
Over $300 million to $1.5 billion............................. .06%
Over $1.5 billion............................................. .05%
</TABLE>
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 Fund's shares are qualified for sale.
The Advisory Agreement provides that, upon the request of the Board of
Trustees, AIM may perform or arrange for the performance of certain additional
services on behalf of the Portfolio which are not required by the Advisory
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
a 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 (the "Prior Advisory Agreement"), which provided for the
same level of compensation to AIM as the Advisory Agreement, and the Advisory
Agreement currently in effect, AIM received fees from the Fund for the fiscal
years ended August 31, 1995, 1994 and 1993 with respect to the Portfolio in the
amounts of $1,925,198, $2,337,627 and $2,211,262, respectively.
The Advisory Agreement was approved for its initial term by the Board of
Trustees on July 19, 1993. The Advisory Agreement will continue in effect until
June 30, 1996, 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
Advisory 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
Advisory Agreement on 60 days' notice without penalty. The Advisory 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.
FMC is a registered broker-dealer and wholly-owned subsidiary 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").
The Administrative Services Agreement was initially approved by the Board of
Trustees on July 19, 1993. Under the Administrative Services Agreement, AIM
performs accounting 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 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 year ended August 31, 1993 in the amount of $82,419, for fund accounting
services for the Portfolio.
Under the Administrative Services Agreement, AIM was reimbursed for the fiscal
year ended August 31, 1995 and 1994, $135,387 and $97,055, respectively, for
fund accounting services.
Under the terms of a Transfer Agency and Service Agreement, dated July 1,
1995, between the Fund and AIFS, a registered transfer agent and wholly-owned
subsidiary of AIM, as well as under previous agreements, AIFS received $114,179
and
A-9
<PAGE> 34
$13,752, for the fiscal years ended August 31, 1995 and 1994 respectively, for
the provision of certain shareholder services for the Fund.
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). 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, 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 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 AGENT 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.
A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046-1173, acts as transfer agent for the shares of the Class
and receives an annual fee from the Fund for its services in such capacity in
the amount of .007% of average daily net assets of the Fund, payable monthly.
Such compensation may be changed from time to time as is agreed to by A I M
Institutional Fund Services, Inc. and the Fund.
A-10
<PAGE> 35
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 Portfolio and its financial statements. The annual
financial statements are audited by the Fund's independent auditors. The 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.
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 25, 1995, 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 Texas................................................... 14.27%
P.O. Box 831000
Dallas, TX 75283-1000
Wachovia Bank and Trust............................................. 12.50%
P.O. Box 3075
Winston-Salem, NC 27150
Trust Company Bank.................................................. 11.96%
P.O. Box 105504
Atlanta, GA 30348
Victoria Bank & Trust............................................... 7.84%
One O'Connor Plaza 6th Fl.
Victoria, TX 77902
Texas Commerce Bank................................................. 6.47%
601 Travis
Houston, TX 77702
U.S. Bank of Washington............................................ 5.62%
P.O. Box 3168
Portland, OR 97208
FRNCO............................................................... 5.04%
P.O. Box 939
Rogers, AR 72757-0939
</TABLE>
PERSONAL INVESTMENT CLASS
- -------------------------
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
---------------- --------------
<S> <C>
Frost National Bank....................................................... 49.42%(b)
P.O. Box 2358
San Antonio, TX 78299
Republic National Bank.................................................... 27.58%(b)
1 Hanson Pl., Lower Level
Brooklyn, NY 11243
The Bank of New York...................................................... 21.30%
440 Mamaroneck Ave.
Harrison, NY 10528
</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 more than 25% 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.
A-11
<PAGE> 36
PRIVATE INVESTMENT CLASS
- ------------------------
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY
---------------- -----------
<S> <C> <C>
Liberty Bank and Trust Co. of Oklahoma................................... 41.02%(b)
P.O. Box 25848
Oklahoma City, OK 73125
First Trust/VAR & Co..................................................... 29.92%(b)
180 E. 5th Street
St. Paul, MN 55101
Huntington Capital Corp.................................................. 14.82%
41 S. High St.
Columbus, Ohio 43287
Charter National Bank.................................................... 6.39%
P.O. Box 1494
Houston, TX 77251-1494
United Counties Trust Co................................................. 5.20%
30 Maple St.
Summit, NJ 07901
</TABLE>
CASH MANAGEMENT CLASS
- ---------------------
<TABLE>
<CAPTION>
PERCENT PERCENT
NAME AND ADDRESS OWNED OWNED OF
OF RECORD OWNER BENEFICIALLY ONLY RECORD ONLY
---------------- ----------------- -----------
<S> <C> <C>
City of Riverside....................................... 21.65% - 0 -
P.O. Box 12005
Riverside, CA 92502-2205
LA Export Terminal...................................... - 0 - 11.72%
P.O. Box 1769
San Pedro, CA 90733
State Street Bank and Trust............................. - 0 - 10.87%
61 Broadway 15th Fl.
New York, NY 10006
Montgomery County....................................... 6.76% - 0 -
101 Monroe St., 15th Fl.
Rockville, MD 20850
City of West Sacramento................................. 6.60% - 0 -
2101 Stone Blvd.
W. Sacramento, CA 95691
City of Ontario......................................... 5.26% - 0 -
303 East "B" Street
Ontario, CA 91764
</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 more than 25% 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.
RESOURCE CLASS
AIM provided the initial capitalization of the Resource Class of the Treasury
Portfolio and, accordingly, as of the date of this Statement of Additional
Information, owned all the outstanding shares of beneficial interest of the
Resource Class of the Treasury Portfolio. Although the Resource Class of the
Treasury 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 Resource Class of the Treasury Portfolio that are outstanding,
it may be presumed to be in "control" of the Resource Class of the Treasury
Portfolio, as defined in the 1940 Act.
A-12
<PAGE> 37
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 25, 1995, 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................................................ 28.6%(b)
1700 Farnam Street
Omaha, NE 68102
Muchmore & Co...................................................... 13.7%
750 Walnut Street
Cranford, NJ 07016-1205
Key Trust Company.................................................. 10.1%
4900 Tiedeman
Cleveland, OH 44101-5971
Boatmen's Trust Company............................................ 8.7%
P.O. Box 14737
St. Louis, MO 63178
Wachovia Bank and Trust Co. NA..................................... 7.6%
P.O. Box 3075
Winston-Salem, NC 27150
Liberty Bank & Trust Company of Tulsa, N.A......................... 7.5%
P.O. Box 25848
Oklahoma City, OK 73125
</TABLE>
PRIVATE INVESTMENT CLASS
- ------------------------
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY
---------------- -----------
<S> <C>
Huntington Capital Corp.............................................. 100%(b)
41 S. High St.
Columbus, OH 43287
</TABLE>
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(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 more than 25% 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.
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 25, 1995, the trustees
and officers of the Fund beneficially owned less than 1% of each class of the
Fund's outstanding shares.
PURCHASES AND REDEMPTIONS
NET ASSET VALUE DETERMINATION
Shares of the Portfolio are sold at net asset value. 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, which require the Fund to adhere to certain
conditions. 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 Fund's Board of Trustees to be of high quality with
minimal credit risk.
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The Board of Trustees is required to establish procedures designed to
stabilize, to the extent reasonably practicable, the Fund's price per share at
$1.00 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.
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. The address of FMC is 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046-1173. 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. FMC has not
undertaken to sell any specified number of shares of the Class. FMC does not
receive any fees with respect to the shares of the Class pursuant to the
Distribution Agreement.
On July 19, 1993, the Board of Trustees (including the affirmative vote of 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, 1996, 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 15, 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.
PERFORMANCE INFORMATION
As stated under the caption "Yield Information" in the Prospectus, yield
information for the shares of the Class may be obtained by calling the Fund at
(800) 659-1005. The current yield quoted will be the net average annualized
yield for an identified period. 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, 1995, the current yield and the
effective yield of the Class (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) were 5.71% and 5.87%, respectively, excluding capital
gains distributions. For the seven-day period ended August 31, 1995, the current
yield and the effective yield, including capital gains distributions, (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) were 5.74% and
5.91%, 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;
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- other mutual funds, especially those with similar investment
objectives. These comparisons may be based on data published by
IBC/Donoghue's Money Fund Report 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;
- 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
The Portfolio seeks to achieve its objective by investing in high grade money
market instruments. 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 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 enter into repurchase agreements with respect
to U.S. Treasury securities. The Portfolio may also 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 repurchase agreement. The Portfolio will only borrow money or
enter into reverse repurchase agreements for temporary or emergency purposes to
facilitate the orderly sale of portfolio securities to accommodate abnormally
heavy redemption requests should they occur.
ELIGIBLE SECURITIES
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 NRSROs1 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
(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
- ---------------
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., Moody's Investors Service,
Inc., 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.
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<PAGE> 40
(iii) an unrated security2 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).
INVESTMENT RESTRICTIONS
As a matter of fundamental policy which may not be changed without a majority
vote of 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 amended from time to time;
(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.
- ---------------
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.
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<PAGE> 41
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 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 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. 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.
From time to time, the Fund may sell a security, or purchase a security from
an AIM Fund or another investment account advised by AIM or A I M Capital
Management, Inc. ("AIM Capital"), when such transactions comply with applicable
rules and regulations and are deemed consistent with the investment objective(s)
and policies of the investment accounts advised by AIM or AIM Capital.
Procedures pursuant to Rule 17a-7 under the 1940 Act regarding transactions
between investment accounts advised by AIM or AIM Capital have been adopted by
the Boards of Directors/Trustees of the various AIM Funds, including the Fund.
Although such transactions may result in custodian, tax or other related
expenses, no brokerage commissions or other direct transaction costs are
generated by transactions among the investment accounts advised by AIM or AIM
Capital.
Provisions of the 1940 Act and rules and regulations thereunder have 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, transactions in such securities will be
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<PAGE> 42
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.
Furthermore, the 1940 Act prohibits the Fund from purchasing a security being
publicly underwritten by a syndicate of which persons affiliated with the Fund
are a member except in accordance with certain conditions. These conditions may
restrict the ability of the Portfolio to purchase Money Market obligations being
publicly underwritten by such a syndicate, and the Portfolio may be required to
wait until the syndicate has been terminated before buying such securities. At
such time, the market price of the securities may be higher or lower than the
original offering price. A person affiliated with the Fund may, from time to
time, serve as placement agent or financial advisor to an issuer of Money Market
obligations and be paid a fee by such issuer. The Portfolio may purchase such
Money Market obligations directly from the issuer, provided that the purchase
made in accordance with procedures adopted by the Fund's Board of Trustees and
any such purchases are reviewed at least quarterly by the Fund's Board of
Trustees and a determination is made that all such purchases were effected in
compliance with such procedures, including a determination that the placement
fee or other remuneration paid by the issuer to the person affiliated with the
Fund was fair and reasonable in relation to the fees charged by others
performing similar services. During the fiscal year ended August 31, 1995, no
securities or instruments were purchased by the Portfolio from issuers who paid
placement fees or other compensation to a broker affiliated with the Portfolio.
TAX MATTERS
The following is only a summary of certain additional tax considerations
generally affecting the Portfolio 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 Portfolio 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 Portfolio 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 Portfolio 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 Portfolio 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 forwards 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
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,
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<PAGE> 43
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( a "taxable year election")). 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 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."
SALE OR REDEMPTION OF SHARES
A shareholder will recognize gain or loss on the sale or redemption of shares
of the Class in an amount equal to the difference between the proceeds of the
sale or redemption and the shareholder's adjusted tax basis in the shares. All
or a portion of any loss so recognized may be disallowed if the shareholder
purchases other shares of the Class within 30 days before or after the sale or
redemption. In general, any gain or loss arising from (or treated as arising
from) the sale or redemption of shares of the Class will be considered capital
gain or loss and will be long-term capital gain or loss if the shares were held
for longer than one year. However, any capital loss arising from the sale or
redemption of shares held for six months or less will be treated as a long-term
capital loss to the extent of the amount of capital gain dividends received on
such shares. For this purpose, the special holding period rules of Code Section
246(c)(3) and (4) generally will apply in determining the holding period of
shares.
FOREIGN SHAREHOLDERS
Taxation of a shareholder who, as to the United States, is a nonresident alien
individual, foreign trust or estate, foreign corporation, or foreign partnership
("foreign shareholder"), depends on whether the income from the Portfolio is
"effectively connected" with a U.S. trade or business carried on by such
shareholder.
A-19
<PAGE> 44
If the income from the Portfolio is not effectively connected with a U.S.
trade or business carried on by a foreign shareholder, dividends and
distributions (other than capital gains dividends) will be subject to U.S.
withholding tax at the rate of 30% (or lower treaty rate) upon the gross amount
of the dividend or distribution. Such a foreign shareholder would generally be
exempt from U.S. federal income tax on gains realized on the sale of shares of
the Class, capital gain dividends and amounts retained by the Portfolio that are
designated as undistributed capital gains.
If the income from the Portfolio is effectively connected with a U.S. trade or
business carried on by a foreign shareholder, then ordinary income dividends,
capital gain dividends and any gains realized upon the sale of shares of the
Portfolio will be subject to U.S. federal income tax at the rates applicable to
U.S. citizens or domestic corporations.
In the case of foreign noncorporate shareholders, the Portfolio may be
required to withhold U.S. federal income tax at a rate of 31% on distributions
that are otherwise exempt from withholding tax unless such shareholders furnish
the Portfolio with proper notification of their foreign status.
The tax consequences to a foreign shareholder entitled to claim the benefits
of an applicable tax treaty may be different from those described herein.
Foreign shareholders are urged to consult their own tax advisers with respect to
the particular tax consequences to them of an investment in the Portfolio,
including the applicability of foreign taxes.
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 November
1, 1995. 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.
A-20
<PAGE> 45
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholders
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, 1995, 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, 1995 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Treasury Portfolio as of August 31, 1995, 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.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Houston, Texas
October 6, 1995
FS-1
<PAGE> 46
SCHEDULE OF INVESTMENTS
August 31, 1995
<TABLE>
<CAPTION>
MATURITY PAR (000) VALUE
<S> <C> <C> <C>
U. S. TREASURY SECURITIES-26.52%
U. S. TREASURY BILLS(a)-22.83%
5.780% 10/05/95 $ 25,000 $ 24,863,528
- ------------------------------------------------------------------------------------------------
5.750% 10/26/95 50,000 49,560,764
- ------------------------------------------------------------------------------------------------
5.775% 10/26/95 30,000 29,735,313
- ------------------------------------------------------------------------------------------------
5.580% 11/02/95 25,000 24,759,750
- ------------------------------------------------------------------------------------------------
5.620% 11/09/95 50,000 49,461,417
- ------------------------------------------------------------------------------------------------
5.590% 11/16/95 30,000 29,645,966
- ------------------------------------------------------------------------------------------------
5.655% 11/16/95 50,000 49,403,084
- ------------------------------------------------------------------------------------------------
5.220% 11/30/95 12,500 12,336,875
- ------------------------------------------------------------------------------------------------
5.590% 11/30/95 25,000 24,650,625
- ------------------------------------------------------------------------------------------------
5.480% 12/07/95 25,000 24,630,861
- ------------------------------------------------------------------------------------------------
5.335% 12/21/95 25,000 24,588,760
- ------------------------------------------------------------------------------------------------
5.410% 12/21/95 50,000 49,165,958
- ------------------------------------------------------------------------------------------------
5.330% 12/28/95 50,000 49,126,472
- ------------------------------------------------------------------------------------------------
5.340% 12/28/95 25,000 24,562,416
- ------------------------------------------------------------------------------------------------
5.280% 01/04/96 25,000 24,541,667
- ------------------------------------------------------------------------------------------------
5.400% 01/04/96 20,000 19,625,000
- ------------------------------------------------------------------------------------------------
5.410% 01/04/96 25,000 24,530,382
- ------------------------------------------------------------------------------------------------
5.300% 01/11/96 34,200 33,535,380
- ------------------------------------------------------------------------------------------------
5.380% 01/18/96 25,000 24,480,681
- ------------------------------------------------------------------------------------------------
5.400% 01/25/96 25,000 24,452,500
- ------------------------------------------------------------------------------------------------
5.415% 02/01/96 48,000 46,895,340
- ------------------------------------------------------------------------------------------------
5.395% 02/08/96 25,000 24,400,556
- ------------------------------------------------------------------------------------------------
5.460% 02/08/96 25,000 24,393,333
- ------------------------------------------------------------------------------------------------
5.540% 08/22/96 20,000 18,904,224
- ------------------------------------------------------------------------------------------------
5.550% 08/22/96 12,600 11,908,428
- ------------------------------------------------------------------------------------------------
744,159,280
- ------------------------------------------------------------------------------------------------
U.S. TREASURY NOTES-3.69%
8.625% 10/15/95 25,000 25,076,660
- ------------------------------------------------------------------------------------------------
4.250% 11/30/95 50,000 49,768,670
- ------------------------------------------------------------------------------------------------
7.750% 03/31/96 45,000 45,488,910
- ------------------------------------------------------------------------------------------------
120,334,240
- ------------------------------------------------------------------------------------------------
Total U.S. Treasury Securities 864,493,520
- ------------------------------------------------------------------------------------------------
Total Investments (excluding
Repurchase Agreements) 864,493,520
- ------------------------------------------------------------------------------------------------
</TABLE>
FS-2
<PAGE> 47
<TABLE>
<CAPTION>
MATURITY PAR (000) VALUE
<S> <C> <C> <C>
REPURCHASE AGREEMENTS(b)-73.86%
BT Securities Corp., 5.78%(c) -- $130,000 $ 130,000,000
------------------------------------------------------------------------------------------------
Barclays de Zoete Wedd Government Securities,
Inc., 5.84%(d) 09/01/95 140,000 140,000,000
------------------------------------------------------------------------------------------------
Bear, Stearns & Co. Inc., 5.84%(e) -- 140,000 140,000,000
------------------------------------------------------------------------------------------------
Daiwa Securities America Inc., 5.84%(f) 09/01/95 117,902 117,902,411
------------------------------------------------------------------------------------------------
Deutsche Bank Government Securities, Inc.,
5.85%(g) -- 160,000 160,000,000
5.85%(h) -- 400,000 400,000,000
------------------------------------------------------------------------------------------------
First Boston Corp. (The), 5.80%(i) 09/01/95 140,000 140,000,000
------------------------------------------------------------------------------------------------
Fuji Securities Inc., 5.85%(j) -- 100,000 100,000,000
5.87%(k) -- 110,000 110,000,000
------------------------------------------------------------------------------------------------
Goldman, Sachs & Co., 5.80%(l) 09/01/95 140,000 140,000,000
------------------------------------------------------------------------------------------------
Lehman Government Securities, Inc., 5.82%(m) -- 140,000 140,000,000
------------------------------------------------------------------------------------------------
Nikko Securities Co., Ltd., 5.85%(n) -- 130,000 130,000,000
------------------------------------------------------------------------------------------------
Nomura Securities International, Inc., 5.83%(o) 09/01/95 140,000 140,000,000
------------------------------------------------------------------------------------------------
SBC Government Securities, Inc., 5.83%(p) -- 140,000 140,000,000
------------------------------------------------------------------------------------------------
State Street Bank & Trust Co., 5.81%(q) 09/01/95 140,000 140,000,000
------------------------------------------------------------------------------------------------
UBS Securities Inc., 5.85%(r) -- 140,000 140,000,000
------------------------------------------------------------------------------------------------
Total Repurchase Agreements 2,407,902,411
------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS-100.38% 3,272,395,931(s)
------------------------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-(0.38%) (12,427,259)
------------------------------------------------------------------------------------------------
NET ASSETS-100.00% $3,259,968,672
================================================================================================
(a) U.S. Treasury bills are traded on a discount basis. In such cases the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Portfolio.
(b) 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% of the sales price of
the repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds managed by
the investment advisor.
(c) Open repurchase agreement entered into 02/27/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $95,590,000 U.S. Treasury Notes, 10.375% to 12.75% due
11/15/09 to 11/15/10.
(d) Entered into 08/31/95 with a maturing value of $140,022,711. Collateralized
by $138,800,000 U.S. Treasury obligations, 4.25% to 8.875% due 10/15/95 to
08/15/25.
(e) Open repurchase agreement entered into 07/06/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $264,550,000 U.S. Treasury STRIPS, due 05/15/97 to
02/15/09.
(f) Joint repurchase agreement entered into 08/31/95 with a maturing value of
$209,464,857. Collateralized by $204,224,000 U.S. Treasury obligations, 0%
to 10.75% due 11/30/95 to 05/15/16.
(g) Open repurchase agreement entered into 04/13/94; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $151,682,000 U.S. Treasury obligations, 0% to 8.75% due
04/04/96 to 05/15/21.
(h) Open repurchase agreement entered into 12/28/94; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $339,762,000 U.S. Treasury obligations, 5.375% to 11.25%
due 09/30/96 to 02/15/20.
</TABLE>
FS-3
<PAGE> 48
<TABLE>
<S> <C>
(i) Entered into 08/31/95 with a maturing value of $140,022,556. Collateralized
by $145,970,000 U.S. Treasury Bills due 11/30/95 to 01/04/96.
(j) Open repurchase agreement entered into 01/11/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $216,668,000 U.S. Treasury STRIPS, due 02/15/99 to
05/15/14.
(k) Open joint repurchase agreement entered into 06/20/95; however, either party
may terminate the agreement upon demand. Interest rates are redetermined
daily. Collateralized by $332,491,000 U.S. Treasury obligations 0% to 9.25%
due 05/15/97 to 02/15/16.
(l) Entered into 08/31/95 with a maturing value of $140,022,556. Collateralized
by $131,445,000 U.S. Treasury obligations, 3.875% to 12.00% due 10/31/95 to
11/15/18.
(m) Open repurchase agreement entered into 03/01/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $594,791,000 U.S. Treasury STRIPS, due 05/15/98 to
05/15/21.
(n) Open repurchase agreement entered into 05/15/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $132,685,000 U.S. Treasury Notes, 5.875% due 08/15/98.
(o) Entered into 08/31/95 with a maturing value of $140,022,672. Collateralized
by $130,344,000 U.S. Treasury obligations, 0% to 11.125% due 12/28/95 to
11/15/24.
(p) Open repurchase agreement entered into 08/16/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $116,853,000 U.S. Treasury obligations, 0% to 11.875% due
03/07/96 to 08/15/23.
(q) Entered into 08/31/95 with a maturing value of $140,022,594. Collateralized
by $132,870,000 U.S. Treasury Notes, 7.125% to 7.75% due 09/30/99 to
11/30/99.
(r) Open joint repurchase agreement entered into 08/18/95; however, either party
may terminate the agreement upon demand. Collateralized by $249,645,000 U.S.
Treasury Bills, due 12/14/95 to 01/18/96.
(s) Also represents cost for federal income tax purposes.
</TABLE>
See Notes to Financial Statements.
FS-4
<PAGE> 49
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments, excluding repurchase agreements, at value (amortized cost) $ 864,493,520
-----------------------------------------------------------------------------------------
Repurchase agreements 2,407,902,411
-----------------------------------------------------------------------------------------
Interest receivable 3,526,829
-----------------------------------------------------------------------------------------
Investment for deferred compensation plan 27,164
-----------------------------------------------------------------------------------------
Other assets 170,052
-----------------------------------------------------------------------------------------
Total assets 3,276,119,976
-----------------------------------------------------------------------------------------
LIABILITIES:
Deferred compensation payable 27,164
-----------------------------------------------------------------------------------------
Dividends payable 15,637,389
-----------------------------------------------------------------------------------------
Accrued advisory fees 173,398
-----------------------------------------------------------------------------------------
Accrued distribution fees 150,161
-----------------------------------------------------------------------------------------
Accrued transfer agent fees 30,953
-----------------------------------------------------------------------------------------
Accrued trustees' fees 6,457
-----------------------------------------------------------------------------------------
Accrued administrative services fees 22,829
-----------------------------------------------------------------------------------------
Accrued operating expenses 102,953
-----------------------------------------------------------------------------------------
Total liabilities 16,151,304
-----------------------------------------------------------------------------------------
NET ASSETS $3,259,968,672
=========================================================================================
NET ASSETS:
Institutional Class $2,669,637,166
=========================================================================================
Private Investment Class $ 394,585,487
=========================================================================================
Personal Investment Class $ 114,527,171
=========================================================================================
Cash Management Class $ 81,218,848
=========================================================================================
SHARES OF BENEFICIAL INTEREST, $.01 PAR VALUE PER SHARE:
Institutional Class 2,669,507,426
=========================================================================================
Private Investment Class 394,566,270
=========================================================================================
Personal Investment Class 114,521,888
=========================================================================================
Cash Management Class 81,214,894
=========================================================================================
Net asset value, offering and redemption price per share $ 1.00
=========================================================================================
</TABLE>
See Notes to Financial Statements.
FS-5
<PAGE> 50
STATEMENT OF OPERATIONS
For the year ended August 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $169,306,110
----------------------------------------------------------------------------------------
EXPENSES:
Advisory fees 1,925,198
----------------------------------------------------------------------------------------
Custodian fees 315,447
----------------------------------------------------------------------------------------
Administrative services fees 208,753
----------------------------------------------------------------------------------------
Trustees' fees and expenses 33,135
----------------------------------------------------------------------------------------
Transfer agent fees 91,597
----------------------------------------------------------------------------------------
Professional fees 96,603
----------------------------------------------------------------------------------------
Distribution fees (Note 2) 1,751,898
----------------------------------------------------------------------------------------
Other 271,094
----------------------------------------------------------------------------------------
Total expenses 4,693,725
----------------------------------------------------------------------------------------
Less expenses assumed by advisor (47,000)
========================================================================================
Net expenses 4,646,725
========================================================================================
Net investment income 164,659,385
----------------------------------------------------------------------------------------
Net realized gain on sales of investments 67,230
----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $164,726,615
========================================================================================
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
OPERATIONS:
Net investment income $ 164,659,385 $ 129,450,854
---------------------------------------------------------------------------------------------
Net realized gain on sales of investments 67,230 63,526
---------------------------------------------------------------------------------------------
Net increase in net assets resulting from
operations 164,726,615 129,514,380
---------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income (164,659,385) (129,450,854)
---------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investments (63,547) --
---------------------------------------------------------------------------------------------
Share transactions-net 232,658,749 (908,258,039)
---------------------------------------------------------------------------------------------
Net increase (decrease) in net assets 232,662,432 (908,194,513)
---------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 3,027,306,240 3,935,500,753
---------------------------------------------------------------------------------------------
End of period $3,259,968,672 $3,027,306,240
=============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $3,259,810,478 $3,027,151,729
---------------------------------------------------------------------------------------------
Undistributed net realized gain on sales of
investments 158,194 154,511
=============================================================================================
$3,259,968,672 $3,027,306,240
=============================================================================================
</TABLE>
See Notes to Financial Statements.
FS-6
<PAGE> 51
NOTES TO FINANCIAL STATEMENTS
August 31, 1995
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
Short-Term Investments Trust (the "Fund") is registered 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 class of shares are
charged to that class' operations. Expenses which are applicable to more than
one class, e.g., advisory fees, are allocated among them.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund has entered into a master investment advisory agreement with AIM
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>
<S> <C>
Net Assets RATE
- ----------------------------------------------------------------------------------
First $300 million 0.15%
- ----------------------------------------------------------------------------------
Over $300 million to $1.5 billion 0.06%
- ----------------------------------------------------------------------------------
Over $1.5 billion 0.05%
- ----------------------------------------------------------------------------------
</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 $47,000 on the Treasury Portfolio Personal Investment Class during
the year ended August 31, 1995.
The Portfolio, pursuant to a master administrative services agreement with
AIM, has agreed to reimburse AIM for certain costs incurred in providing
accounting services to the Portfolio. During the year ended August 31, 1995, the
Portfolio reimbursed AIM $135,387 for such services. During the year ended
August 31, 1995, the Portfolio paid A I M Institutional Fund Services, Inc.
("AIFS") $114,179 for shareholder and transfer agency services. Effective July
1, 1995, AIFS became the exclusive transfer agent of the Portfolio.
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
FS-7
- -
- -
- -
<PAGE> 52
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES-(continued)
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, 1995, 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
$1,244,628, $448,840 and $58,430, respectively, under the Plan. Certain officers
and trustees of the Trust are officers of AIM, FMC and AIFS.
The Portfolio paid legal fees of $9,818 for the year ended August 31, 1995 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 and the Portfolio paid legal fees of $8,687
for services rendered by that firm as counsel to the Board of Trustees. A
trustee of the Trust was a member of the firm of Reid & Priest until September
1994, when he became a member of Kramer, Levin, Naftalis, Nessen, Kamin &
Frankel.
NOTE 3-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is not
an "interested person" of AIM. The Fund invests trustees' fees, if so elected by
a trustee, in mutual fund shares in accordance with a deferred compensation
plan.
NOTE 4-SHARE INFORMATION
Changes in shares outstanding for the years ended August 31, 1995 and 1994 were
as follows:
<TABLE>
<CAPTION>
1995 1994
----------------------------------- -----------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
Sold:
Institutional
Class 13,265,129,336 $ 13,265,129,336 26,026,026,543 $ 26,026,026,543
-------------------------------------------------------- -----------------------------------
Private
Investment
Class 3,483,722,415 3,483,722,415 827,921,059 827,921,059
-------------------------------------------------------- -----------------------------------
Personal
Investment
Class 628,065,796 628,065,796 343,375,963 343,375,963
-------------------------------------------------------- -----------------------------------
Cash
Management
Class 97,195,296 97,195,296 142,326,763 142,326,763
-------------------------------------------------------- -----------------------------------
Issued as
reinvestment of
dividends:
Institutional
Class 11,558,277 11,558,277 11,688,081 11,688,081
-------------------------------------------------------- -----------------------------------
Private
Investment
Class 2,167,906 2,167,906 361,516 361,516
-------------------------------------------------------- -----------------------------------
Personal
Investment
Class 2,719,512 2,719,512 1,153,701 1,153,701
-------------------------------------------------------- -----------------------------------
Cash
Management
Class 2,671,137 2,671,137 1,883,744 1,883,744
-------------------------------------------------------- -----------------------------------
Reacquired:
Institutional
Class (13,059,443,790) (13,059,443,790) (27,238,038,910) (27,238,038,910)
-------------------------------------------------------- -----------------------------------
Private
Investment
Class (3,504,019,234) (3,504,019,234) (619,863,560) (619,863,560)
-------------------------------------------------------- -----------------------------------
Personal
Investment
Class (604,841,208) (604,841,208) (325,817,071) (325,817,071)
-------------------------------------------------------- -----------------------------------
Cash
Management
Class (92,266,694) (92,266,694) (79,275,868) (79,275,868)
-------------------------------------------------------- -----------------------------------
Net increase
(decrease) 232,658,749 $ 232,658,749 (908,258,039) $ (908,258,039)
-------------------------------------------------------- -----------------------------------
</TABLE>
FS-8
<PAGE> 53
NOTE 5-FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share outstanding of
the Treasury Portfolio Institutional Class during each of the years in the
ten-year period ended August 31, 1995.
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Income from investment
operations:
Net investment income 0.06 0.04 0.03 0.05 0.07 0.08 0.09
- -------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net
investment income (0.06) (0.04) (0.03) (0.05) (0.07) (0.08) (0.09)
- -------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========================== ========== ========== ========== ========== ========== ========== ==========
Total return 5.66% 3.53% 3.22% 4.56% 7.04% 8.52% 9.03%
========================== ========== ========== ========== ========== ========== ========== ==========
Ratios/supplemental data:
Net assets, end of
period (000s omitted) $2,669,637 $2,452,389 $3,652,672 $3,835,387 $2,437,902 $1,703,460 $1,189,822
========================== ========== ========== ========== ========== ========== ========== ==========
Ratio of expenses to
average net assets 0.10%(a) 0.08% 0.08% 0.09% 0.10% 0.12% 0.11%
========================== ========== ========== ========== ========== ========== ========== ==========
Ratio of net investment
income to average net
assets 5.53%(a) 3.39% 3.17% 4.38% 6.73% 8.19% 8.69%
========================== ========== ========== ========== ========== ========== ========== ==========
<CAPTION>
1988 1987 1986
---------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning
of period $ 1.00 $ 1.00 $ 1.00
- -------------------------- ---------- -------- --------
Income from investment
operations:
Net investment income 0.07 0.06 0.07
- -------------------------- ---------- -------- --------
Less distributions:
Dividends from net
investment income (0.07) (0.06) (0.07)
- -------------------------- ---------- -------- --------
Net asset value, end of
period $ 1.00 $ 1.00 $ 1.00
========================= ========== ======== ========
Total return 6.98% 6.17% 7.28%
========================= ========== ======== ========
Ratios/supplemental data:
Net assets, end of
period (000s omitted) $1,121,144 $650,547 $488,239
========================= ========== ======== ========
Ratio of expenses to
average net assets 0.13% 0.14% 0.19%
========================= ========== ======== ========
Ratio of net investment
income to average net
assets 6.76% 6.01% 6.89%
========================= ========== ======== ========
</TABLE>
(a) Ratios are based on average net assets of $2,432,714,207.
FS-9
<PAGE> 54
<TABLE>
<S> <C>
======================================================= =======================================================
PROSPECTUS
SHORT-TERM INVESTMENTS TRUST
11 Greenway Plaza, Suite 1919 December 14, 1995
Houston, Texas 77046-1173
(713) 626-1919 SHORT-TERM
INVESTMENTS TRUST
INVESTMENT ADVISOR ---------------------
A I M ADVISORS, INC.
11 Greenway Plaza, Suite 1919 TREASURY PORTFOLIO
Houston, Texas 77046-1173
(713) 626-1919 ---------------------
DISTRIBUTOR INSTITUTIONAL CLASS
FUND MANAGEMENT COMPANY
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173 TABLE OF CONTENTS
(800) 659-1005 PAGE
----
AUDITORS Summary.......................................... 2
KPMG PEAT MARWICK LLP
NationsBank Building Table of Fees and Expenses....................... 4
Houston, Texas 77002
Financial Highlights............................. 5
CUSTODIAN
THE BANK OF NEW YORK Suitability For Investors........................ 6
110 Washington Street
8th Floor Investment Program............................... 6
New York, New York 10286
Purchase of Shares............................... 8
TRANSFER AGENT Redemption of Shares............................. 9
A I M INSTITUTIONAL FUND SERVICES, INC.
Dividends........................................ 9
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173 Taxes............................................ 10
Net Asset Value.................................. 10
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS Yield Information................................ 10
PROSPECTUS IN CONNECTION WITH THE OFFERING MADE BY THE
PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR Reports to Shareholders.......................... 11
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE FUND OR THE DISTRIBUTOR. THIS Management of the Fund........................... 11
PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY
JURISDICTION TO ANY PERSON TO WHOM SUCH OFFERING MAY General Information.............................. 12
NOT LAWFULLY BE MADE.
Appendix......................................... A-1
======================================================= =======================================================
</TABLE>
<PAGE> 55
PROSPECTUS
PERSONAL INVESTMENT CLASS
OF THE
TREASURY PORTFOLIO
OF
SHORT-TERM INVESTMENTS TRUST
11 GREENWAY PLAZA, SUITE 1919
HOUSTON, TEXAS 77046-1173
(800) 877-4744
------------------
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 Personal 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 in a diversified money market fund.
The Fund also offers shares of the following classes of the Treasury
Portfolio pursuant to separate prospectuses: the Institutional Class, Private
Investment Class, Cash Management Class and Resource 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 Personal Investment Class of the
Treasury Portfolio and should be read and retained for future reference. A
Statement of Additional Information, dated December 14, 1995, has been filed
with the United States Securities and Exchange Commission and is hereby
incorporated by reference. For a copy of the Statement of Additional
Information without charge, write to the address above or call (800) 877-4744.
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 14, 1995
<PAGE> 56
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE PAGE
---- ----
<S> <C> <S> <C>
SUMMARY................................. 2 DIVIDENDS............................... 11
TABLE OF FEES AND EXPENSES.............. 4 TAXES................................... 12
FINANCIAL HIGHLIGHTS.................... 5 NET ASSET VALUE......................... 12
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..................... 17
</TABLE>
SUMMARY
THE PORTFOLIO AND ITS INVESTMENT OBJECTIVE
The Fund is an open-end diversified series management investment company.
This Prospectus relates to the Personal 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 shares of other
classes of shares 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 the
"Portfolios."
Because the Portfolio 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 $1,000. There is no minimum
amount for subsequent investments. Payment for shares purchased must be in funds
immediately available to the Portfolio. See "Purchase of Shares."
2
<PAGE> 57
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
4:00 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 4:00 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 5:00 p.m. Eastern Time on that day.
See "Dividends."
CONSTANT NET ASSET VALUE
The Portfolio uses the amortized cost method of valuing its portfolio
securities and rounds its 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 Portfolio's investment advisor
and receives a fee based on the Portfolio's average daily net assets. During the
fiscal year ended August 31, 1995, AIM received 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 a separate 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" and "-- Administrative Services."
DISTRIBUTOR AND DISTRIBUTION PLAN
Fund Management Company ("FMC") acts as the exclusive distributor of shares
of the Class. Pursuant to a plan of distribution adopted by the Fund's Board of
Trustees, the Fund may pay to FMC as well as certain broker-dealers or other
financial institutions up to 0.75% of the average daily net asset value of the
Portfolio attributable to the Class. Of this amount, up to 0.25% may be for
continuing personal services to shareholders provided by broker-dealers, banks
or other financial 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."
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK AND AIM INSTITUTIONAL FUNDS ARE REGISTERED
SERVICE MARKS OF A I M MANAGEMENT GROUP INC.
3
<PAGE> 58
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 -- PERSONAL INVESTMENT CLASS
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management fees......................................................... 0.06%
12b-1 fees (after fee waivers)*......................................... 0.50%**
Other expenses:
Custodian fees....................................................... 0.01%
Other (after expense reimbursements)*................................ 0.03%
-----
Total other expenses............................................ 0.04%
----
Total portfolio operating expenses --
Personal investment class............................................ 0.60%
====
</TABLE>
- ------------
* Had there been no fee waivers and no expense reimbursements, 12b-1 fees and
Other expenses would have been 0.75% and 0.09%, 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............................................... $ 6
3 years.............................................. $19
5 years.............................................. $33
10 years.............................................. $75
</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 for the fiscal year ended
August 31, 1995. There can be no assurance that future waivers of 12b-1 fees (if
any) will not vary from the figures reflected in the Fee Table. To the extent
4
<PAGE> 59
any service providers assume additional expenses of the Class, such assumption
of additional expenses will have the effect of lowering the Class' 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 -- Personal 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 LESS THAN THOSE SHOWN.
FINANCIAL HIGHLIGHTS
Shown below are the per share data, ratios and supplemental data
(collectively "data") for each of the years in the four-year period ended August
31, 1995 and the period August 8, 1991 (date operations commenced) through
August 31, 1991. The data has been audited by KPMG Peat Marwick LLP, independent
auditors, whose unqualified report thereon appears in the Statement of
Additional Information.
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment
operations:
Net investment income......... 0.05 0.03 0.03 0.04 0.003
-------- ------- ------- ------- -------
Total from investment
operations.......... 0.05 0.03 0.03 0.04 0.003
-------- ------- ------- ------- -------
Less distributions:
Dividends (from net investment
income).................... (0.05) (0.03) (0.03) (0.04) (0.003)
-------- ------- ------- ------- -------
Net asset value, end of
period........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======= ======= =======
Total return.................... 5.13% 3.02% 2.77% 4.07% 5.04%(a)
======== ======= ======= ======= =======
Ratios/supplemental data:
Net assets, end of period
(000s omitted)................ $114,527 $88,582 $69,867 $23,853 $ 330
======== ======= ======= ======= =======
Ratio of expenses to average net
assets(b)..................... 0.60%(c) 0.58% 0.53% 0.49% 0.81%(a)
======== ======= ======= ======= =======
Ratio of net investment income
to average net assets(b)...... 5.03%(c) 2.99% 2.70% 3.55% 5.03%(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 0.65% and 4.98%,
respectively, for the year ended August 31, 1995, 0.66% and 2.91%,
respectively, for the year ended August 31, 1994, 0.63% and 2.59%,
respectively, for the year ended August 31, 1993.
(c) Ratios are based on average net assets of $89,767,973.
5
<PAGE> 60
SUITABILITY FOR INVESTORS
The Shares of the Class are 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 $1,000.
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 the
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> 61
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) the expense of enforcing its rights. Repurchase agreements are considered to
be loans 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 under the 1940 Act.
LENDING OF PORTFOLIO SECURITIES. The Portfolio may 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> 62
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 or 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 United
States 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> 63
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 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 4:00 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 (individually, an "Institution" and,
collectively, "Institutions"). Individuals, corporations, partnerships and other
businesses that maintain qualified accounts at an Institution may invest in the
Class. Each Institution will render administrative support services to its
customers who are the beneficial owners 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; 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 laws
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
Application, which can be obtained from A I M Institutional Fund Services, Inc.
("AIFS"), must be completed and sent to AIFS at 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046-1173. Any changes made to the information provided in the
Account Application must be made in writing or by completing a new form and
providing it to AIFS. An investor must open an account in the Class through an
Institution in accordance with procedures established by such Institution. Each
Institution separately determines the rules applicable to accounts in the Class
opened with it, including minimum initial and subsequent investment requirements
and the procedures to be followed by investors to effect purchases of the Class.
The minimum initial investment is $1,000, and there is no minimum amount of
subsequent purchases of the Class by an Institution on behalf of its customers.
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 in the Class is
supplied to the customer periodically, and confirmations of all transactions for
the account of the customer are provided by the Institution to the customer
promptly upon request. In addition, the Institution sends each customer proxies,
periodic reports and other information with
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regard to the customer's shares. The customer's shares 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 additional shares in the Class directly, except through reinvestment of
dividends and distributions.
Orders for the purchase of shares in 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 purchased by Institutions on behalf of their customers must be in federal
funds. If an investor's order to purchase shares 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 AIFS.
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 purchased is received by the Portfolio in the form described above and
notice of such order is provided to AIFS or (ii) at the time the order is
placed, if the Portfolio is assured of payment. Shares purchased by orders which
are accepted prior to 4:00 p.m. Eastern Time will earn the dividend declared on
the date of purchase.
Federal Reserve wires should be sent as early in the day 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 Personal 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 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(R), 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 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 Application, but may be remitted by check upon request by a shareholder.
If a redemption request is received by AIFS prior to 4:00 p.m. Eastern Time on a
business
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<PAGE> 65
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 AIFS after 4:00 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 4:00 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 or AIFS, the
Fund's transfer agent.
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.
Shares of the Class are not redeemable at the option of the Fund unless the
Board of Trustees of the Fund determines in its sole discretion that failure to
so redeem may have materially adverse consequences to the shareholders of the
Fund.
DIVIDENDS
Dividends from the net income of the Portfolio are declared daily to
shareholders of record of the Class of the Portfolio as of immediately after
4:00 p.m. Eastern Time on the day of declaration. Net income for dividend
purposes is determined daily as of 4:00 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' pro rata share of the total
outstanding shares representing an interest in the Portfolio, less (b) Fund
expenses, such as custodian fees, trustees' fees and accounting and legal
expenses, based upon such class' pro rata share of the net assets of the
Portfolio, less (c) expenses directly attributable to such class, 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 Fund does not expect to realize any long-term capital gains or
losses in the Portfolio.
All dividends declared during a month will normally be paid by wire
transfer. 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 4:00 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 AIFS, 11 Greenway Plaza, Suite 1919, Houston, TX 77046-1173 and
will become effective with dividends paid after its receipt by AIFS. If a
shareholder redeems all the shares 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 Fund uses its best efforts to maintain the net asset value per share of
the Portfolio at $1.00 for purposes of sales and redemptions. See "Net Asset
Value." Should the Fund incur or anticipate any unusual
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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.
The Portfolio will be treated as a separate corporation for purposes of
determining taxable income, distribution requirements and other requirements of
Subchapter M. Therefore, the Portfolio may not offset its gains against the
losses of the other portfolio of the Fund and each portfolio of the Fund 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 November 1, 1995, which are subject to change
by legislation or administrative action.
NET ASSET VALUE
The net asset value per share of the Portfolio is determined daily as of
4:00 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 its
liabilities (including
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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 SEC 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) 877-4744. 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 the
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 other Institution. These factors
should be carefully considered by the investor before investing in the
Portfolio.
For the seven-day period ended August 31, 1995, the current yield and the
effective yield of the Class (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) were 5.21% and 5.35%, respectively, excluding capital
gains distributions. For the seven-day period ended August 31, 1995, the current
distribution rate and the effective distribution rate of the Class, including
capital gains distributions, (which assumes the reinvestment of dividends for a
365-day year and a return for the entire year equal to the average annualized
current distribution rate for the period) were 5.24% and 5.38%, respectively.
These performance numbers are quoted for illustration purposes only. The
performance numbers for any other seven-day period may be substantially
different from those quoted above.
To assist banks and other institutions performing their own sub-accounting,
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 5:00 p.m.
Eastern Time.
From time to time and in its discretion, AIM may waive all or a portion of
its advisory fees and/or assume certain expenses of the Portfolio. Such a
practice will have the effect of increasing the Portfolio's yield and total
return.
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 by the Portfolio and financial statements. The annual financial
statements are audited by the Fund's independent auditors.
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Unless otherwise requested by the shareholder, each shareholder will be
provided by its Institution a written confirmation for each transaction.
MANAGEMENT OF THE FUND
BOARD OF TRUSTEES
The overall management of the business and affairs of the Fund is vested
with the 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 objective 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 October 31, 1995, the
total assets of the investment company portfolios managed or advised by AIM and
its affiliates were approximately $39.3 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"), a privately held corporation. AIM Management is a holding company
engaged in the financial services business.
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, 1995, AIM received fees with respect
to the Portfolio from the Fund under an advisory agreement previously in effect,
which provided for the same level of compensation to AIM as the Advisory
Agreement, which represented 0.06% of the Portfolio's average daily net assets.
During such fiscal year, the expenses of the Class, including AIM's fees,
amounted to 0.60% of the Class' average daily net assets.
ADMINISTRATIVE SERVICES
The Fund has entered into a Master Administrative Services Agreement dated
as of 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")
entered into an Administrative Services Agreement pursuant to which AIFS was
reimbursed by AIM for its costs in providing shareholder services for the Fund.
AIFS or its affiliates received reimbursement of shareholder services costs of
$73,366 with respect to the Portfolio for the year ended August 31, 1995 which
represented 0.002% of the Portfolio's
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average daily net assets. The Administrative Services Agreement between AIM and
AIFS was terminated July 1, 1995. Beginning July 1, 1995, AIFS received fees
with respect to the Portfolio for its provision of shareholder services pursuant
to a Transfer Agency and Service Agreement with the Fund. For the period July 1,
1995 through August 31, 1995, AIFS received transfer agency fees from AIM with
respect to the Portfolio in the amount of $40,813.
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. The Distribution Agreement provides that FMC has the
exclusive right to distribute shares of the Fund 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 .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. Sales of shares
of the Class may not be used 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 the shares of the Class an amount
equal to 0.75% 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, payment of 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 daily 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
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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 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 the
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 Fund's 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 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 shares 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 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 votes 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.
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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 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). Shares of beneficial interest of the Fund are divided into seven
classes. Five 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. The other classes of the Fund
may have different sales charges and other expenses which may affect
performance. An investor may obtain information concerning the Fund's other
classes by contacting FMC.
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 holders of shares of the Portfolio 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 or allocated to the respective portfolio based on the liquidation
value of the 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 or
classes of the Fund without shareholder approval.
TRANSFER AGENT 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.
A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 1919, Houston,
Texas 77046-1173, acts as transfer agent for shares of the Class.
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<PAGE> 72
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.
SHAREHOLDER INQUIRIES
Shareholder inquiries concerning the status of an account should be
directed to the Fund at 11 Greenway Plaza, Suite 1919, Houston, Texas
77046-1173, or may be made by calling (800) 877-4744.
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 SEC. 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 SEC. Copies of the registration statement,
including items omitted herein, may be obtained from the SEC by paying the
charges prescribed under its rules and regulations.
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<TABLE>
<S> <C> <C>
SHORT-TERM INVESTMENTS TRUST SHORT-TERM
11 Greenway Plaza, Suite 1919 INVESTMENTS TRUST
Houston, Texas 77046-1173
(800) 877-4744
INVESTMENT ADVISOR
A I M ADVISORS, INC. PERSONAL
11 Greenway Plaza, Suite 1919 INVESTMENT CLASS
Houston, Texas 77046-1173 OF THE
(713) 626-1919 ------------------------------------------------------
DISTRIBUTOR TREASURY PORTFOLIO PROSPECTUS
FUND MANAGEMENT COMPANY
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
(800) 877-4744
AUDITORS
KPMG PEAT MARWICK LLP
NationsBank Building DECEMBER 14, 1995
700 Louisiana
Houston, Texas 77002
CUSTODIAN
THE BANK OF NEW YORK
110 Washington Street, 8th Floor
New York, New York 10286
TRANSFER AGENT
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 PERSON TO WHOM [LOGO APPEARS HERE]
SUCH OFFERING MAY NOT LAWFULLY BE MADE. Fund Management Company
</TABLE>
<PAGE> 74
STATEMENT OF
ADDITIONAL INFORMATION
PERSONAL INVESTMENT CLASS
OF THE
TREASURY PORTFOLIO
OF
SHORT-TERM INVESTMENTS TRUST
11 GREENWAY PLAZA
SUITE 1919
HOUSTON, TEXAS 77046-1173
(800) 877-4744
______________________
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS.
IT SHOULD BE READ IN CONJUNCTION WITH
THE PROSPECTUS DATED DECEMBER 14, 1995
COPIES OF WHICH MAY BE OBTAINED BY WRITING
FUND MANAGEMENT COMPANY, P.O. BOX 4333,
HOUSTON, TEXAS 77210-4333
OR CALLING (800) 877-4744
______________________
STATEMENT OF ADDITIONAL INFORMATION DATED: DECEMBER 14, 1995
RELATING TO THE PROSPECTUS DATED: DECEMBER 14, 1995
<PAGE> 75
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Administrative Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Banking Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Transfer Agent and Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Principal Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
PURCHASES AND REDEMPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Net Asset Value Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Distribution Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Distribution Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Performance Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Suspension of Redemption Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
INVESTMENT PROGRAM AND RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Investment Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Other Investment Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Qualification as a Regulated Investment Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Excise Tax on Regulated Investment Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Portfolio Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Sale or Redemption of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Foreign Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Effect of Future Legislation; Local Tax Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FS
</TABLE>
i
<PAGE> 76
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 United States 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 14, 1995 (the
"Prospectus"). Copies of the Prospectus and additional copies of this
Statement of Additional Information may be obtained without charge by writing
to 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) 877-4744. Investors must receive a Prospectus before they invest.
This Statement of Additional Information is intended to furnish
prospective investors with additional information concerning the Personal
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 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). A copy of the Agreement and Declaration of Trust ("Declaration
of Trust") establishing the Fund is on file with the SEC. 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 five classes of shares: Private Investment Class, Personal
Investment Class, Institutional Class, Cash Management Class and Resource
Class. Each such class has different shareholder qualifications and bears
expenses differently. This Statement of Additional Information and the
Prospectus relate solely to the Personal 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.
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
1
<PAGE> 77
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 Portfolio and any class thereof, however, may be
terminated at any time, upon the recommendation of the 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, of $.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. 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,
2
<PAGE> 78
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 (76)
Director, Chairman and Chief Executive Officer, A I M Management Group
Inc.; 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
Global Associates, Inc., A I M Global Holdings, Inc., A I M Institutional Fund
Services, Inc. and Fund Management Company; and Director, AIM Global Advisors
Limited, A I M Global Management Company Limited and AIM Global Ventures Co.
BRUCE L. CROCKETT, Trustee (51)
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).
OWEN DALY II, Trustee (71)
6 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.
__________________________________
* A trustee who is an "interested person" of the Fund and A I M
Advisors, Inc., as defined in the Investment Company Act of 1940, as
amended (the "1940 Act").
3
<PAGE> 79
*CARL FRISCHLING, Trustee (58)
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 (49)
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 Capital Management, Inc., A I M Fund Services, Inc., A I M
Global Associates, Inc., A I M Global Holdings, Inc., AIM Global Ventures Co.,
A I M Institutional Fund Services, Inc. and Fund Management Company; Senior
Vice President, AIM Global Advisors Limited.
JOHN F. KROEGER, Trustee (71)
24875 Swan Road - Martingham
Box 464
St. Michaels, MD 21663
Director, Flag Investors International Fund, Inc., Flag Investors
Emerging Growth Fund, Inc., Flag Investors Telephone Income Fund, Inc., Flag
Investors Equity Partners Fund, Inc., Total Return U.S. Treasury Fund, Inc.,
Flag Investors Intermediate Term Income Fund, Inc., Managed Municipal Fund,
Inc., Flag Investors Value Builder Fund, Inc., Flag Investors Maryland
Intermediate Tax-Free Income Fund, Inc., Flag Investors Real Estate Securities
Fund, Inc., Alex. Brown Cash Reserve Fund, Inc. and North American Government
Bond Fund, Inc. (investment companies). Formerly, Consultant, Wendell & Stockel
Associates, Inc. (consulting firm).
LEWIS F. PENNOCK, Trustee (53)
6363 Woodway, Suite 825
Houston, TX 77057
Attorney in private practice in Houston, Texas.
IAN W. ROBINSON, Trustee (72)
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.
__________________________________
* 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 A I M Advisors,
Inc., as defined in the 1940 Act.
4
<PAGE> 80
LOUIS S. SKLAR, Trustee (56)
Transco Tower, 50th Floor
2800 Post Oak Blvd.
Houston, TX 77056
Executive Vice President, Development and Operations, Hines Interests
Limited Partnership (real estate development).
*JOHN J. ARTHUR, Senior Vice President and Treasurer (51)
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; and Vice President, AIM Global
Advisors Limited, A I M Global Associates, Inc., A I M Global Holdings, Inc.,
and AIM Global Ventures Co.
GARY T. CRUM, Senior Vice President (48)
Director and President, A I M Capital Management, Inc.; Director and
Senior Vice President, A I M Management Group Inc., A I M Advisors, Inc., A I M
Global Associates, Inc., A I M Global Holdings, Inc. and AIM Global Ventures
Co., Director, A I M Distributors, Inc.; and Senior Vice President, AIM Global
Advisors Limited.
*CAROL F. RELIHAN, Vice President and Secretary (41)
Vice President, General Counsel and Secretary, A I M Management Group
Inc., A I M Advisors, Inc., A I M Fund Services, Inc., A I M Institutional Fund
Services, Inc., and Fund Management Company; Vice President and Secretary,
A I M Distributors, Inc., A I M Global Associates, Inc. and AIM Global
Holdings, Inc.; Vice President and Assistant Secretary, AIM Global Advisors
Limited and AIM Global Ventures Co.; and Secretary, A I M Capital
Management, Inc.
DANA R. SUTTON, Vice President and Assistant Treasurer (36)
Vice President and Fund Controller, A I M Advisors, Inc.; and
Assistant Vice President and Assistant Treasurer, Fund Management Company.
MELVILLE B. COX, Vice President (52)
Vice President, A I M Advisors, Inc., A I M Capital Management, Inc.,
A I M Fund Services, Inc. and A I M Institutional 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.
__________________________________
* Mr. Arthur and Ms. Relihan are married to each other.
5
<PAGE> 81
KAREN DUNN KELLEY, Vice President (35)
Director, A I M Global Management Company Limited; Senior Vice
President, A I M Capital Management, Inc. and AIM Global Advisors Limited; and
Vice President, A I M Advisors, Inc. and AIM Global Ventures Co.
J. ABBOTT SPRAGUE, Vice President (40)
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 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 Board of Trustees 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 of Trustees and such committee.
The members of the Investments Committee are Messrs. Bauer, Crockett,
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
of Trustees 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 Advisors,
Inc. ("AIM") or distributed and administered by FMC. All of the Fund's
executive officers hold similar offices with some or all of such investment
companies.
6
<PAGE> 82
Remuneration of Trustees
Set forth below is information regarding compensation paid or accrued
during the fiscal year ended August 31, 1995 for each trustee of the Fund:
<TABLE>
<CAPTION>
====================================================================================================
DIRECTOR AGGREGATE RETIREMENT TOTAL
COMPENSATION BENEFITS COMPENSATION
FROM FUND(1) ACCRUED FROM ALL AIM
BY ALL AIM FUNDS(3)
FUNDS(2)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Charles T. Bauer $ 0 $ 0 $ 0
- ----------------------------------------------------------------------------------------------------
Bruce L. Crockett 3,281 2,814 45,094
- ----------------------------------------------------------------------------------------------------
Owen Daly II 3,298 14,375 45,844
- ----------------------------------------------------------------------------------------------------
Carl Frischling 3,281 7,542 45,094
- ----------------------------------------------------------------------------------------------------
Robert H. Graham 0 0 0
- ----------------------------------------------------------------------------------------------------
John F. Kroeger 3,298 20,517 45,844
- ----------------------------------------------------------------------------------------------------
Lewis F. Pennock 3,298 5,093 45,844
- ----------------------------------------------------------------------------------------------------
Ian W. Robinson 3,249 10,396 45,094
- ----------------------------------------------------------------------------------------------------
Louis S. Sklar 3,249 4,682 45,094
====================================================================================================
</TABLE>
______________________
(1) The total amount of compensation deferred by all Trustees of the Fund
during the fiscal year ended August 31, 1995, including interest
earned thereon, was $13,735.
(2) During the fiscal year ended August 31, 1995, the total amount of
expenses allocated to the Fund in respect of such retirement benefits
was $8,673. Data reflects compensation earned for the calendar year
ended December 31, 1994.
(3) Messrs. Bauer, Daly, Graham, Kroeger and Pennock each serves as a
Director or Trustee of a total of 11 AIM Funds. Messrs. Crockett,
Frischling, Robinson and Sklar each serves as a Director or Trustee of
a total of 10 AIM Funds. Data reflects compensation earned for the
calendar year ended December 31, 1994.
AIM Funds Retirement Plan for Eligible Directors/Trustees
Under the terms of the AIM Funds Retirement Plan for Eligible
Directors/Trustees (the "Plan"), each director (who is not a employee of any of
the AIM Funds, A I M Management Group Inc. or any of their affiliates) may be
entitled to certain benefits upon retirement from the Board of Directors.
Pursuant to the Plan, the normal retirement date is the date on which the
eligible director has attained age 65 and has completed at least five years of
continuous service with one or more of the regulated investment companies
7
<PAGE> 83
managed, administered or distributed by AIM or its affiliates (the "AIM
Funds"). Each eligible director is entitled to receive an annual benefit from
the AIM Funds commencing on the first day of the calendar quarter coincident
with or following his date of retirement equal to 5% of such Trustees'
compensation paid by the AIM Funds multiplied by the number of such Trustee's
years of service (not in excess of 10 years of service) completed with respect
to any of the AIM Funds. Such benefit is payable to each eligible trustee in
quarterly installments for a period of no more than five years. If an eligible
trustee dies after attaining the normal retirement date but before receipt of
any benefits under the Plan commences, the trustee's surviving spouse (if any)
shall receive a quarterly survivor's benefit equal to 50% of the amount payable
to the deceased trustee, for no more than five years beginning the first day of
the calendar quarter following the date of the director's death. Payments
under the Plan are not secured or funded by any AIM Fund.
Set forth below is a table that shows the estimated annual benefits
payable to an eligible director upon retirement assuming various compensation
and years of service classifications. The estimated credited years of service
as of December 31, 1994 for Messrs. Crockett, Daly, Frischling, Kroeger,
Pennock, Robinson and Sklar are 7, 8, 17, 17, 13, 7, and 5 years, respectively.
<TABLE>
Annual Compensation Paid
By All AIM Funds
<CAPTION>
<S> <C> <C> <C>
$60,000 $65,000
=========================================
Number of Years of 10 $30,000 $32,500
Service with the -----------------------------------------
AIM Funds 9 $27,000 $29,250
-----------------------------------------
8 $24,000 $26,000
-----------------------------------------
7 $21,000 $22,750
-----------------------------------------
6 $18,000 $19,500
-----------------------------------------
5 $15,000 $16,250
=========================================
</TABLE>
Deferred Compensation Agreements
Messrs. Daly, Frischling, Kroeger, Robinson and Sklar (for purposes of
this paragraph only, the "deferring directors") have each executed a Deferred
Compensation Agreement (collectively, the "Agreements"). Pursuant to the
Agreements, the deferring directors may elect to defer receipt of up to 100% of
their compensation payable by the Fund, and such amounts are placed into a
deferral account. Currently, the deferring directors may select various AIM
Funds in which all or part of his deferral account shall be deemed to be
invested. Distributions from the deferring directors' deferral accounts will
be paid in cash, in generally equal quarterly installments over a period of
five years beginning on the date the deferring director's retirement benefits
commence under the Plan. The Fund's Board of Trustees, in its sole discretion,
may accelerate or extend the distribution of such deferral accounts after the
deferring director's termination of service as a director of the Fund. If a
deferring director dies prior to the distribution of amounts in his deferral
account, the balance of the deferral account will be distributed to his
designated beneficiary in a single lump sum payment as soon as practicable
after such deferring director's death. The Agreements are not funded and, with
respect to the payments of amounts held in the deferral accounts, the deferring
directors have the status of unsecured creditors of the Fund and of each other
AIM Fund from which they are deferring compensation.
The Portfolio paid legal fees of $9,818 for the year ended August 31,
1995 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 and the Portfolio paid legal
fees of $8,687 for services rendered by that firm as counsel to the Board of
Trustees. A trustee of the Fund was
8
<PAGE> 84
a partner of Reid & Priest until September 1994, when he became a partner of
Kramer, Levin, Naftalis, Nessen, Kamin & Frankel.
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
manages or advises 37 investment company portfolios. As of October 31, 1995,
the total assets of the investment company portfolios managed or advised by AIM
and its affiliates were approximately $39.3 billion.
AIM and the Fund have adopted a Code of Ethics which requires
investment personnel (a) to pre-clear all personal securities transactions, (b)
to file reports regarding such transactions, and (c) to refrain from personally
engaging in (i) short-term trading of a security, (ii) transactions involving a
security within seven days of an AIM Fund transaction involving the same
security and (iii) transactions involving securities being considered for
investment by an AIM Fund. The Code also prohibits investment personnel from
purchasing securities in an initial public offering. Personal trading reports
are reviewed periodically by AIM, and the Board of Trustees reviews annually
such reports (including information on any substantial violations of the Code).
Violations of the Code may result in censure, monetary penalties, suspension or
termination of employment.
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 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 (the "Prior Advisory Agreement"), which provided for the
same level of compensation to AIM as the Agreement and the Advisory Agreement
currently in effect, AIM received fees from the Fund for the fiscal years ended
9
<PAGE> 85
August 31, 1995, 1994 and 1993, with respect to the Portfolio in the amounts of
$1,925,198, $2,337,627, and $2,211,262 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, 1996, 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. The address of each director and officer of AIM is 11 Greenway Plaza,
Suite 1919, Houston, Texas 77046-1173.
FMC is a registered broker-dealer and a wholly-owned subsidiary of
AIM. FMC acts as distributor of the Shares.
ADMINISTRATIVE SERVICES
AIM also provides the Portfolio with administrative services pursuant
to a Master Administrative Services Agreement dated as of October 18, 1993
between AIM and the Fund (the "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 or arrange for the performance of certain
accounting, 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 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, which provided that
AIM would be reimbursed for its costs in providing certain accounting services.
AIM was reimbursed for the fiscal year ended August 31, 1993, in the amount of
$82,419, for performing additional services for the Portfolio.
Under the Administrative Services Agreement, AIM was reimbursed for
the fiscal years ended August 31, 1995 and 1994, $135,387 and $97,055,
respectively, for fund accounting services.
Under the terms of a Transfer Agency and Service Agreement, dated July
1, 1995, between the Fund and AIFS, a registered transfer agent and
wholly-owned subsidiary of AIM, as well as under previous agreements, AIFS
received $114,179 and $13,752, for the fiscal years ended August 31, 1995
and 1994, respectively, for the provision of certain shareholder serivces for
the Fund.
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,
10
<PAGE> 86
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 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, 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 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.
11
<PAGE> 87
TRANSFER AGENT 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.
A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite
1919, Houston, TX 77046-1173, acts as transfer agent for the shares of the
Class and receives an annual fee from the Fund for its services in such
capacity in the amount of .007% of average daily net assets of the Fund,
payable monthly. Such compensation may be changed from time to time as is
agreed to by A I M Institutional Fund Services, Inc. and the Fund.
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 Portfolio and its financial statements. The annual
financial statements are audited by the Fund's independent auditors. The 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.
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 25, 1995 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 Texas 14.27%
P.O. Box 831000
Dallas, TX 75283-1000
Wachovia Bank and Trust 12.50%
P.O. Box 3075
Winston-Salem, NC 27150
Trust Company Bank 11.96%
P.O. Box 105504
Atlanta, GA 30348
</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.
12
<PAGE> 88
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- -----------
<S> <C>
Victoria Bank & Trust 7.84%
One O'Connor Plaza 6th Fl.
Victoria, TX 77902
Texas Commerce Bank 6.47%
601 Travis
Houston, TX 77002
U.S. Bank of Washington 5.62%
P.O. Box 3168
Portland, OR 97208
FRNCO 5.04%
P.O. Box 939
Rogers, AR 72757-0939
</TABLE>
PERSONAL INVESTMENT CLASS
- -------------------------
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- -----------
<S> <C>
Frost National Bank 49.42%(b)
P.O. Box 2358
San Antonio, TX 78299
Republic National Bank 27.58%(b)
1 Hanson Pl., Lower Level
Brooklyn, NY 11243
The Bank of New York 21.30%
440 Mamaroneck Ave.
Harrison, NY 10528
</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 more than 25% 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> 89
PRIVATE INVESTMENT CLASS
- ------------------------
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- -----------
<S> <C>
Liberty Bank and Trust Co. 41.02%(b)
of Oklahoma, N.A.
P.O. Box 25848
Oklahoma City, OK 73125
First Trust/VAR & Co. 29.92%(b)
180 E. 5th Street
St. Paul, MN 55101
Huntington Capital Corp 14.82%
41 S. High St.
Columbus, OH 43287
Charter National Bank 6.39%
P.O. Box 1494
Houston, TX 77251-1494
United Counties Trust Co. 5.20%
30 Maple St.
Summit, NJ 07901
</TABLE>
CASH MANAGEMENT CLASS
- ---------------------
<TABLE>
<CAPTION>
PERCENT PERCENT
NAME AND ADDRESS OWNED OWNED OF
OF RECORD OWNER BENEFICIALLY ONLY RECORD ONLY
--------------- ----------------- -----------
<S> <C> <C>
City of Riverside 21.65% -0-
P.O. Box 12005
Riverside, CA 92502-2205
LA Export Terminal -0- 11.72%(a)
P.O. Box 1769
San Pedro, CA 90733
State Street Bank and Trust -0- 10.87%(a)
61 Broadway 15th Fl.
New York, NY 10006
</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 more than 25% 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.
14
<PAGE> 90
<TABLE>
<CAPTION>
PERCENT PERCENT
NAME AND ADDRESS OWNED OWNED OF
OF RECORD OWNER BENEFICIALLY ONLY RECORD ONLY
--------------- ----------------- -----------
<S> <C> <C>
Montgomery County 6.76% -0-
101 Monroe Street 15th Fl.
Rockville, MD 20850
City of West Sacramento 6.60% -0-
2101 Stone Blvd.
W. Sacramento, CA 95691
City of Ontario 5.26% -0-
303 East "B" St.
Ontario, CA 91764
</TABLE>
RESOURCE CLASS
- --------------
AIM provided the initial capitalization of the Resource Class of the
Treasury Portfolio and, accordingly, as of the date of this Statement of
Additional Information, owned all the outstanding shares of beneficial interest
of the Resource Class of the Treasury Portfolio. Although the Resource Class
of the Treasury 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 Resource Class of the Treasury Portfolio
that are outstanding, it may be presumed to be in "control" of the Resource
Class of the Treasury Portfolio, as defined in the 1940 Act.
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 25, 1995, 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 28.6%(b)
1700 Farnam Street
Omaha, NE 68102
</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 more than 25% 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.
15
<PAGE> 91
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- -----------
<S> <C>
Muchmore & Co. 13.7%
750 Walnut Street
Cranford, NJ 07016-1205
Key Trust Company 10.1%
4900 Tiedeman
Cleveland, OH 44101-5971
Boatmen's Trust Company 8.7%
P.O. Box 14737
St. Louis, MO 63178
Wachovia Bank and Trust Co NA 7.6%
P.O. Box 3075
Winston-Salem, NC 27150
Liberty Bank & Trust Company 7.5%
of Tulsa, N.A.
P.O. Box 25848
Oklahoma City, OK 73125
</TABLE>
PRIVATE INVESTMENT CLASS
- ------------------------
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- -----------
<S> <C>
Huntington Capital Corp 100%(b)
41 S. High St.
Columbus, OH 43287
</TABLE>
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 25, 1995, 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.
(b) A shareholder who holds more than 25% 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.
16
<PAGE> 92
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, which require
the Fund to adhere to certain conditions. 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.
The Board of Trustees is required to establish procedures designed to
stabilize, to the extent reasonably practicable, the Fund's price per share at
$1.00 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.
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. The address of FMC is 11 Greenway
Plaza, Suite 1919, Houston, Texas 77046-1173. 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 pursuant
to Rule 12b-1 adopted by the Fund's Board of Trustees. FMC has not undertaken
to sell any specified number of shares of the Class.
On July 19, 1993, the Board of Trustees (including the affirmative
vote of 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, 1996 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
17
<PAGE> 93
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 Portfolio. These services may include
among other things: (i) answering customer inquiries regarding the shares and
the Portfolio; (ii) assisting customers in changing dividend options, account
designations and addresses; (iii) performing sub-accounting; (iv) establishing
and maintaining shareholder accounts and records; (v) processing purchase and
redemption transactions; (vi) automatic investment of customer cash account
balances in shares of the Class; (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, 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, 1995, FMC received compensation
pursuant to the Plan in the amount of $448,840 or an amount equal to 0.50%, of
the average daily net assets of the Class. Of such amount, $365,612 (or an
amount equal to 0.41% of the average daily net assets of the Class) was paid to
dealers and financial institutions and $83,228 (or an amount equal to 0.09% of
the average daily net assets of the Class) was retained by FMC.
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 Class may be obtained by calling the Fund at (800)
877-4744. The current yield quoted will be the net average annualized yield for
an identified period. 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 shares, 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, 1995, the current yield and
the effective yield of the Class (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) were 5.21% and 5.35%, respectively, excluding
capital gains distributions. For the seven-day period ended August 31, 1995,
the current distribution rate and the effective distribution rate of the Class,
including capital gains distributions (which assumes the reinvestment of
dividends for a 365-day year and a return for the entire year equal to the
annualized current distribution rate
18
<PAGE> 94
for the period) were 5.24% and 5.38%, respectively. These performance numbers
are quoted for illustration purposes only. The performance numbers for any
other seven-day period may be substantially different from those quoted above.
The Fund may compare the performance of the Class or the performance
of securities in which it may invest to:
o IBC/Donoghue's Money Fund Averages, which are average
yields of various types of money market funds that include the effect
of compounding distributions;
o other mutual funds, especially those with similar
investment objectives. These comparisons may be based on data
published by IBC/Donoghue's Money Fund Report 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;
o 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
o 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, including the Portfolio, 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
19
<PAGE> 95
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
(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 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(2) 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).
INVESTMENT RESTRICTIONS
As a matter of fundamental policy which may not be changed without a
majority vote of 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) "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 at 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.
("Fitch") 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.
(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.
20
<PAGE> 96
(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 amended from time to time;
(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 or 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,
21
<PAGE> 97
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 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.
From time to time, the Fund may sell a security, or purchase a
security from an AIM Fund or another investment account advised by AIM or A I M
Capital Management, Inc. ("AIM Capital"), when such transactions comply with
applicable rules and regulations and are deemed consistent with the investment
objective(s) and policies of the investment accounts advised by AIM or AIM
Capital. Procedures pursuant to Rule 17a-7 under the 1940 Act regarding
transactions between investment accounts advised by AIM or AIM Capital have
been adopted by Boards of Directors/Trustees of the various AIM Funds,
including the Fund. Although such transactions may result in custodian, tax or
other related expenses, no brokerage commissions or other direct transaction
costs are generated by transactions among the investment accounts advised by
AIM or AIM Capital.
22
<PAGE> 98
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 consistent with the
investment policies of the Portfolio and one or more of these accounts is
considered at or about the same time, 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. Furthermore, the 1940 Act prohibits the Fund from purchasing a
security being publicly underwritten by a syndicate of which persons affiliated
with the Fund are a member except in accordance with certain conditions. These
conditions may restrict the ability of the Portfolio to purchase Money Market
obligations being publicly underwritten by such a syndicate, and the Portfolio
may be required to wait until the syndicate has been terminated before buying
such securities. At such time, the market price of the securities may be
higher or lower than the original offering price. A person affiliated with the
Fund may, from time to time, serve as placement agent or financial advisor to
an issuer of Money Market obligations and be paid a fee by such issuer. The
Portfolio may purchase such Money Market obligations directly from the issuer,
provided that the purchase made in accordance with procedures adopted by the
Fund's Board of Trustees and any such purchases are reviewed at least quarterly
by the Fund's Board of Trustees and a determination is made that all such
purchases were effected in compliance with such procedures, including a
determination that the placement fee or other remuneration paid by the issuer
to the person affiliated with the Fund was fair and reasonable in relation to
the fees charged by others performing similar services. During the fiscal year
ended August 31, 1995, no securities or instruments were purchased by the
Portfolio from issuers who paid placement fees or other compensation to a
broker affiliated with the Portfolio.
TAX MATTERS
The following is only a summary of certain additional tax
considerations generally affecting the Portfolio 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 Portfolio 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 Portfolio 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 Portfolio 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
23
<PAGE> 99
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 Portfolio 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 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 (a "taxable year election")).
The balance of such income must be distributed during
24
<PAGE> 100
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 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."
SALE OR REDEMPTION OF SHARES
A shareholder will recognize gain or loss on the sale or redemption of
shares of the Class in an amount equal to the difference between the proceeds
of the sale or redemption and the shareholder's adjusted tax basis in the
shares. All or a portion of any loss so recognized may be disallowed if the
shareholder purchases other shares of the Class within 30 days before or after
the sale or redemption. In general, any gain or loss arising from (or treated
as arising from) the sale or redemption of shares of the Class will be
considered capital gain or loss and will be long-term capital gain or loss if
the shares were held for longer than one year. However, any capital loss
arising from the sale or redemption of shares held for six months or less will
be treated as a long-term capital loss to the extent of the amount of capital
gain dividends received on such shares. For this purpose, the special holding
period rules of Code Section 246(c)(3) and (4) generally will apply in
determining the holding period of shares.
FOREIGN SHAREHOLDERS
Taxation of a shareholder who, as to the United States, is a
nonresident alien individual, foreign trust or estate, foreign corporation, or
foreign partnership ("foreign shareholder"), depends on whether the income from
the Portfolio is "effectively connected" with a U.S. trade or business carried
on by such shareholder.
25
<PAGE> 101
If the income from the Portfolio is not effectively connected with a
U.S. trade or business carried on by a foreign shareholder, dividends and
distributions (other than capital gains dividends) will be subject to U.S.
withholding tax at the rate of 30% (or lower treaty rate) upon the gross amount
of the dividend or distribution. Such a foreign shareholder would generally be
exempt from U.S. federal income tax on gains realized on the sale of shares of
the Portfolio, capital gain dividends and amounts retained by the Class that
are designated as undistributed capital gains.
If the income from the Portfolio is effectively connected with a U.S.
trade or business carried on by a foreign shareholder, then ordinary income
dividends, capital gain dividends and any gains realized upon the sale of
shares of the Portfolio will be subject to U.S. federal income tax at the rates
applicable to U.S. citizens or domestic corporations.
In the case of foreign noncorporate shareholders, the Portfolio may be
required to withhold U.S. federal income tax at a rate of 31% on distributions
that are otherwise exempt from withholding tax unless such shareholders furnish
the Portfolio with proper notification of their foreign status.
The tax consequences to a foreign shareholder entitled to claim the
benefits of an applicable tax treaty may be different from those described
herein. Foreign shareholders are urged to consult their own tax advisers with
respect to the particular tax consequences to them of an investment in the
Portfolio, including the applicability of foreign taxes.
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 November 1, 1995. 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.
26
<PAGE> 102
FINANCIAL STATEMENTS
FS
<PAGE> 103
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholders
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, 1995, 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, 1995 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Treasury Portfolio as of August 31, 1995, 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.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Houston, Texas
October 6, 1995
FS-1
<PAGE> 104
SCHEDULE OF INVESTMENTS
August 31, 1995
<TABLE>
<CAPTION>
MATURITY PAR (000) VALUE
<S> <C> <C> <C>
U.S. TREASURY SECURITIES - 26.52%
U.S. TREASURY BILLS(a) - 22.83%
5.780% 10/05/95 $ 25,000 $ 24,863,528
- ----------------------------------------------------------------------------
5.750% 10/26/95 50,000 49,560,764
- ----------------------------------------------------------------------------
5.775% 10/26/95 30,000 29,735,313
- ----------------------------------------------------------------------------
5.580% 11/02/95 25,000 24,759,750
- ----------------------------------------------------------------------------
5.620% 11/09/95 50,000 49,461,417
- ----------------------------------------------------------------------------
5.590% 11/16/95 30,000 29,645,966
- ----------------------------------------------------------------------------
5.655% 11/16/95 50,000 49,403,084
- ----------------------------------------------------------------------------
5.220% 11/30/95 12,500 12,336,875
- ----------------------------------------------------------------------------
5.590% 11/30/95 25,000 24,650,625
- ----------------------------------------------------------------------------
5.480% 12/07/95 25,000 24,630,861
- ----------------------------------------------------------------------------
5.335% 12/21/95 25,000 24,588,760
- ----------------------------------------------------------------------------
5.410% 12/21/95 50,000 49,165,958
- ----------------------------------------------------------------------------
5.330% 12/28/95 50,000 49,126,472
- ----------------------------------------------------------------------------
5.340% 12/28/95 25,000 24,562,416
- ----------------------------------------------------------------------------
5.280% 01/04/96 25,000 24,541,667
- ----------------------------------------------------------------------------
5.400% 01/04/96 20,000 19,625,000
- ----------------------------------------------------------------------------
5.410% 01/04/96 25,000 24,530,382
- ----------------------------------------------------------------------------
5.300% 01/11/96 34,200 33,535,380
- ----------------------------------------------------------------------------
5.380% 01/18/96 25,000 24,480,681
- ----------------------------------------------------------------------------
5.400% 01/25/96 25,000 24,452,500
- ----------------------------------------------------------------------------
5.415% 02/01/96 48,000 46,895,340
- ----------------------------------------------------------------------------
5.395% 02/08/96 25,000 24,400,556
- ----------------------------------------------------------------------------
5.460% 02/08/96 25,000 24,393,333
- ----------------------------------------------------------------------------
5.540% 08/22/96 20,000 18,904,224
- ----------------------------------------------------------------------------
5.550% 08/22/96 12,600 11,908,428
- ----------------------------------------------------------------------------
744,159,280
- ----------------------------------------------------------------------------
U.S. TREASURY NOTES - 3.69%
8.625% 10/15/95 25,000 25,076,660
- ----------------------------------------------------------------------------
4.250% 11/30/95 50,000 49,768,670
- ----------------------------------------------------------------------------
7.750% 03/31/96 45,000 45,488,910
- ----------------------------------------------------------------------------
120,334,240
- ----------------------------------------------------------------------------
Total U.S. Treasury Securities 864,493,520
- ----------------------------------------------------------------------------
Total Investments (excluding Repurchase
Agreements) 864,493,520
- ----------------------------------------------------------------------------
</TABLE>
FS-2
<PAGE> 105
<TABLE>
<CAPTION>
MATURITY PAR (000) VALUE
<S> <C> <C> <C>
REPURCHASE AGREEMENTS(b) - 73.86%
BT Securities Corp., 5.78%(c) -- $130,000 $ 130,000,000
- -----------------------------------------------------------------------------
Barclays de Zoete Wedd Government
Securities, Inc., 5.84%(d) 09/01/95 140,000 140,000,000
- -----------------------------------------------------------------------------
Bear, Stearns & Co. Inc., 5.84%(e) -- 140,000 140,000,000
- -----------------------------------------------------------------------------
Daiwa Securities America Inc., 5.84%(f) 09/01/95 117,902 117,902,411
- -----------------------------------------------------------------------------
Deutsche Bank Government Securities,
Inc., 5.85%(g) -- 160,000 160,000,000
5.85%(h) -- 400,000 400,000,000
- -----------------------------------------------------------------------------
First Boston Corp. (The), 5.80%(i) 09/01/95 140,000 140,000,000
- -----------------------------------------------------------------------------
Fuji Securities Inc., 5.85%(j) -- 100,000 100,000,000
5.87%(k) -- 110,000 110,000,000
- -----------------------------------------------------------------------------
Goldman, Sachs & Co., 5.80%(l) 09/01/95 140,000 140,000,000
- -----------------------------------------------------------------------------
Lehman Government Securities, Inc.,
5.82%(m) -- 140,000 140,000,000
- -----------------------------------------------------------------------------
Nikko Securities Co., Ltd., 5.85%(n) -- 130,000 130,000,000
- -----------------------------------------------------------------------------
Nomura Securities International, Inc.,
5.83%(o) 09/01/95 140,000 140,000,000
- -----------------------------------------------------------------------------
SBC Government Securities, Inc.,
5.83%(p) -- 140,000 140,000,000
- -----------------------------------------------------------------------------
State Street Bank & Trust Co., 5.81%(q) 09/01/95 140,000 140,000,000
- -----------------------------------------------------------------------------
UBS Securities Inc., 5.85%(r) -- 140,000 140,000,000
- -----------------------------------------------------------------------------
Total Repurchase Agreements 2,407,902,411
- -----------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.38% 3,272,395,931(s)
- -----------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES --
(0.38%) (12,427,259)
- -----------------------------------------------------------------------------
NET ASSETS -- 100.00% $3,259,968,672
- -----------------------------------------------------------------------------
</TABLE>
(a) U.S. Treasury bills are traded on a discount basis. In such cases the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Portfolio.
(b) 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% of the sales price of
the repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds managed by
the investment advisor.
(c) Open repurchase agreement entered into 02/27/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $95,590,000 U.S. Treasury Notes, 10.375% to 12.75% due
11/15/09 to 11/15/10.
(d) Entered into 08/31/95 with a maturing value of $140,022,711. Collateralized
by $138,800,000 U.S. Treasury obligations, 4.25% to 8.875% due 10/15/95 to
08/15/25.
(e) Open repurchase agreement entered into 07/06/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $264,550,000 U.S. Treasury STRIPS, due 05/15/97 to
02/15/09.
(f) Joint repurchase agreement entered into 08/31/95 with a maturing value of
$209,464,857. Collateralized by $204,224,000 U.S. Treasury obligations, 0%
to 10.75% due 11/30/95 to 05/15/16.
(g) Open repurchase agreement entered into 04/13/94; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $151,682,000 U.S. Treasury obligations, 0% to 8.75% due
04/04/96 to 05/15/21.
(h) Open repurchase agreement entered into 12/28/94; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $339,762,000 U.S. Treasury obligations, 5.375% to 11.25%
due 09/30/96 to 02/15/20.
FS-3
<PAGE> 106
(i) Entered into 08/31/95 with a maturing value of $140,022,556. Collateralized
by $145,970,000 U.S. Treasury Bills due 11/30/95 to 01/04/96.
(j) Open repurchase agreement entered into 01/11/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $216,668,000 U.S. Treasury STRIPS, due 02/15/99 to
05/15/14.
(k) Open joint repurchase agreement entered into 06/20/95; however, either
party may terminate the agreement upon demand. Interest rates are
redetermined daily. Collateralized by $332,491,000 U.S. Treasury
obligations 0% to 9.25% due 05/15/97 to 02/15/16.
(l) Entered into 08/31/95 with a maturing value of $140,022,556. Collateralized
by $131,445,000 U.S. Treasury obligations, 3.875% to 12.00% due 10/31/95 to
11/15/18.
(m) Open repurchase agreement entered into 05/15/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $594,791,000 U.S. Treasury STRIPS, due 05/15/98 to
05/15/21.
(n) Open repurchase agreement entered into 05/15/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $132,685,000 U.S. Treasury Notes, 5.875% due 08/15/98.
(o) Entered into 08/31/95 with a maturing value of $140,022,672. Collateralized
by $130,344,000 U.S. Treasury obligations, 0% to 11.125% due 12/28/95 to
11/15/24.
(p) Open repurchase agreement entered into 08/16/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $116,853,000 U.S. Treasury obligations, 0% to 11.875% due
03/07/96 to 08/15/23.
(q) Entered into 08/31/95 with a maturing value of $140,022,594. Collateralized
by $132,870,000 U.S. Treasury Notes, 7.125% to 7.75% due 09/30/99 to
11/30/99.
(r) Open joint repurchase agreement entered into 08/18/95; however, either
party may terminate the agreement upon demand. Collateralized by
$249,645,000 U.S. Treasury Bills, due 12/14/95 to 01/18/96.
(s) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
FS-4
<PAGE> 107
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments, excluding repurchase agreements, at value
(amortized cost) $ 864,493,520
- ------------------------------------------------------------------------
Repurchase agreements 2,407,902,411
- ------------------------------------------------------------------------
Interest receivable 3,526,829
- ------------------------------------------------------------------------
Investment for deferred compensation plan 27,164
- ------------------------------------------------------------------------
Other assets 170,052
- ------------------------------------------------------------------------
Total assets 3,276,119,976
- ------------------------------------------------------------------------
LIABILITIES:
Deferred compensation payable 27,164
- ------------------------------------------------------------------------
Dividends payable 15,637,389
- ------------------------------------------------------------------------
Accrued advisory fees 173,398
- ------------------------------------------------------------------------
Accrued distribution fees 150,161
- ------------------------------------------------------------------------
Accrued transfer agent fees 30,953
- ------------------------------------------------------------------------
Accrued trustees' fees 6,457
- ------------------------------------------------------------------------
Accrued administrative services fees 22,829
- ------------------------------------------------------------------------
Accrued operating expenses 102,953
- ------------------------------------------------------------------------
Total liabilities 16,151,304
- ------------------------------------------------------------------------
NET ASSETS $3,259,968,672
========================================================================
NET ASSETS:
Institutional Class $2,669,637,166
========================================================================
Private Investment Class $ 394,585,487
========================================================================
Personal Investment Class $ 114,527,171
========================================================================
Cash Management Class $ 81,218,848
========================================================================
SHARES OF BENEFICIAL INTEREST, $.01 PAR VALUE PER SHARE:
Institutional Class 2,669,507,426
========================================================================
Private Investment Class 394,566,270
========================================================================
Personal Investment Class 114,521,888
========================================================================
Cash Management Class 81,214,894
========================================================================
Net asset value, offering and redemption price per share $ 1.00
========================================================================
</TABLE>
See Notes to Financial Statements.
FS-5
<PAGE> 108
STATEMENT OF OPERATIONS
For the year ended August 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $169,306,110
- -----------------------------------------------------------------------------
EXPENSES:
Advisory fees 1,925,198
- -----------------------------------------------------------------------------
Custodian fees 315,447
- -----------------------------------------------------------------------------
Administrative services fees 208,753
- -----------------------------------------------------------------------------
Trustees' fees and expenses 33,135
- -----------------------------------------------------------------------------
Transfer agent fees 91,597
- -----------------------------------------------------------------------------
Professional fees 96,603
- -----------------------------------------------------------------------------
Distribution fees (Note 2) 1,751,898
- -----------------------------------------------------------------------------
Other 271,094
- -----------------------------------------------------------------------------
Total expenses 4,693,725
- -----------------------------------------------------------------------------
Less expenses assumed by advisor (47,000)
=============================================================================
Net expenses 4,646,725
=============================================================================
Net investment income 164,659,385
- -----------------------------------------------------------------------------
Net realized gain on sales of investments 67,230
- -----------------------------------------------------------------------------
Net increase in net assets resulting from operations $164,726,615
=============================================================================
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 164,659,385 $ 129,450,854
- -----------------------------------------------------------------------------
Net realized gain on sales of investments 67,230 63,526
- -----------------------------------------------------------------------------
Net increase in net assets resulting from
operations 164,726,615 129,514,380
- -----------------------------------------------------------------------------
Distributions to shareholders from net
investment income (164,659,385) (129,450,854)
- -----------------------------------------------------------------------------
Distributions to shareholders from net
realized gains on investments (63,547) --
- -----------------------------------------------------------------------------
Share transactions-net 232,658,749 (908,258,039)
- -----------------------------------------------------------------------------
Net increase (decrease) in net assets 232,662,432 (908,194,513)
- -----------------------------------------------------------------------------
NET ASSETS:
Beginning of period 3,027,306,240 3,935,500,753
- -----------------------------------------------------------------------------
End of period $3,259,968,672 $3,027,306,240
=============================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $3,259,810,478 $3,027,151,729
- -----------------------------------------------------------------------------
Undistributed net realized gain on sales of
investments 158,194 154,511
- -----------------------------------------------------------------------------
$3,259,968,672 $3,027,306,240
=============================================================================
</TABLE>
See Notes to Financial Statements.
FS-6
<PAGE> 109
NOTES TO FINANCIAL STATEMENTS
August 31, 1995
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
Short-Term Investments Trust (the "Fund") is registered 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 class of shares are
charged to that class' operations. Expenses which are applicable to more
than one class, e.g., advisory fees, are allocated among them.
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 0.15%
- -----------------------------------------------------------------------
Over $300 million to $1.5 billion 0.06%
- -----------------------------------------------------------------------
Over $1.5 billion 0.05%
- -----------------------------------------------------------------------
</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 $47,000 on the Treasury Portfolio Personal Investment Class during
the year ended August 31, 1995.
The Portfolio, pursuant to a master administrative services agreement with
AIM, has agreed to reimburse AIM for certain costs incurred in providing
accounting services to the Portfolio. During the year ended August 31, 1995,
the Portfolio reimbursed AIM $135,387 for such services. During the year ended
August 31, 1995, the Portfolio paid A I M Institutional Fund Services, Inc.
("AIFS") $114,179 for shareholder and transfer agency services. Effective July
1, 1995, AIFS became the exclusive transfer agent of the Portfolio.
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
FS-7
<PAGE> 110
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, 1995, 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 $1,244,628, $448,840 and $58,430, respectively, under the Plan.
Certain officers and trustees of the Trust are officers of AIM, FMC and AIFS.
The Portfolio paid legal fees of $9,818 for the year ended August 31, 1995 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 and the Portfolio paid legal fees of $8,687
for services rendered by that firm as counsel to the Board of Trustees. A
trustee of the Trust was a member of the firm of Reid & Priest until September
1994, when he became a member of Kramer, Levin, Naftalis, Nessen, Kamin &
Frankel.
NOTE 3-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is
not an "interested person" of AIM. The Fund invests trustees' fees, if so
elected by a trustee, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 4-SHARE INFORMATION
Changes in shares outstanding for the years ended August 31, 1995 and 1994 were
as follows:
<TABLE>
<CAPTION>
1995 1994
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
Sold:
Institutional Class 13,265,129,336 $ 13,265,129,336 26,026,026,543 $ 26,026,026,543
- ---------------------------------------------------------------------------------------------
Private Investment
Class 3,483,722,415 3,483,722,415 827,921,059 827,921,059
- ---------------------------------------------------------------------------------------------
Personal Investment
Class 628,065,796 628,065,796 343,375,963 343,375,963
- ---------------------------------------------------------------------------------------------
Cash Management Class 97,195,296 97,195,296 142,326,763 142,326,763
- ---------------------------------------------------------------------------------------------
Issued as reinvestment
of dividends:
Institutional Class 11,558,277 11,558,277 11,688,081 11,688,081
- ---------------------------------------------------------------------------------------------
Private Investment
Class 2,167,906 2,167,906 361,516 361,516
- ---------------------------------------------------------------------------------------------
Personal Investment
Class 2,719,512 2,719,512 1,153,701 1,153,701
- ---------------------------------------------------------------------------------------------
Cash Management Class 2,671,137 2,671,137 1,883,744 1,883,744
- ---------------------------------------------------------------------------------------------
Reacquired:
Institutional Class (13,059,443,790) (13,059,443,790) (27,238,038,910) (27,238,038,910)
- ---------------------------------------------------------------------------------------------
Private Investment
Class (3,504,019,234) (3,504,019,234) (619,863,560) (619,863,560)
- ---------------------------------------------------------------------------------------------
Personal Investment
Class (604,841,208) (604,841,208) (325,817,071) (325,817,071)
- ---------------------------------------------------------------------------------------------
Cash Management Class (92,266,694) (92,266,694) (79,275,868) (79,275,868)
- ---------------------------------------------------------------------------------------------
Net increase (decrease) 232,658,749 $ 232,658,749 (908,258,039) $ (908,258,039)
=============================================================================================
</TABLE>
FS-8
<PAGE> 111
NOTE 5-FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share outstanding of
the Treasury Portfolio Personal Investment Class during each of the years in
the four-year period ended August 31, 1995 and the period August 8, 1991 (date
operations commenced) through August 31, 1991.
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
-------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------- -------- ------- ------- ------- ------
Income from investment
operations:
Net investment income 0.05 0.03 0.03 0.04 0.003
- -------------------------- -------- ------- ------- ------- ------
Less distributions:
Dividends from net
investment income (0.05) (0.03) (0.03) (0.04) (0.003)
- -------------------------- -------- ------- ------- ------- ------
Net asset value, end of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========================== ======== ======= ======= ======= ======
Total return 5.13% 3.02% 2.77% 4.07% 5.04%(a)
========================== ======== ======= ======= ======= ======
Ratios/supplemental data:
Net assets, end of period
(000s omitted) $114,527 $88,582 $69,867 $23,853 $330
========================== ======== ======= ======= ======= ======
Ratio of expenses to
average net assets(b) 0.60%(c) 0.58% 0.53% 0.49% 0.81%(a)
========================== ======== ======= ======= ======= ======
Ratio of net investment
income to average net
assets(b) 5.03%(c) 2.99% 2.70% 3.55% 5.03%(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 0.65% and 4.98%,
respectively, for the year ended August 31, 1995, 0.66% and 2.91%,
respectively, for the year ended August 31, 1994, 0.63% and 2.59%,
respectively, for the year ended August 31, 1993.
(c) Ratios are based on average net assets of $89,767,973.
FS-9
<PAGE> 112
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, Personal Investment Class and Resource 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 14, 1995, HAS BEEN FILED
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION AND IS HEREBY
INCORPORATED BY REFERENCE. FOR A COPY OF THE STATEMENT OF ADDITIONAL INFORMATION
WITHOUT CHARGE, 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 14, 1995
<PAGE> 113
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE PAGE
---- ----
<S> <C> <C> <C>
SUMMARY........................ 2 DIVIDENDS...................... 11
TABLE OF FEES AND EXPENSES..... 4 TAXES.......................... 12
FINANCIAL HIGHLIGHTS........... 5 NET ASSET VALUE................ 12
SUITABILITY FOR INVESTORS...... 5 YIELD INFORMATION.............. 13
INVESTMENT PROGRAM............. 6 REPORTS TO SHAREHOLDERS........ 13
PURCHASE OF SHARES............. 8 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> 114
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
4:00 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 4:00 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 5:00 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, 1995, 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."
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK AND AIM INSTITUTIONAL FUNDS ARE REGISTERED
SERVICE MARKS OF A I M MANAGEMENT GROUP INC.
3
<PAGE> 115
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................................................................. 0.03%
----
Total other expenses............................................. 0.04%
-----
Total portfolio operating expenses --
Private Investment Class.............................................. 0.40%
=====
</TABLE>
- ---------------
* Had there been no fee waivers, 12b-1 fees would have been 0.50%.
** 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.............................................................. $13
5 years.............................................................. $22
10 years.............................................................. $51
</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 for the fiscal year ended
August 31, 1995. 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 from the figures reflected in the
Table of Fees and Expenses. To
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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
three-year period ended August 31, 1995 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>
1995 1994 1993 1992
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period...... $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income................... 0.05 0.03 0.03 0.03
-------- -------- -------- --------
Total from investment operations........ 0.05 0.03 0.03 0.03
-------- -------- -------- --------
Less distributions:
Dividends from net investment income.... (0.05) (0.03) (0.03) (0.03)
-------- -------- -------- --------
Net asset value, end of period............ $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ========
Total return.............................. 5.34% 3.22% 2.91% 3.92%(a)
======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s
omitted)............................. $394,585 $412,716 $204,281 $ 525
======== ======== ======== ========
Ratio of expenses to average net
assets(b)............................ 0.40%(c) 0.38% 0.38% 0.40%(a)
======== ======== ======== ========
Ratio of net investment income to
average net assets(b)................ 5.23%(c) 3.26% 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 $414,815,972.
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.
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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 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.
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<PAGE> 118
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 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
7
<PAGE> 119
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 United
States 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.
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
8
<PAGE> 120
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 4:00 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
Application, which can be obtained from A I M Institutional Fund Services, Inc.
("AIFS"), must be completed and sent to AIFS at 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046-1173. Any changes made to the information provided in the
Account Application must be made in writing or by completing a new form and
providing it to AIFS. 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 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 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
9
<PAGE> 121
record. In such case, however, the investor will not be able to purchase
additional shares of the Class directly, 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 AIFS.
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 and notice of such order is provided to AIFS 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 4:00 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(R), 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 Application, but may be remitted by check upon request by a shareholder.
If a redemption request is received by AIFS prior to 4:00 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 AIFS after 4:00 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 4:00 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.
10
<PAGE> 122
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 or AIFS, the
Fund's transfer agent.
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
4:00 p.m. Eastern Time on the day of declaration. Net income for dividend
purposes is determined daily as of 4:00 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' pro rata share of the total
outstanding shares representing an interest in the Portfolio, less (b) Fund
expenses, such as custodian fees, trustees' fees, accounting and legal expenses,
based upon such class' pro rata share of the net assets of the Portfolio, less
(c) expenses directly attributable to such class, 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 normally be paid by wire
transfer. 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 4:00 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 AIFS at 11 Greenway Plaza, Suite 1919, Houston, TX 77046-1173 and
will become effective with dividends paid after its receipt by AIFS. 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
11
<PAGE> 123
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.
The Portfolio will be treated as a separate corporation for purposes of
determining taxable income, distribution requirements and other requirements of
Subchapter M. Therefore, the Portfolio may not offset its gains against the
losses of the other portfolio of the Fund and each portfolio of the Fund 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 November 1, 1995, which are subject to change
by legislation or administrative action.
NET ASSET VALUE
The net asset value per share of the Portfolio is determined daily as of
4:00 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 SEC 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
12
<PAGE> 124
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, 1995, 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 5.41% and 5.56%, respectively, excluding capital gains
distributions. For the seven-day period ended August 31, 1995, the current
distribution rate and the effective distribution rate of the Class, including
capital gains distributions, (which assumes the reinvestment of dividends for a
365-day year and a return for the entire year equal to the annualized current
distribution rate for the period) were 5.44% and 5.59%, respectively. These
performance numbers are quoted for illustration purposes only. The performance
numbers for any other seven-day period may be substantially different from those
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 5:00 p.m.
Eastern time.
From time to time and in its discretion, AIM may waive all or a portion of
its advisory fees and/or assume certain expenses of the Portfolio. Such a
practice will have the effect of increasing the Portfolio's yield and total
return.
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.
Unless otherwise requested by the shareholder, each shareholder will be
provided with a written confirmation for each transaction by its Institution.
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<PAGE> 125
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 October 31, 1995, the
total assets of the investment company portfolios managed or advised by AIM and
its affiliates were approximately $39.3 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"). AIM Management is a holding company engaged in the financial
services business.
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, 1995, 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 0.40% of the Class' 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 AIFS entered into an Administrative Services Agreement
pursuant to which AIFS was reimbursed by AIM for its costs in providing
shareholder services for the Fund. AIFS or its affiliates received reimbursement
of shareholder services costs of $73,666 with respect to the Portfolio for
fiscal year ended August 31, 1995 which represented 0.002% of the Portfolio's
average daily net assets. The Administrative Services Agreement between AIM and
AIFS was terminated July 1, 1995. Beginning July 1, 1995, AIFS received fees
with respect to the Portfolio for its provision of shareholder services pursuant
to a Transfer
14
<PAGE> 126
Agency and Service Agreement with the Fund. For the period July 1, 1995 through
August 31, 1995, AIFS received transfer agency fees from AIM with respect to the
Portfolio in the amount of $40,813.
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> 127
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> 128
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). Shares of
beneficial interest of the Fund are divided into seven classes. Five 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. The other classes of the Fund may have
different sales charges and other expenses which may affect performance. An
investor may obtain information concerning the Fund's other classes by
contacting FMC.
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 AGENT 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.
A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 1919, Houston,
Texas 77046-1173, acts as 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.
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.
17
<PAGE> 129
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 SEC. 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 SEC. Copies of the registration statement,
including items omitted herein, may be obtained from the SEC by paying the
charges prescribed under its rules and regulations.
18
<PAGE> 130
SHORT-TERM INVESTMENTS TRUST SHORT-TERM
11 Greenway Plaza, Suite 1919 INVESTMENTS TRUST
Houston, Texas 77046-1173
(800) 877-7748
INVESTMENT ADVISOR PRIVATE
A I M ADVISORS, INC. INVESTMENT CLASS
11 Greenway Plaza, Suite 1919 OF THE
Houston, Texas 77046-1173 ----------------------------------------
(713) 626-1919
TREASURY PORTFOLIO PROSPECTUS
DISTRIBUTOR
FUND MANAGEMENT COMPANY
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
(800) 877-7748
AUDITORS
KPMG PEAT MARWICK LLP
NationsBank Building
700 Louisiana
Houston, Texas 77002 DECEMBER 14, 1995
CUSTODIAN
THE BANK OF NEW YORK
110 Washington Street, 8th Floor
New York, New York 10286
TRANSFER AGENT
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 [LOGO APPEARS HERE]
PERSON TO WHOM SUCH OFFERING MAY Fund Management Company
NOT LAWFULLY BE MADE.
<PAGE> 131
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 14, 1995
RELATING TO THE PROSPECTUS DATED DECEMBER 14, 1995
<PAGE> 132
TABLE OF CONTENTS
Page
<TABLE>
<S> <C>
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
GENERAL INFORMATION ABOUT THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Fund and Its Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Trustees and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Investment Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Administrative Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Banking Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Transfer Agent and Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Principal Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
PURCHASES AND REDEMPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Net Asset Value Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Distribution Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Distribution Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Performance Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Suspension of Redemption Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
INVESTMENT PROGRAM AND RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Investment Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Other Investment Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Qualification as a Regulated Investment Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Excise Tax on Regulated Investment Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Portfolio Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Sale or Redemption of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Foreign Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Effect of Future Legislation; Local Tax Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FS
</TABLE>
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<PAGE> 133
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 United States 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 14, 1995 (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). A copy of the Agreement and Declaration of Trust (the
"Declaration of Trust") establishing the Fund is on file with the SEC. 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 five
classes of shares: Private Investment Class, Personal Investment Class,
Institutional Class, Cash Management Class and Resource Class. Each such class
has different shareholder qualifications and bears 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
1
<PAGE> 134
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. 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
2
<PAGE> 135
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 (76)
Director, Chairman and Chief Executive Officer, A I M Management Group
Inc.; 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
Global Associates, Inc., A I M Global Holdings, Inc., A I M Institutional Fund
Services, Inc. and Fund Management Company; and Director, AIM Global Advisors
Limited, A I M Global Management Company Limited and AIM Global Ventures Co.
BRUCE L. CROCKETT, Trustee (51)
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).
OWEN DALY II, Trustee (71)
6 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.
__________________________________
* A trustee who is an "interested person" of the Fund and A I M
Advisors, Inc., as defined in the Investment Company Act of 1940, as
amended (the "1940 Act").
3
<PAGE> 136
*CARL FRISCHLING, Trustee (58)
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 (49)
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 Capital Management, Inc., A I M Fund Services, Inc., A I M
Global Associates, Inc., A I M Global Holdings, Inc., AIM Global Ventures Co.,
A I M Institutional Fund Services, Inc. and Fund Management Company; Senior
Vice President, AIM Global Advisors Limited.
JOHN F. KROEGER, Trustee (71)
24875 Swan Road - Martingham
Box 464
St. Michaels, MD 21663
Director, Flag Investors International Fund, Inc., Flag Investors
Emerging Growth Fund, Inc., Flag Investors Telephone Income Fund, Inc., Flag
Investors Equity Partners Fund, Inc., Total Return U.S. Treasury Fund, Inc.,
Flag Investors Intermediate Term Income Fund, Inc., Managed Municipal Fund,
Inc., Flag Investors Value Builder Fund, Inc., Flag Investors Maryland
Intermediate Tax-Free Income Fund, Inc., Flag Investors Real Estate Securities
Fund, Inc., Alex. Brown Cash Reserve Fund, Inc. and North American Government
Bond Fund, Inc. (investment companies). Formerly, Consultant, Wendell & Stockel
Associates, Inc. (consulting firm).
LEWIS F. PENNOCK, Trustee (53)
6363 Woodway, Suite 825
Houston, TX 77057
Attorney in private practice in Houston, Texas.
IAN W. ROBINSON, Trustee (72)
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.
__________________________________
* 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 A I M Advisors,
Inc., as defined in the 1940 Act.
4
<PAGE> 137
LOUIS S. SKLAR, Trustee (56)
Transco Tower, 50th Floor
2800 Post Oak Blvd.
Houston, TX 77056
Executive Vice President, Development and Operations, Hines Interests
Limited Partnership (real estate development).
*JOHN J. ARTHUR, Senior Vice President and Treasurer (51)
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; and Vice President, AIM Global
Advisors Limited, A I M Global Associates, Inc., A I M Global Holdings, Inc.,
and AIM Global Ventures Co.
GARY T. CRUM, Senior Vice President (48)
Director and President, A I M Capital Management, Inc.; Director and
Senior Vice President, A I M Management Group Inc., A I M Advisors, Inc., A I M
Global Associates, Inc., A I M Global Holdings, Inc. and AIM Global Ventures
Co., Director, A I M Distributors, Inc.; and Senior Vice President, AIM Global
Advisors Limited.
*CAROL F. RELIHAN, Vice President and Secretary (41)
Vice President, General Counsel and Secretary, A I M Management Group
Inc., A I M Advisors, Inc., A I M Fund Services, Inc., A I M Institutional Fund
Services, Inc., and Fund Management Company; Vice President and Secretary, A I
M Distributors, Inc., A I M Global Associates, Inc. and AIM Global Holdings,
Inc.; Vice President and Assistant Secretary, AIM Global Advisors Limited and
AIM Global Ventures Co.; and Secretary, A I M Capital Management, Inc.
DANA R. SUTTON, Vice President and Assistant Treasurer (36)
Vice President and Fund Controller, A I M Advisors, Inc.; and
Assistant Vice President and Assistant Treasurer, Fund Management Company.
MELVILLE B. COX, Vice President (52)
Vice President, A I M Advisors, Inc., A I M Capital Management, Inc.,
A I M Fund Services, Inc. and A I M Institutional 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.
__________________________________
* Mr. Arthur and Ms. Relihan are married to each other.
5
<PAGE> 138
KAREN DUNN KELLEY, Vice President (35)
Director, A I M Global Management Company Limited; Senior Vice
President, A I M Capital Management, Inc. and AIM Global Advisors Limited; and
Vice President, A I M Advisors, Inc. and AIM Global Ventures Co.
J. ABBOTT SPRAGUE, Vice President (40)
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 Committee 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 Advisors,
Inc. ("AIM") or distributed and administered by FMC. All of the Fund's
executive officers hold similar offices with some or all of such investment
companies.
Remuneration of Trustees
Set forth below is information regarding compensation paid or accrued
during the fiscal year ended August 31, 1995 for each trustee of the Fund:
<TABLE>
<CAPTION>
==============================================================================================
RETIREMENT
AGGREGATE BENEFITS TOTAL
COMPENSATION ACCRUED COMPENSATION
FROM BY ALL FROM ALL
DIRECTOR FUND(1) AIM FUNDS(2) AIM FUNDS(3)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Charles T. Bauer $ 0 $ 0 $ 0
- ----------------------------------------------------------------------------------------------
Bruce L. Crockett 3,281 2,814 45,094
- ----------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 139
<TABLE>
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Owen Daly II 3,298 14,375 45,844
- ---------------------------------------------------------------------------------------------
Carl Frischling 3,281 7,542 45,094
- ---------------------------------------------------------------------------------------------
Robert H. Graham 0 0 0
- ---------------------------------------------------------------------------------------------
John F. Kroeger 3,298 20,517 45,844
- ---------------------------------------------------------------------------------------------
Lewis F. Pennock 3,298 5,093 45,844
- ---------------------------------------------------------------------------------------------
Ian W. Robinson 3,249 10,396 45,094
- ---------------------------------------------------------------------------------------------
Louis S. Sklar 3,249 4,682 45,094
=============================================================================================
</TABLE>
______________________
(1) The total amount of compensation deferred by all Trustees of the Fund
during the fiscal year ended August 31, 1995, including interest
earned thereon, was $13,735.
(2) During the fiscal year ended August 31, 1995, the total amount of
expenses allocated to the Fund in respect of such retirement benefits
was $8,673. Data reflects compensation earned for the calendar year
ended December 31, 1994.
(3) Messrs. Bauer, Daly, Graham, Kroeger and Pennock each serves as a
Director or Trustee of a total of 11 AIM Funds. Messrs. Crockett,
Frischling, Robinson and Sklar each serves as a Director or Trustee of
a total of 10 AIM Funds. Data reflects compensation earned for the
calendar year ended December 31, 1994.
AIM Funds Retirement Plan for Eligible Directors/Trustees
Under the terms of the AIM Funds Retirement Plan for Eligible
Directors/Trustees (the "Plan"), each director (who is not a employee of any of
the AIM Funds, A I M Management Group Inc. or any of their affiliates) may be
entitled to certain benefits upon retirement from the Board of Directors.
Pursuant to the Plan, the normal retirement date is the date on which the
eligible director has attained age 65 and has completed at least five years of
continuous service with one or more of the regulated investment companies
managed, administered or distributed by AIM or its affiliates (the "AIM
Funds"). Each eligible director is entitled to receive an annual benefit from
the AIM Funds commencing on the first day of the calendar quarter coincident
with or following his date of retirement equal to 5% of such Trustees'
compensation paid by the AIM Funds multiplied by the number of such Trustee's
years of service (not in excess of 10 years of service) completed with respect
to any of the AIM Funds. Such benefit is payable to each eligible trustee in
quarterly installments for a period of no more than five years. If an eligible
trustee dies after attaining the normal retirement date but before receipt of
any benefits under the Plan commences, the trustee's surviving spouse (if any)
shall receive a quarterly survivor's benefit equal to 50% of the amount payable
to the deceased trustee, for no more than five years beginning the first day of
the calendar quarter following the date of the director's death. Payments
under the Plan are not secured or funded by any AIM Fund.
Set forth below is a table that shows the estimated annual benefits
payable to an eligible director upon retirement assuming various compensation
and years of service classifications. The estimated credited years of service
as of December 31, 1994 for Messrs. Crockett, Daly, Frischling, Kroeger,
Pennock, Robinson and Sklar are 7, 8, 17, 17, 13, 7, and 5 years, respectively.
7
<PAGE> 140
<TABLE>
<CAPTION>
Annual Compensation Paid By All AIM Funds
$60,000 $65,000
<S> <C> <C> <C>
=========================================
Number of 10 $30,000 $32,500
Years of -----------------------------------------
Service With 9 $27,000 $29,250
the AIM -----------------------------------------
Funds 8 $24,000 $26,000
-----------------------------------------
7 $21,000 $22,750
-----------------------------------------
6 $18,000 $19,500
-----------------------------------------
5 $15,000 $16,250
=========================================
</TABLE>
Deferred Compensation Agreements
Messrs. Daly, Frischling, Kroeger, Robinson and Sklar (for purposes of
this paragraph only, the "deferring directors") have each executed a Deferred
Compensation Agreement (collectively, the "Agreements"). Pursuant to the
Agreements, the deferring directors may elect to defer receipt of up to 100% of
their compensation payable by the Fund, and such amounts are placed into a
deferral account. Currently, the deferring directors may select various AIM
Funds in which all or part of his deferral account shall be deemed to be
invested. Distributions from the deferring directors' deferral accounts will
be paid in cash, in generally equal quarterly installments over a period of
five years beginning on the date the deferring director's retirement benefits
commence under the Plan. The Fund's Board of Trustees, in its sole discretion,
may accelerate or extend the distribution of such deferral accounts after the
deferring director's termination of service as a director of the Fund. If a
deferring director dies prior to the distribution of amounts in his deferral
account, the balance of the deferral account will be distributed to his
designated beneficiary in a single lump sum payment as soon as practicable
after such deferring director's death. The Agreements are not funded and, with
respect to the payments of amounts held in the deferral accounts, the deferring
directors have the status of unsecured creditors of the Fund and of each other
AIM Fund from which they are deferring compensation.
The Portfolio paid legal fees of $9,818 for the year ended August 31,
1995 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 and the Portfolio paid legal
fees of $8,687 for services rendered by that firm as counsel to the Board of
Trustees. A trustee of the Fund was a partner of the firm of Reid & Priest
until September 1994, when he became a partner of Kramer, Levin, Naftalis,
Nessen, Kamin & Frankel.
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 October 31, 1995,
the total assets of the investment company portfolios managed or advised by AIM
and its affiliates were approximately $39.3 billion.
AIM and the Fund have adopted a Code of Ethics which requires
investment personnel (a) to pre-clear all personal securities transactions, (b)
to file reports regarding such transactions, and (c) to refrain from personally
engaging in (i) short-term trading of a security, (ii) transactions involving a
security within seven days of an AIM Fund transaction involving the same
security, and (iii) transactions involving securities being considered for
investment by an AIM Fund. The Code also prohibits investment personnel from
8
<PAGE> 141
purchasing securities in an initial public offering. Personal trading reports
are reviewed periodically by AIM, and the Board of Trustees reviews annually
such reports (including information on any substantial violations of the Code).
Violations of the code may result in censure, monetary penalties, suspension or
termination of employment.
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 compensation to AIM as the
Agreement and the Advisory Agreement currently in effect, AIM received fees
from the Fund for the fiscal years ended August 31, 1995, 1994 and 1993, in the
amounts of $1,925,198, $2,337,627, and $2,211,262, 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, 1996 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.
9
<PAGE> 142
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").
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 in the amount of $82,419, for
performing additional services for the Portfolio.
Under the Administrative Services Agreement, AIM was reimbursed for
the fiscal year ended August 31, 1995 and 1994, $135,387 and $97,055,
respectively, for fund accounting services.
Under the terms of a Transfer Agency and Service Agreement, dated
July 1, 1995, between the Fund and AIFS, a registered transfer agent and
wholly-owned subsidiary of AIM, as well as under previous agreements, AIFS
received $114,179 and $13,752, for the fiscal years ended August 31, 1995
and1994, respectively, for the provision of certain shareholder serivces for
the Fund.
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
10
<PAGE> 143
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 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 AGENT 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.
A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite
1919, Houston, Texas 77046-1173, acts as transfer agent for the shares of the
Class and receives an annual fee from the Fund for its services in such
capacity in the amount of .007% of average daily net assets of the Fund,
payable monthly. Such compensation may be changed from time to time as is
agreed to by A I M Institutional Fund Services, Inc. and the Fund.
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,
11
<PAGE> 144
Texas 77002, as the independent auditors to audit the financial statements and
review the tax returns of the 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 25, 1995 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 Texas 14.27%
P.O. Box 831000
Dallas, TX 75283-1000
Wachovia Bank and Trust 12.50%
P.O. Box 3075
Winston-Salem, NC 27150
Trust Company Bank 11.96%
P.O. 105504
Atlanta, GA 30348
Victoria Bank & Trust 7.84%
One O'Connor Plaza 6th Fl.
Victoria, TX 77902
Texas Commerce Bank 6.47%
601 Travis
Houston, TX 77002
U.S. Bank of Washington 5.62%
P.O. Box 3168
Portland, OR 97208
FRNCO 5.04%
P.O. Box 939
Rogers, AR 72757-0939
</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.
12
<PAGE> 145
PERSONAL INVESTMENT CLASS
- -------------------------
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- --------------
<S> <C>
Frost National Bank 49.42%(b)
P.O. Box 2358
San Antonio, TX 78299
Republic National Bank 27.58%(b)
1 Hanson Pl., Lower Level
Brooklyn, NY 11243
The Bank of New York 21.30%
440 Mamaroneck Ave.
Harrison, NY 10528
</TABLE>
PRIVATE INVESTMENT CLASS
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- --------------
<S> <C>
Liberty Bank and Trust Co. 41.02%(b)
of Oklahoma, N.A.
P.O. Box 25848
Oklahoma City, OK 73125
First Trust/VAR & Co. 29.92%(b)
180 E. 5th Street
St. Paul, MN 55101
Huntington Capital Corp 14.82%
41 S. High St.
Columbus, OH 43287
Charter National Bank 6.39%
P.O. Box 1494
Houston, TX 77251-1494
United Counties Trust Co. 5.20%
30 Maple Street
Summit, NJ 07901
</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 more than 25% 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> 146
CASH MANAGEMENT CLASS
- ---------------------
<TABLE>
<CAPTION>
PERCENT PERCENT
NAME AND ADDRESS OWNED OWNED OF
OF RECORD OWNER BENEFICIALLY ONLY RECORD ONLY
--------------- ----------------- -----------
<S> <C> <C>
City of Riverside 21.65% -0-
P.O. Box 12005
Riverside, CA 92502-2205
LA Export Terminal -0- 11.72%(a)
P.O. Box 1769
San Pedro, CA 90733
State Street Bank & Trust Company -0- 10.87%(a)
61 Broadway 15th Fl.
New York, NY 10006
Montgomery County 6.76% -0-
101 Monroe St. 15th Fl.
Rockville, MD 20850
City of West Sacramento 6.60% -0-
2101 Stone Blvd.
W. Sacramento, CA 95691
City of Ontario 5.26% -0-
303 East "B" St.
Ontario, CA 91764
</TABLE>
RESOURCE CLASS
- --------------
AIM provided the initial capitalization of the Resource Class of the
Treasury Portfolio and, accordingly, as of the date of this Statement of
Additional Information, owned all the outstanding shares of beneficial interest
of the Resource Class of the Treasury Portfolio. Although the Resource Class
of the Treasury 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 Resource Class of the Treasury Portfolio
that are outstanding, it may presumed to be in "control" of the Resource Class
of the Treasury Portfolio, as defined in the 1940 Act.
__________________________________
(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 more than 25% 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.
14
<PAGE> 147
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 25, 1995, 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 28.6%(b)
1700 Farnam Street
Omaha, NE 68102
Muchmore & Co. 13.7%
750 Walnut Street
Cranford, NJ 07016-1205
Key Trust Company 10.1%
4900 Tiedeman
Cleveland, OH 44101-5971
Boatmen's Trust Copany 8.7%
P.O. Box 14737
St. Louis, MO 63178
Wachovia Bank and Trust Co NA 7.6%
P.O. Box 3075
Winston-Salem, NC 27150
Liberty Bank & Trust Company 7.5%
of Tulsa, N.A.
P.O. Box 25848
Oklahoma City, OK 73125
</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 more than 25% 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.
15
<PAGE> 148
PRIVATE INVESTMENT CLASS
- ------------------------
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- -----------
<S> <C>
Huntington Capital Corp 100%(b)
41 S. High St.
Columbus, OH 43287
</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 more than 25% 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.
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 25, 1995, the
trustees and officers of the Fund beneficially owned less than 1% of each class
of the Fund's outstanding shares.
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.
16
<PAGE> 149
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, 1996 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 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, 1995, FMC received compensation
pursuant to the Plan in the amount of $1,244,628, or an amount equal to 0.30%
of the average daily net assets of the Class. Of such amount, $1,082,636 (or
an amount equal to 0.26% of the average daily net assets of the Class) was paid
to dealer and financial institutions and $161,992 (or an amount equal to 0.04%
of the average daily net assets of the Class) was retained by FMC.
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
17
<PAGE> 150
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, 1995, the current yield and
the effective yield of the Class (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) were 5.41% and 5.56%, respectively, excluding
capital gains distributions. For the seven-day period ended August 31, 1995,
the current distribution rate and the effective distribution rate of the Class,
including capital gains distributions, (which assumes the reinvestment of
dividends for a 365-day year and a return for the entire year equal to the
annualized current distribution rate for the period) were 5.44% and 5.59%,
respectively. These performance numbers are quoted for illustration purposes
only. The performance numbers for any other seven-day period may be
substantially different from those quoted above.
The Fund may compare the performance of the Class or the performance
of securities in which it may invest to:
o IBC/Donoghue's Money Fund Averages, which are average
yields of various types of money market funds that include the effect
of compounding distributions;
o 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;
o 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
o 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' 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
18
<PAGE> 151
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 NRSRO(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
(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:
__________________________________
(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.
(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.
19
<PAGE> 152
(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) 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;
20
<PAGE> 153
(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 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
21
<PAGE> 154
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.
From time to time, the Fund may sell a security, or purchase a
security from an AIM Fund or another investment account advised by AIM or A I M
Capital Management, Inc. ("AIM Capital"), when such transactions comply with
applicable rules and regulations and are deemed consistent with the investment
objective(s) and policies of the investment accounts advised by AIM or AIM
Capital. Procedures pursuant to Rule 17a-7 under the 1940 Act regarding
transactions between investment accounts advised by AIM or AIM Capital have
been adopted by the Boards of Directors/Trustees of the various AIM Funds,
including the Fund. Although such transactions may result in custodian, tax or
other related expenses, no brokerage commissions or other direct transaction
costs are generated by transactions among the investment accounts advised by
AIM or AIM Capital.
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, 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.
22
<PAGE> 155
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. Furthermore, the 1940 Act prohibits the Fund from purchasing a
security being publicly underwritten by a syndicate of which persons affiliated
with the Fund are a member except in accordance with certain conditions. These
conditions may restrict the ability of the Portfolio to purchase Money Market
obligations being publicly underwritten by such a syndicate, and the Portfolio
may be required to wait until the syndicate has been terminated before buying
such securities. At such time, the market price of the securities may be
higher or lower than the original offering price. A person affiliated with the
Fund may, from time to time, serve as placement agent or financial advisor to
an issuer of Money Market obligations and be paid a fee by such issuer. The
Portfolio may purchase such Money Market obligations directly from the issuer,
provided that the purchase made in accordance with procedures adopted by the
Fund's Board of Trustees and any such purchases are reviewed at least quarterly
by the Fund's Board of Trustees and a determination is made that all such
purchases were effected in compliance with such procedures, including a
determination that the placement fee or other remuneration paid by the issuer
to the person affiliated with the Fund was fair and reasonable in relation to
the fees charged by others performing similar services. During the fiscal year
ended August 31, 1995, no securities or instruments were purchased by the
Portfolio from issuers who paid placement fees or other compensation to a
broker affiliated with the Portfolio.
TAX MATTERS
The following is only a summary of certain additional tax
considerations generally affecting the Portfolio 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 Portfolio 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 Portfolio 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 Portfolio 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
Portfolio 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
23
<PAGE> 156
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 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 (a "taxable year election")).
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.
24
<PAGE> 157
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 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."
SALE OR REDEMPTION OF SHARES
A shareholder will recognize gain or loss on the sale or redemption of
shares of the Class in an amount equal to the difference between the proceeds
of the sale or redemption and the shareholder's adjusted tax basis in the
shares. All or a portion of any loss so recognized may be disallowed if the
shareholder purchases other shares of the Class within 30 days before or after
the sale or redemption. In general, any gain or loss arising from (or treated
as arising from) the sale or redemption of shares of the Class will be
considered capital gain or loss and will be long-term capital gain or loss if
the shares were held for longer than one year. However, any capital loss
arising from the sale or redemption of shares held for six months or less will
be treated as a long-term capital loss to the extent of the amount of capital
gain dividends received on such shares. For this purpose, the special holding
period rules of Code Section 246(c)(3) and (4) generally will apply in
determining the holding period of shares.
FOREIGN SHAREHOLDERS
Taxation of a shareholder who, as to the United States, is a
nonresident alien individual, foreign trust or estate, foreign corporation, or
foreign partnership ("foreign shareholder"), depends on whether the income from
the Portfolio is "effectively connected" with a U.S. trade or business carried
on by such shareholder.
If the income from the Portfolio is not effectively connected with a
U.S. trade or business carried on by a foreign shareholder, dividends and
distributions (other than capital gains dividends) will be subject to U.S.
withholding tax at the rate of 30% (or lower treaty rate) upon the gross amount
of the dividend or distribution. Such a foreign shareholder would generally be
exempt from U.S. federal income tax on gains realized on the sale of shares of
the Portfolio, capital gain dividends and amounts retained by the Class that
are designated as undistributed capital gains.
If the income from the Portfolio is effectively connected with a U.S.
trade or business carried on by a foreign shareholder, then ordinary income
dividends, capital gain dividends and any gains realized upon the sale of
shares of the Portfolio will be subject to U.S. federal income tax at the rates
applicable to U.S. citizens or domestic corporations.
In the case of foreign noncorporate shareholders, the Portfolio may be
required to withhold U.S. federal income tax at a rate of 31% on distributions
that are otherwise exempt from withholding tax unless such shareholders furnish
the Portfolio with proper notification of their foreign status.
The tax consequences to a foreign shareholder entitled to claim the
benefits of an applicable tax treaty may be different from those described
herein. Foreign shareholders are urged to consult their own tax advisers with
respect to the particular tax consequences to them of an investment in the
Portfolio, including the applicability of foreign taxes.
25
<PAGE> 158
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 November 1, 1995. 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.
26
<PAGE> 159
FINANCIAL STATEMENTS
FS
<PAGE> 160
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholders
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, 1995, 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, 1995 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Treasury Portfolio as of August 31, 1995, 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.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Houston, Texas
October 6, 1995
FS-1
<PAGE> 161
SCHEDULE OF INVESTMENTS
August 31, 1995
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
U.S. TREASURY SECURITIES - 26.52%
U.S. TREASURY BILLS(a) - 22.83%
5.780% 10/05/95 $ 25,000 $ 24,863,528
- ---------------------------------------------------------------------------
5.750% 10/26/95 50,000 49,560,764
- ---------------------------------------------------------------------------
5.775% 10/26/95 30,000 29,735,313
- ---------------------------------------------------------------------------
5.580% 11/02/95 25,000 24,759,750
- ---------------------------------------------------------------------------
5.620% 11/09/95 50,000 49,461,417
- ---------------------------------------------------------------------------
5.590% 11/16/95 30,000 29,645,966
- ---------------------------------------------------------------------------
5.655% 11/16/95 50,000 49,403,084
- ---------------------------------------------------------------------------
5.220% 11/30/95 12,500 12,336,875
- ---------------------------------------------------------------------------
5.590% 11/30/95 25,000 24,650,625
- ---------------------------------------------------------------------------
5.480% 12/07/95 25,000 24,630,861
- ---------------------------------------------------------------------------
5.335% 12/21/95 25,000 24,588,760
- ---------------------------------------------------------------------------
5.410% 12/21/95 50,000 49,165,958
- ---------------------------------------------------------------------------
5.330% 12/28/95 50,000 49,126,472
- ---------------------------------------------------------------------------
5.340% 12/28/95 25,000 24,562,416
- ---------------------------------------------------------------------------
5.280% 01/04/96 25,000 24,541,667
- ---------------------------------------------------------------------------
5.400% 01/04/96 20,000 19,625,000
- ---------------------------------------------------------------------------
5.410% 01/04/96 25,000 24,530,382
- ---------------------------------------------------------------------------
5.300% 01/11/96 34,200 33,535,380
- ---------------------------------------------------------------------------
5.380% 01/18/96 25,000 24,480,681
- ---------------------------------------------------------------------------
5.400% 01/25/96 25,000 24,452,500
- ---------------------------------------------------------------------------
5.415% 02/01/96 48,000 46,895,340
- ---------------------------------------------------------------------------
5.395% 02/08/96 25,000 24,400,556
- ---------------------------------------------------------------------------
5.460% 02/08/96 25,000 24,393,333
- ---------------------------------------------------------------------------
5.540% 08/22/96 20,000 18,904,224
- ---------------------------------------------------------------------------
5.550% 08/22/96 12,600 11,908,428
- ---------------------------------------------------------------------------
744,159,280
===========================================================================
U.S. TREASURY NOTES - 3.69%
8.625% 10/15/95 25,000 25,076,660
- ---------------------------------------------------------------------------
4.250% 11/30/95 50,000 49,768,670
- ---------------------------------------------------------------------------
7.750% 03/31/96 45,000 45,488,910
- ---------------------------------------------------------------------------
120,334,240
- ---------------------------------------------------------------------------
Total U.S. Treasury Securities 864,493,520
- ---------------------------------------------------------------------------
Total Investments (excluding Repurchase
Agreements) 864,493,520
- ---------------------------------------------------------------------------
</TABLE>
FS-2
<PAGE> 162
<TABLE>
<CAPTION>
MATURITY PAR (000) VALUE
<S> <C> <C> <C>
REPURCHASE AGREEMENTS(b) - 73.86%
BT Securities Corp., 5.78%(c) -- $130,000 $ 130,000,000
- -----------------------------------------------------------------------------
Barclays de Zoete Wedd Government
Securities, Inc., 5.84%(d) 09/01/95 140,000 140,000,000
- -----------------------------------------------------------------------------
Bear, Stearns & Co. Inc., 5.84%(e) -- 140,000 140,000,000
- -----------------------------------------------------------------------------
Daiwa Securities America Inc., 5.84%(f) 09/01/95 117,902 117,902,411
- -----------------------------------------------------------------------------
Deutsche Bank Government Securities,
Inc., 5.85%(g) -- 160,000 160,000,000
5.85%(h) -- 400,000 400,000,000
- -----------------------------------------------------------------------------
First Boston Corp. (The), 5.80%(i) 09/01/95 140,000 140,000,000
- -----------------------------------------------------------------------------
Fuji Securities Inc., 5.85%(j) -- 100,000 100,000,000
5.87%(k) -- 110,000 110,000,000
- -----------------------------------------------------------------------------
Goldman, Sachs & Co., 5.80%(l) 09/01/95 140,000 140,000,000
- -----------------------------------------------------------------------------
Lehman Government Securities, Inc.,
5.82%(m) -- 140,000 140,000,000
- -----------------------------------------------------------------------------
Nikko Securities Co., Ltd., 5.85%(n) -- 130,000 130,000,000
- -----------------------------------------------------------------------------
Nomura Securities International, Inc.,
5.83%(o) 09/01/95 140,000 140,000,000
- -----------------------------------------------------------------------------
SBC Government Securities, Inc.,
5.83%(p) -- 140,000 140,000,000
- -----------------------------------------------------------------------------
State Street Bank & Trust Co., 5.81%(q) 09/01/95 140,000 140,000,000
- -----------------------------------------------------------------------------
UBS Securities Inc., 5.85%(r) -- 140,000 140,000,000
- -----------------------------------------------------------------------------
Total Repurchase Agreements 2,407,902,411
- -----------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.38% 3,272,395,931(s)
- -----------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES --
(0.38%) (12,427,259)
- -----------------------------------------------------------------------------
NET ASSETS -- 100.00% $3,259,968,672
=============================================================================
</TABLE>
(a) U.S. Treasury bills are traded on a discount basis. In such cases the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Portfolio.
(b) 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% of the sales price of
the repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds managed by
the investment advisor.
(c) Open repurchase agreement entered into 02/27/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $95,590,000 U.S. Treasury Notes, 10.375% to 12.75% due
11/15/09 to 11/15/10.
(d) Entered into 08/31/95 with a maturing value of $140,022,711. Collateralized
by $138,800,000 U.S. Treasury obligations, 4.25% to 8.875% due 10/15/95 to
08/15/25.
(e) Open repurchase agreement entered into 07/06/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $264,550,000 U.S. Treasury STRIPS, due 05/15/97 to
02/15/09.
(f) Joint repurchase agreement entered into 08/31/95 with a maturing value of
$209,464,857. Collateralized by $204,224,000 U.S. Treasury obligations, 0%
to 10.75% due 11/30/95 to 05/15/16.
(g) Open repurchase agreement entered into 04/13/94; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $151,682,000 U.S. Treasury obligations, 0% to 8.75% due
04/04/96 to 05/15/21.
(h) Open repurchase agreement entered into 12/28/94; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $339,762,000 U.S. Treasury obligations, 5.375% to 11.25%
due 09/30/96 to 02/15/20.
FS-3
<PAGE> 163
(i) Entered into 08/31/95 with a maturing value of $140,022,556. Collateralized
by $145,970,000 U.S. Treasury Bills due 11/30/95 to 01/04/96.
(j) Open repurchase agreement entered into 01/11/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $216,668,000 U.S. Treasury STRIPS, due 02/15/99 to
05/15/14.
(k) Open joint repurchase agreement entered into 06/20/95; however, either
party may terminate the agreement upon demand. Interest rates are
redetermined daily. Collateralized by $332,491,000 U.S. Treasury
obligations 0% to 9.25% due 05/15/97 to 02/15/16.
(l) Entered into 08/31/95 with a maturing value of $140,022,556. Collateralized
by $131,445,000 U.S. Treasury obligations, 3.875% to 12.00% due 10/31/95 to
11/15/18.
(m) Open repurchase agreement entered into 03/01/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $594,791,000 U.S. Treasury STRIPS, due 05/15/98 to
05/15/21.
(n) Open repurchase agreement entered into 05/15/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $132,685,000 U.S. Treasury Notes, 5.875% due 08/15/98.
(o) Entered into 08/31/95 with a maturing value of $140,022,672. Collateralized
by $130,344,000 U.S. Treasury obligations, 0% to 11.125% due 12/28/95 to
11/15/24.
(p) Open repurchase agreement entered into 08/16/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $116,853,000 U.S. Treasury obligations, 0% to 11.875% due
03/07/96 to 08/15/23.
(q) Entered into 08/31/95 with a maturing value of $140,022,594. Collateralized
by $132,870,000 U.S. Treasury Notes, 7.125% to 7.75% due 09/30/99 to
11/30/99.
(r) Open joint repurchase agreement entered into 08/18/95; however, either
party may terminate the agreement upon demand. Collateralized by
$249,645,000 U.S. Treasury Bills, due 12/14/95 to 01/18/96.
(s) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
FS-4
<PAGE> 164
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments, excluding repurchase agreements, at value
(amortized cost) $ 864,493,520
- ------------------------------------------------------------------------
Repurchase agreements 2,407,902,411
- ------------------------------------------------------------------------
Interest receivable 3,526,829
- ------------------------------------------------------------------------
Investment for deferred compensation plan 27,164
- ------------------------------------------------------------------------
Other assets 170,052
- ------------------------------------------------------------------------
Total assets 3,276,119,976
- ------------------------------------------------------------------------
LIABILITIES:
Deferred compensation payable 27,164
- ------------------------------------------------------------------------
Dividends payable 15,637,389
- ------------------------------------------------------------------------
Accrued advisory fees 173,398
- ------------------------------------------------------------------------
Accrued distribution fees 150,161
- ------------------------------------------------------------------------
Accrued transfer agent fees 30,953
- ------------------------------------------------------------------------
Accrued trustees' fees 6,457
- ------------------------------------------------------------------------
Accrued administrative services fees 22,829
- ------------------------------------------------------------------------
Accrued operating expenses 102,953
- ------------------------------------------------------------------------
Total liabilities 16,151,304
- ------------------------------------------------------------------------
NET ASSETS $3,259,968,672
========================================================================
NET ASSETS:
Institutional Class $2,669,637,166
========================================================================
Private Investment Class $ 394,585,487
========================================================================
Personal Investment Class $ 114,527,171
========================================================================
Cash Management Class $ 81,218,848
========================================================================
SHARES OF BENEFICIAL INTEREST, $.01 PAR VALUE PER SHARE:
Institutional Class 2,669,507,426
========================================================================
Private Investment Class 394,566,270
========================================================================
Personal Investment Class 114,521,888
========================================================================
Cash Management Class 81,214,894
========================================================================
Net asset value, offering and redemption price per share $ 1.00
========================================================================
</TABLE>
See Notes to Financial Statements.
FS-5
<PAGE> 165
STATEMENT OF OPERATIONS
For the year ended August 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $169,306,110
- -----------------------------------------------------------------------------
EXPENSES:
Advisory fees 1,925,198
- -----------------------------------------------------------------------------
Custodian fees 315,447
- -----------------------------------------------------------------------------
Administrative services fees 208,753
- -----------------------------------------------------------------------------
Trustees' fees and expenses 33,135
- -----------------------------------------------------------------------------
Transfer agent fees 91,597
- -----------------------------------------------------------------------------
Professional fees 96,603
- -----------------------------------------------------------------------------
Distribution fees (Note 2) 1,751,898
- -----------------------------------------------------------------------------
Other 271,094
- -----------------------------------------------------------------------------
Total expenses 4,693,725
- -----------------------------------------------------------------------------
Less expenses assumed by advisor (47,000)
=============================================================================
Net expenses 4,646,725
=============================================================================
Net investment income 164,659,385
- -----------------------------------------------------------------------------
Net realized gain on sales of investments 67,230
- -----------------------------------------------------------------------------
Net increase in net assets resulting from operations $164,726,615
=============================================================================
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
-------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 164,659,385 $ 129,450,854
- -----------------------------------------------------------------------------
Net realized gain on sales of investments 67,230 63,526
- -----------------------------------------------------------------------------
Net increase in net assets resulting from
operations 164,726,615 129,514,380
- -----------------------------------------------------------------------------
Distributions to shareholders from net
investment income (164,659,385) (129,450,854)
- -----------------------------------------------------------------------------
Distributions to shareholders from net
realized gains on investments (63,547) --
- -----------------------------------------------------------------------------
Share transactions-net 232,658,749 (908,258,039)
- -----------------------------------------------------------------------------
Net increase (decrease) in net assets 232,662,432 (908,194,513)
- -----------------------------------------------------------------------------
NET ASSETS:
Beginning of period 3,027,306,240 3,935,500,753
- -----------------------------------------------------------------------------
End of period $3,259,968,672 $3,027,306,240
============================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $3,259,810,478 $3,027,151,729
- -----------------------------------------------------------------------------
Undistributed net realized gain on sales of
investments 158,194 154,511
- -----------------------------------------------------------------------------
$3,259,968,672 $3,027,306,240
============================================================================
</TABLE>
See Notes to Financial Statements.
FS-6
<PAGE> 166
NOTES TO FINANCIAL STATEMENTS
August 31, 1995
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
Short-Term Investments Trust (the "Fund") is registered 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 class of shares are
charged to that class' operations. Expenses which are applicable to more
than one class, e.g., advisory fees, are allocated among them.
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 0.15%
- -----------------------------------------------------------------------
Over $300 million to $1.5 billion 0.06%
- -----------------------------------------------------------------------
Over $1.5 billion 0.05%
- -----------------------------------------------------------------------
</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 $47,000 on the Treasury Portfolio Personal Investment Class during
the year ended August 31, 1995.
The Portfolio, pursuant to a master administrative services agreement with
AIM, has agreed to reimburse AIM for certain costs incurred in providing
accounting services to the Portfolio. During the year ended August 31, 1995,
the Portfolio reimbursed AIM $135,387 for such services. During the year ended
August 31, 1995, the Portfolio paid A I M Institutional Fund Services, Inc.
("AIFS") $114,179 for shareholder and transfer agency services. Effective July
1, 1995, AIFS became the exclusive transfer agent of the Portfolio.
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
FS-7
<PAGE> 167
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, 1995, 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 $1,244,628, $448,840 and $58,430, respectively, under the Plan.
Certain officers and trustees of the Trust are officers of AIM, FMC and AIFS.
The Portfolio paid legal fees of $9,818 for the year ended August 31, 1995 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 and the Portfolio paid legal fees of $8,687
for services rendered by that firm as counsel to the Board of Trustees. A
trustee of the Trust was a member of the firm of Reid & Priest until September
1994, when he became a member of Kramer, Levin, Naftalis, Nessen, Kamin &
Frankel.
NOTE 3-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is
not an "interested person" of AIM. The Fund invests trustees' fees, if so
elected by a trustee, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 4-SHARE INFORMATION
Changes in shares outstanding for the years ended August 31, 1995 and 1994 were
as follows:
<TABLE>
<CAPTION>
1995 1994
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
Sold:
Institutional Class 13,265,129,336 $ 13,265,129,336 26,026,026,543 $ 26,026,026,543
- ---------------------------------------------------------------------------------------------
Private Investment
Class 3,483,722,415 3,483,722,415 827,921,059 827,921,059
- ---------------------------------------------------------------------------------------------
Personal Investment
Class 628,065,796 628,065,796 343,375,963 343,375,963
- ---------------------------------------------------------------------------------------------
Cash Management Class 97,195,296 97,195,296 142,326,763 142,326,763
- ---------------------------------------------------------------------------------------------
Issued as reinvestment
of dividends:
Institutional Class 11,558,277 11,558,277 11,688,081 11,688,081
- ---------------------------------------------------------------------------------------------
Private Investment
Class 2,167,906 2,167,906 361,516 361,516
- ---------------------------------------------------------------------------------------------
Personal Investment
Class 2,719,512 2,719,512 1,153,701 1,153,701
- ---------------------------------------------------------------------------------------------
Cash Management Class 2,671,137 2,671,137 1,883,744 1,883,744
- ---------------------------------------------------------------------------------------------
Reacquired:
Institutional Class (13,059,443,790) (13,059,443,790) (27,238,038,910) (27,238,038,910)
- ---------------------------------------------------------------------------------------------
Private Investment
Class (3,504,019,234) (3,504,019,234) (619,863,560) (619,863,560)
- ---------------------------------------------------------------------------------------------
Personal Investment
Class (604,841,208) (604,841,208) (325,817,071) (325,817,071)
- ---------------------------------------------------------------------------------------------
Cash Management Class (92,266,694) (92,266,694) (79,275,868) (79,275,868)
- ---------------------------------------------------------------------------------------------
Net increase (decrease) 232,658,749 $ 232,658,749 (908,258,039) $ (908,258,039)
=============================================================================================
</TABLE>
FS-8
<PAGE> 168
NOTE 5-FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share outstanding of
the Treasury Portfolio Private Investment Class during each of the years in the
three-year period ended August 31, 1995 and the period November 25, 1991 (date
operations commenced) through August 31, 1992.
<TABLE>
<CAPTION>
1995 1994 1993 1992
-------- -------- -------- -----
<S> <C> <C> <C> <C>
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $1.00
- ---------------------------------- -------- -------- -------- -----
Income from investment operations:
Net investment income 0.05 0.03 0.03 0.03
- ---------------------------------- -------- -------- -------- -----
Less distributions:
Dividends from net investment
income (0.05) (0.03) (0.03) (0.03)
- ---------------------------------- -------- -------- -------- -----
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $1.00
================================== ======== ======== ======== =====
Total return 5.34% 3.22% 2.91 % 3.92%(a)
================================== ======== ======== ======== =====
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $394,585 $412,716 $204,281 $525
================================== ======== ======== ======== =====
Ratio of expenses to average net
assets(b) 0.40%(c) 0.38% 0.38% 0.40%(a)
================================== ======== ======== ======== =====
Ratio of net investment income to
average net assets(b) 5.23%(c) 3.26% 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 $414,815,972.
FS-9
<PAGE> 169
SHORT-TERM
INVESTMENTS TRUST
Prospectus
- --------------------------------------------------------------------------------
TREASURY
PORTFOLIO 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
CASH objective by investing in direct obligations of the
MANAGEMENT U.S. Treasury and repurchase agreements secured by such
CLASS obligations. The instruments purchased by the Treasury
Portfolio will have maturities of 397 days or less.
DECEMBER 14, 1995 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 Cash Management Class
of the Treasury Portfolio, a class of shares designed
to be a convenient vehicle in which institutional
customers of banks, certain broker-dealers and other
financial institutions can invest in a diversified
money market fund.
The Fund also offers shares of other classes of
the Treasury Portfolio pursuant to separate
prospectuses: the Institutional Class, Private
Investment Class, Personal Investment Class and
Resource 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 CASH MANAGEMENT CLASS OF THE TREASURY
PORTFOLIO AND SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE. A STATEMENT OF ADDITIONAL INFORMATION, DATED
DECEMBER 14, 1995, HAS BEEN FILED WITH THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION AND IS HEREBY
INCORPORATED BY REFERENCE. FOR A COPY OF THE STATEMENT
OF ADDITIONAL INFORMATION WITHOUT CHARGE, WRITE TO THE
ADDRESS BELOW OR CALL (800) 877-7745.
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.
[LOGO APPEARS HERE]
Fund Management Company
11 Greenway Plaza
Suite 1919
Houston, Texas 77046-1173
(800) 877-7745
<PAGE> 170
SUMMARY
THE PORTFOLIO AND ITS INVESTMENT OBJECTIVE
The Fund is an open-end diversified series management investment company. This
Prospectus relates to the Cash Management 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 shares of other
classes 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 separate
prospectuses. Such classes have different distribution arrangements and are
designed for institutional and other categories of investors. The portfolios of
the Fund are referred to collectively as the "Portfolios."
Because the Portfolio 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 institutional
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 $1,000,000. There is no minimum
amount for subsequent investments. Payment for shares of the Class purchased
must be in funds immediately available to the Portfolio. See "Purchase of
Shares."
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
4:00 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 4:00 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 5:00 p.m. Eastern Time on that day.
See "Dividends."
CONSTANT NET ASSET VALUE
The Fund uses the amortized cost method of valuing the securities of 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 Portfolio's investment advisor and
receives a fee based on the Portfolio's average daily net assets. During the
fiscal year ended August 31, 1995, 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 a separate 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" and "-- Administrative Services."
2
<PAGE> 171
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, FMC receives a fee from the Fund of up to 0.10% of the
average daily net assets of the Portfolio attributable to the shares of the
Class as compensation for distribution-related services pursuant to plans of
distribution adopted by the Fund's Board of Trustees. The Fund may also make
payments pursuant to such distribution plans to certain broker-dealers or other
financial institutions for distribution-related services. 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."
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK AND AIM INSTITUTIONAL FUNDS ARE REGISTERED
SERVICE MARKS OF A I M MANAGEMENT GROUP INC.
3
<PAGE> 172
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 -- CASH MANAGEMENT CLASS
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management fees........................................................... 0.06%
12b-1 fees (after fee waivers)*........................................... 0.08%
Other expenses:
Custodian fees......................................................... 0.01%
Other.................................................................. 0.03%
----
Total other expenses.............................................. 0.04%
----
Total portfolio operating expenses -- Cash Management Class............... 0.18%
=====
</TABLE>
- ---------------
* If there were no fee waivers, 12b-1 Fees would have been 0.10%.
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............................................................... $ 2
3 years.............................................................. $ 6
5 years.............................................................. $10
10 years.............................................................. $23
</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 for the fiscal year ended
August 31, 1995. 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 from the figures reflected in the
Table of Fees and Expenses. To the extent any service providers assume expenses
of the Class, such assumption of 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. As a result of 12b-1
fees, a long-term shareholder of the shares of the Class may pay more than the
economic equivalent of the maximum front-end sales charges permitted by the
Rules of the National Association of Securities Dealers, Inc.
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 -- Cash Management Class" remain the same in the years shown.
The example shown in the above table is based on the amounts listed under
"Annual Portfolio Operating Expenses." 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.
4
<PAGE> 173
FINANCIAL HIGHLIGHTS
Shown below are the per share data, ratios and supplemental data
(collectively, "data") for the two-year period ended August 31, 1995 and the
period August 17, 1993 (date operations commenced) through August 31, 1993. The
data has been audited by KPMG Peat Marwick LLP, independent auditors, whose
unqualified report thereon appears in the Statement of Additional Information.
<TABLE>
<CAPTION>
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
Net asset value, beginning of period.......................... $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income....................................... 0.05 0.03 0.001
------- ------- -------
Total from investment operations..................... 0.05 0.03 0.001
------- ------- -------
Less distributions:
Dividends from net investment income........................ (0.05) (0.03) (0.001)
------- ------- -------
Net asset value, end of period................................ $ 1.00 $ 1.00 $ 1.00
======= ======= =======
Total return.................................................. 5.57% 3.44% 2.91%(c)
======= ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted).................... $81,219 $73,619 $ 8,681
======= ======= =======
Ratio of expenses to average net assets..................... 0.18%(a) 0.16%(b) 0.16%(c)
======= ======= =======
Ratio of net investment income to average net assets........ 5.42%(a) 3.48%(b) 3.00%(c)
======= ======= =======
</TABLE>
- ---------------
(a) Ratios are based on average daily net assets of $73,038,062.
(b) Had there been no expense reimbursements, the ratios of expenses and net
investment income to average net assets would have been 0.19% and 3.45%.
(c) Annualized.
SUITABILITY FOR INVESTORS
The shares of the Class are intended for use primarily by institutional
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. It is expected that the shares of the Class may be particularly
suitable investments for corporate cash managers, municipalities or other public
entities. The minimum initial investment is $1,000,000.
Investors in the shares of 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 shares 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 the 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
5
<PAGE> 174
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 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 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 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 Portfolio 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.
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 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.
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
6
<PAGE> 175
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 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 or 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 United
States 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.
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,
the 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 4:00 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 institutional customers of banks, certain
broker-dealers and other financial institutions (individually, 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 re-
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demption 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 laws 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 Application,
which can be obtained from A I M Institutional Fund Services, Inc. ("AIFS"),
must be completed and sent to AIFS 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 AIFS. 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 $1,000,000, and there is no minimum
amount of subsequent purchases of shares of the Class by an Institution on
behalf of its customers. 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 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 additional shares of the Class directly, 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 AIFS.
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 and
notice of such order is provided to AIFS 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 "Cash Management 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. 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(R), 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
Application, but may be remitted by check upon request by a shareholder. If a
redemption
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request is received by AIFS prior to 4:00 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 AIFS after 4:00 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 4:00 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 or AIFS, the
Fund's transfer agent.
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.
The shares of the Class are not redeemable at the option of the Fund unless
the Board of Trustees of the Fund determines in its sole discretion that failure
to so redeem may have materially adverse consequences to the shareholders of the
Fund.
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
4:00 p.m. Eastern Time on the day of declaration. Net income for dividend
purposes is determined daily as of 4:00 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' pro rata share of the total
outstanding shares representing an interest in the Portfolio, less (b) Fund
expenses, such as custodian fees, trustees' fees, accounting and legal expenses,
based upon such class' pro rata share of the net assets of the Portfolio, less
(c) expenses directly attributable to such class, 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 normally be paid by wire transfer.
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 at the net asset value as of 4:00 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 AIFS at
11 Greenway Plaza, Suite 1919, Houston, TX 77046-1173 and will become effective
with dividends paid after its receipt by AIFS. If a shareholder redeems all the
Shares 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 its 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 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 as-
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sets 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.
The Portfolio will be treated as a separate corporation for purposes of
determining taxable income, distribution requirements and other requirements of
Subchapter M. Therefore, the Portfolio may not offset its gains against the
losses of the other portfolio of the Fund and each portfolio of the Fund 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 November 1, 1995, which are subject to change
by legislation or administrative action.
NET ASSET VALUE
The net asset value per share of the Portfolio is determined daily as of 4:00
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 SEC 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)
877-7745. 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 the
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 an investor before making an investment in the
Portfolio.
For the seven-day period ended August 31, 1995, the current yield and the
effective yield of the Class (which assumes the reinvestment of dividends for a
365-day year and a return for the entire year equal to the average annualized
current yield for the period) were 5.63% and 5.79%, respectively, excluding
capital gains distributions. For the seven-day period ended August 31, 1995, the
current distribution rate and the effective distribution rate of the Class,
including capital gains distributions, (which assumes the reinvestment of
dividends for a 365-day year and a return for the entire year equal to the
average annualized current distribution rate for the period) were 5.66% and
5.82%, respectively. These performance numbers are quoted for illustration
purposes only. The performance numbers for any other seven-day period may be
substantially different from those 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 5:00 p.m.
Eastern time.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Portfolio. Such a practice
will have the effect of increasing the Portfolio's yield and total return.
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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 by the Portfolio and financial statements. The annual financial
statements are audited by the Fund's independent auditors.
Unless otherwise requested by the shareholder, each shareholder will be
provided by its Institution with a written confirmation for each transaction.
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 objective 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 October 31, 1995, the
total assets of the investment company portfolios managed or advised by AIM and
its affiliates were approximately $39.3 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"). AIM Management is a holding company in the financial services
business.
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, 1995, AIM received fees from the Fund,
with respect to the Portfolio under the Advisory Agreement which represented
0.06% of the Portfolio's average daily net assets. During such fiscal year, the
expenses of the Class, including AIM's fees, amounted to 0.18% of the Class's
average daily net assets.
ADMINISTRATIVE SERVICES
The Fund has entered into a Master Administrative Services Agreement dated as
of 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 AIFS entered into an Administrative Services Agreement
pursuant to which AIFS was reimbursed by AIM for its costs in providing
shareholder services for the Fund. AIFS or its affiliates received reimbursement
of shareholder services costs of $73,366 with respect to the Portfolio for the
year ended August 31, 1995 which represented 0.002% of the Portfolio's average
daily net assets. The Administrative Services Agreement between AIM and AIFS was
terminated July 1, 1995. Beginning July 1, 1995, AIFS received fees with respect
to the Portfolio for its provision of shareholder services pursuant to a
Transfer Agency and Service Agreement with the Fund. For the period July 1, 1995
through August 31, 1995, AIFS received transfer agency fees from AIM with
respect to the Portfolio in the amount of $40,813.
EXPENSES
In addition to fees paid to AIM pursuant to the Advisory 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
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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.
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 agree to waive voluntarily 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 Fund 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 financial institutions 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 financial
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
.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. Sales
of the shares of the Class may not be used 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 the shares of the Class an amount equal to
0.10% on an annualized basis of the average daily net assets of the Portfolio
attributable to the Class. Such amount 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.
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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 0.10% of the average daily net assets of the
Portfolio attributable to the Class which are attributable to the customers of
such dealers or financial institutions. 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
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 the
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 holders of
the shares 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 class to which the Plan relates. 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 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). Shares of beneficial interest of the Fund are divided into seven
classes. Five 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. The other classes of the Fund
may have different sales charges and other expenses which may affect
performance. An investor may obtain information concerning the Fund's other
classes by contacting FMC.
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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 holders of shares of the Portfolio 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 or allocated to the respective portfolio based on the liquidation
value of the 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 of the Fund without
shareholder approval.
TRANSFER AGENT 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.
A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 1919, Houston,
Texas 77046-1173, acts as 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.
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) 877-7745.
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 SEC. 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 SEC. Copies of the registration statement,
including items omitted herein, may be obtained from the SEC by paying the
charges prescribed under its rules and regulations.
14
<PAGE> 183
<TABLE>
<S> <C>
=================================================== =======================================================
SHORT-TERM INVESTMENTS TRUST PROSPECTUS
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
(800) 877-7745 December 14, 1995
INVESTMENT ADVISOR
A I M ADVISORS, INC. SHORT-TERM
11 Greenway Plaza, Suite 1919 INVESTMENTS TRUST
Houston, Texas 77046-1173
(713) 626-1919
---------------------
DISTRIBUTOR
FUND MANAGEMENT COMPANY
11 Greenway Plaza, Suite 1919 TREASURY PORTFOLIO
Houston, Texas 77046-1173
(800) 877-7745
---------------------
AUDITORS
KPMG PEAT MARWICK LLP
700 Louisiana CASH MANAGEMENT CLASS
NationsBank Bldg.
Houston, Texas 77002
CUSTODIAN
THE BANK OF NEW YORK
110 Washington Street,
8th Floor
New York, New York 10286 TABLE OF CONTENTS
TRANSFER AGENT PAGE
A I M INSTITUTIONAL FUND SERVICES, INC. ----
Summary........................................... 2
11 Greenway Plaza, Suite 1919 Table of Fees and Expenses........................ 4
Houston, Texas 77046-1173 Financial Highlights.............................. 5
Suitability for Investors......................... 5
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY Investment Program................................ 5
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT Purchase of Shares................................ 7
CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH Redemption of Shares.............................. 8
THE OFFERING MADE BY THIS PROSPECTUS, AND IF Dividends......................................... 9
GIVEN OR MADE, SUCH INFORMATION OR Taxes............................................. 9
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING Net Asset Value................................... 10
BEEN AUTHORIZED BY THE FUND OR THE DISTRIBUTOR. Yield Information................................. 10
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN Reports to Shareholders........................... 11
ANY JURISDICTION TO ANY PERSON TO WHOM SUCH Management of the Fund............................ 11
OFFERING MAY NOT LAWFULLY BE MADE. General Information............................... 13
=================================================== =======================================================
</TABLE>
<PAGE> 184
STATEMENT OF
ADDITIONAL INFORMATION
CASH MANAGEMENT CLASS
OF THE
TREASURY PORTFOLIO
OF
SHORT-TERM INVESTMENTS TRUST
11 GREENWAY PLAZA
SUITE 1919
HOUSTON, TEXAS 77046-1173
(800) 877-7745
______________________
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) 877-7745
______________________
STATEMENT OF ADDITIONAL INFORMATION DATED DECEMBER 14, 1995
RELATING TO THE PROSPECTUS DATED DECEMBER 14, 1995
<PAGE> 185
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Administrative Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Banking Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Transfer Agent and Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Principal Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
PURCHASES AND REDEMPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Net Asset Value Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Distribution Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Distribution Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Performance Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Suspension of Redemption Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
INVESTMENT PROGRAM AND RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Investment Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Eligible Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Other Investment Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Qualification as a Regulated Investment Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Excise Tax on Regulated Investment Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Portfolio Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Sale or Redemption of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Foreign Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Effect of Future Legislation; Local Tax Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FS
</TABLE>
i
<PAGE> 186
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 United States 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 the Prospectus dated December 14, 1995 (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) 877-7745. Investors must receive a Prospectus before they invest.
This Statement of Additional Information is intended to furnish
prospective investors with additional information concerning the Cash
Management 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 management series 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
Statement of Additional Information 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).
A copy of the Agreement and Declaration of Trust ("Declaration of
Trust") establishing the Fund is on file with the SEC. 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 five classes of shares: Private Investment Class, Personal
Investment Class, Institutional Class, Cash Management Class and Resource
Class. Each such class has different shareholder qualifications and bears
expenses differently. This Statement of Additional Information and the
Prospectus relate solely to shares of the Cash Management 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."
1
<PAGE> 187
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 Portfolio and any class thereof, however, may be
terminated at any time, upon the recommendation of the 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, of $.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. 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.
2
<PAGE> 188
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 that 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 (76)
Director, Chairman and Chief Executive Officer, A I M Management Group
Inc.; 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
Global Associates, Inc., A I M Global Holdings, Inc., A I M Institutional Fund
Services, Inc. and Fund Management Company; and Director, AIM Global Advisors
Limited, A I M Global Management Company Limited and AIM Global Ventures Co.
BRUCE L. CROCKETT, Trustee (51)
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).
OWEN DALY II, Trustee (71)
6 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 (58)
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).
___________________________________
* A trustee who is an "interested person" of the Fund and A I M
Advisors, Inc., as defined in the Investment Company Act of 1940, as
amended (the "1940 Act").
** A trustee who is an "interested person" of the Fund, as defined in the
1940 Act.
3
<PAGE> 189
*ROBERT H. GRAHAM, Trustee and President (49)
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 Capital Management, Inc., A I M Fund Services, Inc., A I M
Global Associates, Inc., A I M Global Holdings, Inc., AIM Global Ventures Co.,
A I M Institutional Fund Services, Inc. and Fund Management Company; and Senior
Vice President, AIM Global Advisors Limited.
JOHN F. KROEGER, Trustee (71)
24875 Swan Road - Martingham
Box 464
St. Michaels, MD 21663
Director, Flag Investors International Fund, Inc., Flag Investors
Emerging Growth Fund, Inc., Flag Investors Telephone Income Fund, Inc., Flag
Investors Equity Partners Fund, Inc., Total Return U.S. Treasury Fund, Inc.,
Flag Investors Intermediate Term Income Fund, Inc., Managed Municipal Fund,
Inc., Flag Investors Value Builder Fund, Inc., Flag Investors Maryland
Intermediate Tax-Free Income Fund, Inc., Flag Investors Real Estate Securities
Fund, Inc., Alex. Brown Cash Reserve Fund, Inc. and North American Government
Bond Fund, Inc. (investment companies). Formerly, Consultant, Wendell & Stockel
Associates, Inc. (consulting firm).
LEWIS F. PENNOCK, Trustee (53)
6363 Woodway, Suite 825
Houston, TX 77057
Attorney in private practice in Houston, Texas.
IAN W. ROBINSON, Trustee (72)
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 (56)
Transco Tower, 50th Floor
2800 Post Oak Blvd.
Houston, TX 77056
Executive Vice President, Development and Operations, Hines Interests
Limited Partnership (real estate development).
**JOHN J. ARTHUR, Senior Vice President and Treasurer (51)
Senior Vice President and Treasurer, A I M Advisors, Inc.; 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; and Vice President, AIM Global
Advisors Limited, A I M Global Associates, Inc., A I M Global Holdings, Inc.,
and AIM Global Ventures Co.
__________________________________
* A trustee who is an "interested person" of the Fund and A I M
Advisors, Inc., as defined in the 1940 Act.
** Mr. Arthur and Ms. Relihan are married to each other.
4
<PAGE> 190
GARY T. CRUM, Senior Vice President (48)
Director and President, A I M Capital Management, Inc.; Director and
Senior Vice President, A I M Management Group Inc., A I M Advisors, Inc., A I M
Global Associates, Inc., A I M Global Holdings, Inc. and AIM Global Ventures
Co.; Director, A I M Distributors, Inc.; and Senior Vice President, AIM Global
Advisors Limited.
**CAROL F. RELIHAN, Vice President and Secretary (41)
Vice President, General Counsel and Secretary, A I M Management Group
Inc., A I M Advisors, Inc., A I M Fund Services, Inc., A I M Institutional Fund
Services, Inc. and Fund Management Company; Vice President and Secretary, A I M
Distributors, Inc., A I M Global Associates, Inc. and A I M Global Holdings,
Inc.; Vice President and Assistant Secretary, AIM Global Advisors Limited and
AIM Global Ventures Co.; and Secretary, A I M Capital Management, Inc.
DANA R. SUTTON, Vice President and Assistant Treasurer (36)
Vice President and Fund Controller, A I M Advisors, Inc.; and
Assistant Vice President and Assistant Treasurer, Fund Management Company.
MELVILLE B. COX, Vice President (52)
Vice President, A I M Advisors, Inc., A I M Capital Management, Inc.,
A I M Fund Services, Inc. and A I M Institutional 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 (35)
Director, A I M Global Management Company Limited; Senior Vice
President, A I M Capital Management, Inc. and AIM Global Advisors Limited; and
Vice President, A I M Advisors, Inc. and AIM Global Ventures Co.
J. ABBOTT SPRAGUE, Vice President (40)
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 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 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 Board of Trustees and such committee.
The members of the Investments Committee are Messrs. Bauer, Crockett,
Daly (Chairman), Kroeger and Pennock. The Investments Committee is responsible
for reviewing portfolio compliance, brokerage
** Mr. Arthur and Ms. Relihan are married to each other.
5
<PAGE> 191
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 of Trustees 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 of Trustees 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 Advisors,
Inc. ("AIM") or distributed and administered by FMC. All of the Fund's
executive officers hold similar offices with some or all of such investment
companies.
Remuneration of Trustees
Set forth below is information regarding compensation paid or accrued
during the fiscal year ended August 31, 1995 for each trustee of the Fund:
<TABLE>
<CAPTION>
===============================================================================================
DIRECTOR AGGREGATE RETIREMENT TOTAL
COMPENSATION BENEFITS COMPENSATION
FROM FUND(1) ACCRUED FROM ALL AIM
BY ALL AIM FUNDS(3)
FUNDS(2)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Charles T. Bauer $ 0 $ 0 $ 0
- -----------------------------------------------------------------------------------------------
Bruce L. Crockett 3,281 2,814 45,094
- -----------------------------------------------------------------------------------------------
Owen Daly II 3,298 14,375 45,844
- -----------------------------------------------------------------------------------------------
Carl Frischling 3,281 7,542 45,094
- -----------------------------------------------------------------------------------------------
Robert H. Graham 0 0 0
- -----------------------------------------------------------------------------------------------
John F. Kroeger 3,298 20,517 45,844
- -----------------------------------------------------------------------------------------------
Lewis F. Pennock 3,298 5,093 45,844
- -----------------------------------------------------------------------------------------------
Ian W. Robinson 3,249 10,396 45,094
- -----------------------------------------------------------------------------------------------
Louis S. Sklar 3,249 4,682 45,094
===============================================================================================
</TABLE>
______________________
(1) The total amount of compensation deferred by all Trustees of the Fund
during the fiscal year ended August 31, 1995, including interest
earned thereon, was $13,735.
(2) During the fiscal year ended August 31, 1995, the total amount of
expenses allocated to the Fund in respect of such retirement benefits
was $8,673. Data reflects compensation earned for the calendar year
ended December 31, 1994.
(3) Messrs. Bauer, Daly, Graham, Kroeger and Pennock each serves as a
Director or Trustee of a total of 11 AIM Funds. Messrs. Crockett,
Frischling, Robinson and Sklar each serves as a Director or Trustee of
a total of 10 AIM Funds. Data reflects compensation earned for the
calendar year ended December 31, 1994.
6
<PAGE> 192
AIM Funds Retirement Plan for Eligible Directors/Trustees
Under the terms of the AIM Funds Retirement Plan for Eligible
Directors/Trustees (the "Plan"), each director (who is not a employee of any of
the AIM Funds, A I M Management Group Inc. or any of their affiliates) may be
entitled to certain benefits upon retirement from the Board of Directors.
Pursuant to the Plan, the normal retirement date is the date on which the
eligible director has attained age 65 and has completed at least five years of
continuous service with one or more of the regulated investment companies
managed, administered or distributed by AIM or its affiliates (the "AIM
Funds"). Each eligible director is entitled to receive an annual benefit from
the AIM Funds commencing on the first day of the calendar quarter coincident
with or following his date of retirement equal to 5% of such Trustees'
compensation paid by the AIM Funds multiplied by the number of such Trustee's
years of service (not in excess of 10 years of service) completed with respect
to any of the AIM Funds. Such benefit is payable to each eligible trustee in
quarterly installments for a period of no more than five years. If an eligible
trustee dies after attaining the normal retirement date but before receipt of
any benefits under the Plan commences, the trustee's surviving spouse (if any)
shall receive a quarterly survivor's benefit equal to 50% of the amount payable
to the deceased trustee, for no more than five years beginning the first day of
the calendar quarter following the date of the director's death. Payments
under the Plan are not secured or funded by any AIM Fund.
Set forth below is a table that shows the estimated annual benefits
payable to an eligible director upon retirement assuming various compensation
and years of service classifications. The estimated credited years of service
as of December 31, 1994 for Messrs. Crockett, Daly, Frischling, Kroeger,
Pennock, Robinson and Sklar are 7, 8, 17, 17, 13, 7, and 5 years, respectively.
<TABLE>
<CAPTION>
Annual Compensation Paid
By All AIM Funds
<S> <C> <C> <C>
$60,000 $65,000
Number of Years of =========================================
Service With the 10 $30,000 $32,500
AIM Funds -----------------------------------------
9 $27,000 $29,250
-----------------------------------------
8 $24,000 $26,000
-----------------------------------------
7 $21,000 $22,750
-----------------------------------------
6 $18,000 $19,500
-----------------------------------------
5 $15,000 $16,250
=========================================
</TABLE>
Deferred Compensation Agreements
Messrs. Daly, Frischling, Kroeger, Robinson and Sklar (for purposes of
this paragraph only, the "deferring directors") have each executed a Deferred
Compensation Agreement (collectively, the "Agreements"). Pursuant to the
Agreements, the deferring directors may elect to defer receipt of up to 100% of
their compensation payable by the Fund, and such amounts are placed into a
deferral account. Currently, the deferring directors may select various AIM
Funds in which all or part of his deferral account shall be deemed to be
invested. Distributions from the deferring directors' deferral accounts will
be paid in cash, in generally equal quarterly installments over a period of
five years beginning on the date the deferring director's retirement benefits
commence under the Plan. The Fund's Board of Trustees, in its sole discretion,
may accelerate or extend the distribution of such deferral accounts after the
deferring director's termination of service as a director of the Fund. If a
deferring director dies prior to the distribution of amounts in his deferral
account, the balance of the deferral account will be distributed to his
designated beneficiary in a single lump sum payment as soon as practicable
after such deferring director's death. The Agreements are not funded and, with
respect to the payments of amounts held in the deferral accounts, the deferring
directors have the status of unsecured creditors of the Fund and of each other
AIM Fund from which they are deferring compensation.
The Portfolio paid legal fees of $9,818 for the year ended August 31,
1995 for services rendered by Reid & Priest as counsel to the Board of
Trustees. In September 1994, Kramer, Levin, Naftalis, Nessen,
7
<PAGE> 193
Kamin & Frankel was appointed as counsel to the Board of Trustees and the
Portfolio paid legal fees of $8,687 for services rendered by that firm as
counsel to the Board of Trustees. A trustee of the Fund was a partner of the
firm of Reid & Priest until September 1994, when he became a partner of Kramer,
Levin, Naftalis, Nessen, Kamin & Frankel.
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
"Advisory Agreement"). AIM was organized in 1976, and together with its
affiliates advises or manages 37 investment company portfolios. As of October
31, 1995, the total assets of the investment company portfolios managed or
advised by AIM and its affiliates were approximately $39.3 billion.
AIM and the Fund have adopted a Code of Ethics which requires
investment personnel to (a) pre-clear all personal securities transactions, (b)
to file reports regarding such transactions, and (c) to refrain from personally
engaging in (i) short-term trading of a security, (ii) transactions involving a
security within seven days of an AIM Fund transaction involving the same
security, and (iii) transactions involving securities being considered for
investment by an AIM Fund. The Code also prohibits investment personnel from
purchasing securities in an initial public offering. Personal trading reports
are reviewed periodically by AIM, and the Board of Trustees reviews annually
such reports (including information on any substantial violations of the Code).
Violations of the Code may result in censure, monetary penalities, suspension
or termination of employment.
Pursuant to the terms of the Advisory 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 .15%
Over $300 million to $1.5 billion .06%
Over $1.5 billion .05%
</TABLE>
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 Fund's shares are qualified
for sale.
The Advisory Agreement provides that, upon the request of the Board of
Trustees, AIM may perform or arrange for the provision of certain additional
services on behalf of the Portfolio which are not required by the Advisory
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 a 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 (the "Prior Advisory Agreement"), which provided for the
same level of compensation to AIM as the Advisory Agreement and the Advisory
Agreement currently in effect, AIM received fees from the Fund for the fiscal
8
<PAGE> 194
years ended August 31, 1995, 1994 and 1993, with respect to the Portfolio in
the amounts of $1,925,198, $2,337,627 and $2,211,262, respectively.
The Advisory Agreement was approved for its initial term by the Board
of Trustees on July 19, 1993. The Advisory Agreement will continue in effect
until June 30, 1996, 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
Advisory 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
Advisory Agreement on 60 days' notice without penalty. The Advisory 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.
FMC is a registered broker-dealer and a wholly-owned subsidiary of
AIM. FMC acts as distributor of the shares of the Class.
ADMINISTRATIVE SERVICES
AIM also provides certain additional services pursuant to a Master
Administrative Services Agreement dated as of October 18, 1993 between AIM and
the Fund (the "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 performs accounting 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 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 Prior Advisory Agreement, AIM was reimbursed for the fiscal
year ended August 31, 1993 in the amount of $82,419 for fund accounting
services for the Portfolio.
Under the Administrative Services Agreement, AIM was reimbursed for
the fiscal years ended August 31, 1995 and 1994, $135,387 and $97,055,
respectively, for fund accounting services.
Under the terms of a Transfer Agency and Service Agreement, dated July
1, 1995, between the Fund and AIFS, a registered transfer agent and
wholly-owned subsidiary of AIM, as well as under previous agreements, AIFS
received $114,179 and $13,752, for the fiscal years ended August 31, 1995
and 1994, respectively, for the provision of certain shareholder serivces for
the Fund.
EXPENSES
Expenses of the Fund include, but are not limited to, fees paid to AIM
under the Advisory Agreement, the charges and expenses of any registrar, any
custodian or depositary appointed by the Fund for the safekeeping of 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
9
<PAGE> 195
connection with the registration and maintenance of registration of the Fund
and 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 directors' meetings and of
preparing, printing and mailing of prospectuses, proxy statements and reports
to shareholders; fees and travel expenses of directors and director 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
directors 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 directors) 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 either of the Portfolios 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 one or both of the Portfolios are prorated among all
classes of such Portfolios based upon the relative net assets of each such
class. The expenses of the Portfolio are deducted from its total income before
dividends are paid. 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, 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 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 AGENT 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.
A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite
1919, Houston, Texas, 77046-1173, acts as transfer agent for the shares of the
Class and receives an annual fee from the Fund for its services in such
capacity in the amount of .007% of average daily net assets of the Fund,
payable monthly. Such compensation may be changed from time to time as is
agreed to by A I M Institutional Fund Services, Inc. and the Fund.
10
<PAGE> 196
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 Portfolio and its financial statements. The annual
financial statements are audited by the Fund's independent auditors. The 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.
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 25, 1995, 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 Texas 14.27%
P.O. Box 831000
Dallas, TX 75283-1000
Wachovia Bank and Trust 12.50%
P.O. Box 3075
Winston-Salem, NC 27150
Trust Company Bank 11.96%
P.O. Box 105504
Atlanta, GA 30348
601 Travis
Houston, TX 77002
U.S. Bank of Washington 5.62%
P.O. Box 3168
Portland, OR 97208
Victoria Bank & Trust 7.84%
One O'Connor Plaza 6th Fl.
Victoria, TX 77902
Texas Commerce Bank 6.47%
601 Travis
Houston, TX 77002
U.S. Bank of Washington 5.62%
P.O. Box 3168
Portland, OR 97208
</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.
11
<PAGE> 197
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- --------------
<S> <C>
FRNCO 5.04%
P.O. Box 939
Rogers, AR 72757-0939
</TABLE>
PERSONAL INVESTMENT CLASS
- -------------------------
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- --------------
<S> <C>
Frost National Bank 49.42%(b)
P.O. Box 2358
San Antonio, TX 78299
Republic National Bank 27.58%(b)
1 Hanson Pl., Lower Level
Brooklyn, NY 11243
The Bank of New York 21.30%
440 Mamaroneck Ave.
Harrison, NY 10528
</TABLE>
PRIVATE INVESTMENT CLASS
- ------------------------
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- --------------
<S> <C>
Liberty Bank and Trust Co. 41.02%(b)
of Oklahoma, N.A.
P.O. Box 25848
Oklahoma City, OK 73125
<S> <C>
First Trust/VAR & Co. 29.92%(b)
180 E. 5th Street
St. Paul, MN 55101
</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 more than 25% 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.
12
<PAGE> 198
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- --------------
<S> <C>
Huntington Capital Corp 14.82%
41 S. High St.
Columbus, OH 43287
Charter National Bank 6.39%
P.O. Box 1494
Houston, TX 77251-1494
United Counties Trust Co. 5.20%
30 Maple St.
Summit, NJ 07901
</TABLE>
CASH MANAGEMENT CLASS
- ---------------------
<TABLE>
<CAPTION>
PERCENT PERCENT
NAME AND ADDRESS OWNED OWNED OF
OF RECORD OWNER BENEFICIALLY ONLY RECORD ONLY
--------------- ----------------- -----------
<S> <C> <C>
City of Riverside 21.65% -0-
P.O. Box 12005
Riverside, CA 92502-2205
LA Export Terminal -0- 11.72%(a)
P.O. Box 1769
San Pedro, CA 90733
State Street Bank & Trust -0- 10.87%(a)
61 Broadway 15th Fl.
New York, NY 10006
Montgomery County 6.76% -0-
101 Monroe Street 15th Fl.
Rockville, MD 20850
City of West Sacramento 6.60% -0-
2101 Stone Blvd.
W. Sacramento, CA 95691
City of Ontario 5.26% -0-
303 East "B" St.
Ontario, CA 91764
</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 more than 25% 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> 199
RESOURCE CLASS
- --------------
AIM provided the initial capitalization of the Resource Class of the
Treasury Portfolio and, accordingly, as of the date of this Statement of
Additional Information, owned all the outstanding shares of beneficial interest
of the Resource Class of the Treasury Portfolio. Although the Resource Class
of the Treasury 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 Resource Class of the Treasury Portfolio
that are outstanding, it may be presumed to be in "control" of the Resource
Class of the Treasury Portfolio, as defined in the 1940 Act.
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 25, 1995, 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 28.6%(b)
1700 Farnam Street
Omaha, NE 68102
Muchmore & Co. 13.7%
750 Walnut Street
Cranford, NJ 07016-1205
Key Trust Company 10.1%
4900 Tiedeman
Cleveland, OH 44101-5971
Boatmen's Trust Company 8.7%
P.O. Box 14737
St. Louis, MO 63178
Wachovia Bank and Trust Co NA 7.6%
P.O. Box 3075
Winston-Salem, NC 27150
Liberty Bank & Trust Company 7.5%
of Tulsa, N.A.
P.O. Box 25848
Oklahoma City, OK 73125
</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 more than 25% 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.
14
<PAGE> 200
PRIVATE INVESTMENT CLASS
- ------------------------
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- --------------
<S> <C>
Huntington Capital Corp 100%(b)
41 S. High St.
Columbus, OH 43287
</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 more than 25% 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.
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 25, 1995, the
trustees and officers of the Fund beneficially owned less than 1% of each class
of the Fund's outstanding shares.
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, which require the Fund to adhere
to certain conditions. 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 Fund's Board of Trustees
to be of high quality with minimal credit risk.
The Board of Trustees is required to establish procedures designed to
stabilize, to the extent reasonably practicable, the Fund's price per share at
$1.00 for the Portfolio as computed for the purpose of sales and redemptions.
Such procedures include review of the Portfolio's holdings by the Board of
Trustees,
15
<PAGE> 201
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 sale of portfolio instruments prior to
maturity to realize capital gains or losses or to shorten the average portfolio
maturity; the withholding of dividends; redemption of shares in kind; or the
establishment of a net asset value per share by using available market
quotations.
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. The address of FMC is 11 Greenway
Plaza, Suite 1919, Houston, Texas 77046-1173. 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 pursuant
to Rule 12b-1 adopted by the Fund's Board of Trustees. FMC has not undertaken
to sell any specified number of shares of the Class. FMC does not receive any
fees with respect to the shares of the Class pursuant to the Distribution
Agreement.
On July 19, 1993, the Board of Trustees (including the affirmative
vote of 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, 1996, 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 to those of the Distribution Agreement was in effect through
October 15, 1993. The Fund or FMC may terminate the Distribution Agreement on
sixty 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 shareholder accounts and records;
(v) processing purchase and redemption transactions; (vi) automatic investment
in 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.
16
<PAGE> 202
For the fiscal year ended August 31, 1995, FMC received compensation
pursuant to the Plan in the amount of $58,430, or an amount equal to 0.08%, 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 of the Class may be obtained by calling the
Fund at (800) 877-7745. The current yield quoted will be the net average
annualized yield for an identified period. 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, 1995, the current yield and
the effective yield of the Class (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) were 5.63% and 5.79%, respectively, excluding
capital gains distributions. For the seven-day period ended August 31, 1995,
the current distribution rate and the effective distribution rate of the Class,
including capital gains distributions, (which assumes the reinvestment of
dividends for a 365-day year and a return for the entire year equal to the
annualized current distribution rate for the period) were 5.66% and 5.82%,
respectively. These performance numbers are quoted for illustration purposes
only. The performance numbers for any other seven-day period may be
substantially different from those quoted above.
The Fund may compare the performance of the Class or the performance
of securities in which it may invest to:
o IBC/Donoghue's Money Fund Averages, which are average
yields of various types of money market funds that include the effect
of compounding distributions;
o other mutual funds, especially those with similar
investment objectives. These comparisons may be based on data
published by IBC/Donoghue's Money Fund Report 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;
o 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
o 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' 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.
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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
The Portfolio seeks to achieve its objective by investing in high
grade money market instruments. 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 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 enter into repurchase
agreements with respect to U.S. Treasury securities. The Portfolio may also
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 repurchase agreement. The Portfolio
will only borrow money or enter into reverse repurchase agreements for
temporary or emergency purposes to facilitate the orderly sale of portfolio
securities to accommodate abnormally heavy redemption requests should they
occur.
ELIGIBLE SECURITIES
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.
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(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).
INVESTMENT RESTRICTIONS
As a matter of fundamental policy which may not be changed without a
majority vote of 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 amended from time to time;
(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;
__________________________________
(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.
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(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 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.
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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 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. 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.
From time to time, the Fund may sell a security, or purchase a
security from an AIM Fund or another investment account advised by AIM or A I M
Capital Management, Inc. ("AIM Capital"), when such transactions comply with
applicable rules and regulations and are deemed consistent with the investment
objective(s) and policies of the investment accounts advised by AIM or AIM
Capital. Procedures pursuant to Rule 17a-7 under the 1940 Act regarding
transactions between investment accounts advised by AIM or AIM Capital have
been adopted by the Boards of Directors/Trustees of the various AIM Funds,
including the Fund. Although such transactions may result in custodian, tax or
other related expenses, no brokerage commissions or other direct transaction
costs are generated by transactions among the investment accounts advised by
AIM or AIM Capital.
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, 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.
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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. Furthermore, the 1940 Act prohibits the Fund from purchasing a
security being publicly underwritten by a syndicate of which persons affiliated
with the Fund are a member except in accordance with certain conditions. These
conditions may restrict the ability of the Portfolio to purchase Money Market
obligations being publicly underwritten by such a syndicate, and the Portfolio
may be required to wait until the syndicate has been terminated before buying
such securities. At such time, the market price of the securities may be
higher or lower than the original offering price. A person affiliated with the
Fund may, from time to time, serve as placement agent or financial advisor to
an issuer of Money Market obligations and be paid a fee by such issuer. The
Portfolio may purchase such Money Market obligations directly from the issuer,
provided that the purchase made in accordance with procedures adopted by the
Fund's Board of Trustees and any such purchases are reviewed at least quarterly
by the Fund's Board of Trustees and a determination is made that all such
purchases were effected in compliance with such procedures, including a
determination that the placement fee or other remuneration paid by the issuer
to the person affiliated with the Fund was fair and reasonable in relation to
the fees charged by others performing similar services. During the fiscal year
ended August 31, 1995, no securities or instruments were purchased by the
Portfolio from issuers who paid placement fees or other compensation to a
broker affiliated with the Portfolio.
TAX MATTERS
The following is only a summary of certain additional tax
considerations generally affecting the Portfolio 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 Portfolio 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 Portfolio 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 Portfolio 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
Portfolio 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
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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 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 years 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 (a "taxable year election")).
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 annually as to the
U.S. federal income tax consequences of distributions made (or deemed made)
during the year.
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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."
SALE OR REDEMPTION OF SHARES
A shareholder will recognize gain or loss on the sale or redemption of
shares of the Class in an amount equal to the difference between the proceeds
of the sale or redemption and the shareholder's adjusted tax basis in the
shares. All or a portion of any loss so recognized may be disallowed if the
shareholder purchases other shares of the Class within 30 days before or after
the sale or redemption. In general, any gain or loss arising from (or treated
as arising from) the sale or redemption of shares of the Class will be
considered capital gain or loss and will be long-term capital gain or loss if
the shares were held for longer than one year. However, any capital loss
arising from the sale or redemption of shares held for six months or less will
be treated as a long-term capital loss to the extent of the amount of capital
gain dividends received on such shares. For this purpose, the special holding
period rules of Code Section 246(c)(3) and (4) generally will apply in
determining the holding period of shares.
FOREIGN SHAREHOLDERS
Taxation of a shareholder who, as to the United States, is a
nonresident alien individual, foreign trust or estate, foreign corporation, or
foreign partnership ("foreign shareholder"), depends on whether the income from
the Portfolio is "effectively connected" with a U.S. trade or business carried
on by such shareholder.
If the income from the Portfolio is not effectively connected with a
U.S. trade or business carried on by a foreign shareholder, dividends and
distributions (other than capital gains dividends) will be subject to U.S.
withholding tax at the rate of 30% (or lower treaty rate) upon the gross amount
of the dividend or distribution. Such a foreign shareholder would generally be
exempt from U.S. federal income tax on gains realized on the sale of shares of
the Portfolio, capital gain dividends and amounts retained by the Class that
are designated as undistributed capital gains.
If the income from the Portfolio is effectively connected with a U.S.
trade or business carried on by a foreign shareholder, then ordinary income
dividends, capital gain dividends and any gains realized upon the sale of
shares of the Portfolio will be subject to U.S. federal income tax at the rates
applicable to U.S. citizens or domestic corporations.
In the case of foreign noncorporate shareholders, the Portfolio may be
required to withhold U.S. federal income tax at a rate of 31% on distributions
that are otherwise exempt from withholding tax unless such shareholders furnish
the Portfolio with proper notification of their foreign status.
The tax consequences to a foreign shareholder entitled to claim the
benefits of an applicable tax treaty may be different from those described
herein. Foreign shareholders are urged to consult their own tax advisers with
respect to the particular tax consequences to them of an investment in the
Portfolio, including the applicability of foreign taxes.
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 November 1, 1995. 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.
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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.
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FINANCIAL STATEMENTS
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INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholders
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, 1995, 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, 1995 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Treasury Portfolio as of August 31, 1995, 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
/s/ KPMG Peat Marwick LLP
Houston, Texas
October 6, 1995
FS-1
<PAGE> 213
SCHEDULE OF INVESTMENTS
August 31, 1995
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
U.S. TREASURY SECURITIES - 26.52%
U.S. TREASURY BILLS(a) - 22.83%
5.780% 10/05/95 $ 25,000 $ 24,863,528
- ---------------------------------------------------------------------------
5.750% 10/26/95 50,000 49,560,764
- ---------------------------------------------------------------------------
5.775% 10/26/95 30,000 29,735,313
- ---------------------------------------------------------------------------
5.580% 11/02/95 25,000 24,759,750
- ---------------------------------------------------------------------------
5.620% 11/09/95 50,000 49,461,417
- ---------------------------------------------------------------------------
5.590% 11/16/95 30,000 29,645,966
- ---------------------------------------------------------------------------
5.655% 11/16/95 50,000 49,403,084
- ---------------------------------------------------------------------------
5.220% 11/30/95 12,500 12,336,875
- ---------------------------------------------------------------------------
5.590% 11/30/95 25,000 24,650,625
- ---------------------------------------------------------------------------
5.480% 12/07/95 25,000 24,630,861
- ---------------------------------------------------------------------------
5.335% 12/21/95 25,000 24,588,760
- ---------------------------------------------------------------------------
5.410% 12/21/95 50,000 49,165,958
- ---------------------------------------------------------------------------
5.330% 12/28/95 50,000 49,126,472
- ---------------------------------------------------------------------------
5.340% 12/28/95 25,000 24,562,416
- ---------------------------------------------------------------------------
5.280% 01/04/96 25,000 24,541,667
- ---------------------------------------------------------------------------
5.400% 01/04/96 20,000 19,625,000
- ---------------------------------------------------------------------------
5.410% 01/04/96 25,000 24,530,382
- ---------------------------------------------------------------------------
5.300% 01/11/96 34,200 33,535,380
- ---------------------------------------------------------------------------
5.380% 01/18/96 25,000 24,480,681
- ---------------------------------------------------------------------------
5.400% 01/25/96 25,000 24,452,500
- ---------------------------------------------------------------------------
5.415% 02/01/96 48,000 46,895,340
- ---------------------------------------------------------------------------
5.395% 02/08/96 25,000 24,400,556
- ---------------------------------------------------------------------------
5.460% 02/08/96 25,000 24,393,333
- ---------------------------------------------------------------------------
5.540% 08/22/96 20,000 18,904,224
- ---------------------------------------------------------------------------
5.550% 08/22/96 12,600 11,908,428
- ---------------------------------------------------------------------------
744,159,280
- ---------------------------------------------------------------------------
U.S. TREASURY NOTES - 3.69%
8.625% 10/15/95 25,000 25,076,660
- ---------------------------------------------------------------------------
4.250% 11/30/95 50,000 49,768,670
- ---------------------------------------------------------------------------
7.750% 03/31/96 45,000 45,488,910
- ---------------------------------------------------------------------------
120,334,240
- ---------------------------------------------------------------------------
Total U.S. Treasury Securities 864,493,520
- ---------------------------------------------------------------------------
Total Investments (excluding Repurchase
Agreements) 864,493,520
- ---------------------------------------------------------------------------
</TABLE>
FS-2
<PAGE> 214
<TABLE>
<CAPTION>
MATURITY PAR (000) VALUE
<S> <C> <C> <C>
REPURCHASE AGREEMENTS(b) - 73.86%
BT Securities Corp., 5.78%(c) -- $130,000 $ 130,000,000
- -----------------------------------------------------------------------------
Barclays de Zoete Wedd Government
Securities, Inc., 5.84%(d) 09/01/95 140,000 140,000,000
- -----------------------------------------------------------------------------
Bear, Stearns & Co. Inc., 5.84%(e) -- 140,000 140,000,000
- -----------------------------------------------------------------------------
Daiwa Securities America Inc., 5.84%(f) 09/01/95 117,902 117,902,411
- -----------------------------------------------------------------------------
Deutsche Bank Government Securities,
Inc., 5.85%(g) -- 160,000 160,000,000
5.85%(h) -- 400,000 400,000,000
- -----------------------------------------------------------------------------
First Boston Corp. (The), 5.80%(i) 09/01/95 140,000 140,000,000
- -----------------------------------------------------------------------------
Fuji Securities Inc., 5.85%(j) -- 100,000 100,000,000
5.87%(k) -- 110,000 110,000,000
- -----------------------------------------------------------------------------
Goldman, Sachs & Co., 5.80%(l) 09/01/95 140,000 140,000,000
- -----------------------------------------------------------------------------
Lehman Government Securities, Inc.,
5.82%(m) -- 140,000 140,000,000
- -----------------------------------------------------------------------------
Nikko Securities Co., Ltd., 5.85%(n) -- 130,000 130,000,000
- -----------------------------------------------------------------------------
Nomura Securities International, Inc.,
5.83%(o) 09/01/95 140,000 140,000,000
- -----------------------------------------------------------------------------
SBC Government Securities, Inc.,
5.83%(p) -- 140,000 140,000,000
- -----------------------------------------------------------------------------
State Street Bank & Trust Co., 5.81%(q) 09/01/95 140,000 140,000,000
- -----------------------------------------------------------------------------
UBS Securities Inc., 5.85%(r) -- 140,000 140,000,000
- -----------------------------------------------------------------------------
Total Repurchase Agreements 2,407,902,411
- -----------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.38% 3,272,395,931(s)
- -----------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES --
(0.38%) (12,427,259)
- -----------------------------------------------------------------------------
NET ASSETS -- 100.00% $3,259,968,672
=============================================================================
</TABLE>
(a) U.S. Treasury bills are traded on a discount basis. In such cases the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Portfolio.
(b) 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% of the sales price of
the repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds managed by
the investment advisor.
(c) Open repurchase agreement entered into 02/27/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $95,590,000 U.S. Treasury Notes, 10.375% to 12.75% due
11/15/09 to 11/15/10.
(d) Entered into 08/31/95 with a maturing value of $140,022,711. Collateralized
by $138,800,000 U.S. Treasury obligations, 4.25% to 8.875% due 10/15/95 to
08/15/25.
(e) Open repurchase agreement entered into 07/06/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $264,550,000 U.S. Treasury STRIPS, due 05/15/97 to
02/15/09.
(f) Joint repurchase agreement entered into 08/31/95 with a maturing value of
$209,464,857. Collateralized by $204,224,000 U.S. Treasury obligations, 0%
to 10.75% due 11/30/95 to 05/15/16.
(g) Open repurchase agreement entered into 04/13/94; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $151,682,000 U.S. Treasury obligations, 0% to 8.75% due
04/04/96 to 05/15/21.
(h) Open repurchase agreement entered into 12/28/94; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $339,762,000 U.S. Treasury obligations, 5.375% to 11.25%
due 09/30/96 to 02/15/20.
FS-3
<PAGE> 215
(i) Entered into 08/31/95 with a maturing value of $140,022,556. Collateralized
by $145,970,000 U.S. Treasury Bills due 11/30/95 to 01/04/96.
(j) Open repurchase agreement entered into 01/11/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $216,668,000 U.S. Treasury STRIPS, due 02/15/99 to
05/15/14.
(k) Open joint repurchase agreement entered into 06/20/95; however, either
party may terminate the agreement upon demand. Interest rates are
redetermined daily. Collateralized by $332,491,000 U.S. Treasury
obligations 0% to 9.25% due 05/15/97 to 02/15/16.
(l) Entered into 08/31/95 with a maturing value of $140,022,556. Collateralized
by $131,445,000 U.S. Treasury obligations, 3.875% to 12.00% due 10/31/95 to
11/15/18.
(m) Open repurchase agreement entered into 03/01/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $594,791,000 U.S. Treasury STRIPS, due 05/15/98 to
05/15/21.
(n) Open repurchase agreement entered into 05/15/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $132,685,000 U.S. Treasury Notes, 5.875% due 08/15/98.
(o) Entered into 08/31/95 with a maturing value of $140,022,672. Collateralized
by $130,344,000 U.S. Treasury obligations, 0% to 11.125% due 12/28/95 to
11/15/24.
(p) Open repurchase agreement entered into 08/16/95; however, either party may
terminate the agreement upon demand. Interest rates are redetermined daily.
Collateralized by $116,853,000 U.S. Treasury obligations, 0% to 11.875% due
03/07/96 to 08/15/23.
(q) Entered into 08/31/95 with a maturing value of $140,022,594. Collateralized
by $132,870,000 U.S. Treasury Notes, 7.125% to 7.75% due 09/30/99 to
11/30/99.
(r) Open joint repurchase agreement entered into 08/18/95; however, either
party may terminate the agreement upon demand. Collateralized by
$249,645,000 U.S. Treasury Bills, due 12/14/95 to 01/18/96.
(s) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
FS-4
<PAGE> 216
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments, excluding repurchase agreements, at value
(amortized cost) $ 864,493,520
- ------------------------------------------------------------------------
Repurchase agreements 2,407,902,411
- ------------------------------------------------------------------------
Interest receivable 3,526,829
- ------------------------------------------------------------------------
Investment for deferred compensation plan 27,164
- ------------------------------------------------------------------------
Other assets 170,052
- ------------------------------------------------------------------------
Total assets 3,276,119,976
- ------------------------------------------------------------------------
LIABILITIES:
Deferred compensation payable 27,164
- ------------------------------------------------------------------------
Dividends payable 15,637,389
- ------------------------------------------------------------------------
Accrued advisory fees 173,398
- ------------------------------------------------------------------------
Accrued distribution fees 150,161
- ------------------------------------------------------------------------
Accrued transfer agent fees 30,953
- ------------------------------------------------------------------------
Accrued trustees' fees 6,457
- ------------------------------------------------------------------------
Accrued administrative services fees 22,829
- ------------------------------------------------------------------------
Accrued operating expenses 102,953
- ------------------------------------------------------------------------
Total liabilities 16,151,304
- ------------------------------------------------------------------------
NET ASSETS $3,259,968,672
========================================================================
NET ASSETS:
Institutional Class $2,669,637,166
========================================================================
Private Investment Class $ 394,585,487
========================================================================
Personal Investment Class $ 114,527,171
========================================================================
Cash Management Class $ 81,218,848
========================================================================
SHARES OF BENEFICIAL INTEREST, $.01 PAR VALUE PER SHARE:
Institutional Class 2,669,507,426
========================================================================
Private Investment Class 394,566,270
========================================================================
Personal Investment Class 114,521,888
========================================================================
Cash Management Class 81,214,894
========================================================================
Net asset value, offering and redemption price per share $ 1.00
========================================================================
</TABLE>
See Notes to Financial Statements.
FS-5
<PAGE> 217
STATEMENT OF OPERATIONS
For the year ended August 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $169,306,110
- -----------------------------------------------------------------------------
EXPENSES:
Advisory fees 1,925,198
- -----------------------------------------------------------------------------
Custodian fees 315,447
- -----------------------------------------------------------------------------
Administrative services fees 208,753
- -----------------------------------------------------------------------------
Trustees' fees and expenses 33,135
- -----------------------------------------------------------------------------
Transfer agent fees 91,597
- -----------------------------------------------------------------------------
Professional fees 96,603
- -----------------------------------------------------------------------------
Distribution fees (Note 2) 1,751,898
- -----------------------------------------------------------------------------
Other 271,094
- -----------------------------------------------------------------------------
Total expenses 4,693,725
=============================================================================
Less expenses assumed by advisor (47,000)
=============================================================================
Net expenses 4,646,725
- -----------------------------------------------------------------------------
Net investment income 164,659,385
- -----------------------------------------------------------------------------
Net realized gain on sales of investments 67,230
- -----------------------------------------------------------------------------
Net increase in net assets resulting from operations $164,726,615
=============================================================================
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
-------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 164,659,385 $ 129,450,854
- -----------------------------------------------------------------------------
Net realized gain on sales of investments 67,230 63,526
- -----------------------------------------------------------------------------
Net increase in net assets resulting from
operations 164,726,615 129,514,380
- -----------------------------------------------------------------------------
Distributions to shareholders from net
investment income (164,659,385) (129,450,854)
- -----------------------------------------------------------------------------
Distributions to shareholders from net
realized gains on investments (63,547) --
- -----------------------------------------------------------------------------
Share transactions-net 232,658,749 (908,258,039)
- -----------------------------------------------------------------------------
Net increase (decrease) in net assets 232,662,432 (908,194,513)
- -----------------------------------------------------------------------------
NET ASSETS:
Beginning of period 3,027,306,240 3,935,500,753
- -----------------------------------------------------------------------------
End of period $3,259,968,672 $3,027,306,240
=============================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $3,259,810,478 $3,027,151,729
- -----------------------------------------------------------------------------
Undistributed net realized gain on sales of
investments 158,194 154,511
- -----------------------------------------------------------------------------
$3,259,968,672 $3,027,306,240
=============================================================================
</TABLE>
See Notes to Financial Statements.
FS-6
<PAGE> 218
NOTES TO FINANCIAL STATEMENTS
August 31, 1995
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
Short-Term Investments Trust (the "Fund") is registered 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 class of shares are
charged to that class' operations. Expenses which are applicable to more
than one class, e.g., advisory fees, are allocated among them.
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 0.15%
- -----------------------------------------------------------------------
Over $300 million to $1.5 billion 0.06%
- -----------------------------------------------------------------------
Over $1.5 billion 0.05%
- -----------------------------------------------------------------------
</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 $47,000 on the Treasury Portfolio Personal Investment Class during
the year ended August 31, 1995.
The Portfolio, pursuant to a master administrative services agreement with
AIM, has agreed to reimburse AIM for certain costs incurred in providing
accounting services to the Portfolio. During the year ended August 31, 1995,
the Portfolio reimbursed AIM $135,387 for such services. During the year ended
August 31, 1995, the Portfolio paid A I M Institutional Fund Services, Inc.
("AIFS") $114,179 for shareholder and transfer agency services. Effective July
1, 1995, AIFS became the exclusive transfer agent of the Portfolio.
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
FS-7
<PAGE> 219
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, 1995, 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 $1,244,628, $448,840 and $58,430, respectively, under the Plan.
Certain officers and trustees of the Trust are officers of AIM, FMC and AIFS.
The Portfolio paid legal fees of $9,818 for the year ended August 31, 1995 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 and the Portfolio paid legal fees of $8,687
for services rendered by that firm as counsel to the Board of Trustees. A
trustee of the Trust was a member of the firm of Reid & Priest until September
1994, when he became a member of Kramer, Levin, Naftalis, Nessen, Kamin &
Frankel.
NOTE 3-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is
not an "interested person" of AIM. The Fund invests trustees' fees, if so
elected by a trustee, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 4-SHARE INFORMATION
Changes in shares outstanding for the years ended August 31, 1995 and 1994 were
as follows:
<TABLE>
<CAPTION>
1995 1994
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
Sold:
Institutional Class 13,265,129,336 $ 13,265,129,336 26,026,026,543 $ 26,026,026,543
- ---------------------------------------------------------------------------------------------
Private Investment
Class 3,483,722,415 3,483,722,415 827,921,059 827,921,059
- ---------------------------------------------------------------------------------------------
Personal Investment
Class 628,065,796 628,065,796 343,375,963 343,375,963
- ---------------------------------------------------------------------------------------------
Cash Management Class 97,195,296 97,195,296 142,326,763 142,326,763
- ---------------------------------------------------------------------------------------------
Issued as reinvestment
of dividends:
Institutional Class 11,558,277 11,558,277 11,688,081 11,688,081
- ---------------------------------------------------------------------------------------------
Private Investment
Class 2,167,906 2,167,906 361,516 361,516
- ---------------------------------------------------------------------------------------------
Personal Investment
Class 2,719,512 2,719,512 1,153,701 1,153,701
- ---------------------------------------------------------------------------------------------
Cash Management Class 2,671,137 2,671,137 1,883,744 1,883,744
- ---------------------------------------------------------------------------------------------
Reacquired:
Institutional Class (13,059,443,790) (13,059,443,790) (27,238,038,910) (27,238,038,910)
- ---------------------------------------------------------------------------------------------
Private Investment
Class (3,504,019,234) (3,504,019,234) (619,863,560) (619,863,560)
- ---------------------------------------------------------------------------------------------
Personal Investment
Class (604,841,208) (604,841,208) (325,817,071) (325,817,071)
- ---------------------------------------------------------------------------------------------
Cash Management Class (92,266,694) (92,266,694) (79,275,868) (79,275,868)
- ---------------------------------------------------------------------------------------------
Net increase (decrease) 232,658,749 $ 232,658,749 (908,258,039) $ (908,258,039)
=============================================================================================
</TABLE>
FS-8
<PAGE> 220
NOTE 5-FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share outstanding of
the Treasury Portfolio Cash Management Class during each of the years in the
two-year period ended August 31, 1995 and the period August 17, 1993 (date
operations commenced) through August 31, 1993.
<TABLE>
<CAPTION>
1995 1994 1993
------- ------- ------
<S> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------- ------- ------- ------
Income from investment operations:
Net investment income 0.05 0.03 0.001
- ----------------------------------------- ------- ------- ------
Less distributions:
Dividends from net investment income (0.05) (0.03) (0.001)
- ----------------------------------------- ------- ------- ------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00
========================================= ======= ======= ======
Total return 5.57% 3.44% 2.91%(c)
========================================= ======= ======= ======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $81,219 $73,619 $8,681
========================================= ======= ======= ======
Ratio of expenses to average net assets 0.18%(a) 0.16%(b) 0.16%(c)
========================================= ======= ======= ======
Ratio of net investment income to average
net assets 5.42%(a) 3.48%(b) 3.00%(c)
========================================= ======= ======= ======
</TABLE>
(a) Ratios are based on average net assets of $73,038,062.
(b) Had there been no expense reimbursements, the ratios of expenses and net
investment income to average net assets would have been 0.19% and 3.45%,
respectively.
(c) Annualized.
FS-9
<PAGE> 221
SUBJECT TO COMPLETION DATED NOVEMBER 13, 1995
SHORT-TERM
INVESTMENTS TRUST
PROSPECTUS
- --------------------------------------------------------------------------------
TRUST The Treasury Portfolio is a money market fund
PORTFOLIO whose investment objective is the maximization of
current income to the extent consistent with the
RESOURCE preservation of capital and the maintenance of
CLASS liquidity. The Treasury Portfolio seeks to achieve its
objective by investing in direct obligations of the
DECEMBER 14, 1995 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 Resource Class of the
Treasury Portfolio, a class of shares designed to be a
convenient vehicle in which institutional customers of
banks, certain broker-dealers and other financial
institutions can invest in a diversified money market
fund.
The Fund also offers shares of other classes of
the Treasury Portfolio pursuant to separate
prospectuses: the Institutional Class, Private
Investment Class, Personal Investment Class and Cash
Management 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 RESOURCE CLASS OF THE TREASURY PORTFOLIO
AND SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE. A
STATEMENT OF ADDITIONAL INFORMATION, DATED DECEMBER 14,
1995, HAS BEEN FILED WITH THE UNITED STATES SECURITIES
AND EXCHANGE COMMISSION AND IS HEREBY INCORPORATED BY
REFERENCE. FOR A COPY OF THE STATEMENT OF ADDITIONAL
INFORMATION WITHOUT CHARGE, WRITE TO THE ADDRESS BELOW
OR CALL (800) 825-6858.
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.
[LOGO APPEARS HERE]
Fund Management Company
11 Greenway Plaza
Suite 1919
Houston, Texas 77046-1173
(800) 825-6858
******************************************************************************
* *
* INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A *
* REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED *
* WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT *
* BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE *
* REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT *
* CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY *
* NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH *
* SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO *
* REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH *
* STATE. *
* *
******************************************************************************
<PAGE> 222
SUMMARY
THE PORTFOLIO AND ITS INVESTMENT OBJECTIVE
The Fund is an open-end diversified series management investment company. This
Prospectus relates to the Resource 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 shares of other
classes 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 separate
prospectuses. Such classes have different distribution arrangements and are
designed for institutional and other categories of investors. The portfolios of
the Fund are referred to collectively as the "Portfolios."
Because the Portfolio 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 institutional
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 Portfolio. See "Purchase of Shares."
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
4:00 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 4:00 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 5:00 p.m. Eastern Time on that day.
See "Dividends."
CONSTANT NET ASSET VALUE
The Fund uses the amortized cost method of valuing the securities of 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 Portfolio's investment advisor and
receives a fee based on the Portfolio'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 a separate 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" and "-- Administrative Services."
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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, FMC receives a fee from the Fund of up to 0.20% of the
average daily net assets of the Portfolio attributable to the shares of the
Class as compensation for distribution-related services pursuant to plans of
distribution adopted by the Fund's Board of Trustees. The Fund may also make
payments pursuant to such distribution plans to certain broker-dealers or other
financial institutions for distribution-related services. 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."
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK AND AIM INSTITUTIONAL FUNDS ARE REGISTERED
SERVICE MARKS OF A I M MANAGEMENT GROUP INC.
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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 -- RESOURCE CLASS
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management fees.......................................................... 0.06%
12b-1 fees (after fee waivers)*.......................................... 0.16%**
Other expenses (estimated):
Custodian fees........................................................ 0.01%
Other................................................................. 0.03%
----
Total other expenses............................................. 0.04%
----
Total portfolio operating expenses -- Resource Class..................... 0.26%
=====
</TABLE>
- ---------------
* Had there been no fee waivers, 12b-1 fees would have been 0.20%.
** 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................................................................ $ 3
3 years............................................................... $ 8
</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 Other Expenses and
12b-1 fees figure is based upon estimated costs and the estimated size of the
Class and the Portfolio and estimated fees to be charged for the current fiscal
year. Thus, actual expenses may be greater or less than such estimates. To the
extent any service providers assume expenses of the Class, such assumption of
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 -- Resource Class" remain the same in the years shown.
The example shown in the above table is based on the amounts listed under
"Annual Portfolio Operating Expenses." 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.
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SUITABILITY FOR INVESTORS
The shares of the Class are intended for use primarily by institutional
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. It is expected that the shares of the Class may be particularly
suitable investments for corporate cash managers, municipalities or other public
entities. The minimum initial investment is $10,000.
Investors in the shares of 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 shares 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 the 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 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 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 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
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net asset value of the Portfolio's shares. Reverse repurchase agreements are
considered to be borrowings by the Portfolio 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.
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 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.
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 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 or 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.
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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 United
States 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.
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,
the 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 4:00 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 institutional customers of banks, certain
broker-dealers and other financial institutions (individually, 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 laws 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 Application,
which can be obtained from A I M Institutional Fund Services, Inc. ("AIFS"),
must be completed and sent to AIFS at 11 Greenway Plaza, Suite 1919, Houston,
Texas 77046-1173. Any changes made to the information provided in the Account
Application must be made in writing or by completing a new form and providing it
to AIFS. 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 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 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 additional shares of the Class directly, 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
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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 AIFS.
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 and
notice of such order is provided to AIFS 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 "Resource 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. 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(R), 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
Application, but may be remitted by check upon request by a shareholder. If a
redemption request is received by AIFS prior to 4:00 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 AIFS after 4:00 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 4:00 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 or AIFS, the
Fund's transfer agent.
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.
The shares of the Class are not redeemable at the option of the Fund unless
the Board of Trustees of the Fund determines in its sole discretion that failure
to so redeem may have materially adverse consequences to the shareholders of the
Fund.
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
4:00 p.m. Eastern Time on the day of declaration. Net income for dividend
purposes is determined daily as of 4:00 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' pro rata share of the total
outstanding shares representing an interest in the Portfolio, less (b) Fund
expenses, such as custodian fees, trustees' fees, accounting and legal expenses,
based upon such class' pro rata share of the net assets of the Portfolio, less
(c) expenses directly attributable to such class, 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
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<PAGE> 229
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 normally be paid by wire transfer.
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 at the net asset value as of 4:00 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 AIFS at
11 Greenway Plaza, Suite 1919, Houston, TX 77046-1173 and will become effective
with dividends paid after its receipt by AIFS. If a shareholder redeems all the
Shares 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 its 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 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.
The Portfolio will be treated as a separate corporation for purposes of
determining taxable income, distribution requirements and other requirements of
Subchapter M. Therefore, the Portfolio may not offset its gains against the
losses of the other portfolio of the Fund and each portfolio of the Fund 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 November 1, 1995, which are subject to change
by legislation or administrative action.
NET ASSET VALUE
The net asset value per share of the Portfolio is determined daily as of 4:00
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 SEC 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
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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)
825-6858. 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 the
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 an investor before making an investment in the
Portfolio.
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 5:00 p.m.
Eastern Time.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Portfolio. Such a practice
will have the effect of increasing the Portfolio's yield and total return.
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 by the Portfolio and financial statements. The annual financial
statements are audited by the Fund's independent auditors.
Unless otherwise requested by the shareholder, each shareholder will be
provided by its Institution with a written confirmation for each transaction.
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 objective 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 October 31, 1995, the
total assets of the investment company portfolios managed or advised by AIM and
its affiliates were approximately $39.3 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"). AIM Management is a holding company engaged in the financial
services business.
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, 1995, AIM received fees from the Fund,
with respect to the Portfolio under the Advisory Agreement which represented
0.06% of the Portfolio's average daily net assets.
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ADMINISTRATIVE SERVICES
The Fund has entered into a Master Administrative Services Agreement dated as
of 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") entered
into an Administrative Services Agreement pursuant to which AIFS was reimbursed
by AIM for its costs in providing shareholder services for the Fund. AIFS or its
affiliates received reimbursement of shareholder services costs of $73,366 with
respect to the Portfolio for the year ended August 31, 1995 which represented
0.002% of the Portfolio's average daily net assets. The Administrative Services
Agreement between AIM and AIFS was terminated July 1, 1995. Beginning July 1,
1995, AIFS received fees with respect to the Portfolio for its provision of
shareholder services pursuant to a Transfer Agent and Service Agreement with the
Fund. For the period July 1, 1995 through August 31, 1995, AIFS received
transfer agency fees from AIM with respect to the Portfolio in the amount of
$40,813.
EXPENSES
In addition to fees paid to AIM pursuant to the Advisory 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.
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 agree to waive voluntarily 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
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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 Fund 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 financial institutions 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 financial
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
.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. Sales
of the shares of the Class may not be used 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 the shares of the Class an amount equal to
0.20% on an annualized basis of the average daily net assets of the Portfolio
attributable to the Class. Such amount 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 0.20% of the average daily net assets of the
Portfolio attributable to the Class which are attributable to the customers of
such dealers or financial institutions. 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
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 the
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 holders of
the shares 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 class to which the Plan relates. 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
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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 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). Shares of beneficial interest of the Fund are divided into seven
classes. Five 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. The other classes of the Fund
may have different sales charges and other expenses which may affect
performance. An investor may obtain information concerning the Fund's other
classes by contacting FMC.
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 holders of shares of the Portfolio 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 or allocated to the respective portfolio based on the liquidation
value of the 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 of the Fund without
shareholder approval.
TRANSFER AGENT 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.
A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 1919, Houston,
Texas 77046-1173, acts as 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.
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) 825-6858.
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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 SEC. 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 SEC. Copies of the registration statement,
including items omitted herein, may be obtained from the SEC by paying the
charges prescribed under its rules and regulations.
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<TABLE>
<S> <C>
===================================== ====================================
SHORT-TERM INVESTMENTS TRUST PROSPECTUS
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
(800) 825-6858 December 14, 1995
INVESTMENT ADVISOR
A I M ADVISORS, INC.
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173 SHORT-TERM
(713) 626-1919 INVESTMENTS TRUST
DISTRIBUTOR
FUND MANAGEMENT COMPANY
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
(800) 877-7745 ---------------------
AUDITORS TREASURY PORTFOLIO
KPMG PEAT MARWICK LLP
700 Louisiana
NationsBank Bldg. ---------------------
Houston, Texas 77002
CUSTODIAN
THE BANK OF NEW YORK
110 Washington Street,
8th Floor RESOURCE CLASS
New York, New York 10286
TRANSFER AGENT
A I M INSTITUTIONAL FUND SERVICES, INC.
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173 <CAPTION>
PAGE
----
<S> <C> <C>
NO PERSON HAS BEEN AUTHORIZED TO Summary...................... 2
GIVE ANY INFORMATION OR TO MAKE ANY Table of Fees and Expenses... 4
REPRESENTATIONS NOT CONTAINED IN THIS Suitability for Investors.... 5
PROSPECTUS IN CONNECTION WITH THE Investment Program........... 5
OFFERING MADE BY THIS PROSPECTUS, AND Purchase of Shares........... 7
IF GIVEN OR MADE, SUCH INFORMATION OR Redemption of Shares......... 8
REPRESENTATIONS MUST NOT BE RELIED Dividends.................... 8
UPON AS HAVING BEEN AUTHORIZED BY THE Taxes........................ 9
FUND OR THE DISTRIBUTOR. THIS Net Asset Value.............. 9
PROSPECTUS DOES NOT CONSTITUTE AN Yield Information............ 10
OFFER IN ANY JURISDICTION TO ANY Reports to Shareholders...... 10
PERSON TO WHOM SUCH OFFERING MAY NOT Management of the Fund....... 10
LAWFULLY BE MADE. General Information.......... 13
===================================== ====================================
</TABLE>
<PAGE> 236
SUBJECT TO COMPLETION
NOVEMBER 13, 1995
STATEMENT OF
ADDITIONAL INFORMATION
RESOURCE CLASS
OF THE
TREASURY PORTFOLIO
OF
SHORT-TERM INVESTMENTS TRUST
11 GREENWAY PLAZA
SUITE 1919
HOUSTON, TEXAS 77046-1173
(800) 825-6858
______________________
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) 825-6858
______________________
STATEMENT OF ADDITIONAL INFORMATION DATED DECEMBER 14, 1995
RELATING TO THE PROSPECTUS DATED DECEMBER 14, 1995
***************************************************************************
* *
* Information contained herein is subject to completion or amendment. A *
* registration statement relating to these securities has been filed *
* with the Securities and Exchange Commission. These securities may not *
* be sold nor any offers to buy be accepted prior to the time the *
* registration statement becomes effective. This Statement of *
* Additional Information does not constitute a prospectus. *
* *
***************************************************************************
<PAGE> 237
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
GENERAL INFORMATION ABOUT THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Fund and Its Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Trustees and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Investment Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Administrative Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Banking Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Transfer Agent and Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Principal Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
PURCHASES AND REDEMPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Net Asset Value Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Distribution Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Distribution Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Performance Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Suspension of Redemption Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
INVESTMENT PROGRAM AND RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Investment Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Eligible Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Other Investment Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Qualification as a Regulated Investment Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Excise Tax on Regulated Investment Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Portfolio Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Sale or Redemption of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Foreign Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Effect of Future Legislation; Local Tax Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
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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 United States 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 the Prospectus dated December 14, 1995 (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) 825-6858. Investors must receive a Prospectus before they invest.
This Statement of Additional Information is intended to furnish
prospective investors with additional information concerning the Resource 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 management series 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
Statement of Additional Information 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).
A copy of the Agreement and Declaration of Trust ("Declaration of
Trust") establishing the Fund is on file with the SEC. 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 five classes of shares: Private Investment Class, Personal
Investment Class, Institutional Class, Cash Management Class and Resource
Class. Each such class has different shareholder qualifications and bears
expenses differently. This Statement of Additional Information and the
Prospectus relate solely to shares of the Resource 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."
1
<PAGE> 239
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 Portfolio and any class thereof, however, may be
terminated at any time, upon the recommendation of the 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, of $.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. 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.
2
<PAGE> 240
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 that 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 (76)
Director, Chairman and Chief Executive Officer, A I M Management Group
Inc.; 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
Global Associates, Inc., A I M Global Holdings, Inc., A I M Institutional Fund
Services, Inc. and Fund Management Company; and Director, AIM Global Advisors
Limited, A I M Global Management Company Limited and AIM Global Ventures Co.
BRUCE L. CROCKETT, Trustee (51)
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).
OWEN DALY II, Trustee (71)
6 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 (58)
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).
__________________________________
* A trustee who is an "interested person" of the Fund and A I M
Advisors, Inc., as defined in the Investment Company Act of 1940, as
amended (the 1940 Act).
** A trustee who is an "interested person" of the Fund, as defined in the
1940 Act.
3
<PAGE> 241
*ROBERT H. GRAHAM, Trustee and President (49)
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 Capital Management, Inc., A I M Fund Services, Inc., A I M
Global Associates, Inc., A I M Global Holdings, Inc., AIM Global Ventures Co.,
A I M Institutional Fund Services, Inc. and Fund Management Company; and Senior
Vice President, AIM Global Advisors Limited.
JOHN F. KROEGER, Trustee (71)
24875 Swan Road - Martingham
Box 464
St. Michaels, MD 21663
Director, Flag Investors International Fund, Inc., Flag Investors
Emerging Growth Fund, Inc., Flag Investors Telephone Income Fund, Inc., Flag
Investors Equity Partners Fund, Inc., Total Return U.S. Treasury Fund, Inc.,
Flag Investors Intermediate Term Income Fund, Inc., Managed Municipal Fund,
Inc., Flag Investors Value Builder Fund, Inc., Flag Investors Maryland
Intermediate Tax-Free Income Fund, Inc., Flag Investors Real Estate Securities
Fund, Inc., Alex. Brown Cash Reserve Fund, Inc. and North American Government
Bond Fund, Inc. (investment companies). Formerly, Consultant, Wendell & Stockel
Associates, Inc. (consulting firm).
LEWIS F. PENNOCK, Trustee (53)
6363 Woodway, Suite 825
Houston, TX 77057
Attorney in private practice in Houston, Texas.
IAN W. ROBINSON, Trustee (72)
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 (56)
Transco Tower, 50th Floor
2800 Post Oak Blvd.
Houston, TX 77056
Executive Vice President, Development and Operations, Hines Interests
Limited Partnership (real estate development).
**JOHN J. ARTHUR, Senior Vice President and Treasurer (51)
Senior Vice President and Treasurer, A I M Advisors, Inc.; 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; and Vice President, AIM Global
Advisors Limited, A I M Global Associates, Inc., A I M Global Holdings, Inc.,
and AIM Global Ventures Co.
__________________________________
* A trustee who is an "interested person" of the Fund and A I M
Advisors, Inc., as defined in the 1940 Act.
** Mr. Arthur and Ms. Relihan are married to each other.
4
<PAGE> 242
GARY T. CRUM, Senior Vice President (48)
Director and President, A I M Capital Management, Inc.; Director and
Senior Vice President, A I M Management Group Inc., A I M Advisors, Inc., A I M
Global Associates, Inc., A I M Global Holdings, Inc. and AIM Global Ventures
Co.; Director, A I M Distributors, Inc.; and Senior Vice President, AIM Global
Advisors Limited.
**CAROL F. RELIHAN, Vice President and Secretary (41)
Vice President, General Counsel and Secretary, A I M Management Group
Inc., A I M Advisors, Inc., A I M Fund Services, Inc., A I M Institutional Fund
Services, Inc. and Fund Management Company; Vice President and Secretary, A I M
Distributors, Inc., A I M Global Associates, Inc. and A I M Global Holdings,
Inc.; Vice President and Assistant Secretary, AIM Global Advisors Limited and
AIM Global Ventures Co.; and Secretary, A I M Capital Management, Inc.
DANA R. SUTTON, Vice President and Assistant Treasurer (36)
Vice President and Fund Controller, A I M Advisors, Inc.; and
Assistant Vice President and Assistant Treasurer, Fund Management Company.
MELVILLE B. COX, Vice President (52)
Vice President, A I M Advisors, Inc., A I M Capital Management, Inc.,
A I M Fund Services, Inc. and A I M Institutional 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 (35)
Director, A I M Global Management Company Limited; Senior Vice
President, A I M Capital Management, Inc. and AIM Global Advisors Limited; and
Vice President, A I M Advisors, Inc. and AIM Global Ventures Co.
J. ABBOTT SPRAGUE, Vice President (40)
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 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 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 Board of Trustees and such committee.
The members of the Investments Committee are Messrs. Bauer, Crockett,
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
of Trustees and such committee.
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<PAGE> 243
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 the
disinterested trustees, or considering such matters as may from time to time be
set forth in a charter adopted by the Board of Trustees and such committee.
All of the 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 Advisors,
Inc. ("AIM") or distributed and administered by FMC. All of the Fund's
executive officers hold similar offices with some or all of such investment
companies.
Remuneration of Trustees
Set forth below is information regarding compensation paid or accrued
during the fiscal year ended August 31, 1995 for each trustee of the Fund:
<TABLE>
<CAPTION>
============================================================================================
DIRECTOR AGGREGATE RETIREMENT TOTAL
COMPENSATION BENEFITS COMPENSATION
FROM FUND(1) ACCRUED FROM ALL AIM
BY ALL AIM FUNDS(3)
FUNDS(2)
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Charles T. Bauer $ -0- $ -0- $ -0-
--------------------------------------------------------------------------------------------
Bruce L. Crockett 3,281 2,814 45,094
--------------------------------------------------------------------------------------------
Owen Daly II 3,298 14,375 45,844
--------------------------------------------------------------------------------------------
Carl Frischling 3,281 7,542 45,094
--------------------------------------------------------------------------------------------
Robert H. Graham -0- -0- -0-
--------------------------------------------------------------------------------------------
John F. Kroeger 3,298 20,517 45,844
--------------------------------------------------------------------------------------------
Lewis F. Pennock 3,298 5,093 45,844
--------------------------------------------------------------------------------------------
Ian W. Robinson 3,249 10,396 45,094
--------------------------------------------------------------------------------------------
Louis S. Sklar 3,249 4,682 45,094
============================================================================================
</TABLE>
- ----------------------
(1) The total amount of compensation deferred by all Trustees of the Fund
during the fiscal year ended August 31, 1995, including interest
earned thereon, was $13,735.
(2) During the fiscal year ended August 31, 1995, the total amount of
expenses allocated to the Fund in respect of such retirement benefits
was $8,673. Data reflects compensation earned for the calendar year
ended December 31, 1994.
(3) Messrs. Bauer, Daly, Graham, Kroeger and Pennock each serves as a
Director or Trustee of a total of 11 AIM Funds. Messrs. Crockett,
Frischling, Robinson and Sklar each serves as a Director or Trustee of
a total of 10 AIM Funds. Data reflects compensation earned for the
calendar year ended December 31, 1994.
AIM Funds Retirement Plan for Eligible Directors/Trustees
Under the terms of the AIM Funds Retirement Plan for Eligible
Directors/Trustees (the "Plan"), each director (who is not a employee of any of
the AIM Funds, A I M Management Group Inc. or any of their
6
<PAGE> 244
affiliates) may be entitled to certain benefits upon retirement from the Board
of Directors. Pursuant to the Plan, the normal retirement date is the date on
which the eligible director has attained age 65 and has completed at least five
years of continuous service with one or more of the regulated investment
companies managed, administered or distributed by AIM or its affiliates (the
"AIM Funds"). Each eligible director is entitled to receive an annual benefit
from the AIM Funds commencing on the first day of the calendar quarter
coincident with or following his date of retirement equal to 5% of such
Trustees' compensation paid by the AIM Funds multiplied by the number of such
Trustee's years of service (not in excess of 10 years of service) completed
with respect to any of the AIM Funds. Such benefit is payable to each eligible
trustee in quarterly installments for a period of no more than five years. If
an eligible trustee dies after attaining the normal retirement date but before
receipt of any benefits under the Plan commences, the trustee's surviving
spouse (if any) shall receive a quarterly survivor's benefit equal to 50% of
the amount payable to the deceased trustee, for no more than five years
beginning the first day of the calendar quarter following the date of the
director's death. Payments under the Plan are not secured or funded by any AIM
Fund.
Set forth below is a table that shows the estimated annual benefits
payable to an eligible director upon retirement assuming various compensation
and years of service classifications. The estimated credited years of service
as of December 31, 1994 for Messrs. Crockett, Daly, Frischling, Kroeger,
Pennock, Robinson and Sklar are 7, 8, 17, 17, 13, 7, and 5 years, respectively.
<TABLE>
<CAPTION>
Annual Compensation Paid
By All AIM Funds
<S> <C> <C> <C>
$60,000 $65,000
=========================================
Number of Years of 10 $30,000 $32,500
Service With the -----------------------------------------
AIM Funds 9 $27,000 $29,250
-----------------------------------------
8 $24,000 $26,000
-----------------------------------------
7 $21,000 $22,750
-----------------------------------------
6 $18,000 $19,500
-----------------------------------------
5 $15,000 $16,250
=========================================
</TABLE>
DEFERRED COMPENSATION AGREEMENTS
Messrs. Daly, Frischling, Kroeger, Robinson and Sklar (for purposes of
this paragraph only, the "deferring directors") have each executed a Deferred
Compensation Agreement (collectively, the "Agreements"). Pursuant to the
Agreements, the deferring directors may elect to defer receipt of up to 100% of
their compensation payable by the Fund, and such amounts are placed into a
deferral account. Currently, the deferring directors may select various AIM
Funds in which all or part of his deferral account shall be deemed to be
invested. Distributions from the deferring directors' deferral accounts will
be paid in cash, in generally equal quarterly installments over a period of
five years beginning on the date the deferring director's retirement benefits
commence under the Plan. The Fund's Board of Trustees, in its sole discretion,
may accelerate or extend the distribution of such deferral accounts after the
deferring director's termination of service as a director of the Fund. If a
deferring director dies prior to the distribution of amounts in his deferral
account, the balance of the deferral account will be distributed to his
designated beneficiary in a single lump sum payment as soon as practicable
after such deferring director's death. The Agreements are not funded and, with
respect to the payments of amounts held in the deferral accounts, the deferring
directors have the status of unsecured creditors of the Fund and of each other
AIM Fund from which they are deferring compensation.
The Portfolio paid legal fees of $9,818 for the year ended August 31,
1995 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 and the Portfolio paid legal
fees of $8,687 for services rendered by that firm as counsel to the Board of
Trustees. A trustee of the Fund was
7
<PAGE> 245
a partner of the firm of Reid & Priest until September 1994, when he became a
partner of Kramer, Levin, Naftalis, Nessen, Kamin & Frankel.
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
"Advisory Agreement"). AIM was organized in 1976, and together with its
affiliates advises or manages 37 investment company portfolios. As of October
31, 1995, the total assets of the investment company portfolios managed or
advised by AIM and its affiliates were approximately $39.3 billion.
AIM and the Fund have adopted a Code of Ethics which requires
investment personnel to (a) pre-clear all personal securities transactions, (b)
to file reports regarding such transactions, and (c) to refrain from personally
engaging in (i) short-term trading of a security, (ii) transactions involving a
security within seven days of an AIM Fund transaction involving the same
security, and (iii) transactions involving securities being considered for
investment by an AIM Fund. The Code also prohibits investment personnel from
purchasing securities in an initial public offering. Personal trading reports
are reviewed periodically by AIM, and the Board of Trustees reviews annually
such reports (including information on any substantial violations of the Code).
Violations of the Code may result in censure, monetary penalties, suspension or
termination of employment.
Pursuant to the terms of the Advisory 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 .15%
Over $300 million to $1.5 billion .06%
Over $1.5 billion .05%
</TABLE>
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 Fund's shares are qualified
for sale.
The Advisory Agreement provides that, upon the request of the Board of
Trustees, AIM may perform or arrange for the provision of certain additional
services on behalf of the Portfolio which are not required by the Advisory
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 a 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 (the "Prior Advisory Agreement"), which provided for the
same level of compensation to AIM as the Advisory Agreement and the Advisory
Agreement currently in effect, AIM received fees from the Fund for the fiscal
years ended August 31, 1995, 1994 and 1993, with respect to the Portfolio in
the amounts of $1,925,198, $2,337,627 and $2,211,262, respectively.
8
<PAGE> 246
The Advisory Agreement was approved for its initial term by the Board
of Trustees on July 19, 1993. The Advisory Agreement will continue in effect
until June 30, 1996, 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
Advisory 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
Advisory Agreement on 60 days' notice without penalty. The Advisory 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.
FMC is a registered broker-dealer and a wholly-owned subsidiary of
AIM. FMC acts as distributor of the shares of the Class.
ADMINISTRATIVE SERVICES
AIM also provides certain additional services pursuant to a Master
Administrative Services Agreement dated as of October 18, 1993 between AIM and
the Fund (the "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 performs accounting 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 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 Prior Advisory Agreement, AIM was reimbursed for the fiscal
year ended August 31, 1993 in the amount of $82,419 for fund accounting
services for the Portfolio.
Under the Administrative Services Agreement, AIM was reimbursed for
the fiscal years ended August 31, 1995 and 1994, $135,387 and $97,055,
respectively, for fund accounting services.
Under the terms of a Transfer Agency and Service Agreement, dated July
1, 1995, between the Fund and AIFS, a registered transfer agent and
wholly-owned subsidiary of AIM, as well as under previous agreements, AIFS
received $114,179 and $13,752, for the fiscal years ended August 31, 1995 and
1994, respectively, for the provision of certain shareholder services for the
Fund.
EXPENSES
Expenses of the Fund include, but are not limited to, fees paid to AIM
under the Advisory Agreement, the charges and expenses of any registrar, any
custodian or depositary appointed by the Fund for the safekeeping of 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 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
9
<PAGE> 247
information of the Fund and supplements thereto to the Fund's shareholders; all
expenses of shareholders' and directors' meetings and of preparing, printing
and mailing of prospectuses, proxy statements and reports to shareholders; fees
and travel expenses of directors and director 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 directors 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
directors) 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 either of the Portfolios 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 one or both of the Portfolios are prorated among all
classes of such Portfolios based upon the relative net assets of each such
class. The expenses of the Portfolio are deducted from its total income before
dividends are paid. 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, 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 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 AGENT 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.
A I M Institutional Fund Services, Inc. ("AIFS") serves as transfer
agent for the shares of the Class and receives an annual fee from the Fund for
its services in such capacity in the amount of .007% of average daily net
assets of the Fund, payable monthly. Such compensation may be changed from
time to time as is agreed to by A I M Institutional Fund Services, Inc. and the
Fund.
10
<PAGE> 248
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 Portfolio and its financial statements. The annual
financial statements are audited by the Fund's independent auditors. The 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.
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 25, 1995, 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 Texas 14.27%
P.O. Box 831000
Dallas, TX 75283-1000
Wachovia Bank and Trust 12.50%
P.O. Box 3075
Winston-Salem, NC 27150
Trust Company Bank 11.96%
P.O. Box 105504
Atlanta, GA 30348
Victoria Bank & Trust 7.84%
One O'Connor Plaza 6th Fl.
Victoria, TX 77902
Texas Commerce Bank 6.47%
601 Travis
Houston, TX 77002
</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.
11
<PAGE> 249
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- --------------
<S> <C>
U.S. Bank of Washington 5.62%
P.O. Box 3168
Portland, OR 97208
FRNCO 5.04%
P.O. Box 939
Rogers, AR 72757-0939
</TABLE>
PERSONAL INVESTMENT CLASS
- -------------------------
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- --------------
<S> <C>
Frost National Bank 49.42%(b)
P.O. Box 2358
San Antonio, TX 78299
Republic National Bank 27.58%(b)
1 Hanson Pl., Lower Level
Brooklyn, NY 11243
The Bank of New York 21.30%
440 Mamaroneck Ave.
Harrison, NY 10528
</TABLE>
PRIVATE INVESTMENT CLASS
- ------------------------
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
-------------------------- --------------
<S> <C>
Liberty Bank and Trust Co. 41.02%(b)
of Oklahoma, N.A.
P.O. Box 25848
Oklahoma City, OK 73125
</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 more than 25% 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.
12
<PAGE> 250
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- --------------
<S> <C>
First Trust/VAR & Co. 29.92%(b)
180 E. 5th Street
St. Paul, MN 55101
Huntington Capital Corp 14.82%
41 S. High St.
Columbus, OH 43287
Charter National Bank 6.39%
P.O. Box 1494
Houston, TX 77251-1494
United Counties Trust Co. 5.20%
30 Maple St.
Summit, NJ 07901
</TABLE>
CASH MANAGEMENT CLASS
- ---------------------
<TABLE>
<CAPTION>
PERCENT PERCENT
NAME AND ADDRESS OWNED OWNED OF
OF RECORD OWNER BENEFICIALLY ONLY RECORD ONLY
------------------------- ----------------- -----------
<S> <C> <C>
City of Riverside 21.65% -0-
P.O. Box 12005
Riverside, CA 92502-2205
LA Export Terminal -0- 11.72%(a)
P.O. Box 1769
San Pedro, CA 90733
State Street Bank and Trust -0- 10.87%(a)
61 Broadway 15th Fl.
New York, NY 10006
Montgomery County 6.76% -0-
101 Monroe St. 15th Fl.
Rockville, MD 20850
City of West Sacramento 6.60% -0-
2101 Stone Blvd.
W. Sacramento, CA 9569
City of Ontario 5.26% -0-
303 East "B" St.
Ontario, CA 91764
</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 more than 25% 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> 251
RESOURCE CLASS
- --------------
AIM provided the initial capitalization of the Resource Class of the
Treasury Portfolio and, accordingly, as of the date of this Statement of
Additional Information, owned all the outstanding shares of beneficial interest
of the Resource Class of the Treasury Portfolio. Although the Resource Class
of the Treasury 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 Resource Class of the Treasury Portfolio
that are outstanding, it may be presumed to be in "control" of the Resource
Class of the Treasury Portfolio, as defined in the 1940 Act.
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 25, 1995, 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 28.6%(b)
1700 Farnam Street
Omaha, NE 68102
Muchmore & Co. 13.7%
750 Walnut Street
Cranford, NJ 07016-1205
Key Trust Company 10.1%
4900 Tiedeman
Cleveland, OH 44101-5971
Boatmen's Trust Company 8.7%
P.O. Box 14737
St. Louis, MO 63178
Wachovia Bank and Trust Co NA 7.6%
P.O. Box 3075
Winston-Salem, NC 27150
Liberty Bank & Trust Company 7.5%
of Tulsa, N.A.
P.O. Box 25848
Oklahoma City, OK 73125
</TABLE>
14
<PAGE> 252
PRIVATE INVESTMENT CLASS
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
-------------------------- --------------
<S> <C>
Huntington Capital Corp 100%(b)
41 S. High St.
Columbus, OH 43287
</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 more than 25% 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.
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 25, 1995, the
trustees and officers of the Fund beneficially owned less than 1% of each class
of the Fund's outstanding shares.
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, which require the Fund to adhere
to certain conditions. 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 Fund's Board of Trustees
to be of high quality with minimal credit risk.
The Board of Trustees is required to establish procedures designed to
stabilize, to the extent reasonably practicable, the Fund's price per share at
$1.00 for the Portfolio as computed for the purpose of sales and redemptions.
Such procedures include review of the Portfolio's holdings by the Board of
Trustees, at such intervals as they may deem appropriate, to determine whether
the net asset value calculated by using available market quotations or other
reputable sources for the 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 sale of portfolio
instruments prior to maturity to realize capital gains or losses or to shorten
the average portfolio maturity; the withholding of dividends; redemption of
shares in kind; or the establishment of a net asset value per share by using
available market quotations.
15
<PAGE> 253
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. The address of FMC is 11 Greenway
Plaza, Suite 1919, Houston, Texas 77046-1173. 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 pursuant
to Rule 12b-1 adopted by the Fund's Board of Trustees. FMC has not undertaken
to sell any specified number of shares of the Class. FMC does not receive any
fees with respect to the shares of the Class pursuant to the Distribution
Agreement.
On July 19, 1993, the Board of Trustees (including the affirmative
vote of 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, 1996, 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 to those of the Distribution Agreement was in effect through
October 15, 1993. The Fund or FMC may terminate the Distribution Agreement on
sixty 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 shareholder accounts and records;
(v) processing purchase and redemption transactions; (vi) automatic investment
in 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.
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 of the Class may be obtained by calling the
Fund at (800) 877-7745. The current yield quoted will be the net average
annualized yield for an identified period. 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
16
<PAGE> 254
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.
The Fund may compare the performance of the Class or the performance
of securities in which it may invest to:
o IBC/Donoghue's Money Fund Averages, which are average yields
of various types of money market funds that include the effect of
compounding distributions;
o other mutual funds, especially those with similar investment
objectives. These comparisons may be based on data published by
IBC/Donoghue's Money Fund Report 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;
o 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
o 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' 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
The Portfolio seeks to achieve its objective by investing in high
grade money market instruments. 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 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 enter into repurchase
agreements with respect to U.S. Treasury securities. The Portfolio may also
borrow money and enter into
17
<PAGE> 255
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 repurchase agreement. The Portfolio will only borrow money or
enter into reverse repurchase agreements for temporary or emergency purposes to
facilitate the orderly sale of portfolio securities to accommodate abnormally
heavy redemption requests should they occur.
ELIGIBLE SECURITIES
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
(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:
__________________________________
(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.
(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> 256
(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).
INVESTMENT RESTRICTIONS
As a matter of fundamental policy which may not be changed without a
majority vote of 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 amended from time to time;
(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.
19
<PAGE> 257
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 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 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. 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.
20
<PAGE> 258
From time to time, the Fund may sell a security, or purchase a
security from an AIM Fund or another investment account advised by AIM or A I M
Capital Management, Inc. ("AIM Capital"), when such transactions comply with
applicable rules and regulations and are deemed consistent with the investment
objective(s) and policies of the investment accounts advised by AIM or AIM
Capital. Procedures pursuant to Rule 17a-7 under the 1940 Act regarding
transactions between investment accounts advised by AIM or AIM Capital have
been adopted by the Boards of Directors/Trustees of the various AIM Funds,
including the Fund. Although such transactions may result in custodian, tax or
other related expenses, no brokerage commissions or other direct transaction
costs are generated by transactions among the investment accounts advised by
AIM or AIM Capital.
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, 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. Furthermore, the 1940 Act prohibits the Fund from purchasing a
security being publicly underwritten by a syndicate of which persons affiliated
with the Fund are a member except in accordance with certain conditions. These
conditions may restrict the ability of the Portfolio to purchase Money Market
obligations being publicly underwritten by such a syndicate, and the Portfolio
may be required to wait until the syndicate has been terminated before buying
such securities. At such time, the market price of the securities may be
higher or lower than the original offering price. A person affiliated with the
Fund may, from time to time, serve as placement agent or financial advisor to
an issuer of Money Market obligations and be paid a fee by such issuer. The
Portfolio may purchase such Money Market obligations directly from the issuer,
provided that the purchase made in accordance with procedures adopted by the
Fund's Board of Trustees and any such purchases are reviewed at least quarterly
by the Fund's Board of Trustees and a determination is made that all such
purchases were effected in compliance with such procedures, including a
determination that the placement fee or other remuneration paid by the issuer
to the person affiliated with the Fund was fair and reasonable in relation to
the fees charged by others performing similar services. During the fiscal year
ended August 4, 1995, no securities or instruments were purchased by the
Portfolio from issuers who paid placement fees or other compensation to a
broker affiliated with the Portfolio.
21
<PAGE> 259
TAX MATTERS
The following is only a summary of certain additional tax
considerations generally affecting the Portfolio 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 Portfolio 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 Portfolio 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 Portfolio 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
Portfolio 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 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 years 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
22
<PAGE> 260
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 (a "taxable year election")).
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 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."
SALE OR REDEMPTION OF SHARES
A shareholder will recognize gain or loss on the sale or redemption of
shares of the Class in an amount equal to the difference between the proceeds
of the sale or redemption and the shareholder's adjusted tax basis in the
shares. All or a portion of any loss so recognized may be disallowed if the
shareholder purchases other shares of the Class within 30 days before or after
the sale or redemption. In general, any gain or loss arising from (or treated
as arising from) the sale or redemption of shares of the Class will be
considered capital gain or loss and will be long-term capital gain or loss if
the shares were held for longer than one year. However, any capital loss
arising from the sale or redemption of shares held for six months or less will
be treated as a long-term capital loss to the extent of the amount of capital
gain
23
<PAGE> 261
dividends received on such shares. For this purpose, the special holding
period rules of Code Section 246(c)(3) and (4) generally will apply in
determining the holding period of shares.
FOREIGN SHAREHOLDERS
Taxation of a shareholder who, as to the United States, is a
nonresident alien individual, foreign trust or estate, foreign corporation, or
foreign partnership ("foreign shareholder"), depends on whether the income from
the Portfolio is "effectively connected" with a U.S. trade or business carried
on by such shareholder.
If the income from the Portfolio is not effectively connected with a
U.S. trade or business carried on by a foreign shareholder, dividends and
distributions (other than capital gains dividends) will be subject to U.S.
withholding tax at the rate of 30% (or lower treaty rate) upon the gross amount
of the dividend or distribution. Such a foreign shareholder would generally be
exempt from U.S. federal income tax on gains realized on the sale of shares of
the Portfolio, capital gain dividends and amounts retained by the Class that
are designated as undistributed capital gains.
If the income from the Portfolio is effectively connected with a U.S.
trade or business carried on by a foreign shareholder, then ordinary income
dividends, capital gain dividends and any gains realized upon the sale of
shares of the Portfolio will be subject to U.S. federal income tax at the rates
applicable to U.S. citizens or domestic corporations.
In the case of foreign noncorporate shareholders, the Portfolio may be
required to withhold U.S. federal income tax at a rate of 31% on distributions
that are otherwise exempt from withholding tax unless such shareholders furnish
the Portfolio with proper notification of their foreign status.
The tax consequences to a foreign shareholder entitled to claim the
benefits of an applicable tax treaty may be different from those described
herein. Foreign shareholders are urged to consult their own tax advisers with
respect to the particular tax consequences to them of an investment in the
Portfolio, including the applicability of foreign taxes.
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 November 1, 1995. 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.
24
<PAGE> 262
SHORT-TERM
INVESTMENTS TRUST
Prospectus
- --------------------------------------------------------------------------------
TREASURY The Treasury TaxAdvantage Portfolio is a money
TAXADVANTAGE market fund whose investment objective is the
PORTFOLIO maximization of current income to the extent
consistent with the preservation of capital and the
INSTITUTIONAL CLASS maintenance of liquidity. The Treasury TaxAdvantage
Portfolio seeks to achieve its objective by investing
DECEMBER 14, 1995 in direct obligations of the U.S. Treasury. The
Treasury TaxAdvantage Portfolio's investment strategy
is intended to enable the Portfolio to provide its
shareholders with dividends that are exempt from state
and local income taxation in certain jurisdictions.
The instruments purchased by the Treasury TaxAdvantage
Portfolio will have maturities of 397 days or less.
The Treasury TaxAdvantage 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 Institutional Class of the Treasury TaxAdvantage
Portfolio, a class of shares designed to be a
convenient vehicle in which institutions, particularly
banks, acting for themselves or in a fiduciary,
advisory, agency, custodial or other similar capacity,
can invest short-term cash reserves. The Fund also
offers shares of another class of the Treasury
TaxAdvantage Portfolio, the Private Investment Class,
pursuant to a separate prospectus, as well as shares
of classes of another portfolio, the Treasury
Portfolio, pursuant to separate prospectuses.
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 TREASURY TAXADVANTAGE PORTFOLIO AND
SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE. A
STATEMENT OF ADDITIONAL INFORMATION, DATED DECEMBER
14, 1995, HAS BEEN FILED WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION AND IS HEREBY
INCORPORATED BY REFERENCE. A COPY OF THE STATEMENT OF
ADDITIONAL INFORMATION, IS ATTACHED HERETO AS AN
APPENDIX.
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 TAXADVANTAGE 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.
[LOGO APPEARS HERE]
Fund Management Company
11 Greenway Plaza
Suite 1919
Houston, Texas 77046-1173
(800) 659-1005
<PAGE> 263
SUMMARY
THE PORTFOLIO AND ITS INVESTMENT OBJECTIVE
The Fund is an open-end diversified series management investment company.
Pursuant to this Prospectus, the Fund offers shares of the Institutional Class
(the "Class") of the Treasury TaxAdvantage Portfolio (the "Portfolio") without a
sales charge. 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. To achieve its objective, the Portfolio will invest in
direct obligations of the U.S. Treasury. The instruments purchased by the
Portfolio will have maturities of 397 days or less. The Portfolio's investment
strategy is intended to enable the Portfolio to provide its shareholders with
dividends that are exempt from state and local income taxation in certain
jurisdictions.
Pursuant to a separate prospectus, the Fund offers shares of another class of
shares representing an interest in the Portfolio. Such class has a different
distribution arrangement and is designed for another category of investors. The
Fund also offers shares of several classes of the Fund representing an interest
in another portfolio, the Treasury Portfolio. The portfolios of the Fund are
referred to collectively as the "Portfolios."
INVESTORS IN THE CLASS
The Class is designed to be a convenient and economical investment vehicle in
which institutions, particularly banks, acting for themselves or in a fiduciary,
advisory, agency, custodial or other similar capacity, can invest short-term
cash reserves. Although shares of the Class may not be purchased by individuals
directly, institutions may purchase shares for accounts maintained by
individuals. See "Suitability for Investors." 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.
PURCHASE OF SHARES
The shares of the Class are sold at net asset value, without a sales charge.
The minimum initial investment in the Class is $1,000,000. There is no minimum
amount for subsequent investments. Payment for shares of the Class purchased
must be in federal funds or other funds immediately available to the Portfolio.
See "Purchase of Shares."
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
1:00 p.m. Eastern Time will normally be made in federal funds 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 1:00 p.m. Eastern Time. Dividends are
paid monthly by check or wire transfer unless a 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 3:30 p.m. Eastern Time on that day.
See "Dividends."
CONSTANT NET ASSET VALUE
The Fund uses the amortized cost method of valuing its 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 Portfolio's investment advisor and
receives a fee based on the Portfolio's average daily net assets pursuant to a
master investment advisory agreement. For its services, AIM receives a fee based
on the average daily net assets of the Portfolio. During the fiscal year ended
August 31, 1995, the Portfolio paid AIM fees which represented 0.15% of the
average net assets of the Portfolio. AIM is primarily engaged in the business of
acting as manager or advisor to investment companies. See "Management of the
Fund -- Investment Advisor." Under a separate administrative services agree-
2
<PAGE> 264
ment with the Fund, AIM may receive reimbursement of its costs to perform
certain accounting and other administrative services for the Portfolio. See
"Management of the Fund -- Investment Advisor" and "-- Administrative Services."
DISTRIBUTOR
Fund Management Company ("FMC") acts as the exclusive distributor of the
shares of the Class. FMC does not receive any fee from the Fund. See "Purchase
of Shares."
SPECIAL RISK CONSIDERATIONS
The Portfolio may borrow money and enter into reverse repurchase agreements
for temporary or emergency purposes, and may 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."
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK AND AIM INSTITUTIONAL FUNDS ARE REGISTERED
SERVICE MARKS OF A I M MANAGEMENT GROUP INC.
3
<PAGE> 265
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 -- INSTITUTIONAL CLASS
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management fees*............................................................ 0.15%
12b-1 fees.................................................................. none
Other expenses:
Custodian fees........................................................... 0.01%
Other.................................................................... 0.04%
-----
Total other expenses................................................... 0.05%
----
Total portfolio operating expenses --
Institutional Class................................................. 0.20%
=====
</TABLE>
- ------------
* Had there been no fee waivers, management fees would have been 0.18%.
EXAMPLE
An investor 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............................................................ $ 2
3 years........................................................... $ 6
5 years........................................................... $11
10 years........................................................... $26
</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 for the fiscal year ended August
31, 1995. To the extent any service providers assume expenses of the Class, such
assumption of expenses will have the effect of lowering the Class' 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 -- Institutional 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 LESS THAN THOSE SHOWN.
4
<PAGE> 266
FINANCIAL HIGHLIGHTS
Shown below are the per share ratios and supplemental data (collectively
"data") for the years in the five-year period ended August 31, 1995 and the
period August 17, 1990 (date operations commenced) through August 31, 1990.
The data has been audited and reported on by KPMG Peat Marwick LLP,
independent auditors, whose unqualified report on the financial statements and
the related notes appears in the Statement of Additional Information.
<TABLE>
<CAPTION>
AUGUST 31,
------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment
operations:
Net investment income...... 0.05 0.03 0.03 0.04 0.07 0.003
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income........ (0.05) (0.03) (0.03) (0.04) (0.07) (0.003)
-------- -------- -------- -------- -------- --------
Net asset value, end of
period..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total return................. 5.35% 3.29% 2.96% 4.32% 6.70% 7.79%(a)
======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period
(000s omitted)........... $394,376 $403,882 $434,693 $573,283 $403,846 $ 16,201
======== ======== ======== ======== ======== ========
Ratio of expenses to
average net assets....... 0.20%(b) 0.20%(c) 0.20% 0.17%(c) 0.14%(c) 0.10%(d)
======== ======== ======== ======== ======== ========
Ratio of net investment
income to average net
assets................... 5.21%(b) 3.23%(c) 2.93% 4.16%(c) 6.16%(c) 7.74%(d)
======== ======== ======== ======== ======== ========
</TABLE>
- ------------
(a) Annualized.
(b) After waiver of advisory fees. Ratios are based on average net assets of
$388,302,148. Ratios of expenses and net investment income to average net
assets prior to waiver of advisory fees were 0.23% and 5.18% respectively.
(c) After waiver of advisory fees.
(d) Annualized. After waiver of advisory fees and expense reimbursements.
5
<PAGE> 267
SUITABILITY FOR INVESTORS
The Class is intended for use primarily by institutions, particularly banks,
acting for themselves or in a fiduciary, advisory, agency, custodial or other
similar capacity. It is designed to be a convenient and economical vehicle in
which such institutions can invest short-term cash reserves. The Portfolio's
investment strategy is intended to provide its shareholders with dividends that
are exempt from state and local income taxation in certain jurisdictions. Shares
of the Class may not be purchased directly by individuals, although institutions
may purchase shares for accounts maintained by individuals. Prospective
investors should determine if an investment in the Class is consistent with the
objectives of an account and with applicable state and federal laws and
regulations.
An investment in the Class may relieve the institution of many of the
investment and administrative burdens encountered when investing in money market
instruments directly. These include: selection of portfolio investments;
surveying the market for the best price at which to buy and sell; valuation of
portfolio securities; selection and scheduling of maturities; receipt, delivery
and safekeeping of securities; and portfolio recordkeeping. It is anticipated
that most institutions will perform their own sub-accounting. To assist these
institutions, information concerning the dividends declared by the Portfolio on
any particular day will normally be available by 3:30 p.m. Eastern Time on that
day.
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 same-day liquidity. 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.
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. However, these expenses are expected to be relatively small due primarily
to the following factors: the Class will have a small number of shareholders who
do not need many of the services provided by other money market investment
companies, thereby resulting in lower transfer agent fees and costs for printing
reports and proxy statements; sales of the Class' shares to institutions acting
for themselves or in a fiduciary capacity are exempt from the registration
requirements of most state securities laws, thereby resulting in reduced state
registration fees; and the relatively low investment advisory fee paid to AIM.
Because the Portfolio invests in direct obligations of the U.S. Treasury it
may be considered to have somewhat less risk than many other money market funds
and yields on the Portfolio may be expected to be somewhat lower than many other
money market funds. However, the possible exemption from state and local income
taxation with respect to dividends paid by the Portfolio may enable shareholders
to achieve an after-tax return comparable to or higher than that obtained from
other money market funds, which may provide an advantage to some shareholders.
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 intends to provide its shareholders with
dividends that are exempt from state and local income taxation in certain
jurisdictions. The Portfolio seeks to achieve its objective by investing in
direct obligations of the U.S. Treasury. The obligations 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 instruments of lesser quality.
INVESTMENT POLICIES
The Portfolio invests exclusively in direct obligations of the U.S. Treasury,
which include Treasury bills, notes and bonds. 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.
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. The Portfolio will
only borrow money or enter into reverse repurchase agreements for temporary or
emergency purposes, such as to facilitate the orderly sale of portfolio
securities to accommodate abnormally heavy redemption requests should they
occur. Borrowing will not be made for leverage purposes. 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
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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 under the Investment
Company Act of 1940, as amended (the "1940 Act").
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 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.
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 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. 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. 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, however, the high turnover rate should not adversely affect the
Portfolio's net income.
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 provides that the Portfolio will not:
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 restriction of the Portfolio (as well as certain
others set forth in the Statement of Additional Information) is a matter 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 governs the operations of money market
funds, and may be more restrictive than the policies described herein. The
United States 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.
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PURCHASE OF SHARES
Shares of the Class are sold on a continuous 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 1:00 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.
Subject to the conditions stated above and the Fund'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 Fund's custodian bank, in the form described
below and notice of such order is provided to A I M Institutional Fund Services,
Inc. ("AIFS") (the Fund's transfer agent) or (ii) at the time the order is
placed, if the Fund is assured of payment. Shares of the Class purchased by
orders which are accepted prior to 1:00 p.m. Eastern Time will earn the dividend
declared on the date of purchase.
Payments for shares purchased must be in the form of federal funds or other
funds immediately available to the Portfolio. 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.
The minimum initial investment in the Class is $1,000,000. Institutions may be
requested to maintain separate Master Accounts in the Class for shares held by
the institution (i) for its own account, for the account of other institutions
and for accounts for which the institution acts as a fiduciary, and (ii) for
accounts for which the institution acts in some other capacity. An institution's
Master Account(s) and sub-accounts with the Class may be aggregated for the
purpose of the minimum investment requirement. No minimum amount is required for
subsequent investments in the Class nor are minimum balances required. Prior to
the initial purchase of shares of the Class, an Account Application must be
completed and sent to A I M Institutional Fund Services, Inc. ("AIFS"), 11
Greenway Plaza, Suite 1919, Houston, Texas 77046-1173. Account Applications may
be obtained from AIFS. Any changes made to the information provided in the
Account Application must be made in writing or by completing a new form and
providing it to AIFS.
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(R), a personal computer application software product.
Normally, the net asset value per share of the Portfolio will remain constant at
$1.00 per share. See "Net Asset Value." Redemption requests with respect to
shares for which certificates have not been issued are normally made by calling
the Fund.
Payment for redeemed shares is normally made by Federal Reserve wire to the
commercial bank account designated in the shareholder's Account Application, but
may be remitted by check upon request by a shareholder. If a redemption request
is received by AIFS prior to 1:00 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 to be redeemed will not receive the
dividend declared on the effective date of the redemption. If a redemption
request is received by AIFS after 1:00 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 1:00 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.
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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 or AIFS, the
Fund's transfer agent.
Payment for shares of the Class redeemed by mail and payment for telephone
redemptions in amounts under $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.
The shares of the Class are not redeemable at the option of the Fund unless
the Board of Trustees of the Fund determines in its sole discretion that failure
to so redeem may have materially adverse consequences to the shareholders of the
Fund.
DIVIDENDS
Dividends from the net income of the Portfolio are declared daily to
shareholders of record of the Class as of immediately after 1:00 p.m. Eastern
Time on the day of declaration. Net income for dividend purposes is determined
daily as of 1 :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' pro rata share of the total outstanding shares
representing an interest in the Portfolio, less (b) Fund expenses, such as
custodian fees, trustees' fees and accounting and legal expenses, based upon
such class' pro rata share of the net assets of the Portfolio, less (c) expenses
directly attributable to such class, 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 the Portfolio's net asset value of $1.00 per share 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 normally be paid by wire transfer.
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 Portfolio at the net asset value of
such shares as of 1:00 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
shareholder to AIFS at P.O. Box 4497, Houston, Texas 77210-4497 and will become
effective with dividends paid after its receipt by AIFS. If a shareholder
redeems all the shares of the Portfolio 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 Fund uses its best efforts to maintain its net asset value per share of
the Portfolio 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 and cause such a shareholder to receive upon
redemption a price per share lower than the shareholder's original cost.
TAXES
FEDERAL TAXATION
The Fund's policy with respect to 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
Fund intends for the Portfolio 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 one-year period ending on October 31 and therefore to meet the
distribution requirements imposed by the Code in order to avoid the imposition
of a 4% excise tax. The Fund also intends for the Portfolio 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 federal income taxes on net investment income and net realized capital gains
paid to shareholders.
The Portfolio will be treated as a separate corporation for purposes of
determining taxable income, distribution requirements and other requirements of
Subchapter M. Therefore, the Portfolio may not offset its gains against losses
of the other portfolio of the Fund and each portfolio of the Fund must
specifically comply with all the provisions of the Code.
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 Portfolio.
The Code provides an exception to this general rule: if the Portfolio declares a
dividend in October, No-
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vember 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 of the following year 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.
The foregoing discussion of federal income tax consequences is based on tax
laws and regulations in effect on November 1, 1995, which are subject to change
by legislation or administrative action.
STATE AND LOCAL TAXATION
Distributions and other Fund 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.
The Portfolio's investment strategy is intended to provide shareholders with
dividends that are exempt from state and local personal and, in some cases,
corporate income taxation in as many jurisdictions as possible. The possible
exemption from such taxation may enable shareholders to achieve an after-tax
return comparable to or higher than that obtained from other money market funds.
Shareholders should consult their own tax advisors concerning the tax impact of
their investment in the Portfolio and the application of state, local and
foreign taxes.
NET ASSET VALUE
The net asset value per share of the Portfolio is determined daily as of 1:00
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 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 SEC 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)
659-1005. 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 the
Portfolio's investments, the Portfolio's maturity and the operating expense
ratio of the Portfolio. A SHAREHOLDER'S INVESTMENT IN THE FUND 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 Fund.
For the seven-day period ended August 31, 1995, the current yield and the
effective yield of the Class (which assumes the reinvestment of dividends for a
365-day year and a return for the entire year equal to the average annualized
current yield for the period) were 5.42% and 5.56%, respectively, excluding
capital gains distributions. For the seven-day period ended August 31, 1995, the
current distribution rate and the effective distribution rate of the Class,
including capital gains distributions, (which assumes the reinvestment of
dividends for a 365-day year and a return for the entire year equal to the
average annualized current distribution rate for the period) were 5.47% and
5.62%, respectively. These performance numbers are quoted for illustration
purposes only. The performance numbers for any other seven-day period may be
substantially different from those quoted above.
To assist banks and other institutions performing their own sub-accounting,
same day information as to the daily dividend per share for the Class to eight
decimal places and current yield normally will be available by 3:30 p.m. Eastern
Time.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Portfolio. Such a practice
will have the effect of increasing the Portfolio's yield and total return.
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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 certified public accountants. A
copy of the current list of the investments of the Portfolio will be sent to
shareholders upon request.
Unless otherwise requested by the shareholder, each shareholder will be
provided with a written confirmation for each transaction. Institutions
establishing sub-accounts will receive a written confirmation for each
transaction in a sub-account. Duplicate confirmations may be transmitted to the
beneficial owner of the sub-account if requested by the institution. The
institution will receive a periodic statement setting forth, for each
sub-account, the share balance, income earned for the month, income earned for
the year to date and the total current value of the account.
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 objective 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 October 31, 1995, the
total assets of the investment company portfolios managed or advised by AIM and
its affiliates were approximately $39.3 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"). AIM Management is a holding company in the financial services
business.
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, 1995, AIM received fees from the Fund
under the Advisory Agreement with respect to the Portfolio which represented
0.15% of the Portfolio's average daily net assets. During such fiscal year, the
expenses of the Class, including AIM's fees, amounted to 0.20% of the Class'
average daily net assets.
ADMINISTRATIVE SERVICES
The Fund has entered into a Master Administrative Services Agreement dated as
of 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 was
reimbursed by AIM for its costs in providing shareholder services for the Fund.
AIFS or its affiliates received reimbursement of shareholder services costs of
$6,263 with respect to the Portfolio for the year ended August 31, 1995 which
represented 0.002% of the Portfolio's average daily net assets. The
Administrative Services Agreement between AIM and AIFS terminated July 1, 1995.
Beginning July 1, 1995, AIFS received fees with respect to the Portfolio for its
provision of shareholder services pursuant to a Transfer Agency and Service
Agreement with the Fund. For the period July 1, 1995 through August 31, 1995,
AIFS received transfer agency fees from AIM with respect to the Portfolio in the
amount of $4,650.
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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.
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 Portfolio. 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 Fund 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, banks or other financial institutions 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, banks or financial 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 .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. Sales of the shares of the Class may not be used to
qualify for any incentives to the extent that such incentives may be prohibited
by the laws of any jurisdiction.
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.
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 with 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.
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 of the Treasury TaxAdvantage 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). Shares of beneficial interest of the Fund are divided into seven
classes of which five represent interests in the Treasury Portfolio and two
represent interests in the Portfolio. Each class of shares has a par value of
$.01 per share. The other classes of the Fund may have different sales charges
and other expenses which may affect performance. An investor may obtain
information concerning the Fund's other classes by contacting FMC.
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 holders of shares of the Portfolio 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
12
<PAGE> 274
such shares relate, less (b) the liabilities of the Fund attributable or
allocated to the respective portfolio based on the liquidation value of the
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 or classes of shares of
the Fund without shareholder approval.
TRANSFER AGENT 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.
A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 1919, Houston,
Texas 77046-1173, acts as 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.
SHAREHOLDER INQUIRIES
Shareholder inquiries concerning the status of an account should be directed
to the Fund at 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173, or may
be made by calling (800) 659-1005.
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 SEC and is attached as an Appendix to this
Prospectus. Additional 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 SEC. Copies of the registration statement, including
items omitted herein, may be obtained from the SEC by paying the charges
prescribed under its rules and regulations.
13
<PAGE> 275
APPENDIX
STATEMENT OF
ADDITIONAL INFORMATION
INSTITUTIONAL CLASS
OF
TREASURY TAXADVANTAGE PORTFOLIO
OF
SHORT-TERM INVESTMENTS TRUST
11 GREENWAY PLAZA
SUITE 1919
HOUSTON, TEXAS 77046-1173
(800) 659-1005
---------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS.
IT SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS
THAT PRECEDES THIS APPENDIX, ADDITIONAL
COPIES OF WHICH MAY BE OBTAINED BY WRITING
FUND MANAGEMENT COMPANY, 11 GREENWAY PLAZA,
SUITE 1919, HOUSTON, TEXAS 77046-1173
OR CALLING (800) 659-1005
---------------------
STATEMENT OF ADDITIONAL INFORMATION DATED DECEMBER 14, 1995
RELATING TO THE PROSPECTUS DATED DECEMBER 14, 1995
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Introduction....................................................... A-3
General Information about the Fund................................. A-3
The Fund and Its Shares....................................... A-3
Trustees and Officers......................................... A-5
Remuneration of Trustees...................................... A-7
Investment Advisor............................................ A-8
Administrative Services....................................... A-9
Expenses...................................................... A-10
Banking Regulations........................................... A-10
Transfer Agent and Custodian.................................. A-11
Reports....................................................... A-11
Principal Holders of Securities............................... A-12
Purchases and Redemptions.......................................... A-15
Net Asset Value Determination................................. A-15
Distribution Agreement........................................ A-15
Performance Information....................................... A-15
Suspension of Redemption Rights............................... A-16
Investment Program and Restrictions................................ A-16
Investment Program............................................ A-16
Eligible Securities........................................... A-16
Investment Restrictions....................................... A-17
Other Investment Policies..................................... A-18
Portfolio Transactions............................................. A-18
Tax Matters........................................................ A-19
Qualifications as a Regulated Investment Company.............. A-19
Excise Tax on Regulated Investment Companies.................. A-20
Portfolio Distributions....................................... A-20
Sale or Redemption of Shares.................................. A-21
Foreign Shareholders.......................................... A-21
Effect of Future Legislation; State and Local Tax
Considerations............................................... A-22
Financial Statements............................................... FS-1
</TABLE>
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INTRODUCTION
The Treasury TaxAdvantage Portfolio (the "Portfolio") is an investment
portfolio of Short-Term Investments Trust (the "Fund"), a mutual fund. The rules
and regulations of the United States 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 the Prospectus dated December 14,
1995 (the "Prospectus") that precedes this Statement of Additional Information.
Additional copies of the Prospectus and 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) 659-1005. Investors must receive a
Prospectus before they invest.
This Statement of Additional Information is intended to furnish prospective
investors with additional information concerning 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, management series 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 TaxAdvantage 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
Statement of Additional Information 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). A copy of the Agreement and
Declaration of Trust ("Declaration of Trust") establishing the Fund is on file
with the SEC. 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 Portfolio (together, the
"Portfolios"). The Portfolio consists of the following two classes of shares:
Institutional Class and Private Investment Class, each pursuant to a separate
prospectus and statement of additional information. The Treasury Portfolio
consists of the following five classes of shares: Private Investment Class,
Personal Investment Class, Institutional Class, Cash Management Class and
Resource Class. Each such class has different shareholder qualifications and
bears expenses differently. This Statement of Additional Information and the
accompanying Prospectus relate solely to the shares of the Institutional Class
(the "Class") of the Portfolio. Shares of the Private Investment Class of the
Portfolio and the four classes of the Treasury 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 Portfolio and any class thereof, however, may be terminated at any
time, upon the recommendation of the Board of Trustees, by vote of a majority of
the out-
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<PAGE> 278
standing 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, of $.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 portfolio 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, however, 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. 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 (76)
Director, Chairman and Chief Executive Officer, A I M Management Group
Inc.; 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 Global Associates, Inc., A I M Global Holdings, Inc., A I M
Institutional Fund Services, Inc. and Fund Management Company; and
Director, A I M Global Advisors Limited, A I M Global Management Company
Limited and AIM Global Ventures Co.
- ---------------
*A trustee who is an "interested person" of the Fund and A I M Advisors, Inc.,
as defined in the Investment Company Act of 1940, as amended (the "1940 Act").
A-4
<PAGE> 279
BRUCE L. CROCKETT, Trustee (51)
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).
OWEN DALY II, Trustee (71)
6 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 (58)
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 (49)
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 Capital Management, Inc., A I M Fund Services, Inc.,
A I M Global Associates, Inc., A I M Global Holdings, Inc., AIM Global
Ventures Co., A I M Institutional Fund Services, Inc. and Fund Management
Company; and Senior Vice President, AIM Global Advisors Limited.
JOHN F. KROEGER, Trustee (71)
24875 Swan Road-Martingham
Box 464
St. Michaels, MD 21663
Director, Flag Investors International Fund, Inc., Flag Investors
Emerging Growth Fund, Inc., Flag Investors Telephone Income Fund, Inc.,
Flag Investors Equity Partners Fund, Inc., Total Return U.S. Treasury Fund,
Inc., Flag Investors Intermediate Term Income Fund, Inc., Managed Municipal
Fund, Inc., Flag Investors Value Builder Fund, Inc., Flag Investors
Maryland Intermediate Tax-Free Income Fund, Inc., Flag Investors Real
Estate Securities Fund, Inc., Alex. Brown Cash Reserve Fund, Inc. and North
American Government Bond Fund, Inc. (investment companies). Formerly,
Consultant, Wendell & Stockel Associates, Inc. (consulting firm).
LEWIS F. PENNOCK, Trustee (53)
6363 Woodway, Suite 825
Houston, TX 77057
Attorney in private practice in Houston, Texas.
- ---------------
*A trustee who is an "interested person" of the Fund and A I M Advisors, Inc.,
as defined in the Investment Company Act of 1940, as amended (the "1940 Act").
**A trustee who is an "interested person" of the Fund, as defined in the 1940
Act.
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IAN W. ROBINSON, Trustee (72)
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 (56)
Transco Tower, 50th Floor
2800 Post Oak Blvd.
Houston, TX 77056
Executive Vice President, Development and Operations, Hines Interests
Limited Partnership (real estate development).
*JOHN J. ARTHUR, Senior Vice President and Treasurer (51)
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; and
Vice President, AIM Global Advisors Limited, A I M Global Associates, Inc.,
A I M Global Holdings, Inc., and AIM Global Ventures Co.
GARY T. CRUM, Senior Vice President (48)
Director and President, A I M Capital Management, Inc.; Director and
Senior Vice President, A I M Management Group Inc., A I M Advisors, Inc.,
A I M Global Associates, Inc., A I M Global Holdings, Inc. and AIM Global
Ventures Co.; Director, A I M Distributors, Inc.; and Senior Vice
President, AIM Global Advisors Limited.
*CAROL F. RELIHAN, Vice President and Secretary (41)
Vice President, General Counsel and Secretary, A I M Management Group
Inc., A I M Advisors, Inc., A I M Fund Services, Inc., A I M Institutional
Fund Services, Inc. and Fund Management Company; Vice President and
Secretary, A I M Distributors, Inc., A I M Global Associates, Inc. and
A I M Global Holdings, Inc.; Vice President and Assistant Secretary, AIM
Global Advisors Limited and AIM Global Ventures Co.; and Secretary, A I M
Capital Management, Inc.
DANA R. SUTTON, Vice President and Assistant Treasurer (36)
Vice President and Fund Controller, A I M Advisors, Inc.; and
Assistant Vice President and Assistant Treasurer, Fund Management Company.
MELVILLE B. COX, Vice President (52)
Vice President, A I M Advisors, Inc., A I M Capital Management, Inc.,
A I M Fund Services, Inc. and A I M Institutional 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 (35)
Director, A I M Global Management Company Limited; Senior Vice
President, A I M Capital Management, Inc. and AIM Global Advisors Limited;
and Vice President, A I M Advisors, Inc. and AIM Global Ventures Co.
J. ABBOTT SPRAGUE, Vice President (40)
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.
- ---------------
*Mr. Arthur and Ms. Relihan are married to each other.
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<PAGE> 281
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 Board of Trustees and such committee.
The members of the Investments Committee are Messrs. Bauer, Crockett, 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
of Trustees 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 the disinterested
trustees, or considering such matters as may from time to time be set forth in a
charter adopted by the Board of Trustees and such committee.
All of the 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 Advisors, Inc.
("AIM") or distributed and administered by FMC. All of the Fund's executive
officers hold similar offices with some or all of such investment companies.
REMUNERATION OF TRUSTEES
Set forth below is information regarding compensation paid or accrued during
the fiscal year ended August 31, 1995 for each trustee of the Fund:
<TABLE>
<CAPTION>
RETIREMENT TOTAL
BENEFITS COMPENSATION
AGGREGATE ACCRUED FROM
COMPENSATION BY ALL ALL
FROM AIM AIM
DIRECTOR FUND(1) FUNDS(2) FUNDS(3)
-------- ------------ ---------- ------------
<S> <C> <C> <C>
Charles T. Bauer.................................... $ 0 $ 0 $ 0
Bruce L. Crockett................................... 1,034 2,814 45,094
Owen Daly II........................................ 1,027 14,375 45,844
Carl Frischling..................................... 1,034 7,542 45,094
Robert H. Graham.................................... 0 0 0
John F. Kroeger..................................... 1,027 20,517 45,844
Lewis F. Pennock.................................... 1,027 5,093 45,844
Ian W. Robinson..................................... 1,024 10,396 45,094
Louis S. Sklar...................................... 1,024 4,862 45,094
</TABLE>
- ---------------
(1) The total amount of compensation deferred by all Trustees of the Fund during
the fiscal year ended August 31, 1995, including interest earned thereon,
was $4,246.
(2) During the fiscal year ended August 31, 1995, the total amount of expenses
allocated to the Fund in respect of such retirement benefits was $1,112.
Data reflects compensation earned for the calendar year ended December 31,
1994.
(3) Messrs. Bauer, Daly, Graham, Kroeger and Pennock each serves as a Director
or Trustee of a total of 11 AIM Funds. Messrs. Crockett, Frischling,
Robinson and Sklar each serves as a Director or Trustee of a total of 10 AIM
Funds. Data reflects compensation earned for the calendar year ended
December 31, 1994.
AIM Funds Retirement Plan for Eligible Directors/Trustees
Under the terms of the AIM Funds Retirement Plan for Eligible
Directors/Trustees (the "Plan"), each director (who is not an employee of any of
the AIM Funds, A I M Management Group Inc. or any of their affiliates) may be
entitled to certain benefits upon retirement from the Board of Directors.
Pursuant to the Plan, the normal retirement date is the date on which the
eligible director has attained age 65 and has completed at least five years of
continuous service with one or more of the regulated investment companies
managed, administered or distributed by AIM or its affiliates (the "AIM Funds").
Each eligible director is entitled to receive an annual benefit from the AIM
Funds commencing on the first day of the calendar quarter coincident with or
following his date of retirement equal to 5% of such Trustees' compensation paid
by the AIM Funds multiplied by the number of such Trustee's years of service
(not in excess of 10 years of service) completed with respect to any of the AIM
Funds. Such benefit is payable to each eligible trustee in quarterly
installments for a period of no more than five years. If an
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eligible trustee dies after attaining the normal retirement date but before
receipt of any benefits under the Plan commences, the trustee's surviving spouse
(if any) shall receive a quarterly survivor's benefit equal to 50% of the amount
payable to the deceased trustee, for no more than five years beginning the first
day of the calendar quarter following the date of the director's death. Payments
under the Plan are not secured or funded by any AIM Fund.
Set forth below is a table that shows the estimated annual benefits payable to
an eligible director upon retirement assuming various compensation and years of
service classifications. The estimated credited years of service as of December
31, 1994 for Messrs. Crockett, Daly, Frischling, Kroeger, Pennock, Robinson and
Sklar are 7, 8, 17, 17, 13, 7, and 5 years, respectively.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION PAID BY
ALL AIM FUNDS
NUMBER OF YEARS OF SERVICE -------------------------------
WITH THE AIM FUNDS $60,000 $65,000
- -------------------------- ------- -------
<S> <C> <C>
10 $30,000 $32,500
9 $27,000 $29,250
8 $24,000 $26,000
7 $21,000 $22,750
6 $18,000 $19,500
5 $15,000 $16,250
</TABLE>
Deferred Compensation Agreements
Messrs. Daly, Frischling, Kroeger, Robinson and Sklar (for purposes of this
paragraph only, the "deferring directors") have each executed a Deferred
Compensation Agreement (collectively, the "Agreements"). Pursuant to the
Agreements, the deferring directors may elect to defer receipt of up to 100% of
their compensation payable by the Fund, and such amounts are placed into a
deferral account. Currently, the deferring directors may select various AIM
Funds in which all or part of his deferral account shall be deemed to be
invested. Distributions from the deferring directors' deferral accounts will be
paid in cash, in generally equal quarterly installments over a period of five
years beginning on the date the deferring director's retirement benefits
commence under the Plan. The Fund's Board of Trustees, in its sole discretion,
may accelerate or extend the distribution of such deferral accounts after the
deferring director's termination of service as a director of the Fund. If a
deferring director dies prior to the distribution of amounts in his deferral
account, the balance of the deferral account will be distributed to his
designated beneficiary in a single lump sum payment as soon as practicable after
such deferring director's death. The Agreements are not funded and, with respect
to the payments of amounts held in the deferral accounts, the deferring
directors have the status of unsecured creditors of the Fund and of each other
AIM Fund from which they are deferring compensation.
The Portfolio paid legal fees of $471 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 and
the Portfolio paid legal fees of $2,654 for services rendered by that firm as
counsel to the Board of Trustees. A trustee of the Fund was a member of the firm
of Reid & Priest until September 1994, when he became a member of Kramer, Levin,
Naftalis, Nessen, Kamin & Frankel.
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 "Advisory
Agreement"). AIM was organized in 1976, and together with its affiliates advises
or manages 37 investment company portfolios. As of October 31, 1995, the total
assets of the investment company portfolios managed or advised by AIM and its
affiliates were approximately $39.3 billion.
Pursuant to the terms of the Advisory 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.
AIM and the Fund have adopted a Code of Ethics which requires investment
personnel (a) to pre-clear all personal securities transactions, (b) to file
reports regarding such transactions, and (c) to refrain from personally engaging
in (i) short-term trading of a security, (ii) transactions involving a security
within seven days of an AIM Fund transaction involving the same security, and
(iii) transactions involving securities being considered for investment by an
AIM Fund. The Code also prohibits investment personnel from purchasing
securities in an initial public offering. Personal trading reports are reviewed
periodi-
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cally by AIM, and the Board of Trustees reviews annually such reports (including
information on any substantial violations of the Code). Violations of the Code
may result in censure, monetary penalties, suspension or termination of
employment.
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 $250 million............................................ .20%
Over $250 million to $500 million............................. .15%
Over $500 million............................................. .10%
</TABLE>
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.
Pursuant to an investment advisory agreement between the Fund and AIM,
previously in effect with respect to the Portfolio, which provided for the same
level of compensation to AIM as the Agreement, and the Advisory Agreement
currently in effect, AIM received fees (net of fee waivers, if any) from the
Fund for the fiscal years ended August 31, 1995, 1994 and 1993, with respect to
the Portfolio in the amounts of $596,449, $640,698 and $904,014, respectively.
For the fiscal years ended August 31, 1995, 1994 and 1993, AIM waived fees with
respect to the Portfolio in the amounts of $117,100, $131,042 and $0,
respectively.
The Advisory Agreement provides, that, upon the request of the Board of
Trustees, AIM may perform or arrange for the performance of certain additional
services on behalf of the Portfolio which are not required by the Advisory
Agreement. AIM may receive reimbursement or reasonable compensation for certain
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
a master administrative services agreement under which AIM will provide the
additional services described below under the caption "Administrative Services."
The Advisory Agreement was approved for its initial term by the Board of
Trustees on July 19, 1993. The Advisory Agreement will continue in effect until
June 30, 1996 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 Advisory 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 Advisory Agreement on
60 days' notice without penalty. The Advisory 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.
FMC is a registered broker-dealer and a wholly-owned subsidiary of AIM. FMC
acts as distributor of the shares of the Class.
ADMINISTRATIVE SERVICES
AIM also provides certain services pursuant to a Master Administrative
Services Agreement dated as of October 18, 1993 between AIM and the Fund (the
"Administrative Services Agreement").
Under the Administrative Services Agreement, AIM performs accounting 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 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.
The Administrative Services Agreement was initially approved by the Board of
Trustees on July 19, 1993. Pursuant to an administrative services agreement
between the Fund and AIM, previously in effect, which provided for the same
level of reimbursement to AIM as the Administrative Services Agreement, AIM was
reimbursed for the fiscal years ended August 31, 1995, 1994 and 1993, in the
amounts of $42,823, $31,534 and $29,382, respectively, for fund accounting
services for the Portfolio.
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<PAGE> 284
Under the terms of a Transfer Agency and Service Agreement, dated July 1,
1995, between the Fund and AIFS, a registered transfer agent and wholly-owned
subsidiary of AIM, as well as under previous agreements, AIFS received $10,913
and $1,892 for the fiscal years ended August 31, 1995 and 1994, respectively,
for the provision of certain shareholder services for the Fund.
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). 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, 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 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 AGENT 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.
A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046-1173, acts as transfer agent for the shares of the Class
and receives an annual fee from the Fund for its services in such capacity in
the amount of .007% of
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<PAGE> 285
average daily net assets of the Fund, payable monthly. Such compensation may be
changed from time to time as is agreed to by A I M Institutional Services, Inc.
and the Fund.
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 Portfolio and its financial statements. The annual
financial statements are audited by the Fund's independent auditors. The 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.
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<PAGE> 286
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 25, 1995, 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 Texas...................................................... 14.27%
P.O. Box 831000
Dallas, TX 75283-1000
Wachovia Bank and Trust................................................ 12.50%
P.O. Box 3075
Winston-Salem, NC 27150
Trust Company Bank..................................................... 11.96%
P.O. Box 105504
Atlanta, GA 30348
Victoria Bank and Trust................................................ 7.84%
One O'Connor Plaza 6th Floor
Victoria, TX 77902
Texas Commerce Bank.................................................... 6.47%
601 Travis
Houston, TX 77002
U.S. Bank of Washington................................................ 5.62%
P.O. Box 3168
Portland, OR 97208
</TABLE>
PERSONAL INVESTMENT CLASS
- -------------------------
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
---------------- --------------
<S> <C>
Frost National Bank.................................................... 49.42%(b)
P.O. Box 2358
San Antonio, TX 78299
Republic National Bank................................................. 27.58%(b)
1 Hanson Place, Lower Level
Brooklyn, NY 11243
The Bank of New York................................................... 21.30%
440 Mamaroneck Ave.
Harrison, NY 10528
</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 more than 25% 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.
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<PAGE> 287
PRIVATE INVESTMENT CLASS
- ------------------------
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
---------------- --------------
<S> <C>
Liberty Bank and Trust Company of Oklahoma ............................ 41.02%(b)
P.O. Box 25848
Oklahoma City, OK 73125
First Trust/VAR & Co................................................... 29.92%(b)
180 E. 5th Street
St. Paul, MN 55101
Huntington Capital Corp................................................ 14.82%
41 S. High St.
Columbus, OH 43287
Charter National Bank.................................................. 6.39%
P.O. Box 1494
Houston, TX 77251-1494
United Counties Trust Co............................................... 5.20%
30 Maple St.
Summit, NJ 07901
</TABLE>
CASH MANAGEMENT CLASS
- ---------------------
<TABLE>
<CAPTION>
PERCENT PERCENT
NAME AND ADDRESS OWNED OWNED OF
OF RECORD OWNER BENEFICIALLY ONLY RECORD ONLY
---------------- ----------------- -----------
<S> <C> <C>
City of Riverside................................. 21.65% -0-
P.O. Box 12005
Riverside, CA 92502-2205
LA Export Terminal................................ -0- 11.72%(a)
P.O. Box 1769
San Pedro, CA 90733
State Street Bank and Trust....................... -0- 10.87%(a)
61 Broadway 15th Fl.
New York, NY 10006
Montgomery County................................. 6.76% -0-
101 Monroe St., 15th Fl.
Rockville, MD 20850
City of West Sacramento........................... 6.60% -0-
2101 Stone Blvd.
W. Sacramento, CA 95691
City of Ontario................................... 5.26% -0-
303 East "B" St.
Ontario, CA 91764
</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 more than 25% 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.
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<PAGE> 288
RESOURCE CLASS
- --------------
AIM provided the initial capitalization of the Resource Class of the Treasury
Portfolio and, accordingly, as of the date of this Statement of Additional
Information, owned all the outstanding shares of beneficial interest of the
Resource Class of the Treasury Portfolio. Although the Resource Class of the
Treasury 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 Resource Class of the Treasury Portfolio that are outstanding,
it may be presumed to be in "control" of the Resource Class of the Treasury
Portfolio, as defined in the 1940 Act.
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 25, 1995, 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...................................................... 28.6%(b)
1700 Farnam Street
Omaha, NE 68102
Muchmore & Co............................................................ 13.7%
750 Walnut Street
Cranford, NJ 07016-1205
Key Trust Company........................................................ 10.1%
4900 Tiedeman
Cleveland, OH 44101-5971
Boatmen's Trust Company.................................................. 8.7%
P.O. Box 14737
St. Louis, MO 63178
Wachovia Bank and Trust Co. N.A.......................................... 7.6%
P.O. Box 3075
Winston-Salem, NC 27150
Liberty Bank & Trust Company of Tulsa, N.A............................... 7.5%
P.O. Box 25848
Oklahoma City, OK 73125
</TABLE>
PRIVATE INVESTMENT CLASS
- ------------------------
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
---------------- --------------
<S> <C>
Huntington Capital Corp.................................................. 100%(b)
41 S. High St.
Columbus, OH 43287
</TABLE>
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 25, 1995, 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.
(b) A shareholder who holds more than 25% 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.
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<PAGE> 289
PURCHASES AND REDEMPTIONS
NET ASSET VALUE DETERMINATION
Shares of the Class 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, which require the Fund to adhere to certain
conditions. 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.
The Board of Trustees is required to establish procedures designed to
stabilize, to the extent reasonably practicable, the Fund's price per share at
$1.00 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 sale of portfolio instruments prior
to maturity to realize capital gains or losses or to shorten the average
portfolio maturity; the withholding of dividends; redemption of shares in kind;
or the establishment of a net asset value per share by using available market
quotations.
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. The address of FMC is 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046-1173. 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 Portfolio 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. FMC
has not undertaken to sell any specified number of shares of the Class. FMC does
not receive any fees with respect to the shares of the Class pursuant to the
Distribution Agreement.
On July 19, 1993, the Board of Trustees (including the affirmative vote of 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, 1996, 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 15, 1993. The Fund or FMC
may terminate the Distribution Agreement on sixty days' written notice without
penalty. The Distribution Agreement will terminate automatically in the event of
its "assignment," as defined in the 1940 Act.
PERFORMANCE INFORMATION
As stated under the caption "Yield Information" in the Prospectus, yield
information for the shares of the Class may be obtained by calling the Fund at
(800) 659-1005. 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
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<PAGE> 290
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, 1995, the current yield and the
effective yield of the Class (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) were 5.42% and 5.56%, respectively, excluding capital
gains distributions. For the seven-day period ended August 31, 1995, the current
distribution rate and the effective distribution rate of the Class, including
capital gains distributions, (which assumes the reinvestment of dividends for a
365-day year and a return for the entire year equal to the average annualized
current distribution rate for the period) were 5.47% and 5.62%, respectively.
These performance numbers are quoted for illustration purposes only. Performance
numbers for any other seven-day period may be substantially different from those
quoted above.
The Portfolio 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 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;
- 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' 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's securities when comparing investment
alternatives.
The Portfolio 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
The Portfolio seeks to achieve its objective by investing in high grade money
market instruments. 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 invests exclusively in direct obligations of the U.S. Treasury, which
include Treasury bills, notes and bonds.
ELIGIBLE SECURITIES
The Portfolio limits its investments to direct U.S. Treasury obligations.
These securities are "Eligible Securities" as defined in Rule 2a-7. Rule 2a-7
limits securities that may be purchased by money market funds to "Eligible
Securities," and 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
- ---------------
(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 at 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
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<PAGE> 291
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
(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 Security2 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
trustees; provided, however, that:
(A) the board of trustees 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 securities purchased by the Portfolio, which are limited to those issued
by the U.S. Treasury, are considered to be in the highest ratings category for
short-term debt obligations.
INVESTMENT RESTRICTIONS
As a matter of fundamental policy which may not be changed without a majority
vote of 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) 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 or 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;
(2) 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;
(3) 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;
(4) 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;
(5) 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;
(6) purchase or sell commodities or commodity futures contracts,
purchase securities on margin, make short sales or invest in puts or calls;
- ---------------
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.
(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.
A-17
<PAGE> 292
(7) invest in any obligation not payable as to principal and interest
in United States currency; or
(8) 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.
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 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 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. 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.
From time to time, the Fund may sell a security, or purchase a security from
an AIM Fund or another investment account advised by AIM or A I M Capital
Management, Inc. ("AIM Capital") when such transactions comply with applicable
rules and regulations and are deemed consistent with the investment objective(s)
and policies of the investment accounts advised by AIM or AIM Capital.
Procedures pursuant to Rule 17a-7 under the 1940 Act regarding transactions
between investment accounts advised by AIM or AIM Capital have been adopted by
the Boards of Directors/Trustees of the various AIM Funds, including the Fund.
Although such transactions may result in custodian, tax or other related
expenses, no brokerage commissions or other direct transaction costs are
generated by transactions among the investment accounts advised by AIM or AIM
Capital.
Provisions of the 1940 Act and rules and regulations thereunder have 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
A-18
<PAGE> 293
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, 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.
Furthermore, the 1940 Act prohibits the Fund from purchasing a security being
publicly underwritten by a syndicate of which persons affiliated with the Fund
are a member except in accordance with certain conditions. These conditions may
restrict the ability of the Portfolio to purchase Money Market obligations being
publicly underwritten by such a syndicate, and the Portfolio may be required to
wait until the syndicate has been terminated before buying such securities. At
such time, the market price of the securities may be higher or lower than the
original offering price. A person affiliated with the Fund may, from time to
time, serve as placement agent or financial advisor to an issuer of Money Market
obligations and be paid a fee by such issuer. The Portfolio may purchase such
Money Market obligations directly from the issuer, provided that the purchase
made in accordance with procedures adopted by the Fund's Board of Trustees and
any such purchases are reviewed at least quarterly by the Fund's Board of
Trustees and a determination is made that all such purchases were effected in
compliance with such procedures, including a determination that the placement
fee or other remuneration paid by the issuer to the person affiliated with the
Fund was fair and reasonable in relation to the fees charged by others
performing similar services. During the fiscal year ended August 31, 1995, no
securities or instruments were purchased by the Portfolio from issuers who paid
placement fees or other compensation to a broker affiliated with the Portfolio.
TAX MATTERS
The following is only a summary of certain additional tax considerations
generally affecting the Portfolio 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 Portfolio or its shareholders, and the discussion here and in
the Prospectus is not intended as a substitute for careful tax planning.
QUALIFICATION AS A REGULATED INVESTMENT COMPANY
The Portfolio 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 Portfolio 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 Portfolio 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 options,
futures or forward contracts thereon) held for less than three months
A-19
<PAGE> 294
(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 options or
futures thereon). Because of the Short-Short Gain Test, the Portfolio 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 the Portfolio 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 the Portfolio 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
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, the Portfolio 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
the Portfolio's taxable year, at least 50% of the value of the Portfolio'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 the Portfolio has not invested more than 5% of the value of
the Portfolio's total assets in securities of such issuer and as to which the
Portfolio 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 the Portfolio 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 (a "taxable year election")). 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.
For purposes of the excise tax, a regulated investment company (1) may reduce
its capital gain net income (but not below its net capital gain) by the amount
of any net ordinary loss for the calendar year and (2) must, unless it has made
a taxable year election, exclude foreign currency gains and losses incurred
after October 31 of any year in determining the amount of ordinary taxable
income for the current calendar year (and, instead, include such gains and
losses in determining ordinary taxable income for the succeeding 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.
The Portfolio may either retain or distribute to shareholders its net capital
gain for each taxable year. The Portfolio currently intends to distribute any
such amounts. If net capital gain is distributed and designated as a capital
gain dividend, it will be taxable to shareholders as long-term capital gain,
regardless of the length of time the shareholder has held his shares or whether
such gain was recognized by the Portfolio prior to the date on which the
shareholder acquired his shares. Conversely, if the Portfolio elects to retain
its net capital gain, the Portfolio will be taxed thereon (except to the extent
of any available capital loss carryovers) at the current corporate tax rate. If
the Portfolio elects to retain net capital gain, it is expected that the
Portfolio also will elect to have shareholders treated as having received a
distribution of such gain, with the result that they will be required to report
their respective shares of such gain on their tax returns as long-term capital
gain, will receive a refundable tax credit for their allocable share of tax paid
by the Portfolio on the gain, and will increase the tax basis for their shares
by an amount equal to the deemed distribution less the tax credit.
A-20
<PAGE> 295
Distributions by the Portfolio that do not constitute ordinary income
dividends or capital gain dividends will be treated as a return of capital to
the extent of (and in reduction of) the shareholder's tax basis in his shares;
any excess will be treated as gain from the sale of his shares, as discussed
below.
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 Class. 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. In addition, if the net asset value at the time a
shareholder purchases shares of the Class reflects undistributed net investment
income or recognized capital gain net income, or unrealized appreciation in the
value of the assets of the Portfolio, distributions of such amounts will be
taxable to the shareholder in the manner described above, although such
distributions economically constitute a return of capital to the shareholder.
Ordinarily, shareholders are required to take distributions by the Portfolio
into account in the year in which the distributions are made. However,
distributions 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 distributions are actually made in January of
the following year. Shareholders will be advised 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 ordinary income dividends and capital gain dividends, and
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 Portfolio that it is not subject to backup withholding
or that it is a corporation or other "exempt recipient."
SALE OR REDEMPTION OF SHARES
A shareholder will recognize gain or loss on the sale or redemption of shares
of the Class in an amount equal to the difference between the proceeds of the
sale or redemption and the shareholder's adjusted tax basis in the shares. All
or a portion of any loss so recognized may be disallowed if the shareholder
purchases other shares of the Class within 30 days before or after the sale or
redemption. In general, any gain or loss arising from (or treated as arising
from) the sale or redemption of shares of the Class will be considered capital
gain or loss and will be long-term capital gain or loss if the shares were held
for longer than one year. However, any capital loss arising from the sale or
redemption of shares held for six months or less will be treated as a long-term
capital loss to the extent of the amount of capital gain dividends received on
such shares. For this purpose, the special holding period rules of Code Section
246(c)(3) and (4) generally will apply in determining the holding period of
shares.
FOREIGN SHAREHOLDERS
Taxation of a shareholder who, as to the United States, is a nonresident alien
individual, foreign trust or estate, foreign corporation, or foreign partnership
("foreign shareholder"), depends on whether the income from the Portfolio is
"effectively connected" with a U.S. trade or business carried on by such
shareholder.
If the income from the Portfolio is not effectively connected with a U.S.
trade or business carried on by a foreign shareholder, dividends and
distributions (other than capital gains dividends) will be subject to U.S.
withholding tax at the rate of 30% (or lower treaty rate) upon the gross amount
of the dividend or distribution. Such a foreign shareholder would generally be
exempt from U.S. federal income tax on gains realized on the sale of shares of
the Class, capital gain dividends and amounts retained by the Portfolio that are
designated as undistributed capital gains.
If the income from the Portfolio is effectively connected with a U.S. trade or
business carried on by a foreign shareholder, then ordinary income dividends,
capital gain dividends and any gains realized upon the sale of shares of the
Portfolio will be subject to U.S. federal income tax at the rates applicable to
U.S. citizens or domestic corporations.
In the case of foreign noncorporate shareholders, the Portfolio may be
required to withhold U.S. federal income tax at a rate of 31% on distributions
that are otherwise exempt from withholding tax unless such shareholders furnish
the Portfolio with proper notification of their foreign status.
The tax consequences to a foreign shareholder entitled to claim the benefits
of an applicable tax treaty may be different from those described herein.
Foreign shareholders are urged to consult their own tax advisers with respect to
the particular tax consequences to them of an investment in the Portfolio,
including the applicability of foreign taxes.
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<PAGE> 296
EFFECT OF FUTURE LEGISLATION; STATE AND 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 November
1, 1995. 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. It is anticipated that the
ordinary income dividends paid by the Portfolio from net investment income will
be exempt from state and local personal and, in some cases, corporate income
taxes in many states. Shareholders are urged to consult their tax advisers as to
the consequences of these and other state and local tax rules affecting their
investment in the Portfolio.
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<PAGE> 297
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholders
Short-Term Investments Trust:
We have audited the accompanying statement of assets and liabilities of the
Treasury TaxAdvantage Portfolio (a series portfolio of Short-Term Investments
Trust), including the schedule of investments, as of August 31, 1995, 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 five-year period then
ended and the period August 17, 1990 (date operations commenced) through August
31, 1990. 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, 1995, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Treasury TaxAdvantage Portfolio as of August 31, 1995, 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 five-year period then ended, and the period August 17,
1990 (date operations commenced) through August 31, 1990 in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Houston, Texas
October 6, 1995
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<PAGE> 298
SCHEDULE OF INVESTMENTS
August 31, 1995
<TABLE>
<CAPTION>
MATURITY PAR VALUE
<S> <C> <C> <C>
U.S. TREASURY SECURITIES-100.39%
U.S. TREASURY BILLS(a)-94.61%
5.425% 09/07/95 $ 1,370,000 $ 1,368,761
------------------------------------------------------------------------------------------------
5.58% 09/07/95 5,470,000 5,464,913
------------------------------------------------------------------------------------------------
5.595% 09/07/95 7,000,000 6,993,473
------------------------------------------------------------------------------------------------
5.745% 09/07/95 17,870,000 17,852,889
------------------------------------------------------------------------------------------------
5.325% 09/14/95 1,295,000 1,292,510
------------------------------------------------------------------------------------------------
5.40% 09/14/95 7,100,000 7,086,155
------------------------------------------------------------------------------------------------
5.41% 09/14/95 2,615,000 2,609,891
------------------------------------------------------------------------------------------------
5.455% 09/14/95 3,300,000 3,293,499
------------------------------------------------------------------------------------------------
5.49% 09/14/95 3,250,000 3,243,557
------------------------------------------------------------------------------------------------
5.375% 09/21/95 12,640,000 12,602,256
------------------------------------------------------------------------------------------------
5.42% 09/21/95 450,000 448,645
------------------------------------------------------------------------------------------------
5.63% 09/21/95 710,000 707,780
------------------------------------------------------------------------------------------------
5.635% 09/21/95 15,000,000 14,953,042
------------------------------------------------------------------------------------------------
5.64% 09/21/95 3,655,000 3,643,548
------------------------------------------------------------------------------------------------
5.66% 09/21/95 8,000,000 7,974,845
------------------------------------------------------------------------------------------------
5.69% 09/21/95 200,000 199,368
------------------------------------------------------------------------------------------------
5.48% 09/28/95 10,415,000 10,372,194
------------------------------------------------------------------------------------------------
5.41% 10/05/95 2,555,000 2,541,945
------------------------------------------------------------------------------------------------
5.465% 10/05/95 10,000,000 9,948,386
------------------------------------------------------------------------------------------------
5.50% 10/05/95 25,000,000 24,870,140
------------------------------------------------------------------------------------------------
5.62% 10/05/95 1,630,000 1,621,348
------------------------------------------------------------------------------------------------
5.37% 10/12/95 4,400,000 4,373,090
------------------------------------------------------------------------------------------------
5.375% 10/12/95 16,375,000 16,274,760
------------------------------------------------------------------------------------------------
5.38% 10/12/95 4,100,000 4,074,878
------------------------------------------------------------------------------------------------
5.44% 10/12/95 4,555,000 4,526,779
------------------------------------------------------------------------------------------------
5.475% 10/12/95 11,965,000 11,890,393
------------------------------------------------------------------------------------------------
5.41% 10/19/95 15,890,000 15,775,380
------------------------------------------------------------------------------------------------
5.425% 10/19/95 15,245,000 15,134,727
------------------------------------------------------------------------------------------------
5.45% 10/19/95 1,860,000 1,846,484
------------------------------------------------------------------------------------------------
5.49% 10/19/95 15,000,000 14,890,200
------------------------------------------------------------------------------------------------
</TABLE>
FS-2
<PAGE> 299
<TABLE>
<CAPTION>
MATURITY PAR VALUE
<S> <C> <C> <C>
U.S. TREASURY BILLS(a)-(CONTINUED)
5.43% 10/26/95 $12,315,000 $ 12,212,837
------------------------------------------------------------------------------------------------
5.41% 11/02/95 710,000 703,385
------------------------------------------------------------------------------------------------
5.415% 11/02/95 7,010,000 6,944,626
------------------------------------------------------------------------------------------------
5.43% 11/02/95 12,000,000 11,887,780
------------------------------------------------------------------------------------------------
5.415% 11/09/95 4,050,000 4,007,966
------------------------------------------------------------------------------------------------
5.445% 11/09/95 1,520,000 1,504,137
------------------------------------------------------------------------------------------------
5.47% 11/09/95 20,000,000 19,790,317
------------------------------------------------------------------------------------------------
5.315% 11/16/95 2,115,000 2,091,269
------------------------------------------------------------------------------------------------
5.37% 11/16/95 8,515,000 8,418,468
------------------------------------------------------------------------------------------------
5.43% 11/16/95 295,000 291,618
------------------------------------------------------------------------------------------------
5.45% 11/16/95 20,000,000 19,769,889
------------------------------------------------------------------------------------------------
5.345% 11/24/95 2,480,000 2,449,070
------------------------------------------------------------------------------------------------
5.35% 11/24/95 4,840,000 4,779,581
------------------------------------------------------------------------------------------------
5.375% 11/24/95 12,000,000 11,849,500
------------------------------------------------------------------------------------------------
5.41% 11/24/95 4,305,000 4,250,657
------------------------------------------------------------------------------------------------
5.42% 11/24/95 7,200,000 7,108,944
------------------------------------------------------------------------------------------------
5.33% 11/30/95 3,220,000 3,177,094
------------------------------------------------------------------------------------------------
5.30% 12/14/95 265,000 260,943
------------------------------------------------------------------------------------------------
5.31% 12/14/95 29,315,000 28,865,308
------------------------------------------------------------------------------------------------
378,239,225
------------------------------------------------------------------------------------------------
U.S. TREASURY NOTES-5.78%
5.125% 11/15/95 14,150,000 14,134,017
------------------------------------------------------------------------------------------------
4.25% 11/30/95 9,000,000 8,969,328
------------------------------------------------------------------------------------------------
23,103,345
------------------------------------------------------------------------------------------------
Total U.S. Treasury Securities 401,342,570
------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS-100.39%(b) 401,342,570(c)
------------------------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-(0.39%) (1,543,472)
------------------------------------------------------------------------------------------------
NET ASSETS-100.00% $399,799,098
================================================================================================
</TABLE>
(a) U.S. Treasury bills are traded on a discount
basis. In such cases the interest rate shown
represents the rate of discount paid or received
at the time of purchase by the Portfolio.
(b) Percentage of Net Assets.
(c) Also represents cost for federal income tax
purposes.
See Notes to Financial Statements.
FS-3
<PAGE> 300
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments, at value (amortized cost) $401,342,570
----------------------------------------------------------------------------------------
Cash 2,686
----------------------------------------------------------------------------------------
Interest receivable 311,990
----------------------------------------------------------------------------------------
Investment for deferred compensation plan 6,131
----------------------------------------------------------------------------------------
Other assets 9,807
----------------------------------------------------------------------------------------
Total assets 401,673,184
----------------------------------------------------------------------------------------
LIABILITIES:
Dividends payable 1,769,980
----------------------------------------------------------------------------------------
Deferred compensation payable 6,131
----------------------------------------------------------------------------------------
Accrued advisory fees 60,277
----------------------------------------------------------------------------------------
Accrued transfer agent fees 2,385
----------------------------------------------------------------------------------------
Accrued trustees' fees 1,075
----------------------------------------------------------------------------------------
Accrued administrative services fees 5,525
----------------------------------------------------------------------------------------
Accrued distribution fees 1,179
----------------------------------------------------------------------------------------
Accrued operating expenses 27,534
----------------------------------------------------------------------------------------
Total liabilities 1,874,086
----------------------------------------------------------------------------------------
NET ASSETS $399,799,098
========================================================================================
NET ASSETS:
Institutional Class $394,375,864
========================================================================================
Private Investment Class $ 5,423,234
========================================================================================
NET ASSET VALUE PER SHARE:
Shares outstanding, $.01 par value per share:
Institutional Class 394,308,752
========================================================================================
Private Investment Class 5,422,315
========================================================================================
Net asset value, offering and redemption price per share $ 1.00
========================================================================================
</TABLE>
See Notes to Financial Statements.
FS-4
<PAGE> 301
STATEMENT OF OPERATIONS
For the year ended August 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $21,243,050
----------------------------------------------------------------------------------------
EXPENSES:
Advisory fees 713,549
----------------------------------------------------------------------------------------
Custodian fees 36,901
----------------------------------------------------------------------------------------
Administrative services fees 42,823
----------------------------------------------------------------------------------------
Trustees' fees and expenses 7,599
----------------------------------------------------------------------------------------
Transfer agent fees 17,122
----------------------------------------------------------------------------------------
Printing expenses 29,481
----------------------------------------------------------------------------------------
Distribution fees 10,159
----------------------------------------------------------------------------------------
Other 66,628
----------------------------------------------------------------------------------------
Total expenses 924,262
----------------------------------------------------------------------------------------
Less expenses assumed by advisor (129,100)
========================================================================================
Net expenses 795,162
========================================================================================
Net investment income 20,447,888
----------------------------------------------------------------------------------------
Net realized gain on sales of investments 24,806
----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $20,472,694
========================================================================================
</TABLE>
See Notes to Financial Statements.
FS-5
<PAGE> 302
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 20,447,888 $ 13,926,577
--------------------------------------------------------------------------------------------
Net realized gain on sales of investments 24,806 12,246
--------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 20,472,694 13,938,823
--------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income (20,447,888) (13,926,577)
--------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investments (12,244) --
--------------------------------------------------------------------------------------------
Share transactions-net (4,095,169) (30,823,909)
--------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (4,082,607) (30,811,663)
--------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 403,881,705 434,693,368
--------------------------------------------------------------------------------------------
End of period $399,799,098 $403,881,705
============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $399,731,067 $403,826,236
--------------------------------------------------------------------------------------------
Undistributed net realized gain on sales of investments 68,031 55,469
--------------------------------------------------------------------------------------------
$399,799,098 $403,881,705
============================================================================================
</TABLE>
See Notes to Financial Statements.
FS-6
<PAGE> 303
NOTES TO FINANCIAL STATEMENTS
August 31, 1995
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
Short-Term Investments Trust (the "Fund") is registered 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, with the
assets, liabilities and operations of each portfolio accounted for separately.
Information presented in these financial statements pertains only to the
Treasury TaxAdvantage Portfolio (the "Portfolio"). The Portfolio consists of two
different classes of shares: the Institutional Class and the Private Investment
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 class of shares are
charged to that class' operations. Expenses which are applicable to more than
one class, e.g., advisory fees, are allocated among them.
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 $250 million 0.20%
- ---------------------------------------------------------------------------------
Over $250 million to $500 million 0.15%
- ---------------------------------------------------------------------------------
Over $500 million 0.10%
=================================================================================
</TABLE>
The Fund has entered into a master distribution agreement with Fund Management
Company ("FMC") for the distribution of shares of the Institutional Class and
the Private Investment Class. The Company has also adopted a distribution plan
(the "Plan") pursuant to Rule 12b-1 under the 1940 Act with respect to the
Private Investment Class. The Plan provides that the Private Investment Class
may pay up to a 0.50% maximum annual rate of the Private Investment Class'
average daily net assets. Of this amount, the Fund may pay an asset-based sales
charge to FMC and the Portfolio may pay a service fee of 0.25% of the average
daily net assets of the Private Investment Class to selected 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.
Any amounts not paid as a service fee under such Plan would constitute an
asset-based sales charge. 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 Private Investment Class. During the year ended
August 31, 1995, the Private Investment Class paid $10,159 as compensation under
the Plan.
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
FS-7
<PAGE> 304
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. During the year ended
August 31, 1995, AIM voluntarily waived advisory fees of $117,100 and assumed
expenses of $12,000.
The Portfolio, pursuant to a master administrative services agreement with
AIM, has agreed to reimburse AIM for certain costs incurred in providing
accounting services to the Portfolio. During the year ended August 31, 1995, the
Portfolio reimbursed AIM $42,823 for such services. During the year ended August
31, 1995, the Portfolio paid A I M Institutional Fund Services, Inc. ("AIFS")
$10,913 for shareholder and transfer agency services. Effective July 1, 1995,
AIFS became the exclusive transfer agent of the Portfolio.
Certain officers and trustees of the Fund are officers and directors of AIM,
FMC, and AIFS.
The Portfolio paid legal fees of $471 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 and
the Portfolio paid legal fees of $2,654 for services rendered by that firm as
counsel to the Board of Trustees. A trustee of the Trust was a member of the
firm of Reid & Priest until September 1994, when he became a member of Kramer,
Levin, Naftalis, Nessen, Kamin & Frankel.
NOTE 3-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is not
an "interested person" of AIM. The Fund may invest trustees' fees, if so elected
by a trustee, in mutual fund shares in accordance with a deferred compensation
plan.
NOTE 4-SHARE INFORMATION
Changes in shares outstanding for the years ended August 31, 1995 and 1994 were
as follows:
<TABLE>
<CAPTION>
1995 1994
--------------------------------- ----------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- --------------- -------------- ----------------
<S> <C> <C> <C> <C>
Sold:
Institutional Class 1,566,228,552 $ 1,566,228,552 1,529,572,244 $ 1,529,572,244
- ---------------------------------------------------------- ----------------------------------
Private Investment
Class* 29,762,798 29,762,798 -- --
- ---------------------------------------------------------- ----------------------------------
Issued as reinvestment
of dividends:
Institutional Class 255,484 255,484 72,270 72,270
- ---------------------------------------------------------- ----------------------------------
Private Investment
Class* 211,779 211,779 -- --
- ---------------------------------------------------------- ----------------------------------
Reacquired:
Institutional Class (1,576,001,520) (1,576,001,520) (1,560,468,423) (1,560,468,423)
- ---------------------------------------------------------- ----------------------------------
Private Investment
Class* (24,552,262) (24,552,262) -- --
- ---------------------------------------------------------- ----------------------------------
Net increase
(decrease) (4,095,169) $ (4,095,169) (30,823,909) $ (30,823,909)
========================================================== ==================================
</TABLE>
* The Private Investment Class commenced operations on December 21, 1994.
FS-8
<PAGE> 305
NOTE 5-FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share outstanding of
the Institutional Class during each of the years in the five-year period ended
August 31, 1995 and the period August 17, 1990 (date operations commenced)
through August 31, 1990.
<TABLE>
<CAPTION>
AUGUST 31,
--------------------------------------------------------------------
1995 1994 1993 1992 1991 1990
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------- -------- -------- -------- -------- -------- --------
Income from
investment
operations:
Net investment
income 0.05 0.03 0.03 0.04 0.07 0.003
- --------------------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income (0.05) (0.03) (0.03) (0.04) (0.07) (0.003)
- --------------------- -------- -------- -------- -------- -------- --------
Net asset value, end
of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
===================== ======== ======== ======== ======== ======== ========
Total return 5.35% 3.29% 2.96% 4.32% 6.70% 7.79%(a)
===================== ======== ======== ======== ======== ======== ========
Ratios/supplemental
data:
Net assets, end of
period (000s
omitted) $394,376 $403,882 $434,693 $573,283 $403,846 $ 16,201
===================== ======== ======== ======== ======== ======== ========
Ratio of expenses to
average net assets 0.20%(b) 0.20%(c) 0.20% 0.17%(c) 0.14%(c) 0.10%(d)
===================== ======== ======== ======== ======== ======== ========
Ratio of net
investment income to
average net assets 5.21%(b) 3.23%(c) 2.93% 4.16%(c) 6.16%(c) 7.74%(d)
===================== ======== ======== ======== ======== ======== ========
</TABLE>
(a) Annualized.
(b) After waiver of advisory fees. Ratios are based on average net assets of
$388,302,148. Ratios of expenses and net investment income to average net
assets prior to waiver of advisory fees were 0.23% and 5.18%, respectively.
(c) After waiver of advisory fees.
(d) Annualized. After waiver of advisory fees and expense reimbursements.
FS-9
<PAGE> 306
====================================== =======================================
SHORT-TERM INVESTMENTS TRUST PROSPECTUS
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173 December 14, 1995
(800) 659-1005 SHORT-TERM
INVESTMENTS TRUST
---------------------
INVESTMENT ADVISOR TREASURY TAX ADVANTAGE
A I M ADVISORS, INC. PORTFOLIO
11 Greenway Plaza, Suite 1919 ---------------------
Houston, Texas 77046-1173
(713) 626-1919 INSTITUTIONAL CLASS
DISTRIBUTOR
FUND MANAGEMENT COMPANY TABLE OF CONTENTS
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
(800) 659-1005 <TABLE>
<CAPTION>
AUDITORS PAGE
KPMG PEAT MARWICK LLP ----
NationsBank Building <S> <C>
700 Louisiana Building Summary........................ 2
Houston, Texas 77002
Table of Fees and Expenses..... 4
CUSTODIAN
THE BANK OF NEW YORK Financial Highlights........... 5
110 Washington Street
8th Floor Suitability For Investors...... 6
New York, New York 10286
Investment Program............. 6
TRANSFER AGENT Purchase of Shares............. 8
A I M INSTITUTIONAL FUND SERVICES, INC.
Redemption of Shares........... 8
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173 Dividends...................... 9
NO PERSON HAS BEEN AUTHORIZED TO GIVE Taxes.......................... 9
ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS Net Asset Value................ 10
PROSPECTUS IN CONNECTION WITH THE
OFFERING MADE BY THE PROSPECTUS, AND Yield Information.............. 10
IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED Reports to Shareholders........ 11
UPON AS HAVING BEEN AUTHORIZED BY THE
FUND OR THE DISTRIBUTOR. THIS Management of the Fund......... 11
PROSPECTUS DOES NOT CONSTITUTE AN
OFFER IN ANY JURISDICTION TO ANY General Information............ 12
PERSON TO WHOM SUCH OFFERING MAY NOT
LAWFULLY BE MADE. Appendix....................... A-1
====================================== =======================================
<PAGE> 307
PROSPECTUS
PRIVATE INVESTMENT CLASS
OF THE
TREASURY TAXADVANTAGE PORTFOLIO
OF
SHORT-TERM INVESTMENTS TRUST
11 GREENWAY PLAZA, SUITE 1919
HOUSTON, TEXAS 77046-1173
(800) 877-7748
------------------
The Treasury TaxAdvantage 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
TaxAdvantage Portfolio seeks to achieve its objective by investing in direct
obligations of the U.S. Treasury. The Treasury TaxAdvantage Portfolio's
investment strategy is intended to enable the Portfolio to provide its
shareholders with dividends that are exempt from state and local income taxation
in certain jurisdictions. The instruments purchased by the Treasury TaxAdvantage
Portfolio will have maturities of 397 days or less.
The Treasury TaxAdvantage 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 TaxAdvantage 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 another class of the Treasury TaxAdvantage
Portfolio pursuant to a separate prospectus: the Institutional Class, as well as
shares of other classes of another portfolio of the Fund, the Treasury
Portfolio: the Cash Management Class, the Institutional Class, the Personal
Investment Class, the Private Investment Class and the Resource Class.
------------------
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 TAXADVANTAGE PORTFOLIO AND SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE. A STATEMENT OF ADDITIONAL INFORMATION, DATED DECEMBER 14, 1995, HAS
BEEN FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION AND IS
HEREBY INCORPORATED BY REFERENCE. FOR A COPY OF THE STATEMENT OF ADDITIONAL
INFORMATION WITHOUT CHARGE, 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 TAXADVANTAGE 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 14, 1995
<PAGE> 308
TABLE OF CONTENTS
</TABLE>
<TABLE>
<CAPTION>
PAGE PAGE
---- ----
<S> <C> <C> <C>
SUMMARY.......................... 2 DIVIDENDS........................ 10
TABLE OF FEES AND EXPENSES....... 4 TAXES............................ 11
FINANCIAL HIGHLIGHTS............. 5 NET ASSET VALUE.................. 12
SUITABILITY FOR INVESTORS........ 5 YIELD INFORMATION................ 12
INVESTMENT PROGRAM............... 6 REPORTS TO SHAREHOLDERS.......... 13
PURCHASE OF SHARES............... 8 MANAGEMENT OF THE FUND........... 13
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 TaxAdvantage Portfolio (the "Portfolio"). The Portfolio is a money
market fund which invests in direct obligations of the U.S. Treasury. 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. The Portfolio's investment strategy is intended to enable the
Portfolio to provide its shareholders with dividends that are exempt from state
and local income taxation in certain jurisdictions.
Pursuant to a separate prospectus, the Fund also offers other shares of
another class of shares of beneficial interest of the Fund representing an
interest in the Portfolio. Such class has different distribution arrangements
and is designed for institutional investors. The Fund also offers shares of
several classes representing an interest in another portfolio, the Treasury
Portfolio, pursuant to separate prospectuses. 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> 309
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
1:00 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 1:00 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 3:30 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, 1995, the Fund paid AIM advisory fees with respect to the
Portfolio which represented 0.15% 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
for temporary or emergency purposes, and may 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."
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK AND AIM INSTITUTIONAL FUNDS ARE REGISTERED
SERVICE MARKS OF A I M MANAGEMENT GROUP INC.
3
<PAGE> 310
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 (after fee waivers)**................................... 0.15%
12b-1 fees (after fee waivers)**........................................ 0.25%***
Other expenses:
Custodian fees....................................................... 0.01%
Other**.............................................................. 0.04%
----
Total other expenses............................................ 0.05%
-----
Total portfolio operating expenses --
Private Investment Class............................................. 0.45%
=====
</TABLE>
- ---------------
* The fees and expenses set forth in the table are based on estimated average
net assets of the Class.
** Had there been no fee waivers, management fees, 12b-1 fees and other
expenses would have been 0.18%, 0.50% and 0.34%, 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............................................................... $ 5
3 years.............................................................. $14
5 years.............................................................. $25
10 years.............................................................. $57
</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 voluntary waivers for the Class.
4
<PAGE> 311
However, there can be no assurance that any future waivers (if any) will not
vary 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
(collectively, "data") for the period December 21, 1994 (date operations
commenced) through August 31, 1995. The data has been audited by KPMG Peat
Marwick LLP, independent auditors, whose unqualified report thereon appears in
the Statement of Additional Information.
<TABLE>
<CAPTION>
1995
------
<S> <C>
Net asset value, beginning of period............................................ $ 1.00
Income from investment operations:
Net investment income......................................................... 0.04
------
Total from investment operations...................................... 0.04
------
Less distributions:
Dividends from net investment income.......................................... (0.04)
------
Net asset value, end of period.................................................. $ 1.00
======
Total return(a)................................................................. 5.32%
======
Ratios/supplemental data:
Net assets, end of period (000s omitted)...................................... $5,423
======
Ratio of expenses to average net assets....................................... 0.45%(b)
======
Ratio of net investment income to average net assets.......................... 5.21%(b)
======
</TABLE>
- ---------------
(a) Annualized.
(b) After waiver of advisory fee and expense reimbursement. Ratios are
annualized and based on average net assets of $5,862,581. Ratios of expenses
and net investment income to average net assets prior to waiver of advisory
fees and expense reimbursements were 0.77% and 4.89%, respectively.
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 Portfolio's
investment strategy is intended to provide its shareholders with dividends that
are exempt from state and local income taxation in certain jurisdictions. The
minimum initial investment is $10,000.
5
<PAGE> 312
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.
Because the Portfolio invests in direct obligations of the U.S. Treasury it
may be considered to have somewhat less risk than many other money market funds
and yields on the Portfolio may be expected to be somewhat lower than many other
money market funds. However, the possible exemption from state and local income
taxation with respect to dividends paid by the Portfolio may enable shareholders
to achieve an after-tax return comparable to or higher than that obtained from
other money market funds, which may provide an advantage to some shareholders.
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 intends to provide its shareholders with
dividends that are exempt from state and local income taxation in certain
jurisdictions. The Portfolio seeks to achieve its objective by investing in
direct obligations of the U.S. Treasury. 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.
INVESTMENT POLICIES
The Portfolio invests exclusively in direct obligations of the U.S.
Treasury, which include Treasury bills, notes and bonds. 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.
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. The Portfolio will
only borrow money or enter into reverse repurchase agreements for temporary or
emergency purposes, such as to facilitate the orderly sale of portfolio
securities to accommodate abnormally heavy redemption requests should they
occur. Borrowing will not be made for leverage purposes. 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 under the Investment Company Act of 1940, as amended
(the "1940 Act").
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
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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 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.
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 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. 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. 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, however, the high turnover rate should not adversely affect the
Portfolio's net income.
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 provides that the Portfolio will not:
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.
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The foregoing investment restriction of the Portfolio (as well as certain
others set forth in the Statement of Additional Information) is a matter 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 governs the operations of money market
funds, and may be more restrictive than the policies described herein. The
United States 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.
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 1:00 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
Application, which can be obtained from A I M Institutional Fund Services, Inc.
("AIFS"), must be completed and sent to AIFS at 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046-1173. Any changes made to the information provided in the
Account Application must be made in writing or by completing a new form and
providing it to AIFS. An
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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 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 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 additional shares of the Class directly, 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 AIFS.
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 and notice of such order is provided to AIFS 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 12:00 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 TaxAdvantage 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.
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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(R), 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 Application, but may be remitted by check upon request by a shareholder.
If a redemption request is received by the Portfolio prior to 1:00 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 1:00 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 1:00
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 or AIFS, the
Fund's transfer agent.
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
1:00 p.m. Eastern Time on the day of declaration. Net income for dividend
purposes is determined daily as of 1:00 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, such as custodian fees, trustees' fees, accounting and legal expenses,
based upon such class' pro rata share of the net assets of the Portfolio, less
(c) expenses directly attributable to such class, 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.
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All dividends declared during a month will normally be paid by wire
transfer. 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 1:00 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 AIFS at 11 Greenway Plaza, Suite 1919, Houston, TX 77046-1173,
and will become effective with dividends paid after its receipt by AIFS. 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
FEDERAL TAXATION
The Fund's policy with respect to 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
Fund intends for the Portfolio 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 one-year period ending on October 31 and therefore to meet the
distribution requirements imposed by the Code in order to avoid the imposition
of a 4% excise tax. The Fund also intends for the Portfolio 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 federal income taxes on net investment income and net realized capital gains
paid to shareholders.
The Portfolio will be treated as a separate corporation for purposes of
determining taxable income, distribution requirements and other requirements of
Subchapter M. Therefore, the Portfolio may not offset its gains against losses
of the other portfolio of the Fund and each portfolio of the Fund must
specifically comply with all the provisions of the Code.
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 Portfolio.
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 of the following year
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.
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The foregoing discussion of federal income tax consequences is based on tax
laws and regulations in effect on November 1, 1995, which are subject to change
by legislation or administrative action.
STATE AND LOCAL TAXATION
Distributions and other Fund 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.
The Portfolio's investment strategy is intended to provide shareholders with
dividends that are exempt from state and local personal and, in some cases,
corporate income taxation in as many jurisdictions as possible. The possible
exemption from such taxation may enable shareholders to achieve an after-tax
return comparable to or higher than that obtained from other money market funds.
Shareholders should consult their own tax advisors concerning the tax impact of
their investment in the Portfolio and the application of state, local and
foreign taxes.
NET ASSET VALUE
The net asset value per share of the Portfolio is determined daily as of
1:00 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 SEC 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, 1995, the current yield and the
effective yield of the Class (which assumes the reinvestment of dividends for a
365-day year and a return for the entire year equal to the average annualized
current yield for the period) were 5.17% and 5.30%, respectively, excluding
capital gains distributions. For the seven-day period ended August 31, 1995, the
current distribution rate and the effective
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distribution rate of the Class, including capital gains distributions, (which
assumes the reinvestment of dividends for a 365-day year and a return for the
entire year equal to the average annualized current distribution rate for the
period) were 5.22% and 5.36%, respectively. These performance numbers are quoted
for illustration purposes only. The performance numbers for any other seven-day
period may be substantially different from those quoted above.
To assist banks and other institutions performing their own sub-accounting,
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.
From time to time and in its discretion, AIM may waive all or a portion of
its advisory fees and/or assume certain expenses of the Portfolio. Such a
practice will have the effect of increasing the Portfolio's yield and total
return.
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.
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 October 31, 1995, the
total assets of the investment company portfolios managed or advised by AIM and
its affiliates were approximately $39.3 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"). AIM Management is a holding company in the financial services
business.
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
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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, 1995, 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, as well as received fees
from the Fund under the Advisory Agreement, with respect to the Portfolio which
represented 0.15% of the Portfolio's average daily net assets. During such
fiscal year, the expenses of the Class, including AIM's fees, amounted to 0.45%
of the Class' daily net assets.
ADMINISTRATIVE SERVICES
The Fund has entered into a Master Administrative Services Agreement dated
as of 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 was
reimbursed by AIM for its costs in providing shareholder services for the Fund.
AIFS or its affiliates received reimbursement of shareholder services costs of
$6,263 with respect to the Portfolio for the year ended August 31, 1995, which
represented $0.002% of the Portfolio's average daily net assets. The
Administrative Services Agreement between AIM and AIFS was terminated July 1,
1995. Beginning July 1, 1995, AIFS received fees with respect to the Portfolio
for its provision of shareholder services pursuant to a Transfer Agency and
Service Agreement with the Fund. For the period July 1, 1995 through August 31,
1995, AIFS received transfer agency fees from AIM with respect to the Portfolio
in the amount of $4,650.
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
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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 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 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 December 6, 1994. In approving 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.
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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.
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 of the Treasury TaxAdvantage 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). Shares of beneficial interest of the Fund are divided into seven
classes. Two classes, including the Class, represent interests in the Portfolio,
and five classes represent interests in the Treasury Portfolio. Each class of
shares has a par value of $.01 per share. The other classes of the Fund may have
different sales charges and other expenses which may affect performance. An
investor may obtain information concerning the Fund's other classes by
contacting FMC.
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.
16
<PAGE> 323
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 AGENT 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.
A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 1919, Houston,
Texas 77046-1173, acts as transfer agent for the shares of the Portfolio.
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.
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 SEC. 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 SEC. Copies of the registration statement,
including items omitted herein, may be obtained from the SEC by paying the
charges prescribed under its rules and regulations.
17
<PAGE> 324
<TABLE>
<S> <C> <C>
SHORT-TERM INVESTMENTS TRUST SHORT-TERM
11 Greenway Plaza, Suite 1919 INVESTMENTS TRUST
Houston, Texas 77046-1173
(800) 877-7748 PRIVATE
INVESTMENT CLASS
OF THE
---------------------------------------------
INVESTMENT ADVISOR TREASURY
TAXADVANTAGE
A I M ADVISORS, INC. PORTFOLIO PROSPECTUS
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
(713) 626-1919
DISTRIBUTOR
FUND MANAGEMENT COMPANY
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
(800) 877-7748
AUDITORS
KPMG PEAT MARWICK LLP
NationsBank Building
700 Louisiana
Houston, Texas 77002
CUSTODIAN
THE BANK OF NEW YORK DECEMBER 14, 1995
110 Washington Street, 8th Floor
New York, New York 10286
TRANSFER AGENT
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 PERSON TO WHOM SUCH OFFERING MAY NOT LAWFULLY BE MADE. [AIM LOGO APPEARS HERE]
Fund Management Company
SM
</TABLE>
<PAGE> 325
STATEMENT OF
ADDITIONAL INFORMATION
PRIVATE INVESTMENT CLASS
OF THE
TREASURY TAXADVANTAGE 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 14, 1995
RELATING TO THE PROSPECTUS DATED DECEMBER 14, 1995
<PAGE> 326
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Administrative Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Banking Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Transfer Agent and Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Principal Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
PURCHASES AND REDEMPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Net Asset Value Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Distribution Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Distribution Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Performance Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Suspension of Redemption Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
INVESTMENT PROGRAM AND RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Investment Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Other Investment Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Qualification as a Regulated Investment Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Excise Tax on Regulated Investment Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Portfolio Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Sale or Redemption of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Foreign Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Effect of Future Legislation; Local Tax Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FS
</TABLE>
i
<PAGE> 327
INTRODUCTION
The Treasury TaxAdvantage Portfolio (the "Portfolio") is an investment
portfolio of Short-Term Investments Trust (the "Fund"), a mutual fund. The
rules and regulations of the United States 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 14,
1995 (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 TaxAdvantage 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 Statement of Additional Information 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). A copy of the
Agreement and Declaration of Trust (the "Declaration of Trust") establishing
the Fund is on file with the SEC. 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 Portfolio (together,
the "Portfolios"). The Portfolio consists of the following two classes of
shares: Private Investment Class and Institutional Class. The Treasury
Portfolio consists of the following five classes of shares: Private Investment
Class, Personal Investment Class, Institutional Class, Cash Management Class
and Resource Class. Each such class has different shareholder qualifications
and bears 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 Institutional Class of the Portfolio
and the classes of the Treasury Portfolio are offered pursuant to separate
prospectuses and statements of additional information.
1
<PAGE> 328
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. 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
2
<PAGE> 329
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 (76)
Director, Chairman and Chief Executive Officer, A I M Management Group
Inc.; 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
Global Associates, Inc., A I M Global Holdings, Inc., A I M Institutional Fund
Services, Inc. and Fund Management Company; and Director, AIM Global Advisors
Limited, A I M Global Management Company Limited and AIM Global Ventures Co.
BRUCE L. CROCKETT, Trustee (51)
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).
OWEN DALY II, Trustee (71)
6 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.
__________________________________
* A trustee who is an "interested person" of the Fund and A I M
Advisors, Inc., as defined in the Investment Company Act of 1940, as
amended (the "1940 Act").
3
<PAGE> 330
*CARL FRISCHLING, Trustee (58)
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 (49)
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 Capital Management, Inc., A I M Fund Services, Inc., A I M
Global Associates, Inc., A I M Global Holdings, Inc., AIM Global Ventures Co.,
A I M Institutional Fund Services, Inc. and Fund Management Company; Senior
Vice President, AIM Global Advisors Limited.
JOHN F. KROEGER, Trustee (71)
24875 Swan Road - Martingham
Box 464
St. Michaels, MD 21663
Director, Flag Investors International Fund, Inc., Flag Investors
Emerging Growth Fund, Inc., Flag Investors Telephone Income Fund, Inc., Flag
Investors Equity Partners Fund, Inc., Total Return U.S. Treasury Fund, Inc.,
Flag Investors Intermediate Term Income Fund, Inc., Managed Municipal Fund,
Inc., Flag Investors Value Builder Fund, Inc., Flag Investors Maryland
Intermediate Tax-Free Income Fund, Inc., Flag Investors Real Estate Securities
Fund, Inc., Alex. Brown Cash Reserve Fund, Inc. and North American Government
Bond Fund, Inc. (investment companies). Formerly, Consultant, Wendell & Stockel
Associates, Inc. (consulting firm).
LEWIS F. PENNOCK, Trustee (53)
6363 Woodway, Suite 825
Houston, TX 77057
Attorney in private practice in Houston, Texas.
IAN W. ROBINSON, Trustee (72)
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.
__________________________________
* 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 A I M Advisors,
Inc., as defined in the 1940 Act.
4
<PAGE> 331
LOUIS S. SKLAR, Trustee (56)
Transco Tower, 50th Floor
2800 Post Oak Blvd.
Houston, TX 77056
Executive Vice President, Development and Operations, Hines Interests
Limited Partnership (real estate development).
*JOHN J. ARTHUR, Senior Vice President and Treasurer (51)
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; and Vice President, AIM Global
Advisors Limited, A I M Global Associates, Inc., A I M Global Holdings, Inc.,
and AIM Global Ventures Co.
GARY T. CRUM, Senior Vice President (48)
Director and President, A I M Capital Management, Inc.; Director and
Senior Vice President, A I M Management Group Inc., A I M Advisors, Inc., A I M
Global Associates, Inc., A I M Global Holdings, Inc. and AIM Global Ventures
Co., Director, A I M Distributors, Inc.; and Senior Vice President, AIM Global
Advisors Limited.
*CAROL F. RELIHAN, Vice President and Secretary (41)
Vice President, General Counsel and Secretary, A I M Management Group
Inc., A I M Advisors, Inc., A I M Fund Services, Inc., A I M Institutional Fund
Services, Inc., and Fund Management Company; Vice President and Secretary,
A I M Distributors, Inc., A I M Global Associates, Inc. and AIM Global
Holdings, Inc.; Vice President and Assistant Secretary, AIM Global Advisors
Limited and AIM Global Ventures Co.; and Secretary, A I M Capital Management,
Inc.
DANA R. SUTTON, Vice President and Assistant Treasurer (36)
Vice President and Fund Controller, A I M Advisors, Inc.; and
Assistant Vice President and Assistant Treasurer, Fund Management Company.
MELVILLE B. COX, Vice President (52)
Vice President, A I M Advisors, Inc., A I M Capital Management, Inc.,
A I M Fund Services, Inc. and A I M Institutional 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 (35)
Director, A I M Global Management Company Limited; Senior Vice
President, A I M Capital Management, Inc. and AIM Global Advisors Limited; and
Vice President, A I M Advisors, Inc. and AIM Global Ventures Co.
__________________________________
* Mr. Arthur and Ms. Relihan are married to each other.
5
<PAGE> 332
J. ABBOTT SPRAGUE, Vice President (40)
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 Board of Trustees and such
committee.
The members of the Investments Committee are Messrs. Bauer, Crockett,
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 the
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 Advisors,
Inc. ("AIM") or distributed and administered by FMC. All of the Fund's
executive officers hold similar offices with some or all of such investment
companies.
Remuneration of Trustees
Set forth below is information regarding compensation paid or accrued
during the fiscal year ended August 31, 1995 for each trustee of the Fund:
<TABLE>
<CAPTION>
============================================================================================
DIRECTOR AGGREGATE RETIREMENT TOTAL
COMPENSATION BENEFITS COMPENSATION
FROM FUND(1) ACCRUED FROM ALL AIM
BY ALL AIM FUNDS(3)
FUNDS(2)
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Charles T. Bauer $ -0- $ -0- $ -0-
--------------------------------------------------------------------------------------------
Bruce L. Crockett 1,034 2,814 45,094
--------------------------------------------------------------------------------------------
Owen Daly II 1,027 14,375 45,844
--------------------------------------------------------------------------------------------
Carl Frischling 1,034 7,542 45,094
--------------------------------------------------------------------------------------------
Robert H. Graham -0- -0- -0-
--------------------------------------------------------------------------------------------
John F. Kroeger 1,027 20,517 45,844
============================================================================================
</TABLE>
6
<PAGE> 333
<TABLE>
<CAPTION>
============================================================================================
DIRECTOR AGGREGATE RETIREMENT TOTAL
COMPENSATION BENEFITS COMPENSATION
FROM FUND(1) ACCRUED FROM ALL AIM
BY ALL AIM FUNDS(3)
FUNDS(2)
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Lewis F. Pennock 1,027 5,094 45,844
--------------------------------------------------------------------------------------------
Ian W. Robinson 1,024 10,396 45,094
--------------------------------------------------------------------------------------------
Louis S. Sklar 1,024 4,682 45,094
============================================================================================
</TABLE>
______________________
(1) The total amount of compensation deferred by all Trustees of the Fund
during the fiscal year ended August 31, 1995, including interest
earned thereon, was $4,246.
(2) During the fiscal year ended August 31, 1995, the total amount of
expenses allocated to the Fund in respect of such retirement benefits
was $1,112. Data reflects compensation earned for the calendar year
ended December 31, 1994.
(3) Messrs. Bauer, Daly, Graham, Kroeger and Pennock each serves as a
Director or Trustee of a total of 11 AIM Funds. Messrs. Crockett,
Frischling, Robinson and Sklar each serves as a Director or Trustee of
a total of 10 AIM Funds. Data reflects compensation earned for the
calendar year ended December 31, 1994.
AIM Funds Retirement Plan for Eligible Directors/Trustees
Under the terms of the AIM Funds Retirement Plan for Eligible
Directors/Trustees (the "Plan"), each director (who is not a employee of any of
the AIM Funds, A I M Management Group Inc. or any of their affiliates) may be
entitled to certain benefits upon retirement from the Board of Directors.
Pursuant to the Plan, the normal retirement date is the date on which the
eligible director has attained age 65 and has completed at least five years of
continuous service with one or more of the regulated investment companies
managed, administered or distributed by AIM or its affiliates (the "AIM
Funds"). Each eligible director is entitled to receive an annual benefit from
the AIM Funds commencing on the first day of the calendar quarter coincident
with or following his date of retirement equal to 5% of such Trustees'
compensation paid by the AIM Funds multiplied by the number of such Trustee's
years of service (not in excess of 10 years of service) completed with respect
to any of the AIM Funds. Such benefit is payable to each eligible trustee in
quarterly installments for a period of no more than five years. If an eligible
trustee dies after attaining the normal retirement date but before receipt of
any benefits under the Plan commences, the trustee's surviving spouse (if any)
shall receive a quarterly survivor's benefit equal to 50% of the amount payable
to the deceased trustee, for no more than five years beginning the first day of
the calendar quarter following the date of the director's death. Payments
under the Plan are not secured or funded by any AIM Fund.
Set forth below is a table that shows the estimated annual benefits
payable to an eligible director upon retirement assuming various compensation
and years of service classifications. The estimated credited years of service
as of December 31, 1994 for Messrs. Crockett, Daly, Frischling, Kroeger,
Pennock, Robinson and Sklar are 7, 8, 17, 17, 13, 7, and 5 years, respectively.
7
<PAGE> 334
<TABLE>
<CAPTION>
Annual Compensation Paid
By All AIM Funds
<S> <C> <C> <C>
$60,000 $65,000
=========================================
Number of Years of 10 $30,000 $32,500
Service With the -----------------------------------------
AIM Funds 9 $27,000 $29,250
-----------------------------------------
8 $24,000 $26,000
-----------------------------------------
7 $21,000 $22,750
-----------------------------------------
6 $18,000 $19,500
-----------------------------------------
5 $15,000 $16,250
=========================================
</TABLE>
DEFERRED COMPENSATION AGREEMENTS
Messrs. Daly, Frischling, Kroeger, Robinson and Sklar (for purposes of
this paragraph only, the "deferring directors") have each executed a Deferred
Compensation Agreement (collectively, the "Agreements"). Pursuant to the
Agreements, the deferring directors may elect to defer receipt of up to 100% of
their compensation payable by the Fund, and such amounts are placed into a
deferral account. Currently, the deferring directors may select various AIM
Funds in which all or part of his deferral account shall be deemed to be
invested. Distributions from the deferring directors' deferral accounts will
be paid in cash, in generally equal quarterly installments over a period of
five years beginning on the date the deferring director's retirement benefits
commence under the Plan. The Fund's Board of Trustees, in its sole discretion,
may accelerate or extend the distribution of such deferral accounts after the
deferring director's termination of service as a director of the Fund. If a
deferring director dies prior to the distribution of amounts in his deferral
account, the balance of the deferral account will be distributed to his
designated beneficiary in a single lump sum payment as soon as practicable
after such deferring director's death. The Agreements are not funded and, with
respect to the payments of amounts held in the deferral accounts, the deferring
directors have the status of unsecured creditors of the Fund and of each other
AIM Fund from which they are deferring compensation.
The Portfolio paid legal fees of $471 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 and the Portfolio paid legal fees of $2,654 for services rendered by
that firm as counsel to the Board of Trustees. A trustee of the Fund was a
partner of the firm of Reid & Priest until September 1994, when he became a
partner of Kramer, Levin, Naftalis, Nessen, Kamin & Frankel.
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
"Advisory Agreement"). AIM was organized in 1976, and together with its
affiliates advises or manages 37 investment company portfolios. As of October
31, 1995, the total assets of the investment company portfolios managed or
advised by AIM and its affiliates were approximately $39.3 billion.
AIM and the Fund have adopted a code of Ethics which requires
investment personnel (a) to pre-clear all personal securities transactions, (b)
to file reports regarding such transactions, and (c) to refrain from personally
engaging in (i) short-term trading of a security, (ii) transactions involving a
security within seven days of an AIM Fund transaction involving the same
security, and (iii) transactions involving securities being considered for
investment by an AIM Fund. The Code also prohibits investment personnel from
purchasing securities in an initial public offering. Personal trading reports
are reviewed periodically by AIM, and the Board of Trustees reviews annually
such reports (including information on any substantial violations
8
<PAGE> 335
of the Code). Violations of the Code may result in censure, monetary
penalties, suspension or termination of employment.
Pursuant to the terms of the Advisory 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 $250 million 0.20%
Over $250 million to $500 million 0.15%
Over $500 million 0.10%
</TABLE>
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 Fund's shares are qualified
for sale.
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 compensation to AIM as the
Advisory Agreement and the Advisory Agreement currently in effect, AIM received
fees (net of fee waivers, if any) from the Fund for the fiscal years ended
August 31, 1995, 1994 and 1993, in the amounts of $596,449, $640,698 and
$904,014, respectively. For the fiscal years ended August 31, 1995, 1994, and
1993, AIM waived fees with respect to the Portfolio in the amounts of $117,100,
$131,042 and $0, respectively.
The Advisory Agreement provides that, upon the request of the Fund's
Board of Trustees, AIM may perform or arrange for the performance of 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."
The Advisory Agreement was approved for its initial term by the Board
of Trustees on July 19, 1993. The Advisory Agreement will continue in effect
until June 30, 1996 and from year to year thereafter only if such continuance
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.
9
<PAGE> 336
FMC is a registered broker-dealer and wholly-owned subsidiary of AIM.
FMC acts as distributor of the shares of the Portfolio.
ADMINISTRATIVE SERVICES
AIM 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").
The Administrative Services Agreement provides that AIM may perform or
arrange for the performance of certain accounting, shareholder servicing and
other administrative services for the Portfolio which are not required to be
performed by AIM under the Advisory Agreement. 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.
The Administrative Services Agreement was initially approved by the
Board of Trustees on July 19, 1993. Pursuant to an administrative services
agreement between the Fund and AIM, previously in effect, which provided for
the same level of reimbursement to AIM as the Administrative Services
Agreement, as well as the Administrative Services Agreement, AIM was reimbursed
for the fiscal years ended August 31, 1995, 1994 and 1993, in the amounts of
$42,823, $29,642 and $29,382, respectively, for fund accounting services for
the Portfolio.
Under the terms of a Transfer Agency and Service Agreement, dated July
1, 1995, between the Fund and AIFS, a registered transfer agent and
wholly-owned subsidiary of AIM, as well as under previous agreements, AIFS
received $10,913 and $1,892, for the fiscal years ended August 31, 1995 and
1994, respectively, for the provision of certain shareholder serivces for the
Fund.
EXPENSES
In addition to fees paid to AIM pursuant to the Advisory 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 borrowing;
postage; insurance premiums on property or personnel (including officers and
trustees) of the Fund which inure to its benefit; and extraordinary
10
<PAGE> 337
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 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 AGENT 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.
A I M Institutional Fund Services, Inc. serves as transfer agent for
the shares of the Class and receives an annual fee from the Fund for its
services in such capacity in the amount of .007% of average daily net assets of
the Fund, payable monthly. Such compensation may be changed from time to time
as is agreed to by A I M Institutional Fund Services, Inc. and the Fund.
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.
11
<PAGE> 338
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 25, 1995, 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 Texas 14.27%
P.O. Box 831000
Dallas, TX 75283-1000
Wachovia Bank and Trust 12.50%
P.O. Box 3075
Winston-Salem, NC 27150
Trust Company Bank 11.96%
P.O. Box 105504
Atlanta, GA 30348
Victoria Bank & Trust 7.84%
One O'Connor Plaza 6th Fl.
Victoria, TX 77902
Texas Commerce Bank 6.47%
601 Travis
Houston, TX 77002
U.S. Bank of Washington 5.62%
P.O. Box 3168
Portland, OR 97208
FRNCO 5.04%
P.O.Box 939
Rogers, AR 72757-0939
</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.
12
<PAGE> 339
PERSONAL INVESTMENT CLASS
- -------------------------
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- -------------
<S> <C>
Frost National Bank 49.42%(b)
P.O. Box 2358
San Antonio, TX 78299
Republic National Bank 27.58%(b)
1 Hanson Pl., Lower Level
Brooklyn, NY 11243
The Bank of New York 21.30%
440 Mamaroneck Ave.
Harrison, NY 10528
PRIVATE INVESTMENT CLASS
- ------------------------
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- -------------
Liberty Bank and Trust Co. 41.02%(b)
of Oklahoma, N.A.
P.O. Box 25848
Oklahoma City, OK 73125
First Trust/VAR & Co. 29.92%b
180 E. 5th Street
St. Paul, MN 55101
Huntington Capital Corp 14.82%
41 S. High St.
Columbus, OH 43287
Charter National Bank 6.39%
P.O. Box 1494
Houston, TX 77251-1494
United Counties Trust Co. 5.20%
30 Maple St.
Summit, NJ 07901
</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 more than 25% 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> 340
CASH MANAGEMENT CLASS
- ---------------------
<TABLE>
<CAPTION>
PERCENT PERCENT
NAME AND ADDRESS OWNED OWNED OF
OF RECORD OWNER BENEFICIALLY ONLY RECORD ONLY
--------------- ----------------- -----------
<S> <C> <C>
City of Riverside 21.65% -0-
P.O. Box 12005
Riverside, CA 92502-2205
LA Export Terminal -0- 11.72%(a)
P.O. Box 1769
San Pedro, CA 90733
State Street Bank & Trust -0- 10.87%(a)
61 Broadway 15th Fl.
New York, NY 10006
Montgomery County 6.76% -0-
101 Monroe St. 15th Fl.
Rockville, MD 20850
City of West Sacramento 6.60% -0-
2101 Stone Blvd.
W. Sacramento, CA 95691
City of Ontario 5.26% -0-
303 East "B" St.
Ontario, CA 91764
</TABLE>
RESOURCE CLASS
- --------------
AIM provided the initial capitalization of the Resource Class of the
Treasury Portfolio and, accordingly, as of the date of this Statement of
Additional Information, owned all the outstanding shares of beneficial interest
of the Resource Class of the Treasury Portfolio. Although the Resource Class
of the Treasury 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 Resource Class of the Treasury Portfolio
that are outstanding, in may be presumed to be in "control" of the Resource
Class of the Treasury Portfolio, as defined in the 1940 Act.
__________________________________
(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 more than 25% 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.
14
<PAGE> 341
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 25, 1995, 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 28.6%(b)
1700 Farnam Street
Omaha, NE 68102
Muchmore & Co. 13.7%
750 Walnut Street
Cranford, NJ 07016-1205
Key Trust Company 10.1%
4900 Tiedeman
Cleveland, OH 44101-5971
Boatmen's Trust Company 8.7%
P.O. Box 14737
St. Louis, MO 63178
Wachovia Bank and Trust Co NA 7.6%
P.O. Box 3075
Winston-Salem, NC 27150
Liberty Bank & Trust Company 7.5%
of Tulsa, N.A.
P.O. Box 25848
Oklahoma City, OK 73125
</TABLE>
PRIVATE INVESTMENT CLASS
- ------------------------
<TABLE>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
--------------- ---------------
<S> <C>
Huntington Capital Corp 100%(b)
41 S. High St.
Columbus, OH 43287
</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 more than 25% 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.
15
<PAGE> 342
To the best of the knowledge of the Fund, as of October 25, 1995, the
trustees and officers of the Fund beneficially owned less than 1% of each class
of the Fund's outstanding shares.
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.
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.
The Board of Trustees is required to establish procedures designed to
stabilize, to the extent reasonably practicable, the Fund's price per share at
$1.00 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 sale of portfolio
instruments prior to maturity to realize capital gains or losses or to shorten
the average portfolio maturity; the withholding of dividends; redemption of
shares in kind; or the establishment of a net asset value per share by using
available market quotations.
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. The address of FMC is 11 Greenway
Plaza, Suite 1919, Houston, Texas 77046-1173. 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.
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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, 1996 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 15, 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 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.
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 of the Portfolio 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, 1995, the current yield and
the effective yield of the Class (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) were 5.17% and 5.30%, respectively, excluding
capital gains distributions. For the seven-day period ended August 31, 1995,
the current distribution rate and the effective
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distribution rate of the Class, including capital gains distributions, (which
assumes the reinvestment of dividends for a 365-day year and a return for the
entire year equal to the annualized current distribution rate for the period)
were 5.22% and 5.36%, respectively. These performance numbers are quoted for
illustration purposes only. The performance numbers for any other seven-day
period may be substantially different from those quoted above.
The Fund may compare the performance of the Class or the performance
of securities in which it may invest to:
o IBC/Donoghue's Money Fund Averages, which are average
yields of various types of money market funds that include the effect
of compounding distributions;
o 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;
o 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
o 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' 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
The Portfolio seeks to achieve its objective by investing in high
grade money market instruments. 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 invests exclusively in direct obligations of the
U.S. Treasury, which include Treasury bills, notes and bonds.
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The Portfolio limits its investments to direct U.S. Treasury
obligations. These securities are "Eligible Securities" as defined in Rule
2a-7 under the 1940 Act. Rule 2a-7, which governs the operations of money
market funds and which limits securities that may be purchased by money market
funds to "Eligible Securities," 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
(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)
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
__________________________________
(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.
(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.
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NRSRO that is not within the NRSRO's two highest categories
(within which there may be sub-categories or gradations
indicating relative standing).
The securities purchased by the Portfolio, which are limited to those
issued by the U.S. Treasury, are considered to be in the highest ratings
category for short-term debt obligations.
INVESTMENT RESTRICTIONS
As a matter of fundamental policy which may not be changed without a
majority vote of 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) 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 or 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 borrowing in excess of 5% of its total assets are outstanding;
(2) mortgage, pledge or hypothecate any assets except to secure
permitted borrowing 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;
(3) 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;
(4) 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;
(5) 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;
(6) purchase or sell commodities or commodity futures contracts,
purchase securities on margin, make short sales or invest in puts or calls;
(7) invest in any obligation not payable as to principal and
interest in United States currency; or
(8) 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
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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.
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 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 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. 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.
From time to time, the Fund may sell a security, or purchase a
security from an AIM Fund or another investment account advised by AIM or A I M
Capital Management, Inc. ("AIM Capital"), when such transactions comply with
applicable rules and regulations and are deemed consistent with the investment
objective(s) and policies of the investment accounts advised by AIM or AIM
Capital. Procedures pursuant to Rule 17a-7 under the 1940 Act regarding
transactions between investment accounts advised by AIM or AIM Capital have
been adopted by the Boards of Directors/Trustees of the various AIM Funds,
including the Fund. Although such transactions may result in custodian, tax or
other related expenses, no brokerage commissions or other direct transaction
costs are generated by transactions among the investment accounts advised by
AIM or AIM Capital.
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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, 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. Furthermore, the 1940 Act prohibits the Fund from purchasing a
security being publicly underwritten by a syndicate of which persons affiliated
with the Fund are a member except in accordance with certain conditions. These
conditions may restrict the ability of the Portfolio to purchase Money Market
obligations being publicly underwritten by such a syndicate, and the Portfolio
may be required to wait until the syndicate has been terminated before buying
such securities. At such time, the market price of the securities may be
higher or lower than the original offering price. A person affiliated with the
Fund may, from time to time, serve as placement agent or financial advisor to
an issuer of Money Market obligations and be paid a fee by such issuer. The
Portfolio may purchase such Money Market obligations directly from the issuer,
provided that the purchase made in accordance with procedures adopted by the
Fund's Board of Trustees and any such purchases are reviewed at least quarterly
by the Fund's Board of Trustees and a determination is made that all such
purchases were effected in compliance with such procedures, including a
determination that the placement fee or other remuneration paid by the issuer
to the person affiliated with the Fund was fair and reasonable in relation to
the fees charged by others performing similar services. During the fiscal year
ended August 31, 1995, no securities or instruments were purchased by the
Portfolio from issuers who paid placement fees or other compensation to a
broker affiliated with the Portfolio.
TAX MATTERS
The following is only a summary of certain additional tax
considerations generally affecting the Portfolio 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 Portfolio 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 Portfolio 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 Portfolio is not subject
to federal income tax on the portion of its net investment income (i.e.,
taxable interest,
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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 Portfolio 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, the Portfolio 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 the Portfolio 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 the Portfolio 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 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, the
Portfolio 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
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election of a regulated investment company having a taxable year ending
November 30 or December 31, for its taxable year (a "taxable year election")).
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.
For purposes of the excise tax, a regulated investment company (1) may
reduce its capital gain net income (but not below its net capital gain) by the
amount of any net ordinary loss for the calendar year and (2) must, unless it
has made a taxable year election, exclude foreign currency gains and losses
incurred after October 31 of any year in determining the amount of ordinary
taxable income for the current calendar year (and, instead, include such gains
and losses in determining ordinary taxable income for the succeeding 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.
The Portfolio may either retain or distribute to shareholders its net
capital gain for each taxable year. The Portfolio currently intends to
distribute any such amounts. If net capital gain is distributed and designated
as a capital gain dividend, it will be taxable to shareholders as long-term
capital gain, regardless of the length of time the shareholder has held his
shares or whether such gain was recognized by the Portfolio prior to the date
on which the shareholder acquired his shares. Conversely, if the Portfolio
elects to retain its net capital gain, the Portfolio will be taxed thereon
(except to the extent of any available capital loss carryovers) at the current
corporate tax rate. If the Portfolio elects to retain net capital gain, it is
expected that the Portfolio also will elect to have shareholders treated as
having received a distribution of such gain, with the result that they will be
required to report their respective shares of such gain on their tax returns as
long-term capital gain, will receive a refundable tax credit for their
allocable share of tax paid by the Portfolio on the gain, and will increase the
tax basis for their shares by an amount equal to the deemed distribution less
the tax credit.
Distributions by the Portfolio that do not constitute ordinary income
dividends or capital gain dividends will be treated as a return of capital to
the extent of (and in reduction of) the shareholder's tax basis in his shares;
any excess will be treated as gain from the sale of his shares, as discussed
below.
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 Class. 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. In addition, if the net asset value at the time a
shareholder purchases shares of the Class reflects undistributed net investment
income or recognized capital gain net income, or unrealized appreciation in the
value of the assets of the Portfolio, distributions of such amounts will be
taxable to the shareholder in the manner described above, although such
distributions economically constitute a return of capital to the shareholder.
Ordinarily, shareholders are required to take distributions by the
Portfolio into account in the year in which the distributions are made.
However, distributions 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
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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 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 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 Portfolio that it is not subject to backup
withholding or that it is a corporation or other "exempt recipient."
SALE OR REDEMPTION OF SHARES
A shareholder will recognize gain or loss on the sale or redemption of
shares of the Class in an amount equal to the difference between the proceeds
of the sale or redemption and the shareholder's adjusted tax basis in the
shares. All or a portion of any loss so recognized may be disallowed if the
shareholder purchases other shares of the Class within 30 days before or after
the sale or redemption. In general, any gain or loss arising from (or treated
as arising from) the sale or redemption of shares of the Class will be
considered capital gain or loss and will be long-term capital gain or loss if
the shares were held for longer than one year. However, any capital loss
arising from the sale or redemption of shares held for six months or less will
be treated as a long-term capital loss to the extent of the amount of capital
gain dividends received on such shares. For this purpose, the special holding
period rules of Code Section 246(c)(3) and (4) generally will apply in
determining the holding period of shares.
FOREIGN SHAREHOLDERS
Taxation of a shareholder who, as to the United States, is a
nonresident alien individual, foreign trust or estate, foreign corporation, or
foreign partnership ("foreign shareholder"), depends on whether the income from
the Portfolio is "effectively connected" with a U.S. trade or business carried
on by such shareholder.
If the income from the Portfolio is not effectively connected with a
U.S. trade or business carried on by a foreign shareholder, dividends and
distributions (other than capital gains dividends) will be subject to U.S.
withholding tax at the rate of 30% (or lower treaty rate) upon the gross amount
of the dividend or distribution. Such a foreign shareholder would generally be
exempt from U.S. federal income tax on gains realized on the sale of shares of
the Portfolio, capital gain dividends and amounts retained by the Portfolio
that are designated as undistributed capital gains.
If the income from the Portfolio is effectively connected with a U.S.
trade or business carried on by a foreign shareholder, then ordinary income
dividends, capital gain dividends and any gains realized upon the sale of
shares of the Portfolio will be subject to U.S. federal income tax at the rates
applicable to U.S. citizens or domestic corporations.
In the case of foreign non corporate shareholders, the Portfolio may
be required to withhold U.S. federal income tax at a rate of 31% on
distributions that are otherwise exempt from withholding tax unless such
shareholders furnish the Portfolio with proper notification of their foreign
status.
The tax consequences to a foreign shareholder entitled to claim the
benefits of an applicable tax treaty may be different from those described
herein. Foreign shareholders are urged to consult their own tax advisers with
respect to the particular tax consequences to them of an investment in the
Portfolio, including the applicability of foreign taxes.
25
<PAGE> 352
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 November 1, 1995. 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. It is anticipated
that the ordinary income dividends paid by the Portfolio from net investment
income will be exempt from state and local personal and, in some cases,
corporate income taxes in many states. 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.
26
<PAGE> 353
FINANCIAL STATEMENTS
FS
<PAGE> 354
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholders
Short-Term Investments Trust:
We have audited the accompanying statement of assets and liabilities of the
Treasury TaxAdvantage Portfolio (a series portfolio of Short-Term Investments
Trust), including the schedule of investments, as of August 31, 1995, 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 five-year period then
ended and the period August 17, 1990 (date operations commenced) through August
31, 1990. 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, 1995, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Treasury TaxAdvantage Portfolio as of August 31, 1995, 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 five-year period then ended, and the period August 17,
1990 (date operations commenced) through August 31, 1990 in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Houston, Texas
October 6, 1995
FS-1
<PAGE> 355
SCHEDULE OF INVESTMENTS
August 31, 1995
<TABLE>
<CAPTION>
MATURITY PAR VALUE
<S> <C> <C> <C>
U.S. TREASURY SECURITIES - 100.39%
U.S. TREASURY BILLS(a) - 94.61%
5.425% 09/07/95 $ 1,370,000 $ 1,368,761
- ----------------------------------------------------------------------
5.58% 09/07/95 5,470,000 5,464,913
- ----------------------------------------------------------------------
5.595% 09/07/95 7,000,000 6,993,473
- ----------------------------------------------------------------------
5.745% 09/07/95 17,870,000 17,852,889
- ----------------------------------------------------------------------
5.325% 09/14/95 1,295,000 1,292,510
- ----------------------------------------------------------------------
5.40% 09/14/95 7,100,000 7,086,155
- ----------------------------------------------------------------------
5.41% 09/14/95 2,615,000 2,609,891
- ----------------------------------------------------------------------
5.455% 09/14/95 3,300,000 3,293,499
- ----------------------------------------------------------------------
5.49% 09/14/95 3,250,000 3,243,557
- ----------------------------------------------------------------------
5.375% 09/21/95 12,640,000 12,602,256
- ----------------------------------------------------------------------
5.42% 09/21/95 450,000 448,645
- ----------------------------------------------------------------------
5.63% 09/21/95 710,000 707,780
- ----------------------------------------------------------------------
5.635% 09/21/95 15,000,000 14,953,042
- ----------------------------------------------------------------------
5.64% 09/21/95 3,655,000 3,643,548
- ----------------------------------------------------------------------
5.66% 09/21/95 8,000,000 7,974,845
- ----------------------------------------------------------------------
5.69% 09/21/95 200,000 199,368
- ----------------------------------------------------------------------
5.48% 09/28/95 10,415,000 10,372,194
- ----------------------------------------------------------------------
5.41% 10/05/95 2,555,000 2,541,945
- ----------------------------------------------------------------------
5.465% 10/05/95 10,000,000 9,948,386
- ----------------------------------------------------------------------
5.50% 10/05/95 25,000,000 24,870,140
- ----------------------------------------------------------------------
5.62% 10/05/95 1,630,000 1,621,348
- ----------------------------------------------------------------------
5.37% 10/12/95 4,400,000 4,373,090
- ----------------------------------------------------------------------
5.375% 10/12/95 16,375,000 16,274,760
- ----------------------------------------------------------------------
5.38% 10/12/95 4,100,000 4,074,878
- ----------------------------------------------------------------------
5.44% 10/12/95 4,555,000 4,526,779
- ----------------------------------------------------------------------
5.475% 10/12/95 11,965,000 11,890,393
- ----------------------------------------------------------------------
5.41% 10/19/95 15,890,000 15,775,380
- ----------------------------------------------------------------------
5.425% 10/19/95 15,245,000 15,134,727
- ----------------------------------------------------------------------
5.45% 10/19/95 1,860,000 1,846,484
- ----------------------------------------------------------------------
5.49% 10/19/95 15,000,000 14,890,200
- ----------------------------------------------------------------------
</TABLE>
FS-2
<PAGE> 356
<TABLE>
<CAPTION>
MATURITY PAR VALUE
<S> <C> <C> <C>
U.S. TREASURY SECURITIES--(continued)
U.S. TREASURY BILLS(a)-(CONTINUED)
5.43% 10/26/95 $12,315,000 $ 12,212,837
- ---------------------------------------------------------------------------
5.41% 11/02/95 710,000 703,385
- ---------------------------------------------------------------------------
5.415% 11/02/95 7,010,000 6,944,626
- ---------------------------------------------------------------------------
5.43% 11/02/95 12,000,000 11,887,780
- ---------------------------------------------------------------------------
5.415% 11/09/95 4,050,000 4,007,966
- ---------------------------------------------------------------------------
5.445% 11/09/95 1,520,000 1,504,137
- ---------------------------------------------------------------------------
5.47% 11/09/95 20,000,000 19,790,317
- ---------------------------------------------------------------------------
5.315% 11/16/95 2,115,000 2,091,269
- ---------------------------------------------------------------------------
5.37% 11/16/95 8,515,000 8,418,468
- ---------------------------------------------------------------------------
5.43% 11/16/95 295,000 291,618
- ---------------------------------------------------------------------------
5.45% 11/16/95 20,000,000 19,769,889
- ---------------------------------------------------------------------------
5.345% 11/24/95 2,480,000 2,449,070
- ---------------------------------------------------------------------------
5.35% 11/24/95 4,840,000 4,779,581
- ---------------------------------------------------------------------------
5.375% 11/24/95 12,000,000 11,849,500
- ---------------------------------------------------------------------------
5.41% 11/24/95 4,305,000 4,250,657
- ---------------------------------------------------------------------------
5.42% 11/24/95 7,200,000 7,108,944
- ---------------------------------------------------------------------------
5.33% 11/30/95 3,220,000 3,177,094
- ---------------------------------------------------------------------------
5.30% 12/14/95 265,000 260,943
- ---------------------------------------------------------------------------
5.31% 12/14/95 29,315,000 28,865,308
- ---------------------------------------------------------------------------
378,239,225
- ---------------------------------------------------------------------------
U.S. TREASURY NOTES - 5.78%
5.125% 11/15/95 14,150,000 14,134,017
- ---------------------------------------------------------------------------
4.25% 11/30/95 9,000,000 8,969,328
- ---------------------------------------------------------------------------
23,103,345
- ---------------------------------------------------------------------------
Total U.S. Treasury Securities 401,342,570
- ---------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.39%(b) 401,342,570(c)
- ---------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES --
(0.39%) (1,543,472)
- ---------------------------------------------------------------------------
NET ASSETS -- 100.00% $399,799,098
===========================================================================
(a) U.S. Treasury bills are traded on a discount basis. In such cases the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Portfolio.
(b) Percentage of Net Assets.
(c) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
</TABLE>
FS-3
<PAGE> 357
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments, at value (amortized cost) $401,342,570
- ----------------------------------------------------------------------
Cash 2,686
- ----------------------------------------------------------------------
Interest receivable 311,990
- ----------------------------------------------------------------------
Investment for deferred compensation plan 6,131
- ----------------------------------------------------------------------
Other assets 9,807
- ----------------------------------------------------------------------
Total assets 401,673,184
- ----------------------------------------------------------------------
LIABILITIES:
Dividends payable 1,769,980
- ----------------------------------------------------------------------
Deferred compensation payable 6,131
- ----------------------------------------------------------------------
Accrued advisory fees 60,277
- ----------------------------------------------------------------------
Accrued transfer agent fees 2,385
- ----------------------------------------------------------------------
Accrued trustees' fees 1,075
- ----------------------------------------------------------------------
Accrued administrative services fees 5,525
- ----------------------------------------------------------------------
Accrued distribution fees 1,179
- ----------------------------------------------------------------------
Accrued operating expenses 27,534
- ----------------------------------------------------------------------
Total liabilities 1,874,086
- ----------------------------------------------------------------------
NET ASSETS $399,799,098
======================================================================
NET ASSETS:
Institutional Class $394,375,864
======================================================================
Private Investment Class $ 5,423,234
======================================================================
NET ASSET VALUE PER SHARE:
Shares outstanding, $.01 par value per share:
Institutional Class 394,308,752
======================================================================
Private Investment Class 5,422,315
======================================================================
Net asset value, offering and redemption price per share $ 1.00
======================================================================
See Notes to Financial Statements.
</TABLE>
FS-4
<PAGE> 358
STATEMENT OF OPERATIONS
For the year ended August 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $21,243,050
- ------------------------------------------------------------------
EXPENSES:
Advisory fees 713,549
- ------------------------------------------------------------------
Custodian fees 36,901
- ------------------------------------------------------------------
Administrative services fees 42,823
- ------------------------------------------------------------------
Trustees' fees and expenses 7,599
- ------------------------------------------------------------------
Transfer agent fees 17,122
- ------------------------------------------------------------------
Printing expenses 29,481
- ------------------------------------------------------------------
Distribution fees 10,159
- ------------------------------------------------------------------
Other 66,628
- ------------------------------------------------------------------
Total expenses 924,262
- ------------------------------------------------------------------
Less expenses assumed by advisor (129,100)
==================================================================
Net expenses 795,162
==================================================================
Net investment income 20,447,888
- ------------------------------------------------------------------
Net realized gain on sales of investments 24,806
- ------------------------------------------------------------------
Net increase in net assets resulting from operations $20,472,694
==================================================================
See Notes to Financial Statements.
</TABLE>
FS-5
<PAGE> 359
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 20,447,888 $ 13,926,577
- ----------------------------------------------------------------------------
Net realized gain on sales of investments 24,806 12,246
- ----------------------------------------------------------------------------
Net increase in net assets resulting from
operations 20,472,694 13,938,823
- ----------------------------------------------------------------------------
Distributions to shareholders from net
investment income (20,447,888) (13,926,577)
- ----------------------------------------------------------------------------
Distributions to shareholders from net realized
gains on investments (12,244) --
- ----------------------------------------------------------------------------
Share transactions-net (4,095,169) (30,823,909)
- ----------------------------------------------------------------------------
Net increase (decrease) in net assets (4,082,607) (30,811,663)
- ----------------------------------------------------------------------------
NET ASSETS:
Beginning of period 403,881,705 434,693,368
- ----------------------------------------------------------------------------
End of period $399,799,098 $403,881,705
============================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $399,731,067 $403,826,236
- ----------------------------------------------------------------------------
Undistributed net realized gain on sales of
investments 68,031 55,469
- ----------------------------------------------------------------------------
$399,799,098 $403,881,705
============================================================================
</TABLE>
See Notes to Financial Statements.
FS-6
<PAGE> 360
NOTES TO FINANCIAL STATEMENTS
August 31, 1995
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
Short-Term Investments Trust (the "Fund") is registered 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, with
the assets, liabilities and operations of each portfolio accounted for
separately. Information presented in these financial statements pertains only
to the Treasury TaxAdvantage Portfolio (the "Portfolio"). The Portfolio
consists of two different classes of shares: the Institutional Class and the
Private Investment 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 class of shares are
charged to that class' operations. Expenses which are applicable to more than
one class, e.g., advisory fees, are allocated among them.
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 $250 million 0.20%
- ----------------------------------------------------------------------
Over $250 million to $500 million 0.15%
- ----------------------------------------------------------------------
Over $500 million 0.10%
- ----------------------------------------------------------------------
</TABLE>
The Fund has entered into a master distribution agreement with Fund Management
Company ("FMC") for the distribution of shares of the Institutional Class and
the Private Investment Class. The Company has also adopted a distribution plan
(the "Plan") pursuant to Rule 12b-1 under the 1940 Act with respect to the
Private Investment Class. The Plan provides that the Private Investment Class
may pay up to a 0.50% maximum annual rate of the Private Investment Class'
average daily net assets. Of this amount, the Fund may pay an asset-based sales
charge to FMC and the Portfolio may pay a service fee of 0.25% of the average
daily net assets of the Private Investment Class to selected 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.
Any amounts not paid as a service fee under such Plan would constitute an
asset-based sales charge. 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 Private Investment Class. During the year ended
August 31, 1995, the Private Investment Class paid $10,159 as compensation
under the Plan.
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
FS-7
<PAGE> 361
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. During the year ended August 31, 1995, AIM
voluntarily waived advisory fees of $117,100 and assumed expenses of $12,000.
The Portfolio, pursuant to a master administrative services agreement with
AIM, has agreed to reimburse AIM for certain costs incurred in providing
accounting services to the Portfolio. During the year ended August 31, 1995,
the Portfolio reimbursed AIM $42,823 for such services. During the year ended
August 31, 1995, the Portfolio paid A I M Institutional Fund Services, Inc.
("AIFS") $10,913 for shareholder and transfer agency services. Effective July
1, 1995, AIFS became the exclusive transfer agent of the Portfolio.
Certain officers and trustees of the Fund are officers and directors of AIM,
FMC, and AIFS.
The Portfolio paid legal fees of $471 for services rendered by Reid & Priest
as counsel to the Board of Trustees. In September 1994, Kramer, Levin,
Naftalis, Kamin & Frankel was appointed as counsel to the Board of Trustees and
the Portfolio paid legal fees of $2,654 for services rendered by that firm as
counsel to the Board of Trustees. A trustee of the Trust was a member of the
firm of Reid & Priest until September 1994, when he became a member of Kramer,
Levin, Naftalis, Kamin & Frankel.
NOTE 3-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is
not an "interested person" of AIM. The Fund may invest trustees' fees, if so
elected by a trustee, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 4-SHARE INFORMATION
Changes in shares outstanding for the years ended August 31, 1995 and 1994 were
as follows:
<TABLE>
<CAPTION>
1995 1994
------------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- --------------- -------------- ----------------
<S> <C> <C> <C> <C>
Sold:
Institutional Class 1,566,228,552 $ 1,566,228,552 1,529,572,244 $ 1,529,572,244
- ------------------------------------------------------------------------------------------
Private Investment
Class* 29,762,798 29,762,798 -- --
- ------------------------------------------------------------------------------------------
Issued as reinvestment
of dividends:
Institutional Class 255,484 255,484 72,270 72,270
- ------------------------------------------------------------------------------------------
Private Investment
Class* 211,779 211,779 -- --
- ------------------------------------------------------------------------------------------
Reacquired:
Institutional Class (1,576,001,520) (1,576,001,520) (1,560,468,423) (1,560,468,423)
- ------------------------------------------------------------------------------------------
Private Investment
Class* (24,552,262) (24,552,262) -- --
==========================================================================================
Net increase (decrease) (4,095,169) $ (4,095,169) (30,823,909) $ (30,823,909)
==========================================================================================
</TABLE>
* The Private Investment Class commenced operations on December 21, 1994.
FS-8
<PAGE> 362
NOTE 5-FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share outstanding of
the Treasury TaxAdvantage Portfolio Private Investment Class for the period
December 21, 1994 (date operations commenced) through August 31, 1995.
<TABLE>
AUGUST 31,
1995
----------
<S> <C>
Net asset value, beginning of period $ 1.00
- ---------------------------------------------------- ------
Income from investment operations:
Net investment income 0.04
- ---------------------------------------------------- ------
Less distributions:
Dividends from net investment income (0.04)
- ---------------------------------------------------- ------
Net asset value, end of period $ 1.00
==================================================== ======
Total return(a) 5.32%
==================================================== ======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $5,423
==================================================== ======
Ratio of expenses to average net assets 0.45%(b)
==================================================== ======
Ratio of net investment income to average net assets 5.21%(b)
==================================================== ======
</TABLE>
(a) Annualized.
(b) After waiver of advisory fee and expense reimbursements. Ratios are
annualized and based on average net assets of $5,862,581. Ratios of
expenses and net investment income to average net assets prior to waiver of
advisory fees and expense reimbursements were 0.77% and 4.89%,
respectively.
FS-9
<PAGE> 363
PART C
OTHER INFORMATION
Item 24.
<TABLE>
<S> <C> <C>
(a) Financial Statements
1. Treasury Portfolio - Institutional Class
In Part A: Financial Highlights as of August 31, 1995 (audited)
In Part B: (1) Independent Auditors' Report
(2) Financial Statements as of August 31, 1995 (audited)
In Part C: None
2. Treasury Portfolio - Personal Investment Class
In Part A: Financial Highlights as of August 31, 1995 (audited)
In Part B: (1) Independent Auditors' Report
(2) Financial Statements as of August 31, 1995 (audited)
In Part C: None
3. Treasury Portfolio - Private Investment Class
In Part A: Financial Highlights as of August 31, 1995 (audited)
In Part B: (1) Independent Auditors' Report
(2) Financial Statements as of August 31, 1995 (audited)
In Part C: None
4. Treasury Portfolio - Cash Management Class
In Part A: Financial Highlights as of August 31, 1995 (audited)
In Part B: (1) Independent Auditors' Report
(2) Financial Statements as of August 31, 1995 (audited)
In Part C: None
5. Treasury Portfolio - Resource Class
In Part A: None
In Part B: None
In Part C: None
</TABLE>
<PAGE> 364
<TABLE>
<S> <C>
6. Treasury TaxAdvantage Portfolio - Institutional Class
In Part A: Financial Highlights as of August 31, 1995 (audited)
In Part B: (1) Independent Auditors' Report
(2) Financial Statements as of August 31, 1995 (audited)
In Part C: None
7. Treasury TaxAdvantage Portfolio - Private Investment Class
In Part A: Financial Highlights as of August 31, 1995 (audited)
In Part B: (1) Independent Auditors' Report
(2) Financial Statements as of August 31, 1995 (audited)
In Part C: None
</TABLE>
(b) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
(1) - Charter -
(a) A copy of Registrant's Agreement and Declaration of Trust was filed as an exhibit to
Registrant's Post-Effective Amendment No. 9 on November 3, 1986.
(b) A copy of an Amendment to Registrant's Agreement and Declaration of Trust was filed as an
exhibit to Registrant's Post-Effective Amendment No. 10 on December 31, 1986.
(c) A copy of a Certificate of Amendment dated October 3, 1990, to Registrant's Agreement and
Declaration of Trust was filed as an exhibit to Registrant's Post-Effective Amendment No. 22 on
December 17, 1991.
(d) A copy of a Certificate of Amendment dated December 8, 1992, to the Registrant's Agreement and
Declaration of Trust was filed as an exhibit to Registrant's Post-Effective Amendment No. 23 on
December 14, 1992.
(e) A copy of a Certificate of Amendment dated December 8, 1992, to the Registrant's Agreement and
Declaration of Trust was filed as an exhibit to Registrant's Post-Effective Amendment No. 25 on
August 16, 1993.
(f) A copy of Registrant's Certificate of Trust was filed as an exhibit to Registrant's Post-
Effective Amendment No. 26 on October 15, 1993.
(g) A copy of the Registrant's Agreement and Declaration of Trust (Delaware) was filed as an
exhibit to Registrant's Post-Effective Amendment No. 26 on October 15, 1993, and is filed
herewith electronically.
</TABLE>
2
<PAGE> 365
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
(h) A copy of the First Amendment, dated September 11, 1993, to the Registrant's Agreement and
Declaration of Trust was filed as an exhibit to Registrant's Post-Effective Amendment No. 26 on
October 15, 1993, and is filed herewith electronically.
(i) A copy of the Second Amendment, dated August 4, 1994, to the Registrant's Agreement and
Declaration of Trust is filed herewith electronically.
(j) A form of the Third Amendment to the Registrant's Agreement and Declaration of Trust
is filed herewith electronically.
(2) - By-Laws -
(a) A copy of the Registrant's By-Laws was filed as an exhibit to Registrant's Post-Effective
Amendment No. 11 on April 27, 1987.
(b) A copy of the Registrant's First Amendment to the By-Laws, dated November 8, 1989, was filed as
an exhibit to Registrant's Post-Effective Amendment No. 16 on December 29, 1989.
(c) A copy of the Registrant's By-Laws (Delaware) was filed as an exhibit to Registrant's Post-
Effective Amendment No. 26 on October 15, 1993, and is filed herewith electronically.
(d) A copy of the Registrant's First Amended By-Laws, dated March 14, 1995, is filed herewith
electronically.
(3) - None.
(4) - Specimen Security -
(a) Specimen Certificate representing shares of the Treasury TaxAdvantage Portfolio was filed as an
exhibit to Registrant's Post-Effective Amendment No. 26 on October 15, 1993, and is hereby
incorporated by reference.
(b) Specimen Certificate representing shares of the Institutional Class of the Treasury Portfolio
was filed as an exhibit to Registrant's Post-Effective Amendment No. 26 on October 15, 1993,
and is hereby incorporated by reference.
(c) Specimen Certificate representing shares of the Personal Investment Class of the Treasury
Portfolio was filed as an exhibit to Registrant's Post-Effective Amendment No. 26 on October
15, 1993, and is hereby incorporated by reference.
(d) Specimen Certificate representing shares of the Private Investment Class of the Treasury
Portfolio was filed as an exhibit to Registrant's Post-Effective Amendment No. 26 on October
15, 1993, and is hereby incorporated by reference.
(e) Specimen Certificate representing shares of the Cash Management Class of the Treasury Portfolio
was filed as an exhibit to Registrant's Post-Effective Amendment No. 26 on October 15, 1993,
and is hereby incorporated by reference.
</TABLE>
3
<PAGE> 366
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
(f) Specimen Certificate representing shares of the Private Investment Class of the Treasury
TaxAdvantage Portfolio was filed as an exhibit to Registrant's Post-Effective Amendment No. 27
on November 14, 1994, and is hereby incorporated by reference.
(g) Specimen Certificate representing shares of the Resource Class of the Treasury Portfolio is
filed herewith electronically.
(5) - Investment Advisory Agreement -
(a) A copy of the Investment Advisory Agreement, dated December 31, 1986, between A I M Advisors,
Inc. and Registrant with respect to the Prime Portfolio and the Treasury Portfolio was filed as
an exhibit to Registrant's Post-Effective Amendment No. 10 on December 31, 1986.
(b) A copy of the Investment Advisory Agreement, dated January 26, 1989, between A I M Advisors,
Inc. and Registrant with respect to the Limited Maturity Treasury Portfolio was filed as an
exhibit to Registrant's Post-Effective Amendment No. 15 on August 23, 1989.
(c) A copy of the Investment Advisory Agreement, dated August 3, 1990, between A I M Advisors, Inc.
and Registrant with respect to the Treasury TaxAdvantage Portfolio was filed as an exhibit to
Registrant's Post-Effective Amendment No. 22 on December 17, 1991.
(d) A copy of the Investment Advisory Agreement, dated December 31, 1990, between A I M Advisors,
Inc. and Registrant with respect to the AIM Money Market Fund was filed as an exhibit to
Registrant's Post-Effective Amendment No. 22 on December 17, 1991.
(e) A copy of Master Investment Advisory, dated August 6, 1993, between A I M Advisors, Inc. and
Registrant with respect to the Treasury Portfolio and the Treasury TaxAdvantage Portfolio was
filed as an exhibit to Registrant's Post-Effective Amendment No. 26 on October 15, 1993.
(f) A copy of Master Investment Advisory Agreement, dated October 18, 1993, between A I M Advisors,
Inc. and Registrant with respect to the Treasury Portfolio and the Treasury TaxAdvantage
Portfolio was filed as an exhibit to Registrant's Post-Effective Amendment No. 27, on November
14, 1994, and is hereby incorporated by reference.
(6) - Distribution Agreement -
(a) A copy of the Distribution Agreement, dated September 24, 1990, between Fund Management Company
and Registrant with respect to the Institutional Classes of Prime Portfolio and Treasury
Portfolio was filed as an exhibit to Registrant's Post-Effective Amendment No. 22 on December
17, 1991.
</TABLE>
4
<PAGE> 367
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ ----------------------------------------------------------------------------------------------------------------
<S> <C>
(b) A copy of the Distribution Agreement, dated July 10, 1991, between Fund Management Company and
Registrant with respect to the Personal Investment Class of the Prime Portfolio was filed as an
exhibit to Registrant's Post-Effective Amendment No. 22 on December 17, 1991.
(c) A copy of the Distribution Agreement, dated July 10, 1991, between Fund Management Company and
Registrant with respect to the Personal Investment Class of the Treasury Portfolio was filed as
an exhibit to Registrant's Post-Effective Amendment No. 22 on December 17, 1991.
(d) A copy of the Distribution Agreement, dated July 10, 1991, between Fund Management Company and
Registrant with respect to the Private Investment Class of the Prime Portfolio was filed as an
exhibit to Registrant's Post-Effective Amendment No. 22 on December 17, 1991.
(e) A copy of the Distribution Agreement, dated July 10, 1991, between Fund Management Company and
Registrant with respect to the Private Investment Class of the Treasury Portfolio was filed as
an exhibit to Registrant's Post-Effective Amendment No. 22 on December 17, 1991.
(f) A copy of the Distribution Agreement, dated September 4, 1990, between Fund Management Company
and Registrant with respect to the Limited Maturity Treasury Portfolio (Institutional Shares)
was filed as an exhibit to Registrant's Post-Effective Amendment No. 22 on December 17, 1991.
(g) A copy of the Distribution Agreement, dated November 4, 1987, between A I M Distributors, Inc.
and Registrant with respect to the AIM Limited Maturity Treasury Shares was filed as an exhibit
to Registrant's Post-Effective Amendment No. 22 on December 17, 1991.
(h) A copy of the Distribution Agreement, dated September 4, 1990, between Fund Management Company
and Registrant with respect to the Treasury TaxAdvantage Portfolio was filed as an exhibit to
Registrant's Post-Effective Amendment No. 22 on December 17, 1991.
(i) A copy of the Distribution Agreement, dated December 31, 1990, between A I M Distributors, Inc.
and Registrant with respect to the AIM Money Market Fund was filed as an exhibit to
Registrant's Post-Effective Amendment No. 22 on December 17, 1991.
(j) A form of the Distribution Agreement, dated March 1, 1993, between Fund Management Company and
Registrant with respect to the Cash Management Class of the Prime Portfolio was filed as an
exhibit to Registrant's Post-Effective Amendment No. 24 on January 7, 1993.
(k) A form of the Distribution Agreement, dated March 1, 1993, between Fund Management Company and
Registrant with respect to the Cash Management Class of the Treasury Portfolio was filed as an
exhibit to Registrant's Post-Effective Amendment No. 24 on January 7, 1993.
</TABLE>
5
<PAGE> 368
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
(l) A copy of the Master Distribution Agreement, dated August 6, 1993, between Fund Management
Company and Registrant with respect to the Treasury and Treasury TaxAdvantage Portfolio was
filed as an exhibit to Registrant's Post-Effective Amendment No. 26 on October 15, 1993.
(m) A copy of the Master Distribution Agreement, dated October 18, 1993, between Fund Management
Company and Registrant with respect to the Treasury and Treasury TaxAdvantage Portfolio was
filed as an exhibit to Registrant's Post-Effective Amendment No. 27 on November 14, 1994, and
is hereby filed electronically.
(n) Amendment No. 1, dated December 8, 1994, to Master Distribution Agreement, dated October 18,
1993, between Fund Management Company and Registrant is filed herewith electronically.
(o) A form of Amendment No. 2 to the Master Distribution Agreement, dated October 18, 1993, between
Fund Management Company and Registrant is filed herewith electronically.
(7) - (a) Retirement Plan for Eligible Directors/Trustees was filed as an exhibit to Registrant's Post-
Effective Amendment No. 27 on November 14, 1994, and is hereby incorporated by reference.
(b) Form of Deferred Compensation Agreement was filed as an exhibit to Registrant's Post-Effective
Amendment No. 27 on November 14, 1994, and is hereby incorporated by reference.
(8) - Custodian Agreement -
(a) A copy of the Amended and Restated Custodian Agreement between The Bank of New York and
Registrant dated June 16, 1987, was filed as an exhibit to Registrant's Post-Effective
Amendment No. 13 on November 18, 1987.
(b) Custodian Agreement between The Bank of New York and Registrant, dated October 15, 1993, was
filed as an exhibit to Registrant's Post-Effective Amendment No. 27 on November 14, 1994 and is
hereby incorporated by reference.
(9) - Other Material Contracts -
(a) A copy of the Transfer Agency Agreement, dated October 1, 1991, between State Street Bank and
Trust Company and the Registrant with respect to each class of the Prime Portfolio and the
Treasury Portfolio, the Treasury TaxAdvantage Portfolio and the Institutional Shares class of
the Limited Maturity Treasury Portfolio was filed as an exhibit to the Registrant's
Post-Effective Amendment No. 22 on December 17, 1991.
(b) Transfer Agency Agreement between State Street Bank and Trust Company and the Registrant, dated
October 15, 1993.
</TABLE>
6
<PAGE> 369
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ ----------------------------------------------------------------------------------------------------------------
<S> <C>
(c) Transfer Agency and Service Agreement between A I M Institutional Fund Services, Inc. and
Registrant was filed as an exhibit to Registrant's Post-Effective Amendment No. 27 on November
14, 1994, and is filed herewith electronically.
(d) Amendment No. 1, dated July 1, 1995, to the Transfer Agency and Service Agreement, dated
September 16, 1994, between A I M Institutional Fund Services, Inc. and Registrant is filed
herewith electronically.
(e) A copy of the Administrative Services Agreement, dated December 31, 1990, between
A I M Advisors, Inc. and the Registrant with respect to its AIM Money Market Fund was filed as
an exhibit to the Registrant's Post-Effective Amendment No. 22 on December 17, 1991.
(f) A copy of the Administrative Services Agreement, dated June 11, 1989, between A I M Advisors,
Inc. and the Registrant with respect to its Limited Maturity Treasury Portfolio was filed as an
exhibit to Registrant's Post-Effective Amendment No. 15 on August 23, 1989.
(g) A copy of the Administrative Services Agreement, dated June 23, 1992, between A I M Advisors,
Inc. and the Registrant with respect to the Treasury TaxAdvantage Portfolio was filed as an
exhibit to the Registrant's Post-Effective Amendment No. 23 on December 14, 1992.
(h) A copy of Master Administrative Services Agreement, dated August 6, 1993, between
A I M Advisors, Inc. and the Registrant was filed as an exhibit to the Registrant's Post-
Effective Amendment No. 26 on October 15, 1993.
(i) A copy of Master Administrative Services Agreement, dated October 18, 1993, between
A I M Advisors, Inc. and Registrant was filed as an exhibit to Registrant's Post-Effective
Amendment No. 27 on November 14, 1994, and is filed herewith electronically.
(j) Form of Amendment No. 1 to Administrative Agreement, dated October 18, 1993, between
A I M Advisors, Inc. and Registrant is filed herewith electronically.
(k) A copy of Administrative Services Agreement, dated October 18, 1993, between A I M Advisors,
Inc. and A I M Fund Services, Inc. on behalf of the Portfolios and Classes was filed as an
exhibit to Registrant's Post-Effective Amendment No. 27 on November 14, 1994.
(l) A copy of Amendment No. 1 to Administrative Services Agreement, dated October 18, 1993, between
A I M Advisors, Inc. and A I M Fund Services, Inc. was filed as an exhibit to Registrant's
Post-Effective Amendment No. 27 on November 14, 1994.
(m) A copy of Amendment No. 2 to Administrative Services Agreement, dated October 18, 1993, between
A I M Advisors, Inc. and A I M Fund Services, Inc. was filed as an exhibit to Registrant's
Post-Effective Amendment No. 27 on November 14, 1994.
</TABLE>
7
<PAGE> 370
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(n) A copy of Amendment No. 3 to Administrative Services Agreement, dated October 18, 1993, between
A I M Advisors, Inc. and A I M Fund Services, Inc. was filed as an exhibit to Registrant's
Post-Effective Amendment No. 27 on November 14, 1994.
(o) A form of Administrative Services Agreement between A I M Institutional Fund Services, Inc. and
A I M Advisors, Inc. on behalf of the Portfolios and Classes of the Registrant is filed
herewith electronically.
(10) - (a) Opinion of Ballard Spahr Andrews & Ingersoll was filed as an exhibit to Registrant's Rule 24f-2
Notice for the fiscal year ending August 31, 1995.
(11) - (a) Consent of Ballard Spahr Andrews & Ingersoll is filed herewith.
(b) Consent of KPMG Peat Marwick LLP is filed herewith.
(12) - None.
(13) - None.
(14) - None.
(15) - (a) Amended Plan pursuant to Rule 12b-1, dated October 31, 1990, and related forms of Dealer
Assistance Agreement and Bank Shareholder Service Agreement with respect to the AIM Limited
Maturity Treasury Shares was filed as an exhibit to Registrant's Post-Effective Amendment No.
23 on December 14, 1992.
(b) Amended Plan pursuant to Rule 12b-1, dated December 31, 1990, and related forms of Dealer
Assistance Agreement and Bank Shareholder Service Agreement with respect to the AIM Money
Market Fund was filed as an exhibit to Registrant's Post-Effective Amendment No. 23 on December
14, 1992.
(c) A copy of the Plan pursuant to Rule 12b-1, dated July 10, 1991, and related forms of agreement
with respect to the Personal Investment Class of the Prime Portfolio has been filed as an
exhibit to the Registrant's Post-Effective Amendment No. 22 filed on December 17, 1991.
(d) A copy of the Plan pursuant to Rule 12b-1, dated July 10, 1991, and related forms of agreement
with respect to the Personal Investment Class of the Treasury Portfolio has been filed as an
exhibit to the Registrant's Post-Effective Amendment No. 22 filed on December 17, 1991.
(e) A copy of the Plan pursuant to Rule 12b-1, dated July 10, 1991, and related forms of agreement
with respect to the Private Investment Class of the Prime Portfolio has been filed as an
exhibit to the Registrant's Post-Effective Amendment No. 22 filed on December 17, 1991.
(f) A copy of the Plan pursuant to Rule 12b-1, dated July 10, 1991, and related forms of agreement
with respect to the Private Investment Class of the Treasury Portfolio has been filed as an
exhibit to the Registrant's Post-Effective Amendment No. 22 filed on December 17, 1991.
</TABLE>
8
<PAGE> 371
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
(g) A copy of the Plan pursuant to Rule 12b-1, dated March 1, 1993, and related forms of agreement
with respect to the Cash Management Class of the Prime Portfolio has been filed as an exhibit
to Registrant's Post-Effective Amendment No. 24 on January 7, 1993.
(h) A copy of the Plan pursuant to Rule 12b-1, dated March 1, 1993, and related forms of agreement
with respect to the Cash Management Class of the Treasury Portfolio was filed as an exhibit to
Registrant's Post-Effective Amendment No. 24 on January 7, 1993.
(i) A copy of Master Plan pursuant to Rule 12b-1, dated August 6, 1993, and related forms of
agreement with respect to the Personal Investment Class, Private Investment Class and the Cash
Management Class of the Treasury Portfolio were filed as an exhibit to Registrant's Post-
Effective Amendment No. 27 on November 14, 1994 and are hereby filed electronically.
(j) Amendment No. 1, dated December 8, 1994, to Master Plan pursuant to Rule 12b-1, dated August 6,
1993, is filed herewith electronically.
(k) A form of Amendment No. 2 to Master Plan pursuant to Rule 12b-1, dated August 6, 1993, is filed
herewith electronically.
(16) - Schedules of Yield and Performance Quotations were filed as an exhibit to Registrant's Post-Effective
Amendment No. 14 on October 31, 1988, and are hereby incorporated by reference.
(27) - Financial Data Schedule.
</TABLE>
Item 25. Persons Controlled by or under Common Control with Registrant
Furnish a list or diagram of all persons directly or
indirectly controlled by or under common control with the Registrant and as to
each such person indicate (1) if a company, the state or other sovereign power
under the laws of which it is organized, and (2) the percentage of voting
securities owned or other basis of control by the person, if any, immediately
controlling it.
None
Item 26. Number of Holders of Securities
State in substantially the tabular form indicated, as of a
specified date within 90 days prior to the date of filing, the number of record
holders of each class of securities of the Registrant.
<TABLE>
<CAPTION>
Number of Record Holders
Title Class October 25, 1995
-------------------------------- ----------------
<S> <C>
Treasury Portfolio
Institutional Class 67
Personal Investment Class 9
</TABLE>
9
<PAGE> 372
<TABLE>
<S> <C>
Private Investment Class 14
Cash Management Class 62
Resource Class 0
Treasury TaxAdvantage Portfolio
Institutional Class 20
Private Investment Class 2
</TABLE>
Item 27. Indemnification
State the general effect of any contract, arrangements or
statute under which any director, officer, underwriter or affiliated person of
the Registrant is insured or indemnified in any manner against any liability
which may be incurred in such capacity, other than insurance provided by any
director, officer, affiliated person or underwriter for their own protection.
Under the terms of the Registrant's Agreement and Declaration of
Trust, the Registrant may indemnify any person who was or is a
trustee, officer or employee of the Registrant to the maximum extent
permitted by law; provided, however, that any such indemnification
(unless ordered by a court) shall be made by the Registrant only as
authorized in the specific case upon a determination that
indemnification of such persons is proper in the circumstances. Such
determination shall be made (i) by the Board of Trustees, by a
majority vote of a quorum which consists of trustees who are neither
"interested persons" of the Registrant, as defined in Section 2(a)(19)
of the Investment Company Act of 1940, nor parties to the proceeding,
or (ii) if the required quorum is not obtainable or, if a quorum of
such trustees so directs, by independent legal counsel in a written
opinion. No indemnification will be provided by the Registrant to any
trustee or officer of the Registrant for any liability to the
Registrant or shareholders to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of duty.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a trustee, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person
in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by
the final adjudication of such issue. Insurance coverage is provided
under a joint Mutual Fund & Investment Advisory Professional and
Directors & Officers Liability Policy, issued by ICI Mutual Insurance
Company with a $15,000,000 limit of liability.
Item 28. Business and Other Connections of Investment Advisor
Describe any other business, profession, vocation or
employment of a substantial nature in which each investment advisor of the
Registrant, and each director, officer or partner of any such investment
advisor, is or has been, at any time during the past two fiscal years, engaged
for his own account or in the capacity of director, officer, employee, partner,
or trustee.
10
<PAGE> 373
See each Statement of Additional Information, Part B under
headings "General Information About the Fund - Investment
Advisor" and "- Trustees and Officers" for information
concerning A I M Advisors, Inc.
Item 29. Principal Underwriters
(a) Fund Management Company, the Registrant's principal
underwriter of all of its shares also acts as a
principal underwriter to the following investment
companies:
AIM Equity Funds, Inc. (Institutional Class)
AIM Investment Securities Funds (Limited Maturity
Treasury Portfolio Institutional Shares)
Tax-Free Investments Co.
Short-Term Investments Co.
(b) The following table sets forth information with
respect to each director, officer or partner of Fund
Management Company:
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Principal Underwriter with Registrant
- ------------------ -------------------------- --------------------
<S> <C> <C>
Charles T. Bauer Chairman of the Board of ChairmanTrustees and Director
J. Abbott Sprague President & Director Vice President
Robert H. Graham Senior Vice President & Director President
William H. Kleh Vice President & Director None
John J. Arthur Vice President & Treasurer Senior Vice President
& Treasurer
Mark D. Santero Senior Vice President None
Carol F. Relihan Vice President, Secretary Vice President & Secretary
& General Counsel
Mark E. McMeans Vice President None
David E. Hessel Assistant Vice President, None
Assistant Treasurer &
Controller
Dana R. Sutton Assistant Vice President & Vice President & Assistant
Assistant Treasurer Treasurer
Melville B. Cox Assistant Vice President Vice President
</TABLE>
- ---------------------------------
* 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173
11
<PAGE> 374
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Principal Underwriter with Registrant
- ------------------ -------------------------- --------------------
<S> <C> <C>
Jeffrey L. Horne Assistant Vice President None
Margaret A. Reilly Assistant Vice President None
Stephen I. Winer Assistant Vice President, Assistant Secretary
Assistant General Counsel &
Assistant Secretary
Nancy L. Martin Assistant General Counsel & Assistant Secretary
Assistant Secretary
Samuel D. Sirko Assistant General Counsel & Assistant Secretary
Assistant Secretary
Kathleen J. Pflueger Assistant Secretary Assistant Secretary
</TABLE>
(c) Not Applicable
Item 30. Location of Accounts and Records
With respect to each account, book or other document required
to be maintained by Section 31(a) of the 1940 Act and the Rules (17 CFR
270.31a-1 to 31a-3) promulgated thereunder, furnish the name and address of
each person maintaining physical possession of each such account, book or other
document.
A I M Advisors, Inc., 11 Greenway Plaza, Suite 1919, Houston, Texas
77046-1173, will maintain physical possession of each such account,
book or other document of the Registrant at its principal executive
offices, except for those maintained by the Custodian, The Bank of New
York, P.O. Box 11,014, Church Street Station, New York, New York
10249; or by the Transfer Agent, A I M Institutional Fund Services,
Inc., 11 Greenway Plaza, Suite 1919, Houston, TX 77046-1173.
Item 31. Management Services
Furnish summary of the substantive provisions of management
related service contract not discussed in Part I of this Form (because the
contract was not believed to be material to a purchaser of securities of
Registrant) under which services are provided to the Registrant, indicating the
parties to the contract, the total dollars paid and by whom, for the last three
fiscal years.
None.
Item 32. Undertakings
(a) None
- ---------------------------
* 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173
12
<PAGE> 375
(b) None.
(c) The Registrant undertakes to furnish each person to
whom a prospectus is delivered with a copy of the
applicable Portfolio's latest annual report to
shareholders, upon request and without charge.
13
<PAGE> 376
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the city of Houston, Texas on the 13th day of November,
1995.
Registrant: SHORT-TERM INVESTMENTS TRUST
By: /s/ CHARLES T. BAUER
----------------------------------------
Charles T. Bauer, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ CHARLES T. BAUER Chairman, President & Trustee November 13, 1995
- ------------------------------ (Principal Executive Officer)
(Charles T. Bauer)
/s/ BRUCE L. CROCKETT Trustee November 13, 1995
- ------------------------------
(Bruce L. Crockett)
/s/ OWEN DALY II Trustee November 13, 1995
- ------------------------------
(Owen Daly II)
/s/ CARL FRISCHLING Trustee November 13, 1995
- ------------------------------
(Carl Frischling)
/s/ JOHN F. KROEGER Trustee November 13, 1995
- ------------------------------
(John F. Kroeger)
/s/ LEWIS F. PENNOCK Trustee November 13, 1995
- ------------------------------
(Lewis F. Pennock)
/s/ IAN W. ROBINSON Trustee November 13, 1995
- ------------------------------
(Ian W. Robinson)
/s/ LOUIS S. SKLAR Trustee November 13, 1995
- ------------------------------
(Louis S. Sklar)
/s/ JOHN J. ARTHUR Vice President & Treasurer November 13, 1995
- ------------------------------ (Principal Financial and
(John J. Arthur) Accounting Officer)
</TABLE>
14
<PAGE> 377
INDEX TO EXHIBITS
Exhibit
Number
1(g) A copy of the Registrant's Agreement and Declaration of Trust
(Delaware)
1(h) A copy of the First Amendment, dated September 11, 1993, to
the Registrant's Agreement and Declaration of Trust
1(i) A copy of the Second Amendment, dated August 4, 1994, to the
Registrant's Agreement and Declaration of Trust
1(j) A form of the Third Amendment to the Registrant's Agreement
and Declaration of Trust
2(c) A copy of the Registrant's By-Laws (Delaware)
2(d) A copy of the Registrant's First Amended By-Laws, dated March
14, 1995
4(g) Specimen Certificate representing shares of the Resource
Class of the Treasury Portfolio
6(m) A copy of the Master Distribution Agreement, dated October
18, 1993, between Fund Management Company and Registrant with
respect to the Treasury and Treasury TaxAdvantage Portfolio
6(n) Amendment No. 1, dated December 8, 1994, to Master
Distribution Agreement dated October 18, 1993, between Fund
Management Company and Registrant
6(o) Form of Amendment No. 2 to Master Distribution Agreement,
dated October 18, 1993, between Fund Management Company and
Registrant
9(c) Transfer Agency and Service Agreement between A I M
Institutional Fund Services, Inc. and Registrant
9(d) Amendment No. 1, dated July 1, 1995, to the Transfer Agency
and Service Agreement, dated September 16, 1994, between A I M
Institutional Fund Services, Inc. and Registrant
9(i) Copy of Administrative Services Agreement, dated October, 18,
1993, between A I M Advisors, Inc. and Registrant
9(j) Copy of Amendment No. 1 to Administrative Services Agreement,
dated October 18, 1993, between A I M Advisors, Inc. and
Registrant
9(o) A form of Administrative Services Agreement between A I M
Institutional Fund Services, Inc. and A I M Advisors, Inc. on
behalf of the Portfolios and Classes of the Registrant
11(a) Consent of Ballard Spahr Andrews & Ingersoll
11(b) Consent of KPMG Peat Marwick LLP
15
<PAGE> 378
15(i) Copy of Master Plan pursuant to Rule 12b-1 and related forms
of agreement with respect to the Personal Investment Class,
Private Investment Class and Cash Management Class of the
Treasury Portfolio
15(j) Amendment No.1, dated December 8, 1994, to Master Plan
pursuant to Rule 12b-1, dated August 6, 1993
15(k) Form of Amendment No. 2 to Master Plan pursuant to Rule
12b-1, dated August 6, 1993
27 Financial Data Schedule
16
<PAGE> 1
EXHIBIT 1(g)
AGREEMENT AND DECLARATION OF TRUST
OF
SHORT-TERM INVESTMENTS TRUST
WHEREAS, THIS AGREEMENT AND DECLARATION OF TRUST is made and entered
into as of May 5, 1993, among William E. Kleh, Charles T. Bauer and Robert H.
Graham, as trustees, and each person who becomes a shareholder (as hereinafter
defined) in accordance with the terms hereinafter set forth.
WHEREAS, the parties hereto desire to create a business trust
pursuant to the Delaware Act (as hereinafter defined) for the investment and
reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees hereby direct that a Certificate of
Trust be filed with the Office of the Secretary of State of Delaware and do
hereby declare that all money and property contributed to the trust hereunder
shall be held and managed in trust under this Trust Agreement for the benefit
of the Shareholders (as hereinafter defined) as herein set forth below.
ARTICLE I
NAME, DEFINITIONS, PURPOSE AND CERTIFICATE OF TRUST
Section 1.1. Name. The name of the business trust created hereby is
"Short-Term Investments Trust," and the Trustees may transact the Trust's
affairs in that name. The Trust shall constitute a Delaware business trust in
accordance with the Delaware Act, as hereinafter defined.
Section 1.2. Definitions. Wherever used herein, unless otherwise
required by the context or specifically provided:
(a) "Agreement" means this Agreement and Declaration of Trust, as it
may be amended from time to time.
(b) "Bylaws" means the Bylaws referred to in Article IV, Section
4.1(e) hereof, as from time to time amended;
(c) The term "Class" means a portion of Shares of a Portfolio of the
Trust established in accordance with the provisions of Article II, Section 2.3
hereof.
(d) The term "Commission" has the meaning given it in the 1940 Act.
The terms "affiliated person", "Company", "Person" and "principal underwriter"
shall have the meanings given them in the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Commission or any rules
- 1 -
<PAGE> 2
or regulations adopted or interpretive releases of the Commission thereunder.
(e) The "Delaware Act" refers to the Delaware Business Trust Act, 12
Del. C. Section 3801, et seq., as such Act may be amended from time to time.
(f) "Portfolio" means a series of Shares of the Trust established in
accordance with the provisions of Article II, Section 2.3 hereof;
(g) "Shareholder" means a record owner of Outstanding Shares of the
Trust;
(h) "Shares" means, as to a Portfolio or any Class thereof, the
equal proportionate transferable units of beneficial interest into which the
beneficial interest of such Portfolio of the Trust or such Class thereof shall
be divided and may include fractions of Shares as well as whole Shares;
(i) The "Trust" means the Short-Term Investments Trust, the Delaware
business trust established hereby, and reference to the Trust, when applicable
to one or more Portfolios of the Trust, or Classes thereof, shall refer to any
such Portfolio, or Class thereof, as the case may be;
(j) The "Trustees" means the Persons who have signed this Agreement
and Declaration of Trust as trustees so long as they shall continue to serve as
trustees of the Trust in accordance with the terms hereof, and all other
Persons who may from time to time be duly appointed as Trustee in accordance
with the provisions of Section 3.4 hereof, and reference herein to a Trustee or
to the Trustees shall refer to such Persons in their capacity as Trustees
hereunder;
(k) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of one or
more of the Trust, any Portfolio, any Class of a Portfolio or the Trustees on
behalf of the Trust, a Portfolio or Class; and
(l) The "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time.
Section 1.3. Purpose. The purpose of the Trust is to conduct,
operate and carry on the business of a management investment company registered
under the 1940 Act through one or more Portfolios investing primarily in
securities and to carry on such other business as the Trustees may from time to
time determine pursuant to their authority under this Trust Agreement.
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Section 1.4. Certificate of Trust. Immediately upon the execution of
this Trust Agreement, the Trustees shall file a Certificate of Trust with
respect to the Trust in the Office of the Secretary of State of the State of
Delaware pursuant to the Delaware Act.
ARTICLE II
BENEFICIAL INTEREST
Section 2.1. Shares of Beneficial Interest. The beneficial interest
in the Trust shall be divide into an unlimited number of Shares, with par value
of $0.01 per Share. The Trustees may, from time to time, authorize the
division of the Shares into one or more series, each of which constitutes a
Portfolio, and may further authorize the division of said Portfolios into one
or more additional, separate and distinct Classes in accordance with Section
2.3 of this Agreement. All Shares issued hereunder, including without
limitation, Shares issued in connection with a dividend in Shares or a split or
reverse split of Shares, shall be fully paid and nonassessable.
Section 2.2. Issuance of Shares. The Trustees in their discretion
may, from time to time, without vote of the Shareholders, issue Shares, in
addition to the then issued and outstanding Shares and Shares held in the
treasury, to such party or parties and for such amount and type of
consideration, subject to applicable law, including cash or securities, at such
time or times and on such terms as the Trustees may deem appropriate, and may
in such manner acquire other assets (including the acquisition of assets
subject to, and in connection with, the assumption of liabilities) and
businesses. In connection with any issuance of Shares, the Trustees may issue
fractional Shares and Shares held in the treasury. The Trustees may from time
to time divide or combine the Shares into a greater or lesser number without
thereby changing the proportionate beneficial interests in the Trust.
Contributions to the Trust may be accepted for, and Shares shall be redeemed
as, whole Shares and/or 1/1,000th of a Share or integral multiples thereof.
Section 2.3. Establishment of Portfolios and Classes. The Trust
shall initially be divided into two Portfolios, the Treasury Portfolio and the
Treasury TaxAdvantage Portfolio. The Treasury Portfolio shall initially
contain four Classes, the Institutional Class, the Private Investment Class,
the Personal Investment Class and the Cash Management Class. The Treasury
TaxAdvantage Portfolio shall initially contain one Class, the Institutional
Class. The Treasury Portfolio, the Treasury TaxAdvantage Portfolio and their
respective initial Classes as set forth in this Section 2.3 are collectively
referred to as the "Initial Portfolios". The establishment and designation of
any other Portfolio or
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Class thereof, or subject to Section 6.1 hereof, any change to the Initial
Portfolios, shall be effective upon the adoption by a majority of the then
Trustees of a resolution which sets forth such establishment, designation or
change.
Section 2.3.1. Subject to Section 6.1 of this Trust Agreement, the
Trustees shall have full power and authority, in their sole discretion without
obtaining any prior authorization or vote of the Shareholders of any Portfolio
of the Trust, or Class thereof, to establish and designate and to change in any
manner any Portfolio of Shares, or any Class or Classes thereof, to fix such
preferences, voting powers, rights and privileges of any Portfolio, or Classes
thereof, as the Trustees may from time to time determine, to divide or combine
the Shares or any Portfolio, or Classes thereof, into a greater or lesser
number, to classify or reclassify any issued Shares or any Portfolio, or
Classes thereof, into one or more Portfolios or Classes of Shares of a
Portfolio, and to take such other action with respect to the Shares as the
Trustees may deem desirable. A Portfolio and any Class thereof may issue any
number of Shares but need not issue any shares. At any time that there are no
Shares outstanding of any particular Portfolio or Class previously established
and designed, the Trustees may by a majority vote of the Trustees abolish that
Portfolio or Class and the establishment and designation thereof.
Section 2.3.2. Unless the establishing resolution or any other
resolution adopted pursuant to this Section 2.3 otherwise provides, Shares of
each Portfolio or Class thereof established hereunder shall have the following
relative rights and preferences:
(a) Except as set forth in paragraph (e) of this Subsection
2.3.2, each Share of a Portfolio, regardless of Class, shall represent an equal
pro rata interest in the assets belonging to such Portfolio and shall have
identical voting, dividend, liquidation and other rights, preferences, powers,
restrictions, limitations, qualifications and designations and terms and
conditions with each other Share of such Portfolio.
(b) Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the Trust or
the Trustees, whether of the same or other Portfolio (or Class).
(c) All consideration received by the Trust for the issue or
sale of Shares of a particular Portfolio (or Class), together with all assets
in which such consideration is invested or reinvested, all income, earnings,
profits, and proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation of such assets, and any funds or
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payments derived from any reinvestment of such proceeds in whatever form the
same may be, shall be held and accounted for separately from the other assets
of the Trust and of every other Portfolio and may be referred to herein as
"assets belonging to" that Portfolio (or Class). The assets belonging to a
particular Portfolio (or Class) shall belong to that Portfolio (or Class) for
all purposes, and to no other Portfolio (or Class), subject only to the rights
of creditors of that Portfolio (or Class). In addition, any assets, income,
earnings, profits or funds, or payments and proceeds with respect thereto,
which are not readily identifiable as belonging to any particular Portfolio (or
Class) shall be allocated by the Trustees between and among one or more of the
Portfolios (or Classes) in such manner as the Trustees, in their sole
discretion, deem fair and equitable. Each such allocation shall be conclusive
and binding upon the Shareholders of all Portfolios or Classes thereof for all
purposes, and such assets, income, earnings, profits, or funds, or payments and
proceeds with respect thereto shall be assets belonging to that Portfolio (or
Class).
(d) The assets belonging to a particular Portfolio (or Class)
shall be charged with the liabilities of that Portfolio (or Class) and all
expenses, costs, charges and reserves attributable to that Portfolio (or
Class). As hereinafter provided, Class Expenses that are directly attributable
to any particular Class shall be borne by such Class. Any general liabilities,
expenses, costs charges or reserves to the Trust which are not readily
identifiable as belonging to any particular Portfolio or Class shall be
allocated and charged by the Trustees between or among any one or more of the
Portfolios (or Classes) in such manner as the Trustees in their sole discretion
deem fair and equitable. Each such allocation shall be conclusive and binding
upon the Shareholders of all Portfolios (or Classes) for all purposes. Without
limitation of the foregoing provisions of this Subsection 2.3.2, the debts,
liabilities, obligations and expenses incurred, contracted for or otherwise
existing with respect to a particular Portfolio (or Class) shall be enforceable
against the assets of such Portfolio (or Class) only, and not against the
assets of the Trust generally. Notice of this contractual limitation on
inter-Portfolio liabilities shall be set forth in the Certificate of Trust
described in Section 1.4 of this Agreement (whether originally or by
amendment), and upon the giving of such notice in the Certificate of Trust, the
statutory provisions of Section 3804 of the Delaware Act relating to
limitations on inter-Portfolio liabilities (and the statutory effect under
Section 3804 of setting forth such notice in the certificate of trust) shall
become applicable to the Trust and each Portfolio and Class thereof.
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(e) Each Class of Shares of a Portfolio shall have a different
Class designation. Each Class of Shares shall bear expenses ("Class Expenses")
of the Trust's operations that are directly attributable to such Class.
Dividends paid by the Trust with respect to each Class of Shares in a Portfolio
shall be calculated in the same manner and shall be in the same amount as
dividends paid by the Trust with respect to each other Class of Shares in the
same Portfolio, except that Class Expenses shall be borne exclusively by the
affected Classes.
All references to Shares in this Trust Agreement shall be deemed to
be Shares of any or all Portfolios, or Classes thereof, as the context may
require. All provisions herein relating to the Trust shall apply equally to
each Portfolio of the Trust, and each Class thereof, except as the context
otherwise requires.
Section 2.4. Investment in the Trust. Investments may be accepted
by the Trust from such Persons, at such times, on such terms, and for such
consideration, which may consist of cash or tangible or intangible property or
a combination thereof, as the Trustees from time to time may authorize. At the
Trustees' discretion, such investments, subject to applicable law, may be in
the form of cash or securities in which the affected Portfolio is authorized to
invest, valued as provided in applicable law. Each investment shall be
credited to the individual shareholder's account in the form of full and
fractional Shares of the Trust, in such Portfolio (or Class) as the purchaser
shall select.
Section 2.5. Personal Liability of Shareholders. As provided by
applicable law, no Shareholder of the Trust shall be personally liable for the
debts, liabilities, obligations and expenses incurred by, contracted for, or
otherwise existing with respect to, the Trust or any Portfolio (or Class)
thereof. Neither the Trust nor the Trustees, nor any officer, employee or
agent of the Trust shall have any power to bind personally any Shareholder or,
except as provided herein or by applicable law, to call upon any Shareholder
for the payment of any sum of money or assessment whatsoever other than such as
the Shareholder may at any time personally agree to pay by way of subscription
for any Shares or otherwise. The Shareholders shall be entitled, to the
fullest extent permitted by applicable law, to the same limitation on personal
liability as is extended under the Delaware General Corporation Law to
stockholders of private corporations for profit. Every note, bond, contract or
other undertaking issued by or on behalf of the Trust or the Trustees relating
to the Trust or to any Portfolio (or Class) thereof shall include a recitation
limiting the obligation represented thereby to the Trust or to one or more
Portfolios thereof and its or their assets (but the
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omission of such a recitation shall not operate to bind any Shareholder or
Trustee of the Trust).
Section 2.6. Assent to Trust Agreement. Every Shareholder, by
virtue o having purchased a Share, shall be held to have expressly assented to,
and agreed to be bound by, the terms hereof. The death of a Shareholder during
the continuance of the Trust shall not operate to terminate the same nor
entitle the representative of any deceased Shareholder to an accounting or to
take any action in court or elsewhere against the Trust or the Trustees, but
only to rights of said decedent under this Trust.
ARTICLE II
THE TRUSTEES
Section 3.1. Management of the Trust. The Trustees shall have
exclusive and absolute control over the Trust Property and over the business of
the Trust to the same extent as if the Trustees were the sole owners of the
Trust Property and business in their own right, but with such powers of
delegation as may be permitted by this Trust Agreement. The Trustees shall
have power to conduct the business of the Trust and carry on its operations in
any and all of its branches and maintain offices both within and without the
State of Delaware, in any and all states of the United States of America, in
the District of Columbia, in any and all commonwealths, territories,
dependencies, colonies, or possessions of the United States of America, and in
any foreign jurisdiction and to do all such other things and execute all such
instruments as they deem necessary, proper or desirable in order to promote the
interests of the Trust although such things are not herein specifically
mentioned. Any determination as to what is in the interests of the Trust made
by the Trustees in good faith shall be conclusive. In construing the
provisions of this Trust Agreement, the presumption shall be in favor of a
grant of power to the Trustees.
The enumeration of any specific power in this Trust Agreement shall
not be construed as limiting the aforesaid power. The powers of the Trustees
may be exercised without order of or resort to any court.
Section 3.2. Initial Trustees. The initial Trustees shall be the
persons named herein. On a date fixed by the Trustees, the Shareholders shall
elect at least three (3) but not more than twelve (12) Trustees, as specified
by the Trustees pursuant to Section 3.6 of this Article III.
Section 3.3. Term of Office of Trustees. The Trustees shall hold
office during the lifetime of this Trust, and until its termination as herein
provided; except (a) that
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any Trustee may resign his trusteeship or may retire by written instrument
signed by him and delivered to the other Trustees, which shall take effect upon
such delivery or upon such later date as is specified therein; (b) that any
Trustee may be removed at any time by written instrument, signed by a least
two-thirds of the number of Trustees prior to such removal, specifying the date
when such removal shall become effective; (c) that any Trustee who has died,
become physically or mentally incapacitated by reason of disease or otherwise,
or is otherwise unable to serve, may be retired by written instrument signed by
a majority of the other Trustees, specifying the date of his retirement; and
(d) that a Trustee may be removed at any meeting of the Shareholders of the
Trust.
Section 3.4. Vacancies and Appointment of Trustees. In case of the
declination to serve, death, resignation, retirement or removal of a Trustee,
or a Trustee is otherwise unable to serve, or an increase in the number of
Trustees, a vacancy shall occur. Whenever a vacancy in the Board of Trustees
shall occur, until such vacancy is filled, the other Trustees shall have all
the powers hereunder and the certification of the other Trustees of such
vacancy shall be conclusive. In the case of an existing vacancy, the remaining
Trustees may fill such vacancy by appointing such other person as they in their
discretion shall see fit, or may leave such vacancy unfilled or may reduce the
number of Trustees to not less than three (3) Trustees. Such appointment shall
be evidenced by a written instrument signed by a majority of the Trustees in
office or by resolution of the Trustees, duly adopted, which shall be recorded
in the minutes of a meeting a the Trustees, whereupon the appointment shall
take effect.
An appointment of a Trustee may be made by the Trustees then in
office in anticipation of a vacancy to occur by reason of retirement,
resignation or increase in number of Trustees effective at a later date,
provided that said appointment shall become effective only at or after the
effective date of said retirement, resignation or increase in number of
Trustees. As soon as any Trustee appointed pursuant to this Section 3.4 shall
have accepted this trust, the trust estate shall vest in the new Trustee or
Trustees, together with the continuing Trustees, without any further act or
conveyance, and he shall be deemed a Trustee hereunder.
Section 3.5. Temporary Absence of Trustee. Any Trustee may, by
power of attorney, delegate his power for a period not exceeding six months at
any one time to any other Trustee or Trustees, provided that in no case shall
less than two Trustees personally exercise the other powers hereunder except as
herein otherwise expressly provided.
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Section 3.6. Number of Trustees. The number of Trustees shall
initially be three (3), and thereafter shall be such number as shall be fixed
from time to time by a majority of the Trustees; provided, however, that the
number of Trustees shall in no event be less than three (3) nor more than
twelve (12).
Section 3.7. Effect of Death, Resignation, etc. of a Trustee. The
declination to serve, death, resignation, retirement, removal, incapacity, or
inability of the Trustees, or any one of them, shall not operate to terminate
the Trust or to revoke any existing agency created pursuant to the terms of
this Trust Agreement.
Section 3.8. Ownership of Assets of the Trust. The assets of the
Trust and of each Portfolio thereof shall be held separate and apart from any
assets now or hereafter held in any capacity other than as Trustee hereunder by
the Trustees or any successor Trustees. Legal title in all of the assets of
the Trust and the right to conduct any business shall at all times be
considered as vested in the Trustees on behalf of the Trust, except that the
Trustees may cause legal title to any Trust Property to be held by, or in the
name of the Trust, or in the name of any Person as nominee. No Shareholder
shall be deemed to have a severable ownership in any individual asset of the
Trust or of any Portfolio, or Class thereof, or any right of partition or
possession thereof, but each Shareholder shall have, except as otherwise
provided for herein, a proportionate undivided beneficial interest in the
Trust, Portfolio or Class thereof. The Shares shall be personal property
giving only the rights specifically set forth in this Trust Agreement or the
Delaware Act.
ARTICLE IV
POWERS OF THE TRUSTEES
Section 4.1. Powers. The Trustees in all instances shall act as
principals, and are and shall be free from the control of the Shareholders.
The Trustees shall have full power and authority to do any and all acts and to
make and execute any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust.
Without limiting the foregoing and subject to any applicable limitation in this
Trust Agreement or the Bylaws of the Trust, the Trustees shall have power and
authority:
(a) To invest and reinvest cash and other property, and to hold cash
or other property uninvested, without in any event being bound or limited by
any present or future law or custom in regard to investments by trustees, and
to sell,
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exchange, lend, pledge, mortgage, hypothecate, write options on and lease any
or all of the assets of the Trust;
(b) To operate as and carry on the business of an investment
company, and exercise all the powers necessary and appropriate to the conduct
of such operations;
(c) To borrow money and in this connection issue notes or other
evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; to endorse, guarantee, or
undertake the performance of an obligation or engagement of any other Person
and to lend Trust Property;
(d) To provide for the distribution of interests of the Trust either
through a principal underwriter in the manner hereinafter provided for or by
the Trust itself, or both, or otherwise pursuant to a plan of distribution of
any kind;
(e) To adopt Bylaws not inconsistent with this Trust Agreement
providing for the conduct of the business of the Trust and to amend and repeal
them to the extent that they do not reserve such right to the Shareholders;
such Bylaws shall be deemed incorporated and included in this Trust Agreement;
(f) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate;
(g) To employ one or more banks, trust companies or companies that
are members of a national securities exchanges or such other domestic or
foreign entities as custodians of any assets of the Trust subject to any
conditions set forth in this Trust Agreement or in the Bylaws;
(h) To retain one or more transfer agents and shareholder servicing
agents, or both;
(i) To set record dates in the manner provided herein or in the
Bylaws;
(j) To delegate such authority as they consider desirable to any
officers of the Trust and to any investment adviser, manager, administrator,
custodian, underwriter or other agent or independent contractor;
(k) To sell or exchange any or all of the assets of the Trust,
subject to the provisions of Article VI, Section 6.1 hereof;
(l) To vote or give assent, or exercise any rights of ownership,
with respect to stock or other securities or property; and to execute and
deliver proxies and powers of
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attorney to such person or persons as the Trustees shall deem proper, granting
to such person or persons such power and discretion with relation to securities
or property as the Trustee shall deem proper;
(m) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities;
(n) To hold any security or property in a form not indicating any
trust, whether in bearer, book entry, unregistered or other negotiable form; or
either in the name of the Trust or of a Portfolio or Class thereof or in the
name of a custodian or a nominee or nominees, subject in either case to proper
safeguards according to the usual practice of Delaware business trusts or
investment companies;
(o) To establish separate and distinct Portfolios with separately
defined investment objectives and policies and distinct investment purposes in
accordance with the provisions of Article II hereof and to establish Classes of
such Portfolios having relative rights, powers and duties as they may provide
consistent with applicable law;
(p) Subject to the provisions of Section 3804 of the Delaware Act,
to allocate assets, liabilities and expenses of the Trust to a particular
Portfolio or to apportion the same between or among two or more Portfolios,
provided that any liabilities or expenses incurred by a particular Portfolio
(or Class) shall be payable solely out of the assets belonging to that
Portfolio (or Class) as provided for in Article II hereof;
(q) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any security of which is
held in the Trust; to consent to any contract, lease, mortgage, purchase, or
sale of property by such corporation or concern, and to pay calls or
subscriptions with respect to any security held in the Trust;
(r) To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy including, but not limited
to, claims for taxes;
(s) To declare and pay dividends and make distributions of income
and of capital gains and capital to Shareholders in the manner hereinafter
provided;
(t) To establish, from time to time, a minimum investment for
Shareholders in the Trust or in one or more Portfolio or Class, and to require
the redemption of the Shares of any Shareholders whose investment is less than
such minimum upon giving notice to such Shareholder;
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(u) To establish one or more committees, to delegate any of the
powers of the Trustees to said committees and to adopt a committee charter
providing for such responsibilities, membership (including Trustees, officers
or other agents of the Trust therein) and any other characteristics of said
committees as the Trustees may deem proper. Notwithstanding the provisions of
this Article IV, and in addition to such provisions or any other provision of
this Trust Agreement or of the Bylaws, the Trustees may by resolution appoint a
committee consisting of less than the whole number of Trustees then in office,
which committee may be empowered to act for and bind the Trustees and the
Trust, as if the acts of such committee were the acts of all the Trustees then
in office, with respect to the institution, prosecution, dismissal, settlement,
review or investigation of any action, suit or proceeding which shall be
pending or threatened to be brought before any court, administrative agency or
other adjudicatory body;
(v) To interpret the investment policies, practices or limitations
of any Portfolio;
(w) To establish a registered office and have a registered agent in
the state of Delaware; and
(x) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable
or proper for the accomplishment of any purpose or the attainment of any object
or the furtherance of any power hereinbefore set forth, either alone or in
association with others, and to do every other act or thing incidental or
appurtenant to or growing out of or connected with the aforesaid business or
purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers,
and the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees. Any action by one
or more the Trustees in their capacity as such hereunder shall be deemed an
action on behalf of the Trust or the applicable Portfolio, and not an action in
an individual capacity.
The Trustees shall not be limited to investing in obligations
maturing before the possible termination of the Trust.
No one dealing with the Trustees shall be under any obligation to
make any inquiry concerning the authority of the Trustees, or to see to the
application of any payments made or property transferred to the Trustees or
upon their order.
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Section 4.2. Issuance and Repurchase of Shares. The Trustees shall
have the power to issue, sell, repurchase, redeem, retire, cancel, acquire,
hold, resell, reissue, dispose of, and otherwise deal in Shares and, subject to
the provisions set forth in Article II and VII, to apply to any such
repurchase, redemption, retirement, cancellation or acquisition of Shares any
funds or property of the Trust, or the particular Portfolio or Class of the
Trust, with respect to which such Shares are issued.
Section 4.3. Action by the Trustees. The Trustees act by majority
vote at a meeting duly called or by unanimous written consent without a meeting
or by telephone meeting provided a quorum of Trustees participate in any such
telephone meeting. At any meeting of the Trustees, a majority of the Trustees
shall constitute a quorum. Written consents or waivers of the Trustees may be
executed in one or more counterparts. Execution of a written consent or waiver
and delivery thereof to the Trust may be accomplished by telefax.
Section 4.4. Principal Transactions. The Trustees may, on behalf of
the Trust, buy any securities from or sell any securities to, or lend any
assets of the Trust to, any Trustee or officer of the Trust or any firm of
which any such Trustee or officer is a member acting as principal, or have any
such dealings with any investment adviser, distributor, or transfer agent for
the Trust or with any affiliated person of such Person; and the Trust may
employ any such Person, or firm or company in which such Person is an
affiliated person, as broker, legal counsel, registrar, investment adviser,
distributor, administrator, transfer agent, dividend disbursing agent,
custodian or in any other capacity upon customary terms, subject in all cases
to applicable laws, rules and regulations and orders of regulatory authorities.
Section 4.5. Payment of Expenses by the Trust. The Trustees are
authorized to pay or cause to be paid out of the principal or income of the
Trust or Portfolio (or Class), or partly out of the principal and partly out of
income, and to charge or allocate the same to, between or among such one or
more of the Portfolios (or Classes) that may be established or designated
pursuant to Article II, Section 2.3, as they deem fair, all expenses, fees,
charges, taxes and liabilities incurred or arising in connection with the Trust
or Portfolio (or Class), or in connection with the management thereof,
including, but not limited to, the Trustees' compensation and such expenses and
charges for the services of the Trust's officers, employees, investment adviser
or manager, administrator, principal underwriter, auditors, counsel, custodian,
transfer agent, Shareholder servicing agent, and such other agents or
independent contractors and such other
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expenses and charges as the Trustees may deem necessary or proper to incur.
Section 4.6. Trustee Compensation. The Trustees as such shall be
entitled to reasonable compensation from the Trust; they may fix the amount of
their compensation. Nothing herein shall in any way prevent the employment of
any Trustee for advisory, management, administrative, legal, accounting,
investment banking, underwriting, brokerage, or investment dealer or other
services and the payment for the same by the Trust.
ARTICLE V
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND
TRANSFER AGENT
Section 5.1. Investment Adviser. The Trustees may in their
discretion, from time to time, enter into an investment advisory or management
contract or contracts with respect to the Trust or any Portfolio whereby the
other party or parties to such contract or contracts shall undertake to furnish
the Trustees with such management, investment advisory, statistical and
research facilities and services and such other facilities and services, if
any, and all upon such terms and conditions, as the Trustees may in their
discretion determine.
The Trustees may authorize the investment advisor to employ, from
time to time, one or more sub-advisors to perform such of the acts and services
of the investment advisor, and upon such terms and conditions, as may be agreed
upon between the investment advisor and sub-advisor. Any reference in this
Trust Agreement to the investment advisor shall be deemed to include such
sub-advisors, unless the context otherwise requires.
Section 5.2 Other Service Contracts. The Trustees may authorize the
engagement of a principal underwriter, transfer agent, administrator, custodian
or similar servicer.
Section 5.3 Parties to Contract. Any contract of the character
described in Sections 5.1 and 5.2 of this Article V may be entered into with
any corporation, firm, partnership, trust or association, although one or more
of the Trustees or officers of the Trust may be an officer, director, trustee,
shareholder, or member of such other party to the contract.
Section 5.4. Miscellaneous. The fact that (i) any of the
Shareholders, Trustees or officers of the Trust is a shareholder, director,
officer, partner, trustee, employee, manager, advisor, principal underwriter or
distributor or agent of or for any Company or of or for any parent or affiliate
of
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any Company, with which an advisory or administration contract, or principal
underwriter's or distributor's contract, or transfer, shareholder servicing,
custodial or other agency contract may have been or may hereafter be made, or
that any such Company, or any parent or affiliate thereof, is a Shareholder or
has an interest in the Trust, or that (ii) any Company with which an advisory
or administration contract or principal underwriter's or distributor's
contract, or transfer, shareholder servicing or other agency contract may have
been or may hereafter be made also has an advisory or administration contract,
or principal underwriter's or distributor's contract, or transfer, shareholder
servicing, custodial or other agency contract with one or more other Companies,
or has other business or interests shall not affect the validity of any such
contract or disqualify any Shareholder, Trustee or officer of the Trust from
voting upon or executing the same or create any liability or accountability to
the Trust or its Shareholders.
ARTICLE VI
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 6.1 Voting Powers. The Shareholders shall have power to
vote only to: (i) elect Trustees, provided that a meeting of Shareholders has
been called for that purpose; (ii) remove Trustees, provided that a meeting of
Shareholders has been called for that purpose; (iii) terminate the Trust or any
Portfolio or Class, unless, as of the date on which the Trustees have
determined to so terminate the Trust or such Portfolio or Class, there are
fewer than 100 holders of record of the Trust or of such terminating Portfolio
or Class; (iv) approve the sale of all or substantially all the assets of the
Trust or of any Portfolio or Class, unless the primary purpose of such sale is
to change the Trust's domicile or form of organization or form of business
trust; (v) approve the merger or consolidation of the Trust or any Portfolio or
Class with and into another Company, unless (A) the primary purpose of such
merger or consolidation is to change the Trust's domicile or form of
organization or form of business trust, or (B) after giving effect to such
merger or consolidation, based on the number of Shares outstanding as of a date
selected by the Trustees, the Shareholders of the Trust or such Portfolio or
Class will have a majority of the outstanding shares of the surviving Company
or portfolio or class, as the case may be; (vi) approve any amendment to this
Section 6.1; and (vii) approve such additional matters as may be required by
law or as the Trustees, in their sole discretion, shall determine.
Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required or permitted by law, this Trust
Agreement or any of the Bylaws of the Trust to be taken by Shareholders.
- 15 -
<PAGE> 16
On any matter submitted to a vote of the Shareholders, all Shares
shall be voted together, except when required by applicable law or when the
Trustees have determined that the matter affects the interests of one or more
Portfolios (or Classes), then only the Shareholders of all such Portfolios (or
Classes) shall be entitled to vote thereon. Each whole Share shall be entitled
to one vote as to any matter on which it is entitled to vote, and each
fractional Share shall be entitled to a proportionate fractional vote. The
vote necessary to approve any such matter shall be set forth in the Bylaws.
ARTICLE VII
DISTRIBUTIONS AND REDEMPTIONS
Section 7.1 Distributions. The Trustees may from time to time
declare and pay dividends and make other distributions with respect to any
Portfolio, or Class thereof, which may be from income, capital gains or
capital. The amount of such dividends or distributions and the payment of them
and whether they are in cash or any other Trust Property shall be wholly in the
discretion of the Trustees.
Section 7.2 Redemptions. Any holder of record of Shares of a
particular Portfolio, or Class thereof, shall have the right to require the
Trust to redeem his Shares, or any portion thereof, subject to such terms and
conditions as are set forth in the Bylaws.
Section 7.3 Redemption of Shares By Trustees. Upon the terms and
conditions get forth in the Bylaws, the Trustees may call for the redemption of
the Shares of any Person or may refuse to transfer or issue Shares to any
Person to the extent that the same is necessary to comply with applicable law
or advisable to further the purposes for which the Trust is formed.
Section 7.4 Redemption of De Minimis Accounts. If, at any time when
a request for transfer or redemption of Shares of any Portfolio is received by
the Trust or its agent, the value of the Shares of such Portfolio in a
Shareholder's account is less than Five Hundred Dollars ($500.00), after giving
effect to such transfer or redemption, the Trust may cause the remaining Shares
of such Portfolio in such Shareholder's account to be redeemed in accordance
with such procedures as are set forth in the Bylaws.
- 16 -
<PAGE> 17
ARTICLE VIII
LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 8.1 Limitation of Liability. A Trustee, when acting in such
capacity, shall not be personally liable to any person - other than the Trust or
a beneficial owner for any act, omission or obligation of the Trust or any
Trustee. A Trustee shall not be liable for any act or omission or any conduct
whatsoever in his capacity as Trustee, provided that nothing contained herein
or in the Delaware Act shall protect any Trustee against any liability to the
Trust or to Shareholders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee hereunder.
Section 8.2 Indemnification of Trustees. Every Person who is, or
has been, a Trustee or officer of the Trust shall be indemnified by the Trust
to the fullest extent permitted by the Delaware Act, the Bylaws and other
applicable law.
Section 8.3 Indemnification of Shareholders. In case any
Shareholder or former Shareholder of the Trust shall be held to be personally
liable solely by reason of his being or having been a Shareholder of the Trust
or any Portfolio or Class and not because of his acts or omissions or for some
other reason, the Shareholder or former Shareholder (or his heirs, executors,
administrators or other legal representatives, or, in the case of a corporation
or other entity, its corporate or other general successor) shall be entitled
out of the assets belonging to the applicable Portfolio (or Class) to be held
harmless from and indemnified against all loss and expense arising from such
liability in accordance with the Bylaws and applicable law.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Trust Not a Partnership. It is hereby expressly
declared that a trust and not a partnership is created hereby. No Trustee
hereunder shall have any power to bind personally either the Trust's officers
or any Shareholder. All persons extending credit to, contracting with or
having any claim against the Trust or the Trustees shall look only to the
assets of the appropriate Portfolio or Class or, if the Trustees shall have yet
to have established any separate Portfolio or Class, of the Trust for payment
under such credit, contract or claim; and neither the Shareholders nor the
- 17 -
<PAGE> 18
Trustee, nor any of their agents, whether past, present or future, shall be
personally liable therefor.
Section 9.2 Trustee's Good Faith Action, Expert Advice, No Bond or
Surety. The exercise by the Trustees of their powers and discretions hereunder
in good faith and with reasonable care under the circumstances then prevailing
shall be binding upon everyone interested. Subject to the provisions of
Article VIII hereof and to Section 9.1 of this Article IX, the Trustees shall
not be liable for errors of judgment or mistakes of fact or law. The Trustees
may take advice of counsel or other experts with respect to the meaning and
operation of this Trust Agreement, and subject to the provisions of Article
VIII hereof and Section 9.1 of this Article IX, shall be under no liability for
any act or omission in accordance with such advice or for failing to follow
such advice. The Trustees shall not be required to give any bond as such, nor
any surety if a bond is obtained.
Section 9.3 Termination of Trust or Portfolio. Unless terminated
as provided herein, the Trust shall continue without limitation of time. The
Trust may be terminated at any time by the Trustees by written notice to the
Shareholders, subject to Section 6.1 of this Trust Agreement. Any Portfolio or
Class may be terminated at any time by the Trustees by written notice to the
Shareholders of that Portfolio or Class, subject to Section 6.1 of this Trust
Agreement.
Upon termination of the Trust (or any Portfolio or Class, as the
case may be), after paying or otherwise providing for all charges, taxes,
expenses and liabilities held, severally, with respect to each Portfolio (or
Class) (or the applicable Portfolio (or Class), as the case may be), whether
due or accrued or anticipated as may be determined by the Trustees, the Trust
shall, in accordance with such procedures as the Trustees consider appropriate,
reduce the remaining assets held, severally, with respect to each Portfolio (or
Class) (or the applicable Portfolio (or Class), as the case may be), to
distribute in cash or shares or other securities, or any combination thereof,
and distribute the proceeds held with respect to each Portfolio (or Class) (or
the applicable Portfolio (or Class), as the case may be), to the Shareholders
of that Portfolio (or Class), as a Portfolio (or Class), ratably according to
the number of Shares of that Portfolio (or Class) held by the several
Shareholders on the date of termination.
Section 9.4 Sale of Assets; Merger and Consolidation. Subject to
Section 6.1 of this Trust Agreement, the Trustees may cause (i) the Trust or
one or more of its Portfolios (or Classes) to the extent consistent with
applicable law to sell all or substantially all of its assets,
- 18 -
<PAGE> 19
or be merged into or consolidated with another Trust or Company, (ii) the
Shares of the Trust or any Portfolio (or Class) to be converted into beneficial
interests in another business trust (or series thereof) created pursuant to
this Section 9.4 of Article IX, or (iii) the Shares to be exchanged under or
pursuant to any state or federal statute to the extent permitted by law. In
all respects not governed by statute or applicable law, the Trustees shall have
power to prescribe the procedure necessary or appropriate to accomplish a sale
of assets, merger or consolidation including the power to create one or more
separate business trusts to which all or any part of the assets, liabilities,
profits or losses of the Trust may be transferred and to provide for the
conversion of Shares of the trust or any Portfolio (or Class) into beneficial
interests in such separate business trust or trusts (or series or class
thereof).
Section 9.5 Filing of Copies, References, Headings. The original or
a copy of this Trust Agreement and each amendment hereof or Trust Agreement
supplemental hereto shall be kept at the office of the Trust where it may be
inspected by any Shareholder. In this Trust Agreement or in any such amendment
or supplemental Trust Agreement, references to this Trust Agreement, and all
expressions like "herein," "hereof" and "hereunder," shall be deemed to refer
to this Trust Agreement as amended or affected by any such supplemental Trust
Agreement. All expressions like "his," "he," and "him," shall be deemed to
include the feminine and neuter, as well as masculine, genders. Headings are
placed herein for convenience of reference only and in case of any conflict,
the text of this Trust Agreement, rather than the headings, shall control.
This Trust Agreement may be executed in any number of counterparts each of
which shall be deemed an original.
Section 9.6. Governing Law. The Trust and this Trust Agreement, and
the rights, obligations and remedies of the Trustees and Shareholders
hereunder, are to be governed by and construed and administered according to
the Delaware Act and the other laws of the State of Delaware; provided,
however, that there shall not be applicable to the Trust, the Trustees, the
Shareholders or this Trust Agreement (a) the provisions of Section 3540 of
Title 12 of the Delaware Code or (b) any provisions of the laws (statutory or
common) of the State of Delaware (other than the Delaware Act) pertaining to
trusts which relate to or regulate (i) the filing with any court or
governmental body or agency of trustee accounts or schedules of trustee fees
and charges, (ii) affirmative requirements to post bonds for trustees,
officers, agents or employees of a trust, (iii) the necessity for obtaining
court or other governmental approval concerning the acquisition, holding or
disposition of real or personal property, (iv) fees or other sums payable to
trustees, officers, agents or employees of a trust, (v) the
- 19 -
<PAGE> 20
allocation of receipts and expenditures to income or principal, (vi)
restrictions or limitations on the permissible nature, amount or concentration
of trust investments or requirements relating to the titling, storage or other
manner of holding of trust assets, or (vii) the establishment of fiduciary or
other standards or responsibilities or limitations on the indemnification, acts
or powers of trustees or other Persons, which are inconsistent with the
limitations or liabilities or authorities and powers of the Trustees or
officers of the Trust set forth or referenced in this Trust Agreement.
The Trust shall be of the type commonly called a "business trust,"
and without limiting the provisions hereof, the Trust may exercise all powers
which are ordinarily exercised by such a trust under Delaware law. The Trust
specifically reserves the right to exercise any of the powers or privileges
afforded to trusts or actions that may be engaged in by trusts under the
Delaware Act, and the absence of a specific reference herein to any such power,
privilege or action shall not imply that the Trust may not exercise such power
or privilege or take such actions; provided, however, that the exercise of any
such power, privilege or action shall not otherwise violate applicable law.
Section 9.7. Amendments. Except as specifically provided in Section
6.1, the Trustees may, without Shareholder vote, amend or otherwise supplement
this Trust Agreement by making an amendment, a Trust Agreement supplemental
hereto or an amended and restated trust instrument.
Section 9.8. Provisions in Conflict with Law. The provisions of
this Trust Agreement are severable, and if the Trustees shall determine, with
the advice of counsel, that any of such provisions is in conflict with
applicable law the conflicting provision shall be deemed never to have
constituted a part of this Trust Agreement; provided, however, that such
determination shall not affect any of the remaining provisions of this Trust
Agreement or render invalid or improper any action taken or omitted prior to
such determination. If any provision of this Trust Agreement shall be held
invalid or enforceable in any jurisdiction, such invalidity or unenforceability
shall attach only to such provision in such jurisdiction and shall not in any
manner affect such provisions in any other jurisdiction or any other provision
of this Trust Agreement in any jurisdiction.
- 20 -
<PAGE> 21
IN WITNESS WHEREOF, the undersigned, being all of the initial
Trustees of the Trust, have executed this instrument this 5th day of May, 1993.
/s/ WILLIAM H. KLEH
----------------------------
William H. Kleh,
as Trustee
/s/ CHARLES T. BAUER
----------------------------
Charles T. Bauer,
as Trustee
/s/ ROBERT H. GRAHAM
----------------------------
Robert H. Graham,
as Trustee
(THIS IS THE SIGNATURE PAGE FOR THE AGREEMENT
AND DECLARATION OF TRUST OF SHORT-TERM INVESTMENTS TRUST]
<PAGE> 1
EXHIBIT 1(h)
FIRST AMENDMENT
TO
AGREEMENT AND DECLARATION OF TRUST
OF
SHORT-TERM INVESTMENTS TRUST
THIS FIRST AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST OF
SHORT-TERM INVESTMENTS TRUST (the "Amendment") is entered into the 11th day of
September, 1993, among Charles T. Bauer, Bruce L. Crockett, Owen Daly, III,
Carl Frischling, John F. Kroeger, Lewis F. Pennock, Ian W. Robinson, Louis S.
Sklar, as trustees, and each person who became or becomes a shareholder in
accordance with the terms set forth in that certain Agreement and Declaration
of Trust of Short-Term Investments Trust entered into as of May 5, 1993 (the
"Agreement").
WHEREAS, Section 9.7 of the Agreement authorizes the Trustees without
Shareholder vote to amend or otherwise supplement the Agreement by making an
amendment; and
WHEREAS, at a meeting duly called and held in Bermuda on the 11th,
day of September, 1993, the Trustees have resolved to amend the Agreement as
hereinafter set forth with an effective date of August 20, 1993.
NOW, THEREFORE, the Trustees hereby amend the Agreement as herein set
forth below:
1. Capitalized terms not specifically defined in this Amendment
shall have the meanings ascribed to them in the Agreement.
2. Subclause (iii) in the first paragraph of Section 6.1 of the
Agreement shall be deleted in its entirety and the following new subclause
(iii) in the first paragraph of Section 6.1 shall be substituted in lieu
therefore:
"(iii) approve the termination of the Trust or any Portfolio or
Class, unless, as of the date on which the Trustees have determined to so
terminate the Trust or such Portfolio or Class, there are fewer than 100
holders of record of the Trust or of such terminating Portfolio or Class and
provided, futher, that the Trustees have called a meeting of the Shareholders
for the purpose of approving any such termination;"
3. Section 8.1 of the Agreement shall be deleted in its entirety and
the following new Section 8.1 shall be substituted in lieu therefore:
"Section 8.1 Limitation of Liability. A Trustee, when acting in
such capacity, shall not be personally liable to any person for any act,
omission or obligation of the Trust or
<PAGE> 2
any Trustee; provided, however, that nothing contained herein or in the
Delaware Act shall protect any Trustee against any liability to the Trust or to
Shareholders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee hereunder."
4. The amendments in the preceding paragraphs 2 and 3 of this
Amendment shall be effective as of the 20th day of August, 1993.
5. With the exception of the amendment in the preceding paragraphs 2
and 3 of this Amendment, the Agreement shall in all other respects remain in
full force and effect.
IN WITNESS WHEREOF, the undersigned, being all of the initial
Trustees of the Trust, have executed this First Amendment to Agreement and
Declaration of Trust of Short-Term Investments Trust the 11th day of September,
1993.
/s/ CHARLES T. BAUER /s/ B L CROCKETT
- ----------------------------------- ---------------------------------
Charles T. Bauer Bruce L. Crockett
Trustee Trustee
/s/ OWEN DALY, III /s/ CARL FRISCHLING
- ----------------------------------- ---------------------------------
Owen Daly, III Carl Frischling
Trustee Trustee
/s/ JOHN F. KROEGER /s/ LEWIS F. PENNOCK
- ----------------------------------- ---------------------------------
John F. Kroeger Lewis F. Pennock
Trustee Trustee
/s/ IAN W. ROBINSON /s/ LOUIS S. SKLAR
- ----------------------------------- ---------------------------------
Ian W. Robinson Louis S. Sklar
Trustee Trustee
[THIS IS THE SIGNATURE PAGE FOR
THE FIRST AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST
OF SHORT-TERM INVESTMENTS TRUST]
-2-
<PAGE> 1
EXHIBIT 1(i)
SECOND AMENDMENT
TO
AGREEMENT AND DECLARATION OF TRUST
OF
SHORT-TERM INVESTMENTS TRUST
THIS SECOND AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST OF
SHORT-TERM INVESTMENTS TRUST (the "Amendment") is entered into as of the 4th
day of August, 1994, among Charles T. Bauer, Bruce L. Crockett, Owen Daly, II,
Carl Frischling, Robert H. Graham, John F. Kroeger, Lewis F. Pennock, Ian W.
Robinson, Louis S. Sklar, as trustees, and each person who became or becomes a
shareholder in accordance with the terms set forth in that certain Agreement
and Declaration of Trust of Short-Term Investments Trust entered into as of May
5, 1993, as amended (the "Agreement").
WHEREAS, Section 9.7 of the Agreement authorizes the Trustees without
shareholder vote to amend or otherwise supplement the Agreement by making an
amendment; and
WHEREAS, at a meeting duly called and held by telephone conference on
the 4th day of August, 1994, the Trustees have resolved to amend the Agreement
as hereinafter set forth.
NOW, THEREFORE, the Trustees hereby amend the Agreement as herein set
forth below:
1. Capitalized terms not specifically defined in this Amendment shall
have the meanings ascribed to them in the Agreement.
2. Section 2.3 of the Agreement is hereby deleted in its entirety and
the following new Section 2.3 is hereby substituted in lieu thereof:
"Section 2.3 Establishment of Portfolios and Classes. The Trust
shall be divided into two Portfolios, the Treasury Portfolio and the Treasury
TaxAdvantage Portfolio. The Treasury Portfolio shall contain four Classes, the
Institutional Class, the Private Investment Class, the Personal Investment
Class and the Cash Management Class. The Treasury TaxAdvantage Portfolio shall
contain two Classes, the Institutional Class and the Private Investment Class.
The Treasury Portfolio, the Treasury TaxAdvantage Portfolio and their
respective Classes as set forth in this Section 2.3 are collectively referred
to as the "Portfolios". The establishment and designation of any other
Portfolio or Class thereof, or, subject to Section 6.1 hereof, any change to
the Portfolios, shall be effective upon the adoption by a majority of the then
Trustees of a resolution which sets forth such establishment, designation or
change."
3. With the exception of the amendment to Section 2.3 of the
Agreement as set forth in paragraph 2 of this Amendment, the Agreement, as
amended, shall in all other respects remain in full force and effect.
4. This Amendment may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same Amendment.
<PAGE> 2
IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this Second Amendment to Agreement and Declaration of
Trust of Short-Term Investments Trust as of the 4th day of August, 1994.
/s/ CHARLES T. BAUER /s/ B L CROCKETT
- --------------------------- ---------------------------
Charles T. Bauer Bruce L. Crockett
Trustee Trustee
/s/ OWEN DALY, II /s/ CARL FRISCHLING
- --------------------------- ---------------------------
Owen Daly, II Carl Frischling
Trustee Trustee
/s/ ROBERT H. GRAHAM /s/ JOHN F. KROEGER
- --------------------------- ---------------------------
Robert H. Graham John F. Kroeger
Trustee Trustee
/s/ LEWIS F. PENNOCK /s/ IAN W. ROBINSON
- --------------------------- ---------------------------
Lewis F. Pennock Ian W. Robinson
Trustee Trustee
/s/ LOUIS S. SKLAR
- ---------------------------
Louis S. Sklar
Trustee
[THIS IS THE SIGNATURE PAGE FOR
THE SECOND AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST
OF SHORT-TERM INVESTMENTS TRUST]
2
<PAGE> 1
EXHIBIT 1(j)
THIRD AMENDMENT
TO
AGREEMENT AND DECLARATION OF TRUST
OF
SHORT-TERM INVESTMENTS TRUST
THIS THIRD AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST OF
SHORT-TERM INVESTMENTS TRUST (the "Amendment") is entered into as of the
19th day of September, 1995, among Charles T. Bauer, Bruce L. Crockett, Owen
Daly, II, Carl Frischling, Robert H. Graham, John F. Kroeger, Lewis F. Pennock,
Ian W. Robinson, Louis S. Sklar, as trustees, and each person who became or
becomes a shareholder in accordance with the terms set forth in that certain
Agreement and Declaration of Trust of Short-Term Investments Trust entered into
as of May 5, 1993, as amended (the "Agreement").
WHEREAS, Section 9.7 of the Agreement authorizes the Trustees without
shareholder vote to amend or otherwise supplement the Agreement by making an
amendment; and
WHEREAS, at a meeting duly called and held on the 19th day of
September, 1995, the Trustees have resolved to amend the Agreement as
hereinafter set forth.
NOW, THEREFORE, the Trustees hereby amend the Agreement as herein set
forth below:
1. Capitalized terms not specifically defined in this Amendment shall
have the meanings ascribed to them in the Agreement.
2. Section 2.3 of the Agreement is hereby deleted in its entirety and
the following new Section 2.3 is hereby substituted in lieu thereof:
"Section 2.3 Establishment of Portfolios and Classes. The Trust
shall be divided into two Portfolios, the Treasury Portfolio and the Treasury
TaxAdvantage Portfolio. The Treasury Portfolio shall contain five Classes, the
Institutional Class, the Private Investment Class, the Personal Investment
Class, the Cash Management Class and the Resource Class. The Treasury
TaxAdvantage Portfolio shall contain two Classes, the Institutional Class and
the Private Investment Class. The Treasury Portfolio, the Treasury
TaxAdvantage Portfolio and their respective Classes as set forth in this
Section 2.3 are collectively referred to as the "Portfolios". The
establishment and designation of any other Portfolio or Class thereof, or,
subject to Section 6.1 hereof, any change to the Portfolios, shall be effective
upon the adoption by a majority of the then Trustees of a resolution which sets
forth such establishment, designation or change."
3. With the exception of the amendment to Section 2.3 of the
Agreement as set forth in paragraph 2 of this Amendment, the Agreement, as
amended, shall in all other respects remain in full force and effect.
<PAGE> 2
4. This Amendment may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same Amendment.
IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this Third Amendment to Agreement and Declaration of Trust
of Short-Term Investments Trust as of the date first above written.
- ------------------------- ----------------------------
Charles T. Bauer Bruce L. Crockett
Trustee Trustee
- ------------------------- ----------------------------
Owen Daly, II Carl Frischling
Trustee Trustee
- ------------------------- ----------------------------
Robert H. Graham John F. Kroeger
Trustee Trustee
- ------------------------- ----------------------------
Lewis F. Pennock Ian W. Robinson
Trustee Trustee
- -------------------------
Louis S. Sklar
Trustee
[THIS IS THE SIGNATURE PAGE FOR
THE THIRD AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST
OF SHORT-TERM INVESTMENTS TRUST]
2
<PAGE> 1
EXHIBIT 2(c)
SHORT-TERM INVESTMENTS TRUST
B Y - L A W S
Capitalized terms not specifically defined herein
shall have the meanings ascribed to them in the
Agreement and Declaration of Trust.
ARTICLE I
OFFICES
Section 1. The registered office of Short-Term Investments Trust (the
"Trust") shall be in the County of New Castle, State of Delaware.
Section 2. The Trust may also have offices at such other places both
within and without the State of Delaware as the Trustees may from time to time
determine or the business of the Trust may require.
ARTICLE II
TRUSTEES
Section 1. The number of Trustees shall initially be three, and
thereafter shall be such number as shall be fixed from time to time by a
majority of the Trustees; provided, however, that the number of Trustees shall
in no event be less than three nor more than twelve.
Section 2. The Trustees shall hold office during the lifetime of the
Trust, and until its termination as provided in the Agreement and Declaration
of Trust; except (a) that any Trustee may resign his trusteeship or may retire
by written instrument signed by him and delivered to the other Trustees, which
shall take effect upon such delivery or upon such later
<PAGE> 2
date as is specified therein; (b) that any Trustee may be removed at any time
by written instrument, signed by a least two-thirds of the number of Trustees
prior to such removal, specifying the date when such removal shall become
effective; (c) that any Trustee who has died, become physically or mentally
incapacitated by reason of disease or otherwise, or is otherwise unable to
serve, may be retired by written instrument signed by a majority of the other
Trustees, specifying the date of his retirement; and (d) that a Trustee may be
removed at any meeting of the shareholders of the Trust.
Section 3. In case of the declination to serve, death, resignation,
retirement or removal of a Trustee, or a Trustee is otherwise unable to serve,
or an increase in the number of Trustees, a vacancy shall occur. Whenever a
vacancy in the Trustees shall occur, until such vacancy is filled, the other
Trustees shall have all the powers hereunder and the certification of the other
Trustees of such vacancy shall be conclusive. In the case of an existing
vacancy, the remaining Trustees may fill such vacancy by appointing such other
person as they in their discretion shall see fit, or may leave such vacancy
unfilled or may reduce the number of Trustees to not less than three Trustees.
Such appointment shall be evidenced by a written instrument signed by a
majority of the Trustees in office or by resolution of the Trustees, duly
adopted, which shall be recorded in the minutes of a meeting a the Trustees,
whereupon the appointment shall take effect.
- 2 -
<PAGE> 3
An appointment of a Trustee may be made by the Trustees then in
office in anticipation of a vacancy to occur by reason of retirement,
resignation or increase in number of Trustees effective at a later date,
provided that said appointment shall become effective only at or after the
effective date of said retirement, resignation or increase in number of
Trustees. As soon as any Trustee appointed pursuant to Sections 2 and 3 of
Article II of these by-laws and the Agreement and Declaration of Trust shall
have accepted this Trust, the trust estate shall vest in the new Trustee or
Trustees, together with the continuing Trustees, without any further act or
conveyance, and he shall be deemed a Trustee hereunder.
Section 4. Any Trustee may, by power of attorney, delegate his power
for a period not exceeding six months at any one time to any other Trustee or
Trustees, provided that in no case shall less than two Trustees personally
exercise the other powers hereunder except as herein otherwise expressly
provided.
Section 5. The declination to serve, death, resignation, retirement,
removal, incapacity, or inability of the Trustees, or any one of them, shall
not operate to terminate the Trust or to revoke any existing agency created
pursuant to the terms of the Agreement and Declaration of Trust.
Section 6. The Trustees shall have exclusive and absolute control
over the trust property and over the business of the Trust to the same extent
as if the Trustees were the sole owners of the trust property and business in
their own right, but with such powers of delegation as may be permitted by the
- 3 -
<PAGE> 4
Agreement and Declaration of Trust. The Trustees shall have power to conduct
the business of the Trust and carry on its operations in any and all of its
branches and maintain offices both within and without the State of Delaware, in
any and all states of the United States of America, in the District of
Columbia, in any and all commonwealths, territories, dependencies, colonies, or
possessions of the United States of America, and in any foreign jurisdiction
and to do all such other things and execute all such instruments as they deem
necessary, proper or desirable in order to promote the interests of the Trust
although such things are not herein specifically mentioned. Any determination
as to what is in the interests of the Trust made by the Trustees in good faith
shall be conclusive. In construing the provisions of these by-laws and the
Agreement and Declaration of Trust, the presumption shall be in favor of a
grant of power to the Trustees.
MEETINGS OF THE TRUSTEES
Section 7. The Trustees of the Trust may hold meetings, both regular
and special, either within or without the State of Delaware.
Section 8. The first meeting of each newly elected Board of Trustees
shall be held at such time and place as shall be fixed by the vote of the
shareholders at the meeting causing their election. In the event of the
failure of the shareholders to fix the time or place of such first meeting of
the newly elected Board of Trustees, or in the event such meeting is not held
at the time and place so fixed by the shareholders, the
- 4 -
<PAGE> 5
meeting may be held at such time and place as shall be specified in a notice
given as hereinafter provided for special meetings of the Trustees, or as shall
be specified in a written waiver signed by all of the Trustees.
Section 9. Regular meetings of the Trustees may be held without
notice at such time and at such place as shall from time to time be determined
by the Trustees.
Section 10. Special meetings of the Trustees may be called by any
Trustee on one day's notice to each Trustee, either personally, by telephone,
by mail, by telegram or by telecopier.
Section 11. At all meetings of the Trustees a majority of Trustees
shall constitute a quorum for the transaction of business. In the event the
number of Trustees of the Trust is hereafter increased, a majority of all the
Trustees of the Trust shall constitute a quorum and the act of a majority of
the Trustees present at any meeting at which there is a quorum shall be the act
of the Board of Trustees, except as may be otherwise specifically provided by
applicable law or by the Agreement and Declaration of Trust. If a quorum shall
not be present at any meeting of the Board of Trustees, the Trustees present
thereat may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 12. Unless otherwise restricted by the Agreement and
Declaration of Trust or these by-laws, any action required or permitted to be
taken at any meeting of the Board of Trustees or of any committee thereof may
be taken without a
- 5 -
<PAGE> 6
meeting, if all members of the Board or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the board or committee.
COMMITTEES OF TRUSTEES
Section 13. In the event the number of Trustees of the Trust is
hereafter increased, the Board of Trustees may, by resolution passed by a
majority of the whole Board, designate one or more committees, each committee
to consist of three or more of the Trustees of the Trust. The Board may
designate one or more Trustees as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of such committee.
Any such committee, to the extent provided in the resolution, shall have and
may exercise the powers of the Board of Trustees in the management of the
business and affairs of the Trust; provided, however, that in the absence or
disqualification of any member of such committee or committees, the member or
members thereof present at any meeting and not disqualified from voting,
whether or not such members constitute a quorum, may unanimously appoint
another member of the Board of Trustees to act at the meeting in the place of
any such absent or disqualified member. Such committee or committees shall
have such name or names as may be determined from time to time by resolution
adopted by the Board of Trustees.
Section 14. Each committee shall keep regular minutes of its
meetings and report the same to the Board of Trustees when required.
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<PAGE> 7
COMPENSATION OF TRUSTEES
Section 15. The Trustees as such shall be entitled to reasonable
compensation from the Trust; they may fix the amount of their compensation.
Nothing herein shall in any way prevent the employment of any Trustee for
advisory, management, administrative, legal, accounting, investment banking,
underwriting, brokerage, or investment dealer or other services and the payment
for the same by the Trust.
ARTICLE III
MEETINGS OF SHAREHOLDERS
Section 1. All meetings of the shareholders for the election of
Trustees shall be held at such place as may be fixed from time to time by the
Trustees, or at such other place either within or without the State of Delaware
as shall be designated from time to time by the Trustees and stated in the
notice indicating that a meeting has been called for such purpose. Meetings of
shareholders may be held for any of the other following purposes and may be
held at such time and place, within or without the State of Delaware as shall
be stated in the notice of the meeting or in a duly executed waiver of notice
thereof: (a) to remove Trustees, (b) to terminate the Trust or any Portfolio or
Class, unless, as of the date on which the Trustees have determined to so
terminate the Trust or such Portfolio or Class, there are fewer than 100
holders of record of the Trust or of such terminating Portfolio or Class; (c)
to approve the sale of all or substantially all the assets of the Trust or of
any
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<PAGE> 8
Portfolio or Class, unless the primary purpose of such sale is to change the
Trust's domicile or form of organization or form of business trust; (d) to
approve the merger or consolidation of the Trust or any Portfolio or Class with
and into another Company, unless (i) the primary purpose of such merger or
consolidation is to change the Trust's domicile or form of organization or form
of business trust, or (ii) after giving effect to such merger or consolidation,
based on the number of shares outstanding as of a date selected by the
Trustees, the shareholders of the Trust or such Portfolio or Class will have a
majority of the outstanding shares of the surviving Company or Portfolio or
Class, as the case may be; (e) to approve any amendment to Section 6.1 of the
Agreement and Declaration of Trust of the Trust; and (f) to approve such
additional matters as may be required by law or as the Trustees, in their sole
discretion, shall determine. Shares may be voted in person or by proxy. A
proxy with respect to shares held in the name of two or more persons shall be
valid if executed by any one of them unless at or prior to exercise of the
proxy the Trust receives a specific written notice to the contrary from any one
of them. A proxy purporting to be executed by or on behalf of a shareholder
shall be deemed valid unless challenged at or prior to its exercise and the
burden of proving invalidity shall rest on the challenger. No proxy shall be
valid after the expiration of eleven months from the date thereof unless
otherwise provided in the proxy.
Section 2. All meetings of shareholders for the purpose of electing
Trustees shall be held on such date and at such time
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<PAGE> 9
as shall be designated from time to time by the Trustees and stated in the
notice of the meeting, at which the shareholders shall elect by a plurality
vote any number of Trustees as the notice for such meeting shall state are to
be elected, and transact such other business as may properly be brought before
the meeting in accordance with Section 1 of this Article III.
Section 3. Written notice of any meeting stating the place, date, and
hour of,the meeting shall be given to each shareholder entitled to vote at such
meeting not less than ten days before the date of the meeting in accordance
with Article XI hereof.
Section 4. The officer who has charge of the share ledger of
beneficial interests of the Trust shall prepare and make, at least ten days
before any meeting of shareholders, a complete list of the shareholders
entitled to vote at the meeting, arranged in alphabetical order, and showing
the address of each shareholder and the number of shares registered in the name
of each shareholder. Such list shall be open to the examination of any
shareholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting, either at a
place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced and kept at
the time and place of the meeting during the whole time thereof, and may be
inspected by any shareholder who is present.
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<PAGE> 10
Section 5. Special meetings of the shareholders, for any purpose or
purposes, unless otherwise prescribed by applicable law or by the Agreement and
Declaration of Trust, may be called by any Trustee; provided, however, that the
Trustees shall promptly call a meeting of the shareholders solely for the
purpose set forth in Article III, Section 1(a) of these by-laws, when requested
in writing so to do by the record holders of not less than ten percent of the
outstanding shares of the Trust.
Section 6. Written notice of a special meeting stating the place,
date, and hour of the meeting and the purpose or purposes for which the meeting
is called, shall be given not less than ten days before the date of the
meeting, to each shareholder entitled to vote at such meeting.
Section 7. Business transacted at any special meeting of shareholders
shall be limited to the purpose stated in the notice.
Section 8. The holders of one-third of the shares of beneficial
interests that are issued and outstanding and entitled to vote thereat, present
in person or represented by proxy, shall constitute a quorum at all meetings of
the shareholders for the transaction of business except as otherwise provided
by applicable law or by the Agreement and Declaration of Trust. if, however,
such quorum shall not be present or represented at any meeting of the
shareholders, the shareholders entitled to vote thereat, present in person or
represented by proxy, shall have power to adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be
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<PAGE> 11
present or represented. At such adjourned meeting, at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
Section 9. When a quorum is present at any meeting, the vote of the
holders of a majority of the shares having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one on which by express provision of applicable law, the
Agreement and Declaration of Trust or these by-laws, a different vote is
required in which case such express provision shall govern and control the
decision of such question.
Section 10. Each whole share shall be entitled to one vote, and each
fractional share shall be entitled to a proportionate fractional vote. On any
matter submitted to a vote of the shareholders, all shares shall be voted
together, except when required by applicable law or when the Trustees have
determined that the matter affects the interests of one or more Portfolios (or
Classes), then only the shareholders of such Portfolios (or Classes) shall be
entitled to vote thereon.
Section 11. Unless otherwise provided in the Agreement and
Declaration of Trust or applicable law, any action required to be taken at any
meeting of shareholders of the Trust, or any action which may be taken at any
meeting of such shareholders, may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the holders of outstanding shares
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<PAGE> 12
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted. Prompt notice of the taking of any such action
without a meeting by less than unanimous written consent shall be given to
those shareholders who have not consented in writing.
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of applicable law or of the
Agreement and Declaration of Trust or of these by-laws, notice is required to
be given to any Trustee or shareholder, it shall not, unless otherwise provided
herein, be construed to mean personal notice, but such notice may be given by
telephone (promptly confirmed in writing) or in writing, by mail, addressed to
such Trustee or shareholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to
be given at the time when the same shall be deposited in the United States
mail. Notice to Trustees may also be given by telegram or telecopier.
Section 2. Whenever any notice is required to be given under the
provisions of applicable 'Law or of the Agreement and Declaration of Trust or
of these by-laws, a waiver '.-hereof in writing, signed by the person or
persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto.
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<PAGE> 13
ARTICLE V
CERTIFICATES OF SHARES
Section 1. Upon request, every holder of shares in the Trust shall be
entitled to have a certificate, signed by, or in the name of the Trust by, a
Trustee, certifying the number of shares owned by him in the Trust.
Section 2. Where a certificate is countersigned (1) by a transfer
agent other than the Trust or its employee, or, (2) by a registrar other than
the Trust or its employee, the signature of the Trustee may be a facsimile.
LOST CERTIFICATES
Section 3. The Board of Trustees may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the Trust alleged to have been lost, stolen or destroyed,
upon the making of an affidavit of the fact by the person claiming the
certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the Board of Trustees may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall require
and/or to give the Trust a bond in such sum as it may direct as indemnity
against any claim that may be made against the Trust with respect to the
certificate alleged to have been lost, stolen or destroyed.
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<PAGE> 14
TRANSFERS OF SHARES
Section 4. The Trustees shall make such rules as they consider
appropriate for the transfer of shares and similar matters. To the extent
certificates are issued in accordance with Section 1 of this Article V, upon
surrender to the Trust or the transfer agent of the Trust of such certificate
for shares duly endorsed or accompanied by proper evidence of succession,
assignment or authority to transfer, it shall be the duty of the Trust to issue
a new certificate to the person entitled thereto, cancel the old certificate
and record the transaction upon its books.
FIXING RECORD DATE
Section 5. In order that the Trustees may determine the shareholders
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof, or to express consent to action in writing without a
meeting, or entitled to receive payment of any dividend or other distribution
of allotment of any rights, or entitled to exercise any rights in respect of
any change, conversion or exchange of beneficial interests or for the purpose
of any other lawful action, the Board of Trustees may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Trustees, and which record date shall
not be more than ninety nor less than ten days before the date of such meeting,
nor more than ten days after the date upon which the resolution fixing the
record date is adopted by the Board of Trustees for
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<PAGE> 15
action by shareholder consent in writing without a meeting, nor more than
ninety days prior to any other action. A determination of shareholders of
record entitled to notice of or to vote at a meeting of shareholders shall
apply to any adjournment of the meeting; provided, however, that the Board of
Trustees may fix a new record date for the adjourned meeting.
REGISTERED SHAREHOLDERS
Section 6. The Trust shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice hereof, except as otherwise provided by the laws of
Delaware.
ARTICLE VI
GENERAL PROVISIONS
DISTRIBUTIONS AND REDEMPTIONS
Section 1. The Trustees may from time to time declare and pay
dividends and make other distributions with respect to any Portfolio, or Class
thereof, which may be from income, capital gains or capital. The amount of
such dividends or distributions and the payment of them and whether they are in
cash or any other Trust Property shall be wholly in the discretion of the
Trustees.
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<PAGE> 16
Section 2. Any holder of record of shares of a particular Portfolio,
or Class thereof, shall have the right to require the Trust to redeem his
shares, or any portion thereof, subject to the terms and conditions set forth
in the registration statement in effect from time to time.
The redemption price may in any case or cases be paid wholly or
partly in kind if the Trustees determine that such payment is advisable in the
interest of the remaining shareholders of the Portfolio or Class thereof for
which the share are being redeemed. Subject to the foregoing, the fair value,
selection and quantity of securities or other property so paid or delivered as
all or part of the redemption price may be determined by or under authority of
the Trustees. In no case shall the Trust be liable for any delay of any
corporation or other Person in transferring securities selected for delivery as
all or part of any payment in kind.
The Trustees may, at their option, and at any time, have the right to
redeem shares of any shareholder of a particular Portfolio or Class thereof in
accordance with Section 2 of this Article VI. The Trustees may refuse to
transfer or issue shares to any person to the extent that the same is necessary
to comply with applicable law or advisable to further the purposes for which
the Trust is formed.
If, at any time when a request for transfer or redemption of shares
of any Portfolio is received by the Trust or its agent, the value of the shares
of such Portfolio in a shareholder's account is less than Five Hundred Dollars
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<PAGE> 17
($500.00), after giving effect to such transfer or redemption, the Trust may
cause the remaining shares of such Portfolio in such shareholder's account to
be redeemed in accordance with such procedures set forth above.
INDEMNIFICATION
Section 3. Every person who is, or has been, a Trustee or officer of
the Trust shall be indemnified by the Trust to the fullest extent permitted by
the Delaware Business Trust Act, these by-laws and other applicable law.
SEAL
Section 4. The business seal shall have inscribed thereon the name of
the business trust, the year of its organization and the words "Business Seal,
Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
ARTICLE VII
AMENDMENTS
Section 1. These by-laws may be altered or repealed at any regular
or special meeting of the Board of Trustees. These by-laws may also be altered
or repealed at any special meeting of the shareholders, but only if the Board
of Trustees resolves to put a proposed alteration or repealer to the vote of
the shareholders and notice of such alteration or repealer is contained in a
notice of the special meeting being held for such purpose.
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<PAGE> 1
EXHIBIT 2(d)
AMENDMENT TO THE BY-LAWS OF
SHORT-TERM INVESTMENTS TRUST
(A DELAWARE BUSINESS TRUST)
ADOPTED DECEMBER 2, 1993
The By-Laws of Short-Term Investments Trust are hereby amended by adding
the following new Article III and renumbering each Article thereafter
accordingly:
ARTICLE III
OFFICERS
Section 1. Executive Officers. The initial executive officers of the
Trust shall be elected by the Board of Trustees as soon as practicable after
the organization of the Trust. The executive officers may include a Chairman
of the Board, and shall include a President, one or more Vice Presidents (the
number thereof to be determined by the Board of Trustees), a Secretary and a
Treasurer. The Chairman of the Board, if any, shall be selected from among the
trustees. The Board of Trustees may also in its discretion appoint Assistant
Vice Presidents, Assistant Secretaries, Assistant Treasurers, and other
officers, agents and employees, who shall have such authority and perform such
duties as the Board may determine. The Board of Trustees may fill any vacancy
which may occur in any office. Any two (2) offices, except those of President
and Vice President, may be held by the same person, but no officer shall
execute, acknowledge or verify any instrument on behalf of the Trust in more
than one (1) capacity, if such instrument is required BY law or by these
By-Laws to be executed, acknowledged or verified by two (2) or more officers.
Section 2. Term of Office. Unless otherwise specifically determined by
the Board of Trustees, the officer's shall serve at the pleasure of the Board
of Trustees. If the Board of Trustees in its judgment finds that the best
interests of the Trust will be served, the Board of Trustees may remove any
officer of the Trust at any time with or without cause.
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<PAGE> 2
Section 3. President. The President shall be the chief executive officer
of the Trust and, subject to the Board of Trustees, shall generally manage the
business and affairs of the Trust. If there is no Chairman of the Board, or if
the Chairman of the Board has been appointed but is absent, the President
shall, if present, preside at all meetings of the shareholders and the Board of
Trustees.
Section 4. Chairman of the Board. The Chairman of the Board, if any,
shall preside at all meetings of the shareholders and the Board of Trustees, if
the Chairman of the Board is present. The Chairman of the Board shall have
such other powers and duties as shall be determined by the Board of Trustees,
and shall undertake such other assignments as may be requested by the
President.
Section 5. Other Officers. The Chairman of the Board or one or more Vice
Presidents shall have and exercise such powers and duties of the President in
the absence or inability to act of the President, as may be assigned to them,
respectively, by the Board of Trustees or, to the extent not so assigned, by
the President. In the absence or inability to act of the President, the powers
and duties of the President not otherwise assigned by the Board of Trustees or
the President shall devolve upon the Chairman of the Board, or in the
Chairman's absence, the Vice Presidents in the order of their election.
Section 6. Secretary. The Secretary shall have custody of the seal of the
Trust, and shall keep the minutes of the meetings of shareholders, Board of
Trustees and any committees thereof, and shall issue all notices of the Trust.
The Secretary shall have charge of the shareholder records and such other books
and papers as the Board may direct, and shall perform such other duties as may
be incidental to the office or which are assigned by the Board of Trustees.
The Secretary shall also keep or cause to be kept a shareholder book, which may
be maintained by means of computer systems, containing the names,
alphabetically arranged, of all persons who are shareholders of the Trust,
showing their places of residence, the number and class or series of Any class
of shares of beneficial interest held by them, respectively, and the dates when
they became the record owners thereof, and such book shall be open for
inspection as prescribed by the laws of the State of Delaware.
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<PAGE> 3
Section 7. Treasurer. The Treasurer shall have the care and custody of
the funds and securities of the Trust and shall deposit the same in the name of
the Trust in such bank or banks or other depositories, subject to withdrawal in
such manner as these By-Laws or the Board of Trustees may determine. The
Treasurer shall, if required by the Board of Trustees, give such bond for the
faithful discharge of duties in such form as the Board of Trustees may require.
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<PAGE> 1
EXHIBIT 4(g)
NO. ____________ SHARES
RESOURCE CLASS
OF THE
TREASURY PORTFOLIO
OF
SHORT-TERM INVESTMENTS TRUST
A DELAWARE BUSINESS TRUST
SEE REVERSE SIDE FOR
CERTAIN DEFINITIONS
THIS CERTIFIES THAT:
CUSIP
is the holder of
FULLY-PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL INTEREST OF THE PAR
VALUE OF $0.01 PER SHARE
Shares of Beneficial Interest of the above named Class of SHORT-TERM
INVESTMENTS TRUST are transferable on the books of the Trust by the holder
hereof in person or by duly authorized Attorney upon surrender of this
Certificate properly endorsed. This certificate is not valid until
countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Trust and the facsimile signatures
of its duly authorized officers.
Dated Countersigned:
AIM INSTITUTIONAL FUND
SERVICES, INC.
Transfer Agent
[SEAL] (Houston, Texas)
/s/ Robert H. Graham )
President )
)
) FOR THE DIRECTORS
) By
/s/ Carol F. Relihan ) ------------------------
Secretary ) Authorized Signature
<PAGE> 2
The Corporation will furnish to any stockholder upon request and without charge
a full statement of the designations and any preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, terms and conditions of redemption of the stock or each class
which the Corporation is authorized to issue, differences in the relative rights
and preferences between the shares of each series to the extent they have been
set, and authority of the Board of Directors to set the relative rights and
preferences of each series.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -as tenants in common
TEN ENT -as tenants by the entireties
JT TEN -as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT- ____________ Custodian ___________ under Uniform Gifts
(Cust) (Minor)
to Minors Act _______________________
(State)
Additional abbreviations may also be used though not in the above list.
For value received, ___________________________ hereby sell, assign and transfer
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
unto /____________________________________/ _________________________________
Please print or type name and address including zip code of assignee.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
_________________________________________________________________________ shares
of common stock represented by the within certificate, and hereby irrevocably
constitute and appoint _________________________________________________________
______________________________________________________________________ attorney
to transfer the said shares on the books of the within mentioned Corporation
with full power of substitution in the premises.
Dated ______________________________________
____________________________________________
Signature guaranteed: ______________________
Acceptable guarantors include banks, brokers-dealers, credit unions,
national securities exchanges, savings associations and any other organization,
provided that such institution or organization qualifies as an "eligible
guarantor institution" as that term is defined in rules adopted by the
Securities and Exchange Commission, and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the New York Stock Exchange Medallion
Signature Program, provided that in either event, the amount of the transaction
involved does not exceed the surety coverage amount indicated on the medallion.
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the certificate, in every particular, without
alteration or enlargement, or any change whatever.
<PAGE> 1
MASTER DISTRIBUTION AGREEMENT EXHIBIT 6(m)
BETWEEN
SHORT-TERM INVESTMENTS TRUST
AND
FUND MANAGEMENT COMPANY
THIS AGREEMENT is made this 18th day of October, 1993, by and between
SHORT-TERM INVESTMENTS TRUST, a Delaware business trust (hereinafter referred
to as the "Company"), and FUND MANAGEMENT COMPANY, a Texas corporation,
(hereinafter referred to as the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt whereof is hereby acknowledged,
the parties hereto agree as follows:
FIRST: The Company hereby appoints the Distributor as its exclusive
agent for the sale of the shares set forth in Appendix A attached hereto (the
"Shares") of the Company to the public through investment dealers in the United
States and throughout the world in accordance with the terms of the Company's
current prospectus applicable to the Shares.
SECOND: The Company shall not sell any Shares except through the
Distributor and under the terms and conditions set forth in paragraph FOURTH
below. Notwithstanding the provisions of the foregoing sentence, however,
(A) the Company may issue Shares of one or more classes of its shares
of beneficial interest to any other investment company or personal holding
company, or to the shareholders thereof, in exchange for all or a majority of
the shares or assets of any such company; and
(B) the Company may issue Shares at their net asset value in
connection with certain categories of transactions or to certain categories of
persons, in accordance with Rule 22d-1 under the Investment Company Act of
1940, as amended (the "1940 Act"), provided that any such category is specified
in the then current prospectuses of the Company.
THIRD: The Distributor hereby accepts appointment as exclusive agent
for the sale of the Shares and agrees that it will use its best efforts to sell
such Shares; provided, however, that:
(A) the Distributor may, and when requested by the Company shall,
suspend its efforts to effectuate such sales at any time when, in the opinion
of the Distributor or of the Company, no sales should be made because of market
or other economic considerations or abnormal circumstance of any kind; and
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<PAGE> 2
(B) the Company may withdraw the offering of the Shares (i) at any
time with the consent of the Distributor, or (ii) without such consent when so
required by the provisions of any statute or of any order, rule or regulation
of any governmental body having jurisdiction. It is mutually understood and
agreed that the Distributor does not undertake to sell any specific amount of
the Shares. The Company shall have the right to specify minimum amounts for
initial and subsequent orders for the purchase of Shares.
FOURTH:
(A) The public offering price of Shares of the Company (the "offering
price") shall be the net asset value per Share. Net asset value per Share
shall be determined in accordance with the provisions of the then current
Shares' prospectus and statement of additional information.
(B) No provision of this Agreement shall be deemed to prohibit any
payments by the Company to the Distributor or by the Company or the Distributor
or to investment dealers through whom the Shares are sold where such payments
are made under a distribution plan adopted by the Company, on behalf of the
applicable Shares, pursuant to Rule 12b-1 under the 1940 Act and approved by
the Company's trustees and by the holders of the Shares in a manner consistent
with such rule.
FIFTH: The Distributor shall act as agent of the Company in
connection with the sale and repurchase of Shares of the Company. Except with
respect to such sales and repurchases, the Distributor shall act as principal
in all matters relating to the promotion of the sale of Shares of the Company
and shall enter into all of its own engagements, agreements and contracts as
principal on its own account. The Distributor shall enter into Selling Group
Agreements with investment dealers selected by the Distributor, authorizing
such investment dealers to offer and sell Shares of the Company to the public
upon the terms and conditions set forth therein, which shall not be
inconsistent with the provisions of this Agreement. Each Selling Group
Agreement shall provide that the investment dealer shall act as a principal,
and not as an agent of the Company.
SIXTH: The Company shall bear
(A) the expenses of qualification of the Shares for sale in connection
with such public offerings in such states as shall be selected by the
Distributor and of continuing the qualification therein until the Distributor
notifies the Company that it does not wish such qualification continued; and
(B) all legal expenses in connection with the foregoing.
SEVENTH: The Distributor shall bear
(A) the expenses of printing from the final proof and distributing
prospectuses and statements of additional information (including supplements
thereto) of the Company relating to the Shares in connection with public
offerings made by the Distributor pursuant to this Agreement
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<PAGE> 3
(which shall not include those prospectuses and statements of additional
information, and supplements thereto, to be distributed to shareholders by the
Company), and any other promotional or sales literature used by the Distributor
or furnished by the Distributor to dealers in connection with such public
offerings; and
(B) expenses of advertising in connection with such public offerings;
provided however, that the Distributor may be reimbursed for all or a portion
of the expenses described in sections (A) and (B) of this paragraph, or may
receive reasonable compensation for distribution related services, to the
extent permitted by a distribution plan adopted by the Company pursuant to Rule
12b-1 under the 1940 Act.
EIGHTH: The Distributor will accept orders for the purchase of Shares
only to the extent of purchase orders actually received and not in excess of
such orders, and it will not avail itself of any opportunity of making a
profit by expediting or withholding orders. It is mutually understood and
agreed that the Company may reject purchase orders where, in the judgment of
the Company, such rejection is in the best interest of the Company.
NINTH: The Company and the Distributor shall each comply with all
applicable provisions of the 1940 Act, the Securities Act of 1933 and of all
other federal and state laws, rules and regulations governing the issuance and
sale of the Shares.
TENTH:
(A) In absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties hereunder on the part of the
Distributor, the Company agrees to indemnify the Distributor against any and
all claims, demands, liabilities and expenses which the Distributor may incur
under the Securities Act of 1933, or common law or otherwise, arising out of or
based upon any alleged untrue statement of a material fact contained in any
registration statement or prospectuses of the Company, or any omission to state
a material fact therein, the omission of which makes any statement contained
therein misleading, unless such statement or omission was made in reliance
upon, and in conformity with, information furnished to the Company in
connection therewith by or on behalf of the Distributor. The Distributor
agrees to indemnify the Company against any and all claims, demands,
liabilities and expenses which the Company may incur arising out of or based
upon any act or deed of the Distributor or its sales representatives which has
not been authorized by the Company in its prospectuses or in this Agreement.
(B) The Distributor agrees to indemnify the Company against any and
all claims, demands, liabilities and expenses which the Company may incur under
the Securities Act of 1933, or common law or otherwise, arising out of or based
upon any alleged untrue statement of a material fact contained in any
registration statement or prospectuses of the Company, or any omission to state
a material fact therein if such statement or omission was made in reliance
upon, and in conformity with, information furnished to the Company in
connection therewith by or on behalf of the Distributor.
-3-
<PAGE> 4
(C) Notwithstanding any other provision of this Agreement, the
Distributor shall not be liable for any errors of the Company's transfer agent
or for any failure of such transfer agent to perform its duties.
ELEVENTH: Nothing herein contained shall require the Company to take
any action contrary to any provision of its charter or to any applicable
statute or regulation.
TWELFTH: This Agreement shall become effective at the close of
business on the date hereof, shall continue until June 30, 1994, and shall
continue in force and effect from year to year thereafter, provided, that such
continuance is specifically approved at least annually (a)(i) by the Board of
Trustees of the Company, or (ii) by the vote of a majority of the Company's
outstanding voting securities (as defined in Section 2(a)(42) of the Investment
Company Act), and (b) by vote of a majority of the Company's trustees who are
not parties to this Agreement or "interested persons" (as defined in Section
2(a)(19) of the Investment Company Act) of any party to this Agreement cast in
person at a meeting called for such purpose.
THIRTEENTH:
(A) This Agreement may be terminated at any time, without the payment
of any penalty, by vote of the Board of Trustees of the Company or by vote of a
majority of the outstanding voting securities of the Company, or by the
Distributor, on sixty (60) days' written notice to the other party.
(B) This Agreement shall automatically terminate in the event of its
assignment, the term "assignment" having the meaning as defined in Section
2(a)(4) of the Investment Company Act.
FOURTEENTH: Any notice under this Agreement shall be in writing,
addressed and delivered, or mailed, postage paid, to the other party at such
address as such other party may designate for the receipt of such notices.
Until further notice to the other party, it is agreed that the address of both
the Company and the Distributor shall be Eleven Greenway Plaza, Suite 1919,
Houston, Texas 77046.
-4-
<PAGE> 5
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate as of the day and year first above written.
SHORT-TERM INVESTMENTS TRUST
By: /s/ CHARLES T. BAUER
---------------------------------
President
Attest:
/s/ NANCY L. MARTIN
- --------------------------
FUND MANAGEMENT COMPANY
By: /s/ CAROL F. RELIHAN
---------------------------------
President
Attest:
/s/ NANCY L. MARTIN
- --------------------------
-5-
<PAGE> 6
APPENDIX A TO
MASTER DISTRIBUTION AGREEMENT OF
SHORT-TERM INVESTMENTS TRUST
Treasury Portfolio
Institutional Class
Personal Investment Class
Private Investment Class
Cash Management Class
Treasury TaxAdvantage Portfolio
-6-
<PAGE> 1
EXHIBIT 6(n)
AMENDMENT NO. 1
MASTER DISTRIBUTION AGREEMENT
The Master Distribution Agreement (the "Agreement"), dated October 18,
1993, by and between Short-Term Investments Trust, a Delaware business trust,
and Fund Management Company, a Texas corporation, is hereby amended as follows:
Appendix A of the Agreement is hereby deleted in its entirety and
replaced with the following:
"APPENDIX A
Treasury Portfolio
Institutional Class
Personal Investment Class
Private Investment Class
Cash Management Class
Treasury TaxAdvantage Portfolio
Institutional Class
Private Investment Class"
All other terms and provisions of the Agreement not amended herein
shall remain in full force and effect.
Dated: December 8, 1994
SHORT-TERM INVESTMENTS TRUST
Attest: /s/ STEPHEN I. WINER By: /s/ ROBERT H. GRAHAM
----------------------------- --------------------------------
Assistant Secretary President
(SEAL)
FUND MANAGEMENT COMPANY
Attest: /s/ STEPHEN I. WINER By: /s/ J. ABBOTT SPRAGUE
----------------------------- --------------------------------
Assistant Secretary President
(SEAL)
<PAGE> 1
EXHIBIT 6(o)
AMENDMENT NO. 2
MASTER DISTRIBUTION AGREEMENT
The Master Distribution Agreement (the "Agreement"), dated October 18,
1993, as amended December 8, 1994, by and between Short-Term Investments Trust,
a Delaware business trust, and Fund Management Company, a Texas corporation, is
hereby amended as follows:
Appendix A of the Agreement is hereby deleted in its entirety and
replaced with the following:
"APPENDIX A
Treasury Portfolio
Institutional Class
Personal Investment Class
Private Investment Class
Cash Management Class
Resource Class
Treasury TaxAdvantage Portfolio
Institutional Class
Private Investment Class"
All other terms and provisions of the Agreement not amended herein
shall remain in full force and effect.
Dated: ______________________, 1995
SHORT-TERM INVESTMENTS TRUST
Attest: By:
---------------------------- ---------------------------------
Assistant Secretary President
(SEAL)
FUND MANAGEMENT COMPANY
Attest: By:
---------------------------- ---------------------------------
Assistant Secretary President
(SEAL)
<PAGE> 1
EXHIBIT 9(c)
TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
SHORT-TERM INVESTMENTS TRUST
AND
A I M INSTITUTIONAL FUND SERVICES, INC.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE I TERMS OF APPOINTMENT; DUTIES OF THE TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2 FEES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 5 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 6 COVENANTS OF THE FUND AND THE TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 7 TERMINATION OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 8 ADDITIONAL FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 9 ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 10 AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 11 TEXAS LAW TO APPLY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 12 MERGER OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 13 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 14 NO PERSONAL LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
</TABLE>
<PAGE> 3
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 16th day of September, 1994, by and between
SHORT-TERM INVESTMENTS TRUST, a Delaware business trust having its principal
office and place of business at 11 Greenway Plaza, Suite 1919, Houston, Texas
77046 (the "Fund"), and A I M Institutional Fund Services, Inc., a Delaware
corporation having its principal office and place of business at 11 Greenway
Plaza, Suite 1919, Houston, Texas 77046 (the "Transfer Agent").
WHEREAS, the Transfer Agent is registered as such with the Securities
and Exchange Commission (the "SEC"); and
WHEREAS, the Fund is authorized to issue shares in separate series and
classes, with each such series representing interests in a separate portfolio
of securities and other assets and each such class having different
distribution arrangements; and
WHEREAS, the Fund on behalf of each class of each of the portfolios
thereof (the "Portfolios") desires to appoint the Transfer Agent as its
transfer agent, and agent in connection with certain other activities, with
respect to the Portfolios, and the Transfer Agent desires to accept such
appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I
TERMS OF APPOINTMENT; DUTIES OF THE TRANSFER AGENT
1.01 Subject to the terms and conditions set forth in this
Agreement, the Fund hereby employs and appoints the Transfer Agent to act as,
and the Transfer Agent agrees to act as, its transfer agent for the authorized
and issued shares of beneficial interest of the Fund representing interests in
each class of each of the respective Portfolios ("Shares"), dividend disbursing
agent, and agent in connection with any accumulation or similar plans provided
to shareholders of each of the Portfolios (the "Shareholders"), including
without limitation any periodic investment plan or periodic withdrawal program,
as provided in the currently effective prospectus and statement of additional
information (the "Prospectus") of the Fund on behalf of the Portfolios.
1.02 The Transfer Agent agrees that it will perform the following
services:
(a) The Transfer Agent shall, in accordance with procedures
established from time to time by agreement between the Fund on behalf of each
of the Portfolios, as applicable, and the Transfer Agent:
(i) receive for acceptance, orders for the purchase of
Shares, and promptly deliver payment and appropriate
documentation thereof to the Custodian of the Fund
authorized pursuant to the Agreement and Declaration
of Trust and By-Laws of the Fund (the "Custodian");
(ii) pursuant to purchase orders, issue the appropriate
number of Shares and hold such Shares in the
appropriate Shareholder account;
1
<PAGE> 4
(iii) receive for acceptance redemption requests and
redemption directions and deliver the appropriate
documentation thereof to the Custodian;
(iv) at the appropriate time as and when it receives
monies paid to it by the Custodian with respect to
any redemption, pay over or cause to be paid over in
the appropriate manner such monies as instructed by
the Fund;
(v) effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions;
(vi) prepare and transmit payments for dividends and
distributions declared by the Fund on behalf of the
Shares;
(vii) maintain records of account for and advise the Fund
and its Shareholders as to the foregoing; and
(viii) record the issuance of Shares of the Fund and
maintain pursuant to SEC Rule 17Ad-1O(e) a record of
the total number of Shares which are authorized,
based upon data provided to it by the Fund, and
issued and outstanding.
The Transfer Agent shall also provide the Fund on a regular basis with
the total number of Shares which are authorized and issued and outstanding but
shall have no obligation, when recording the issuance of Shares, to monitor the
issuance of such Shares or to take cognizance of any laws relating to the issue
or sale of such Shares, which function shall be the sole responsibility of the
Fund.
(b) In addition to the services set forth in the above paragraph
(a), the Transfer Agent shall: (i) perform the customary services of a transfer
agent, including but not limited to: maintaining all Shareholder accounts,
mailing Shareholder reports and prospectuses to current Shareholders, preparing
and mailing confirmation forms and statements of accounts to Shareholders for
all purchases and redemptions of Shares and other confirmable transactions in
Shareholder accounts, preparing and mailing activity statements for
Shareholders, and providing Shareholder account information.
(c) Procedures as to who shall provide certain of these services
in Article 1 may be established from time to time by agreement between the Fund
on behalf of each Portfolio and the Transfer Agent. The Transfer Agent may at
times perform only a portion of these services and the Fund or its agent may
perform these services on the Fund's behalf.
ARTICLE 2
FEES AND EXPENSES
2.01 For performance by the Transfer Agent pursuant to this
Agreement, the Fund agrees on behalf of each of the Portfolios to pay the
Transfer Agent such fees as may be agreed upon from time to time in a written
agreement between the Fund and the Transfer Agent.
2
<PAGE> 5
2.02 In addition to the fee paid under Section 2.01 above, the Fund
agrees to reimburse the Transfer Agent for such out-of-pocket expenses or
advances incurred by the Transfer Agent as may be agreed upon from time to time
in a written agreement between the Fund and the Transfer Agent.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT
The Transfer Agent represents and warrants to the Fund that:
3.01 It is a corporation duly organized and existing and in good
standing under the laws of the state of Delaware.
3.02 It is duly qualified to carry on its business in Delaware and
in Texas.
3.03 It is empowered under applicable laws and by its Charter and
By-Laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
3.06 It is registered as a Transfer Agent as required by the
federal securities laws.
3.07 This Agreement is a legal, valid and binding obligation to it.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund represents and warrants to the Transfer Agent that:
4.01 It is a business trust duly organized and existing and in good
standing under the laws of Delaware.
4.02 It is empowered under applicable laws and by its Agreement and
Declaration of Trust and By-Laws to enter into and perform this Agreement.
4.03 All proceedings required by said Agreement and Declaration of
Trust and By-Laws have been taken to authorize it to enter into and perform
this Agreement.
4.04 It is an open-end, management investment company registered
under the Investment Company Act of 1940, as amended.
4.05 A registration statement under the Securities Act of 1933, as
amended, on behalf of each of the Portfolios is currently effective and will
remain effective, with respect to all Shares of the Fund being offered for
sale.
3
<PAGE> 6
ARTICLE 5
INDEMNIFICATION
5.01 The Transfer Agent shall not be responsible for, and the Fund
shall on behalf of the applicable Portfolio, indemnify and hold the Transfer
Agent harmless from and against, any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liability arising out of or attributable
to:
(a) all actions of the Transfer Agent or its agents or
subcontractors required to be taken pursuant to this Agreement, provided that
such actions are taken in good faith and without negligence or willful
misconduct;
(b) the Fund's lack of good faith, negligence or willful
misconduct which arise out of the breach of any representation or warranty of
the Fund hereunder;
(c) the reliance on or use by the Transfer Agent or its agents or
subcontractors of information, records and documents or services which (i) are
received or relied upon by the Transfer Agent or its agents or subcontractors
and/or furnished to it or performed by on behalf of the Fund, and (ii) have
been prepared, maintained and/or performed by the Fund or any other person or
firm on behalf of the Fund; provided such actions are taken in good faith and
without negligence or willful misconduct;
(d) the reliance on, or the carrying out by the Transfer Agent or
its agents or subcontractors of any instructions or requests of the Fund on
behalf of the applicable Portfolio; provided such actions are taken in good
faith and without negligence or willful misconduct; or
(e) the offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such state or in
violation of any stop order or other determination or ruling by any federal
agency or any state with respect to the offer or sale of such Shares in such
state.
5.02 The Transfer Agent shall indemnify and hold the Fund harmless
from and against any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liability arising out of or attributable to any action
or failure or omission to act by the Transfer Agent as result of the Transfer
Agent's lack of good faith, negligence or willful misconduct.
5.03 At any time the Transfer Agent may apply to any officer of the
Fund for instructions, and may consult with legal counsel with respect to any
matter arising in connection with the services to be performed by the Transfer
Agent under this Agreement, and the Transfer Agent and its agents or
subcontractors shall not be liable to and shall be indemnified by the Fund on
behalf of the applicable Portfolio for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. The
Transfer Agent shall be protected and indemnified in acting upon any paper or
document furnished by or on behalf of the Fund, reasonably believed to be
genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided to the Transfer
Agent or its agents or subcontractors by machine readable input, telex, CRT
data entry or other similar means authorized by the Fund, and shall not be held
to have notice of any change of authority of any person, until receipt of
written notice thereof from the Fund.
4
<PAGE> 7
5.04 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to
the other for any damages resulting from such failure to perform or otherwise
from such causes.
5.05 Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this Agreement or for
any consequential damages arising out of any act or failure to act hereunder.
5.06 In order that the indemnification provisions contained in this
Article 5 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The
party who may be required to indemnify shall have the option to participate
with the party seeking indemnification in the defense of such claim. The party
seeking indemnification shall in no case confess any claim or make any
compromise in any case in which the other party may be required to indemnify it
except with the other party's prior written consent.
ARTICLE 6
COVENANTS OF THE FUND AND THE TRANSFER AGENT
6.01 The Fund shall, upon request, on behalf of each of the
Portfolios promptly furnish to the Transfer Agent the following:
(a) a certified copy of the resolution of the Board of Trustees of
the Fund authorizing the appointment of the Transfer Agent and the execution
and delivery of this Agreement; and
(b) a copy of the Agreement and Declaration of Trust and By-Laws
of the Fund and all amendments thereto.
6.02 The Transfer Agent shall keep records relating to the services
to be performed hereunder, in the form and manner as it may deem advisable. To
the extent required by Section 31 of the Investment Company Act of 1940, as
amended, and the Rules thereunder, the Transfer Agent agrees that all such
records prepared or maintained by the Transfer Agent relating to the services
to be performed by the Transfer Agent hereunder are the property of the Fund
and will be preserved, maintained and made available in accordance with such
Section and Rules, and will be surrendered promptly to the Fund on and in
accordance with its request.
6.03 The Transfer Agent and the Fund agree that all books, records,
information and data pertaining to the business of the other party which are
exchanged or received pursuant to the negotiation or the carrying out of this
Agreement shall remain confidential, and shall not be voluntarily disclosed to
any other person, except as may be required by law.
6.04 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, the Transfer Agent will endeavor to notify the
Fund and to secure instructions from an authorized officer of the Fund as to
such inspection. The Transfer Agent reserves the right, however, to exhibit
the Shareholder records to any person whenever it is advised by its counsel
that it may be held liable for the failure to exhibit the Shareholder records
to such person.
5
<PAGE> 8
ARTICLE 7
TERMINATION OF AGREEMENT
7.01 This Agreement may be terminated by either party upon sixty
(60) days written notice to the other.
7.02 Should the Fund exercise its right to terminate this
Agreement, all out-of-pocket expenses associated with the movement of records
and material will be borne by the Fund on behalf of the applicable
Portfolio(s). Additionally, the Transfer Agent reserves the right to charge
for any other reasonable expenses associated with such termination and/or a
charge equivalent to the average of three (3) months' fees.
ARTICLE 8
ADDITIONAL FUNDS
8.01 In the event that the Fund establishes one or more series of
Shares in addition to the Portfolios with respect to which it desires to have
the Transfer Agent render services as transfer agent under the terms hereof, it
shall so notify the Transfer Agent in writing, and if the Transfer Agent agrees
in writing to provide such services, such series of Shares shall become a
Portfolio hereunder.
ARTICLE 9
ASSIGNMENT
9.01 Except as provided in Section 9.03 below, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party.
9.02 This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and assigns.
9.03 The Transfer Agent may, without further consent on the part of
the Fund, subcontract for the performance hereof with any entity which is duly
registered as a transfer agent pursuant to Section 17A(c)(1) of the Securities
Exchange Act of 1934 as amended ("Section 17A(c)(1)"); provided, however, that
the Transfer Agent shall be as fully responsible to the Fund for the acts and
omissions of any subcontractor as it is for its own acts and omissions.
ARTICLE 10
AMENDMENT
10.01 This Agreement may be amended or modified by a written
agreement executed by both parties and authorized or approved by a resolution
of the Board of Trustees of the Fund.
ARTICLE 11
TEXAS LAW TO APPLY
11.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Texas.
6
<PAGE> 9
ARTICLE 12
MERGER OF AGREEMENT
12.01 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
ARTICLE 13
COUNTERPARTS
13.01 This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
ARTICLE 14
NO PERSONAL LIABILITY
14.01 Notice is hereby given that this Agreement is executed on
behalf of the Fund, by officers of the Fund as officers and not individually
and that the obligations of or arising out of this Agreement are not binding
upon any of the trustees, officers, shareholders, employees or agents of the
Fund individually but are binding only upon the assets and property of the
Fund.
7
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf by and through their duly
authorized officers, as of the day and year first above written.
SHORT-TERM INVESTMENTS TRUST
By: /s/ ROBERT H. GRAHAM
----------------------------------
President
ATTEST:
/s/ STEPHEN I. WINER
- -----------------------------
Assistant Secretary
A I M INSTITUTIONAL FUND SERVICES, INC.
By: /s/ J. ABBOTT SPRAGUE
-----------------------------------
President
ATTEST:
/s/ STEPHEN I. WINER
- -----------------------------
Assistant Secretary
8
<PAGE> 1
EXHIBIT 9(d)
AMENDMENT NO. 1
TRANSFER AGENCY AND SERVICE AGREEMENT
The Transfer Agency and Service Agreement (the "Agreement"), dated
September 16, 1994, by and between Short-Term Investments Trust, a Delaware
business trust and A I M Institutional Fund Services, Inc., a Delaware
corporation, is hereby amended as follows (terms used herein but not otherwise
defined herein have the meaning ascribed them in the Agreement):
1) Section 2.01 of the Agreement is hereby deleted in its entirety and
replaced with the following: "For performance by the Transfer Agent pursuant
to this Agreement, the Fund agrees on behalf of each of the Portfolios to pay
the Transfer Agent an annual fee in the amount of .007% of average daily net
assets, payable monthly. Such fee may be changed from time to time subject to
mutual written agreements between the Fund and the Transfer Agent."
2) Section 2.02 of the Agreement is hereby deleted in its entirety and
replaced with the following: "The Fund agrees on behalf of each of the
Portfolios to pay all fees following the mailing of a billing notice."
All other terms and provisions of the Agreement not amended herein
shall remain in full force and effect.
Dated: July 1, 1995
SHORT-TERM INVESTMENTS TRUST
Attest: /s/ STEPHEN I. WINER By: /s/ ROBERT H. GRAHAM
------------------------- -----------------------------------
Assistant Secretary Robert H. Graham
President
(SEAL)
A I M INSTITUTIONAL FUND SERVICES, INC.
Attest: /s/ STEPHEN I. WINER By: /s/ J. ABBOTT SPRAGUE
------------------------- -----------------------------------
Assistant Secretary J. Abbott Sprague
President
(SEAL)
<PAGE> 1
EXHIBIT 9(i)
MASTER ADMINISTRATIVE SERVICES AGREEMENT
ADMINISTRATIVE SERVICES AGREEMENT (the "Agreement"), dated as of the 18th
day of October, 1993 by and between A I M ADVISORS, INC., a Delaware
corporation (the "Administrator"), and SHORT-TERM INVESTMENTS TRUST, a Delaware
trust (the "Company"), with respect to the separate series set forth from time
to time in Appendix A to this Agreement (the "Portfolios").
WITNESSETH:
WHEREAS, the Company is an open-end investment company registered under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Company, on behalf of the Portfolios, has retained the
Administrator to provide investment advisory services pursuant to a Master
Investment Advisory Agreement which provides that the Administrator may perform
(or arrange for the performance of) accounting, shareholder servicing and other
administrative services as well as investment advisory services to the
Portfolios, and that the Administrator may receive reasonable compensation or
may be reimbursed for its costs in providing such additional services, upon the
request of the Board of Trustees and upon a finding by the Board of Trustees
that the provision of such services is in the best interests of the Portfolios
and their shareholders; and
WHEREAS, the Board of Trustees has found that the provision of such
administrative services is in the best interest of the Portfolios and their
shareholders, and has requested that the Administrator perform such services;
NOW, THEREFORE, the parties hereby agree as follows:
1. The Administrator hereby agrees to provide, or arrange for the
provision of, any or all of the following services by the Administrator or its
affiliates:
(a) the services of a principal financial officer of the Company
(including related office space, facilities and equipment) whose normal
duties consist of maintaining the financial accounts and books and records
of the Company and the Portfolios, including the review of daily net asset
value calculations and the preparation of tax returns; and the services
(including related office space, facilities and equipment) of any of the
personnel operating under the direction of such principal financial
officer,
(b) the services of staff to respond to shareholder inquiries
concerning the status of their accounts; providing assistance to
shareholders in exchanges among the mutual funds managed or advised by the
Administrator, changing account designations or changing addresses;
assisting in the purchase or redemption of shares of the Portfolios;
supervising the operations of the custodian(s), transfer agent(s) or
dividend agent(s) for the Portfolios; or otherwise providing services to
shareholders of the Portfolios; and
(c) such other administrative services as may be furnished from time
to time by the Administrator to the Company or the Portfolios at the
request of the Company's Board of Trustees.
2. The services provided hereunder shall at all times be subject to the
direction and supervision of the Company's Board of Trustees.
3. As full compensation for the services performed and the facilities
furnished by or at the direction of the Administrator, the Portfolios shall
reimburse the Administrator for expenses incurred by them or their affiliates
in accordance with the methodologies established from time to time by the
Company's Board of Trustees. Such amounts shall be paid to the Administrator
on a quarterly basis.
4. The Administrator shall not be liable for any error of judgment or for
any loss suffered by the Company or the Portfolios in connection with any
matter to which this Agreement relates, except a loss resulting from the
Administrator's willful misfeasance, bad faith or gross negligence in the
performance of its duties or from reckless disregard of its obligations and
duties under this Agreement.
5. The Company and the Administrator each hereby represent and warrant,
but only as to themselves, that each has all requisite authority to enter into,
execute, deliver and perform its obligations under this Agreement and that this
Agreement is legal, valid and binding, and enforceable in accordance with its
terms.
6. Nothing in this Agreement shall limit or restrict the rights of any
trustee, officer or employee of the Administrator who may also be a trustee,
officer or employee of the Company to engage in any other business or to
1
<PAGE> 2
devote his time and attention in part to the management or other aspects of any
business, whether of a similar or a dissimilar nature, nor limit or restrict
the right of the Administrator to engage in any other business or to render
services of any kind to any other corporation, firm, individual or association.
7. This Agreement shall continue in effect until June 30, 1994, and shall
continue in effect from year to year thereafter, provided that such continuance
is specifically approved at least annually:
(a)(i) by the Company's Board of Trustees or (ii) by the vote of a
majority of the outstanding voting securities of the Company (as defined
in Section 2(a) (42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the Company's trustees
who are not parties to this Agreement or interested persons of a party to
this Agreement, by votes cast in person at a meeting specifically called
for such purpose.
This Agreement shall terminate automatically in the event of its
assignment (as defined in Section 2 (a) (4) of the 1940 Act) or, with respect
to one or more Portfolios in the event of termination of the Master Investment
Advisory Agreement relating to such Portfolio(s) between the Company and the
Administrator.
8. This Agreement may be amended or modified with respect to one or more
Portfolios, but only by a written instrument signed by both the Company and the
Administrator.
9. Any notice or other communication required to be given pursuant to
this Agreement shall be deemed duly given if delivered or mailed by registered
mail, postage prepaid, (a) to the Administrator at Eleven Greenway Plaza, Suite
1919, Houston, Texas 77046, Attention: President, with a copy to the General
Counsel, or (b) to the Company at Eleven Greenway Plaza, Suite 1919, Houston,
Texas 77046, Attention: President, with a copy to the General Counsel.
10. This Agreement contains the entire agreement between the parties
hereto and supersedes all prior agreements, understandings and arrangements
with respect to the subject matter hereof.
11. This Agreement shall be governed by and construed in accordance with
the laws of the State of Texas.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
A I M ADVISORS, INC.
Attest:
/s/ NANCY L. MARTIN By: /s/ ROBERT H. GRAHAM
- ------------------------------------- -----------------------------------
Assistant Secretary President
(SEAL)
SHORT-TERM INVESTMENTS TRUST
Attest:
/s/ NANCY L. MARTIN By: /s/ CHARLES T. BAUER
- ------------------------------------- -----------------------------------
Assistant Secretary President
(SEAL)
2
<PAGE> 3
SHORT-TERM INVESTMENTS TRUST
APPENDIX A TO MASTER ADMINISTRATIVE SERVICES AGREEMENT
October 18, 1993
Treasury TaxAdvantage Portfolio
Institutional Class
Treasury Portfolio
Institutional Class
Private Investment Class
Personal Investment Class
Cash Management Class
3
<PAGE> 1
EXHIBIT 9(j)
AMENDMENT NO. 1
MASTER ADMINISTRATIVE SERVICES AGREEMENT
The Master Administrative Services Agreement (the "Agreement"), dated
October 18, 1993, by and between Short-Term Investments Trust, a Delaware
business trust, and A I M Advisors, Inc., a Delaware corporation, is hereby
amended as follows:
Appendix A of the Agreement is hereby deleted in its entirety and
replaced with the following:
"SHORT-TERM INVESTMENTS TRUST
APPENDIX A TO MASTER ADMINISTRATIVE SERVICES AGREEMENT
Treasury Portfolio
Institutional Class
Personal Investment Class
Private Investment Class
Cash Management Class
Resource Class
Treasury TaxAdvantage Portfolio
Institutional Class
Private Class"
All other terms and provisions of the Agreement not amended herein
shall remain in full force and effect.
Dated: , 1995
------------------------
SHORT-TERM INVESTMENTS TRUST
Attest: By:
------------------------------- --------------------------------
Assistant Secretary President
(SEAL)
A I M ADVISORS, INC.
Attest: By:
------------------------------- --------------------------------
Assistant Secretary President
(SEAL)
<PAGE> 1
Exhibit 9(o)
ADMINISTRATIVE SERVICES AGREEMENT
ADMINISTRATIVE SERVICES AGREEMENT (the "Agreement"), dated as of the
____ day of __________, 199_, by and between A I M ADVISORS, INC., a Delaware
corporation (the "Advisor"), and A I M INSTITUTIONAL FUND SERVICES, INC., a
Delaware corporation (the "Administrator"), on behalf of the Portfolios and
Classes of shares of the Funds set forth in Appendix A to this agreement (the
"Portfolios").
W I T N E S S E T H:
WHEREAS, each of the Funds listed in Appendix A hereto is an open-end
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, each of the Funds, on behalf of the Portfolios, has retained
the Advisor to provide investment advisory services pursuant to a Master
Investment Advisory Agreement which provides that the Advisor may perform
accounting, shareholder servicing and other administrative services as well as
investment advisory services to the Portfolios, and that the Advisor may
receive reasonable compensation or may be reimbursed for its costs in providing
such additional services, upon the request of the Board of Directors/Trustees
and upon a finding by the Board of Directors/Trustees that the provision of
such services is in the best interests of each Portfolio and its shareholders;
and
WHEREAS, the Advisor desires to arrange for the performance of
accounting, shareholder servicing and other administrative services with the
Administrator;
WHEREAS, the Board of Directors/Trustees has found that the provision
of such administrative services is in the best interests of the Portfolios and
their shareholders, and has requested that the Administrator perform certain of
such services;
NOW, THEREFORE, the parties hereby agree as follows:
1. The Administrator shall provide the services of staff (i) to
respond to shareholder inquiries concerning the status of their accounts, (ii)
to provide assistance to shareholders in exchanges among the mutual funds
managed or advised by the Advisor, (iii) to change account designations or
changing addresses, (iv) to assist in the purchase or redemption of the
Portfolios' shares, (v) to supervise the operations of the custodian(s),
transfer agent(s) or dividend agent(s) for the Portfolios, or (vi) to otherwise
provide services to shareholders of the Portfolios.
2. The services provided hereunder shall at all times be subject to
the direction and supervision of the Funds' Boards of Directors/Trustees.
3. As full compensation for the services performed and the
facilities furnished by or at the direction of the Administrator, the Advisor
shall reimburse the Administrator for expenses incurred by it or its affiliates
in accordance with the methodologies established from time to time
<PAGE> 2
by the Funds' Boards of Directors/Trustees with respect to the Portfolios.
Such amounts shall be paid to the Administrator on a quarterly basis.
4. The Administrator shall not be liable for any error of judgment
or for any loss suffered by the Funds or a Portfolio in connection with any
matter to which this Agreement relates, except a loss resulting from the
Administrator's willful misfeasance, bad faith or gross negligence in the
performance of its duties or from reckless disregard of its obligations and
duties under this Agreement.
5. The Advisor and the Administrator each hereby represent and
warrant, but only as to themselves, that each has all requisite authority to
enter into, execute, deliver and perform its obligations under this Agreement
and that this Agreement is legal, valid and binding, and enforceable in
accordance with its terms.
6. Nothing in this Agreement shall limit or restrict the rights of
any director, officer or employee of the Administrator who may also be a
trustee, officer or employee of the Funds to engage in any other business or to
devote his or her time and attention in part to the management or other aspects
of any business, whether of a similar or a dissimilar nature, nor limit or
restrict the right of the Administrator to engage in any other business or to
render services of any kind to any other corporation, firm, individual or
association.
7. This Agreement shall continue in effect until June 30, 1995, and
shall continue in effect from year to year thereafter; provided that such
continuance is specifically approved at least annually:
(a) (i) by each Fund's Board of Directors/Trustees or (ii) by
the vote of a majority of the outstanding voting securities of the
applicable Portfolio (as defined in Section 2(a)(42) of the 1940 Act);
and
(b) by the affirmative vote of a majority of each Fund's
directors/trustees who are not parties to this Agreement or interested
persons of a party to this Agreement, by votes cast in person at a
meeting specifically called for such purpose.
This Agreement shall terminate automatically as to a Portfolio in the
event of its assignment (as defined in Section 2(a) (4) of the 1940 Act) or in
the event of termination of the Master Investment Advisory Agreement relating
to such Portfolio between a Fund and the Advisor.
8. This Agreement may be amended or modified, but only by a written
instrument signed by both the Advisor and the Administrator.
9. Any notice or other communication required to be given pursuant
to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (a) to the Administrator at 11 Greenway
Plaza, Suite 1919, Houston, Texas 77046, Attention: President, with a copy to
the General Counsel, or (b) to the Advisor at 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046, Attention: President, with a copy to the General Counsel.
2
<PAGE> 3
10. This Agreement contains the entire agreement between the parties
hereto and supersedes all prior agreements, understandings and arrangements
with respect to the subject matter hereof.
11. This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
A I M ADVISORS, INC.
Attest: By:
--------------------- ----------------------------------
Assistant Secretary Robert H. Graham
President
(SEAL)
A I M INSTITUTIONAL FUND SERVICES, INC.
Attest: By:
--------------------- ------------------------------
Assistant Secretary J. Abbott Sprague
President
(SEAL)
3
<PAGE> 4
APPENDIX A
AIM EQUITY FUNDS, INC.
AIM Charter Fund (Institutional Class)
AIM Constellation Fund (Institutional Class)
AIM Weingarten Fund (Institutional Class)
AIM INVESTMENT SECURITIES FUNDS
Limited Maturity Treasury Portfolio (Institutional Class)
SHORT-TERM INVESTMENTS CO.
Liquid Assets Portfolio
Prime Portfolio (All Classes)
SHORT-TERM INVESTMENTS TRUST
Treasury Portfolio (All Classes)
Treasury TaxAdvantage Portfolio (All Classes)
4
<PAGE> 1
EXHIBIT 11(a)
CONSENT OF COUNSEL
SHORT-TERM INVESTMENTS TRUST
We hereby consent to the use of our name and to the references
to our firm under the caption "General Information -- Legal Counsel" in the
Prospectuses for each class of the Treasury Portfolio and each class of the
Treasury TaxAdvantage Portfolio, and under the caption "Miscellaneous
Information -- Legal Matters" in the Statements of Additional Information for
each class of said Portfolios, all of which form a part of Post-Effective
Amendment No. 28 to the Registration Statement of Short-Term Investments Trust
on Form N-1A under the Securities Act of 1933 (Reg. No. 2-58287).
BALLARD SPAHR ANDREWS & INGERSOLL
_________________________________
Ballard Spahr Andrews & Ingersoll
Philadelphia, Pennsylvania
November 1, 1995
<PAGE> 1
EXHIBIT 11(b)
INDEPENDENT AUDITORS' CONSENT
The Board of Trustees
Short-Term Investments Trust
We consent to the use of our reports on the Treasury Portfolio and Treasury
TaxAdvantage Portfolio (portfolios of Short-Term Investments Trust) dated
October 6, 1995 included herein and to the references to our firm under the
headings "Financial Highlights" in the Prospectuses and "Reports" in the
Statements of Additional Information.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Houston, Texas
November 1, 1995
<PAGE> 1
EXHIBIT 15(i)
MASTER DISTRIBUTION PLAN PURSUANT TO RULE 12B-1
OF
SHORT-TERM INVESTMENTS TRUST
WHEREAS, Short-Term Investments Trust (the "Trust") is engaged in
business as an open-end management investment company and is registered as such
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the shares of beneficial interest of the Trust may be divided
into a number of separate series, including the Treasury Portfolio (hereinafter
referred to as the "Portfolios"); and
WHEREAS, the Treasury Portfolio is comprised of a Personal Investment
Class, a Private Investment Class and a Cash Management Class ("Retail Shares")
and an institutional class, and Retail Shares are offered to customers through
certain banks and broker-dealers that may offer special shareholder services to
such customers; and
WHEREAS, the Trust desires to adopt, on behalf of the series of
beneficial interest set forth in Appendix A attached hereto (the "Shares"), a
Plan pursuant to Rule 12b-1 under the Act with respect to the Shares, and the
trustees of the Trust have determined that there is a reasonable likelihood
that adoption of this Plan will benefit the Trust, the Treasury Portfolio and
the holders of the Shares; and
WHEREAS, the Trust has employed A I M Advisors, Inc. ("AIM") as its
investment advisor with respect to the Treasury Portfolio to supply investment
advice; and
WHEREAS, the Trust on behalf of the Treasury Portfolio has entered
into a Master Distribution Agreement (the "Distribution Agreement") designating
a principal distributor of the Shares (the "Distributor").
NOW THEREFORE, the Trust hereby adopts, on behalf of the Treasury
Portfolio, the following terms constituting a Plan pursuant to Rule 12b-1 under
the 1940 Act with respect to the Classes of Shares set forth in Appendix A:
1. The Trust may act as a distributor of the Shares of which
the Trust is the issuer, pursuant to Rule 12b-1 under the 1940 Act, according
to the terms of this Distribution Plan (the "Plan").
2. Amounts set forth in Appendix A may be expended when and if
authorized in advance by the Trust's Board of Trustees. Such amounts may be
used to finance any activity which is primarily intended to result in the sale
of the Shares, including, but not limited to, expenses of organizing and
conducting sales seminars, advertising programs, finders fees, printing of
prospectuses and statements of additional information (and supplements thereto)
and reports for other than existing shareholders, preparation and distribution
of advertising
-1-
<PAGE> 2
material and sales literature, supplemental payments to the Distributor and
the costs of administering the Plan. All amounts expended pursuant to the Plan
shall be paid
(i) to the Distributor, as an asset-based sales charge,
(ii) as a service fee to certain banks ("Service Providers") who offer
continuing personal shareholder services to their customers who
invest in the Shares, and who have entered into Shareholder
Service Agreements substantially in the form of Exhibit A hereto,
and
(iii) as a service fee to certain broker-dealers and other financial
institutions ("Institutions") who offer continuing personal
shareholder services to their customers who invest in the Shares,
and who have entered into Shareholder Service Agreements
substantially in the form of Exhibit B hereto.
The maximum shareholder service fee payable to any Service Provider or
Institution shall not exceed twenty-five one hundredths of one percent (0.25%)
per annum. Amounts paid under the Plan that are not paid as service fees shall
be deemed to be asset-based sales charges.
The activities, the payment of which by the Trust are intended to be
within the scope of the Plan, shall include, but not necessarily be limited to,
payments to the Distributor for its distribution-related activities and to
Service Providers and Institutions as asset-based sales charges or as a service
fee in respect of the Shares owned by shareholders with whom such Service
Provider or Institution has a shareholder servicing relationship. Shareholder
servicing may include, among other things: (i) answering client inquiries
regarding the Shares and the Treasury Portfolio; (ii) assisting clients in
changing dividend options, account designations and addresses; (iii) performing
sub-accounting; (iv) establishing and maintaining shareholder accounts and
records; (v) processing purchase and redemption transactions; (vi) automatic
investment in Shares 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 Trust may request on behalf of the Shares, to the
extent such firms are permitted to engage in such services by applicable
statute, rule or regulation.
3. No additional payments are to be made by the Trust on behalf of
the Treasury Portfolio with respect to the Shares as a result of the Plan other
than the payments such Portfolio is otherwise obligated to make (i) to AIM
pursuant to the Master Investment Advisory Agreement and (ii) for the expenses
otherwise incurred by the Treasury Portfolio and the Trust on behalf of the
Shares in the normal conduct of the Treasury Portfolio's business pursuant to
the Master Investment Advisory Agreement. However, to the extent any payments
by the Trust on behalf of the Treasury Portfolio to AIM or such Portfolio's
shareholder servicing and transfer agent; by AIM to any Service Providers or
Institutions pursuant to any Shareholder Service Agreement; or, generally, by
the Trust on behalf of the Treasury Portfolio to any party for the Treasury
Portfolio's operating expenses, are deemed to be payments for the financing of
any activity primarily intended to result in the sale of the Treasury
Portfolio's shares within the context of Rule 12b-1 under the 1940 Act, then
such payments shall be deemed to be made pursuant to the Plan as set forth
herein.
-2-
<PAGE> 3
4. Notwithstanding any of the foregoing, while the Plan is in
effect, the following terms and provisions will apply:
a. The officers of the Trust shall report quarterly in writing to
the Board of Trustees on the amounts and purpose of payments for
any of the activities in paragraph 1 and shall furnish the Board
of Trustees with such other information as the Board may
reasonably request in connection with such payments in order to
enable the Board to make an informed determination of the nature
and value of such expenditures.
b. The Plan shall continue in effect for a period of more than one
year from the date written below only so long as such continuance
is specifically approved at least annually by the Trust's Board
of Trustees, including the non-interested trustees, by vote cast
in person at a meeting called for the purpose of voting on the
Plan.
c. The Plan may be terminated with respect to any class of Shares at
any time by vote of a majority of the non-interested trustees or
by vote of a majority of the outstanding voting securities of the
applicable class of Shares, on not more than sixty (60) days'
written notice to any other party to the Plan.
d. The Plan may not be amended to materially increase the amount to
be spent hereunder or to permit the Trust on behalf of the
Treasury Portfolio to make payments for distribution other than
to the Distributor or with respect to a Shareholder Service
Agreement or without approval by the holders of the applicable
class of Shares, and all material amendments to the Plan shall be
approved by vote of the dis-interested trustees cast in person at
a meeting called for the purpose of voting on such amendment.
e. So long as the Plan is in effect, the selection and nomination of
the Trust's dis-interested trustees shall be committed to the
discretion of such dis-interested trustees.
5. This Plan shall be subject to the laws of the State of Texas and
shall be interpreted and construed to further promote the operation of the
Trust as an open-end investment company. As used herein the terms "Net Asset
Value," "Offering Price," "Investment Company," "Open-End Investment Company,"
"Assignment," "Principal Underwriter," "Interested Person," "Parent,"
"Affiliated Person," and "Majority of the Outstanding Voting Securities" shall
have the meanings set forth in the Securities Act of 1933, as amended, or the
1940 Act, and the rules and regulations thereunder.
6. Nothing herein shall be deemed to protect the parties to any
Shareholder Service Agreement entered into pursuant to this Plan against any
liability to the Trust or its shareholders to which they would otherwise be
subject by reason of willful misfeasance, bad faith or gross
-3-
<PAGE> 4
negligence in the performance of their duties hereunder, or by reason of their
reckless disregard of their obligations and duties hereunder.
IN WITNESS WHEREOF, the undersigned has executed this document as
constituting a Plan pursuant to Rule 12b-1.
SHORT-TERM INVESTMENTS TRUST
By: /s/ CHARLES T. BAUER
------------------------
President
Effective Date: August 6, 1993
-4-
<PAGE> 5
APPENDIX A TO
MASTER DISTRIBUTION PLAN
OF
SHORT-TERM INVESTMENTS TRUST
The Trust shall pay the Distributor as full compensation for all services
rendered and all facilities furnished under the Distribution Plan for each
Class as designated below, a Distribution Fee* determined by applying the
annual rate set forth below as to each Class to the average daily net asset
value of the Class for the plan year, computed in a manner used for the
determination of the offering price of shares of the Class.
TREASURY PORTFOLIO ANNUAL RATE
- ------------------ -----------
Personal Investment Class 0.75%
Private Investment Class 0.50%
Cash Management Class 0.10%
______________________________
* The Distribution Fee is payable apart from the sales charge, if any, as
stated in the current prospectus for the applicable Class. The amount of
the Distribution Fee is subject to any applicable limitations imposed
from time to time by applicable Rules of the National Association of
Securities Dealers, Inc.
-5-
<PAGE> 6
EXHIBIT A
[LOGO APPEARS HERE] FUND MANAGEMENT COMPANY
FUND MANAGEMENT COMPANY SHAREHOLDER SERVICE AGREEMENT
(BANKS)
______________, 19_____
Fund Management Company
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
Gentlemen:
We desire to enter into an Agreement with Fund Management Company
("FMC") as agent on behalf of the funds listed on Schedule A hereto (the
"Funds"), for the servicing of our clients who are shareholders of, and the
administration of accounts in, the Funds. We understand that this Shareholder
Service Agreement (the "Agreement") has been adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940 (the "1940 Act") by each of the Funds,
under a Distribution Plan (the "Plan") adopted pursuant to said Rule, and is
subject to applicable rules of the National Association of Securities Dealers,
Inc. ("NASD"). This Agreement defines the services to be provided by us for
which we are to receive payments pursuant to the Plan. The Plan and the
Agreement have been approved by a majority of the directors or trustees of the
applicable Fund, including a majority of directors or trustees who are not
interested persons of the applicable Fund, and who have no direct or indirect
financial interest in the operation of the Plan or related agreements, by votes
cast in person at a meeting called for the purpose of voting on the Plan. Such
approval included a determination, in the exercise of their reasonable business
judgement and in light of their fiduciary duties, that there is a reasonable
likelihood that the Plan will benefit the Fund and the holders of its Shares.
The terms and conditions of this Agreement shall be as follows:
1. To the extent that we provide continuing personal shareholder services
and administrative support services to our customers who may from time
to time own shares of the Funds of record or beneficially, including but
not limited to, forwarding sales literature, answering routine customer
inquiries regarding the Funds, assisting customers in changing dividend
options, account designations and addresses, and in enrolling into any
of several special investment plans offered in connection with the
purchase of the Funds, assisting in the establishment and maintenance of
customer accounts and records and in the processing of purchase and
redemption transactions, investing dividends and capital gains
distributions automatically in shares of the Funds and providing such
other services as FMC or the customer may reasonably request, you shall
pay us a fee periodically. We represent that we shall accept fees
hereunder only so long as we continue to provide such personal
shareholder services.
2. Shares of the Funds purchased by us on behalf of our clients may be
registered in our name or the name of our nominee. The client will be
the beneficial owner of the shares of the
<PAGE> 7
Shareholder Service Agreement Page 2
(Banks)
Funds purchased and held by us in accordance with the client's
instructions and the client may exercise all applicable rights of a
holder of such Shares. We agree to transmit to FMC in a timely manner,
all purchase orders and redemption requests of our clients and to
forward to each client all proxy statements, periodic shareholder
reports and other communications received from FMC by us on behalf of
our clients. FMC on behalf of the Funds agrees to pay all out-of-pocket
expenses actually incurred by us in connection with the transfer by us
of such proxy statements and reports to our clients as required under
applicable law or regulation.
3. We agree to transfer to the Funds' custodian in a timely manner as set
forth in the applicable prospectus, federal funds in an amount equal to
the amount of all purchase orders placed by us on behalf of our clients
and accepted by FMC. In the event that FMC fails to receive such
federal funds on such date (other than through the fault of FMC or the
Fund's custodian), we shall indemnify the applicable Fund or FMC against
any expense (including overdraft charges) incurred by the applicable
Fund or FMC as a result of the failure to receive such federal funds.
4. We agree to make available upon FMC's request, such information relating
to our clients who are beneficial owners of Fund shares and their
transactions in such shares as may be required by applicable laws and
regulations or as may be reasonably requested by FMC.
5. We agree to transfer record ownership of a client's Fund shares to the
client promptly upon the request of a client. In addition, record
ownership will be promptly transferred to the client in the event that
the person or entity ceases to be our client.
6. We acknowledge that we are solely responsible for the registration of
account information for FMC's subaccounting customers through AIM
LINK(TM), and that neither FMC, A I M Institutional Fund Services, Inc.
("AIFS") nor any Fund is responsible for the accuracy of such
information; and we will indemify and hold harmless FMC, AIFS and the
Funds for any claims or expenses resulting from the inaccuracy or
inadequacy of such information.
7. We shall provide such facilities and personnel (which may be all or any
part of the facilities currently used in our business, or all or any
personnel employed by us) as may be necessary or beneficial in carrying
out the purposes of this Agreement.
8. Neither we nor any of our employees or agents are authorized to make any
representation to our clients concerning the Funds except those
contained in the then current applicable prospectus applicable to the
Funds, copies of which will be supplied to us by FMC; and we shall have
no authority to act as agent for any Fund. Neither a Fund, nor A I M
Advisors, Inc. ("AIM") will be a party, nor will they be represented as
a party, to any agreement that we may enter into with our clients and
neither a Fund nor AIM shall participate, directly or indirectly,
<PAGE> 8
Shareholder Service Agreement Page 3
(Banks)
in any compensation that we may receive from our clients in connection
with our acting on their behalf with respect to this Agreement.
9. In consideration of the services and facilities described herein, we
shall receive a maximum annual service fee and asset-based sales charge,
payable monthly, as set forth on Schedule A. We understand that this
Agreement and the payment of such service fees and asset-based sales
charge has been authorized and approved by the Board of Directors or
Trustees of the applicable Fund, and that the payment of fees thereunder
is subject to limitations imposed by the rules of the NASD. Service
fees may be remitted to us net of any amounts due and payable to FMC,
AIFS or the Funds from us. A schedule of fees relating to subaccounting
is attached hereto as Schedule B.
10. FMC reserves the right, at its discretion and without notice, to suspend
the sale of any Fund or withdraw the sale of shares of a Fund.
11. FMC may amend this Agreement or Schedule A hereto without our prior
consent by mailing a copy of an amendment to us at the address set forth
below. Such amendment shall become effective on the date set forth in
such amendment unless we terminate this Agreement within thirty (30)
days of our receipt of such amendment.
12. This Agreement may be terminated at any time by FMC on not less than 60
days' written notice to us at our principal place of business. We, on
60 days' written notice addressed to FMC at its principal place of
business, may terminate this Agreement. FMC may also terminate this
Agreement for cause on violation by us of any of the provisions of this
Agreement, said termination to become effective on the date of mailing
notice to us of such termination. FMC's failure to terminate for any
cause shall not constitute a waiver of FMC's right to terminate at a
later date for any such cause. This Agreement shall terminate
automatically in the event of its assignment, the term "assignment" for
this purpose having the meaning defined in Section 2(a) (4) of the 1940
Act.
13. All communications to FMC shall be sent to it at 11 Greenway Plaza,
Suite 1919, Houston, Texas 77046. Any notice to us shall be duly given
if mailed or telegraphed to us at the address shown on this Agreement.
14. We represent that our activities on behalf of our clients and pursuant
to this Agreement either (i) are not such as to require our registration
as a broker-dealer in the state(s) in which we engage in such
activities, or (ii) we are registered as a broker-dealer in the state(s)
in which we engage in such activities.
<PAGE> 9
Shareholder Service Agreement Page 4
(Banks)
15. This Agreement shall become effective as of the date when it is executed
and dated below by FMC. This Agreement and all rights and obligations
of the parties hereunder shall be governed by and construed under the
laws of the State of Texas.
________________________________________
(Firm Name)
________________________________________
(Address)
________________________________________
City/State/Zip/County
BY: ____________________________________
Name: __________________________________
Title: _________________________________
Dated:__________________________________
ACCEPTED:
FUND MANAGEMENT COMPANY
BY: ________________________________________________________
Name: ________________________________________________________
Title: ________________________________________________________
Dated: ________________________________________________________
<PAGE> 10
Shareholder Service Agreement Page 5
(Banks)
SCHEDULE A
<TABLE>
<CAPTION>
FUNDS FEE
- ----- ---
<S> <C>
Short-Term Investments Company
Prime Portfolio - Personal Investment Class .40%
Prime Portfolio - Private Investment Class .25%
Prime Portfolio - Cash Management Class .08%
Short-Term Investments Trust
Treasury Portfolio - Personal Investment Class .40%
Treasury Portfolio - Private Investment Class .25%
Treasury Portfolio - Cash Management Class .08%
Treasury TaxAdvantage Portfolio - Private Investment Class .25%
Tax-Free Investments Co.
Tax-Free Cash Reserve Portfolio - Private Investment Class .25%
</TABLE>
<PAGE> 11
Shareholder Service Agreement Page 6
(Banks)
SCHEDULE B
SUBACCOUNTING FEES
We will be assessed a fee, payable monthly, in the amount of ______
basis points of our monthly average net assets managed by you. As described in
the attached Shareholder Service Agreement, we understand that the amount of
any service fees remitted to us will be net of any amounts due and payable to
FMC, AIFS or the Funds, including the ______ basis points of monthly average
net assets related to subaccounting services provided to us by AIFS.
<PAGE> 12
EXHIBIT B
[LOGO APPEARS HERE] FUND MANAGEMENT COMPANY
FUND MANAGEMENT COMPANY SHAREHOLDER SERVICE AGREEMENT
(BROKER-DEALERS)
______________, 19_____
Fund Management Company
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
Gentlemen:
We desire to enter into an Agreement with Fund Management Company
("FMC") as agent on behalf of the funds listed on Schedule A hereto (the
"Funds"), for the provision of continuing personal shareholder services to our
clients who are shareholders of, and the administration of accounts in, the
Funds. We understand that this Shareholder Service Agreement (the "Agreement")
has been adopted pursuant to Rule 12b-1 under the Investment Company Act of
1940 (the "1940 Act") by each of the Funds, under a Distribution Plan (the
"Plan") adopted pursuant to said Rule, and is subject to applicable rules of
the National Association of Securities Dealers, Inc. ("NASD"). This Agreement
defines the services to be provided by us for which we are to receive payments
pursuant to the Plan. The Plan and the Agreement have been approved by a
majority of the directors or trustees of the applicable Fund, including a
majority of directors or trustees who are not interested persons of the Fund,
and who have no direct or indirect financial interest in the operation of the
Plan or related agreements, by votes cast in person at a meeting called for the
purpose of voting on the Plan. Such approval included a determination, in the
exercise of their reasonable business judgement and in light of their fiduciary
duties, that there is a reasonable likelihood that the Plan will benefit the
Fund and the holders of its Shares. The terms and conditions of this Agreement
shall be as follows:
1. We shall provide continuing personal shareholder services and
administrative support services to our customers who may from time to
time beneficially own shares of the Funds, including but not limited to,
forwarding sales literature, answering routine customer inquiries
regarding the Funds, assisting customers in changing dividend options,
account designations and addresses, and in enrolling into any of several
special investment plans offered in connection with the purchase of the
Funds, assisting in the establishment and maintenance of customer
accounts and records and in the processing of purchase and redemption
transactions, investing dividends and capital gains distributions
automatically in shares of the Funds and providing such other services
as FMC or the customer may reasonably request, and you shall pay us a
fee periodically. We represent that we will accept payment of fees
hereunder only so long as we continue to provide such personal
shareholder services.
2. Shares of the Funds purchased by us on behalf of our clients may
be registered in our name or the name of our nominee. The client will
be the beneficial owner of the shares of the Funds purchased and held by
us in accordance with the client's instructions and the client
<PAGE> 13
Shareholder Service Agreement Page 2
(Broker-Dealers)
may exercise all applicable rights of a holder of such Shares. We
agree to transmit to FMC in a timely manner, all purchase orders and
redemption requests of our clients and to forward to each client all
proxy statements, periodic shareholder reports and other communications
received from FMC by us on behalf of our clients. FMC on behalf of the
Funds agrees to pay all out-of-pocket expenses actually incurred by us
in connection with the transfer by us of such proxy statements and
reports to our clients as required under applicable law or regulation.
3. We agree to transfer to the Funds' custodian, in a timely manner as set
forth in the applicable prospectus, federal funds in an amount equal to
the amount of all purchase orders placed by us on behalf of our clients
and accepted by FMC. In the event that FMC fails to receive such
federal funds on such date (other than through the fault of FMC or the
Fund's custodian), we shall indemnify the applicable Fund or FMC against
any expense (including overdraft charges) incurred by the applicable
Fund or FMC as a result of the failure to receive such federal funds.
4. We agree to make available, upon FMC's request, such information
relating to our clients who are beneficial owners of Fund shares and
their transactions in such shares as may be required by applicable laws
and regulations or as may be reasonably requested by FMC.
5. We agree to transfer record ownership of a client's Fund shares to the
client promptly upon the request of a client. In addition, record
ownership will be promptly transferred to the client in the event that
the person or entity ceases to be our client.
6. We acknowledge that we are solely responsible for the registration of
account information for FMC's subaccounting customers through AIM
LINK(TM), and that neither FMC, A I M Institutional Fund Services, Inc.
("AIFS") nor any Fund is responsible for the accuracy of such
information; and we will indemify and hold harmless FMC, AIFS and the
Funds for any claims or expenses resulting from the inaccuracy or
inadequacy of such information.
7. We shall provide such facilities and personnel (which may be all or any
part of the facilities currently used in our business, or all or any
personnel employed by us) as may be necessary or beneficial in carrying
out the purposes of this Agreement.
8. Neither we nor any of our employees or agents are authorized to make any
representation to our clients concerning the Funds except those
contained in the then current applicable prospectus applicable to the
Funds, copies of which will be supplied to us by FMC; and we shall
have no authority to act as agent for any Fund. Neither a Fund nor
A I M Advisors, Inc. ("AIM") will be a party, nor will they be
represented as a party, to any agreement that we may enter into with
our clients and neither a Fund nor AIM shall participate, directly
or indirectly,
<PAGE> 14
Shareholder Service Agreement Page 3
(Broker-Dealers)
in any compensation that we may receive from our clients in connection
with our acting on their behalf with respect to this Agreement.
9. In consideration of the services and facilities described herein, we
shall receive a maximum annual service fee, payable monthly, as set
forth in Schedule A. We understand that this Agreement and the payment
of such fees has been authorized and approved by the Board of Directors
or Trustees of the applicable Fund, and that the payment of fees
hereunder is subject to limitations imposed by the rules of the NASD.
Service fees may be remitted to us net of any amounts due and payable to
FMC, AIFS or the Funds from us. A schedule of fees relating to
subaccounting is attached hereto as Schedule B.
10. FMC reserves the right, at its discretion and without notice, to suspend
the sale of any Fund shares or withdraw the sale of shares of a Fund.
11. We represent that we are a member in good standing of the NASD, and
agree to abide by the Rules of Fair Practice of the NASD and all other
federal and state rules and regulations that are now or may become
applicable to transactions hereunder. Our expulsion from the NASD will
automatically terminate this agreement without notice. Our suspension
from the NASD or a violation by us of applicable state and federal laws
and rules and regulations of authorized regulatory agencies will
terminate this agreement effective upon notice received by us from FMC.
12. This Agreement or Schedule A hereto may be amended at any time without
our prior consent by FMC, by mailing a copy of an amendment to us at the
address set forth below. Such amendment shall become effective on the
date set forth in such amendment unless we terminate this Agreement
within thirty (30) days of our receipt of such amendment.
13. This Agreement may be terminated at any time by FMC on not less
than 60 days' written notice to us at our principal place of business.
We, on 60 days' written notice addressed to FMC at its principal place
of business, may terminate this Agreement. FMC may also terminate this
Agreement for cause on violation by us of any of the provisions of this
Agreement, said termination to become effective on the date of mailing
notice to us of such termination. FMC's failure to terminate for any
cause shall not constitute a waiver of FMC's right to terminate at a
later date for any such cause. This Agreement shall terminate
automatically in the event of its assignment, the term "assignment" for
this purpose having the meaning defined in Section 2(a) (4) of the 1940
Act.
14. All communications to FMC shall be sent to it at P.O. Box 4333, Houston,
Texas 77210-4333. Any notice to us shall be duly given if mailed or
telegraphed to us at the address shown on this Agreement.
<PAGE> 15
Shareholder Service Agreement Page 4
(Broker-Dealers)
15. This Agreement shall become effective as of the date when it is executed
and dated below by FMC. This Agreement and all rights and obligations
of the parties hereunder shall be governed by and construed under the
laws of the State of Texas.
________________________________________
(Firm Name)
________________________________________
(Address)
________________________________________
City/State/Zip/County
BY: ____________________________________
Name: __________________________________
Title: _________________________________
Dated:__________________________________
ACCEPTED:
FUND MANAGEMENT COMPANY
BY: ________________________________________________________
Name: ________________________________________________________
Title: ________________________________________________________
Dated: ________________________________________________________
<PAGE> 16
Shareholder Service Agreement Page 5
(Broker-Dealers)
SCHEDULE A
<TABLE>
<CAPTION>
FUNDS FEE
- ----- ---
<S> <C>
Short-Term Investments Company
Prime Portfolio - Personal Investment Class .40%
Prime Portfolio - Private Investment Class .25%
Prime Portfolio - Cash Management Class .08%
Short-Term Investments Trust
Treasury Portfolio - Personal Investment Class .40%
Treasury Portfolio - Private Investment Class .25%
Treasury Portfolio - Cash Management Class .08%
Treasury TaxAdvantage Portfolio - Private Investment Class .25%
Tax-Free Investments Co.
Tax-Free Cash Reserve Portfolio - Private Investment Class .25%
</TABLE>
<PAGE> 17
Shareholder Service Agreement Page 6
(Broker-Dealers)
SCHEDULE B
SUBACCOUNTING FEES
We will be assessed a fee, payable monthly, in the amount of ______
basis points of our monthly average net assets managed by you. As described in
the attached Shareholder Service Agreement, we understand that the amount of
any service fees remitted to us will be net of any amounts due and payable to
FMC, AIFS or the Funds, including the ______ basis points of monthly average
net assets related to subaccounting services provided to us by AIFS.
<PAGE> 1
EXHIBIT 15(j)
AMENDMENT NO. 1
MASTER DISTRIBUTION PLAN
The Master Distribution Plan (the 'Plan'), pursuant to Rule 12b-1 of
Short-Term Investments Trust, a Delaware business trust, is hereby amended as
follows:
Appendix A of the Plan is hereby deleted in its entirety and replaced
with the following:
"APPENDIX A TO
MASTER DISTRIBUTION PLAN
OF
SHORT-TERM INVESTMENTS TRUST
The Trust shall pay the Distributor as full compensation for all
services rendered and all facilities furnished under the Distribution Plan for
each Class as designated below, a Distribution Fee* determined by applying
the annual rate set forth below as to each Class to the average daily net asset
value of the Class for the plan year, computed in a manner used for the
determination of the offering price of shares of the Class.
<TABLE>
<CAPTION>
TREASURY PORTFOLIO ANNUAL RATE
- ------------------ -----------
<S> <C>
Personal Investment Class 0.75%
Private Investment Class 0.50%
Cash Management Class 0.10%
<CAPTION>
TREASURY TAXADVANTAGE PORTFOLIO ANNUAL RATE
- ------------------------------- -----------
<S> <C>
Private Investment Class 0.50%
</TABLE>
__________________________________
* The Distribution Fee is payable apart from the sales charge, if any, as
stated in the current prospectus for the applicable Class. The amount
of the Distribution Fee is subject to any applicable limitations imposed
from time to time by applicable Rules of the National Association of
Securities Dealers, Inc."
<PAGE> 2
All other terms and provisions of the Plan not amended herein shall
remain in full force and effect.
Dated: December 8, 1994
SHORT-TERM INVESTMENTS TRUST
Attest: /s/ STEPHEN I. WINER By: /s/ ROBERT H. GRAHAM
Assistant Secretary President
(SEAL)
<PAGE> 1
EXHIBIT 15(k)
AMENDMENT NO. 2
MASTER DISTRIBUTION PLAN
The Master Distribution Plan (the "Plan"), pursuant to Rule 12b-1 of
Short-Term Investments Trust, a Delaware business trust, is hereby amended as
follows:
Appendix A of the Plan is hereby deleted in its entirety and replaced
with the following:
"APPENDIX A TO
MASTER DISTRIBUTION PLAN
OF
SHORT-TERM INVESTMENTS TRUST
The Trust shall pay the Distributor as full compensation for all
services rendered and all facilities furnished under the Distribution Plan for
each Class as designed below, a Distribution Fee* determined by applying the
annual rate set forth below as to each Class to the average daily net asset
value of the Class for the plan year, computed in a manner used for the
determination of the offering price of shares of the Class.
<TABLE>
<CAPTION>
TREASURY PORTFOLIO ANNUAL RATE
- ------------------ -----------
<S> <C>
Personal Investment Class 0.75%
Private Investment Class 0.50%
Resource Class 0.20%
Cash Management Class 0.10%
</TABLE>
<TABLE>
<CAPTION>
TREASURY TAXADVANTAGE PORTFOLIO ANNUAL RATE
- ------------------------------- -----------
<S> <C>
Private Investment Class 0.50%
</TABLE>
__________________________________
* The Distribution Fee is payable apart from the sales charge, if any,
as stated in the current prospectus for the applicable Class. The amount of
the Distribution Fee is subject to any applicable limitations imposed from time
to time by applicable Rules of the National Association of Securities Dealers,
Inc."
<PAGE> 2
All other terms and provisions of the Plan not amended herein shall
remain in full force and effect.
Dated , 1995
------------------------
SHORT-TERM INVESTMENTS TRUST
Attest: By:
------------------------------- -------------------------------
Assistant Secretary President
(SEAL)
-2-
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> TREASURY PORTFOLIO - INSTITUTIONAL CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 3,272,395,931
<INVESTMENTS-AT-VALUE> 3,272,395,931
<RECEIVABLES> 3,526,829
<ASSETS-OTHER> 197,216
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,276,119,976
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 16,151,304
<TOTAL-LIABILITIES> 16,151,304
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,259,810,478
<SHARES-COMMON-STOCK> 3,259,810,478
<SHARES-COMMON-PRIOR> 3,027,151,729
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 158,194
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 3,259,968,672
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 169,306,110
<OTHER-INCOME> 0
<EXPENSES-NET> (4,646,725)
<NET-INVESTMENT-INCOME> 164,659,385
<REALIZED-GAINS-CURRENT> 67,230
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 164,726,615
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (164,726,615)
<DISTRIBUTIONS-OF-GAINS> (63,547)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 17,474,112,843
<NUMBER-OF-SHARES-REDEEMED> (17,260,570,926)
<SHARES-REINVESTED> 19,116,832
<NET-CHANGE-IN-ASSETS> 232,662,432
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 154,511
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,925,198
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,693,725
<AVERAGE-NET-ASSETS> 2,432,714,207
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.060
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.000
<PER-SHARE-DISTRIBUTIONS> (0.060)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.10
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> TREASURY PORTFOLIO - PRIVATE INVESTMENT CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 3,272,395,931
<INVESTMENTS-AT-VALUE> 3,272,395,931
<RECEIVABLES> 3,526,829
<ASSETS-OTHER> 197,216
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,276,119,976
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 16,151,304
<TOTAL-LIABILITIES> 16,151,304
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,259,810,478
<SHARES-COMMON-STOCK> 3,259,810,478
<SHARES-COMMON-PRIOR> 3,027,151,729
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 158,194
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 3,259,968,672
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 169,306,110
<OTHER-INCOME> 0
<EXPENSES-NET> (4,646,725)
<NET-INVESTMENT-INCOME> 164,659,385
<REALIZED-GAINS-CURRENT> 67,230
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 164,726,615
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (164,726,615)
<DISTRIBUTIONS-OF-GAINS> (63,547)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 17,474,112,843
<NUMBER-OF-SHARES-REDEEMED> (17,260,570,926)
<SHARES-REINVESTED> 19,116,832
<NET-CHANGE-IN-ASSETS> 232,662,432
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 154,511
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,925,198
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,693,725
<AVERAGE-NET-ASSETS> 414,815,972
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.050
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.000
<PER-SHARE-DISTRIBUTIONS> (0.050)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> TREASURY PORTFOLIO - PERSONAL INVESTMENT CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 3,272,395,931
<INVESTMENTS-AT-VALUE> 3,272,395,931
<RECEIVABLES> 3,526,829
<ASSETS-OTHER> 197,216
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,276,119,976
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 16,151,304
<TOTAL-LIABILITIES> 16,151,304
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,259,810,478
<SHARES-COMMON-STOCK> 3,259,810,478
<SHARES-COMMON-PRIOR> 3,027,151,729
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 158,194
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 3,259,968,672
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 169,306,110
<OTHER-INCOME> 0
<EXPENSES-NET> (4,646,725)
<NET-INVESTMENT-INCOME> 164,659,385
<REALIZED-GAINS-CURRENT> 67,230
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 164,726,615
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (164,726,615)
<DISTRIBUTIONS-OF-GAINS> (63,547)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 17,474,112,843
<NUMBER-OF-SHARES-REDEEMED> (17,260,570,926)
<SHARES-REINVESTED> 19,116,832
<NET-CHANGE-IN-ASSETS> 232,662,432
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 154,511
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,925,198
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,693,725
<AVERAGE-NET-ASSETS> 89,767,973
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.050
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.000
<PER-SHARE-DISTRIBUTIONS> (0.050)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.60
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> TREASURY PORTFOLIO - CASH MANAGEMENT CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 3,272,395,931
<INVESTMENTS-AT-VALUE> 3,272,395,931
<RECEIVABLES> 3,526,829
<ASSETS-OTHER> 197,216
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,276,119,976
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 16,151,304
<TOTAL-LIABILITIES> 16,151,304
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,259,810,478
<SHARES-COMMON-STOCK> 3,259,810,478
<SHARES-COMMON-PRIOR> 3,027,151,729
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 158,194
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 3,259,968,672
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 169,306,110
<OTHER-INCOME> 0
<EXPENSES-NET> (4,646,725)
<NET-INVESTMENT-INCOME> 164,659,385
<REALIZED-GAINS-CURRENT> 67,230
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 164,726,615
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (164,726,615)
<DISTRIBUTIONS-OF-GAINS> (63,547)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 17,474,112,843
<NUMBER-OF-SHARES-REDEEMED> (17,260,570,926)
<SHARES-REINVESTED> 19,116,832
<NET-CHANGE-IN-ASSETS> 232,662,432
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 154,511
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,925,198
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,693,725
<AVERAGE-NET-ASSETS> 73,038,062
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.050
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.000
<PER-SHARE-DISTRIBUTIONS> (0.050)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.18
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> TREASURY TAX-ADVANTAGE-INSTITUTIONAL
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 401,342,570
<INVESTMENTS-AT-VALUE> 401,342,570
<RECEIVABLES> 311,990
<ASSETS-OTHER> 18,624
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 401,673,184
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,874,086
<TOTAL-LIABILITIES> 1,874,086
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 399,731,067
<SHARES-COMMON-PRIOR> 403,826,236
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 68,031
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 399,799,098
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 21,243,050
<OTHER-INCOME> 0
<EXPENSES-NET> (795,162)
<NET-INVESTMENT-INCOME> 20,447,888
<REALIZED-GAINS-CURRENT> 24,806
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