<PAGE> 1
As filed with the Securities and Exchange Commission on December 17, 1997
Registration No. 2-58287
Investment Co. Act No. 811-2729
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. 30 X
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
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Amendment No. 31 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 100, 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 100, 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 100 1735 Market Street, 51st Floor
Houston, Texas 77046-1173 Philadelphia, Pennsylvania 19103-7599
Approximate Date of Proposed Public Offering: As soon as practicable after
the effective date of this
Amendment
It is proposed that this filing will become effective (check appropriate box)
X 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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on (date) 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
previously filed post-effective amendment.
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Title of Securities Being Registered: Shares of Beneficial Interest
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<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 comprised of five classes of shares - the Cash Management Class,
the Institutional Class, the Personal Investment Class, the Private Investment
Class, and the Resource Class. Each class of shares of the Treasury Portfolio
is offered to customers of certain institutions pursuant to separate
Prospectuses and a combined Statement of Additional Information. The Treasury
TaxAdvantage Portfolio is comprised of two classes of shares. Each class of
shares of the Treasury TaxAdvantage Portfolio is offered to customers of
certain institutions pursuant to separate Prospectuses and a combined Statement
of Additional Information.
Form N-1A
Item Number
I. TREASURY PORTFOLIO -CASH MANAGEMENT CLASS
Part A - Prospectus
<TABLE>
<CAPTION>
Item No. Prospectus Location
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<S> <C> <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
II. TREASURY PORTFOLIO - INSTITUTIONAL 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
4. General Description of Registrant . . . . . . . . . . Cover Page; Investment Program; General Information
5. Management of the Fund . . . . . . . . . . . . . . . Management of the Trust; 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>
III. 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
4. General Description of Registrant . . . . . . . . . . Cover Page; Investment Program; General Information
5. Management of the Fund . . . . . . . . . . . . . . . Management of the Trust; General Information
5A. Management's Discussion of Fund Performance . . . . . [included in annual report]
6. Capital Stock and Other Securities . . . . . . . . . General Information; Dividends; Taxes
</TABLE>
2
<PAGE> 4
<TABLE>
<S> <C> <C>
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>
IV. TREASURY PORTFOLIO - PRIVATE 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
4. General Description of Registrant . . . . . . . . . . Cover Page; Summary; Investment Program; General
Information
5. Management of the Fund . . . . . . . . . . . . . . . Management of the Trust; 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>
V. TREASURY PORTFOLIO - RESOURCE CLASS
Part A - Prospectus
<TABLE>
<CAPTION>
Item No. Prospectus Location
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<S> <C> <C>
1. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page
2. Synopsis . . . . . . . . . . . . . . . . . . . . . . Summary; Table of Fees and Expenses
3. Condensed Financial Information . . . . . . . . . . . Not Applicable
4. General Description of Registrant . . . . . . . . . . Cover Page; Summary; Investment Program; General
Information
</TABLE>
3
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<TABLE>
<S> <C> <C>
5. Management of the Fund . . . . . . . . . . . . . . . Management of the Trust; 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>
VI. TREASURY PORTFOLIO - CASH MANAGEMENT CLASS, INSTITUTIONAL CLASS, PERSONAL
INVESTMENT CLASS, PRIVATE INVESTMENT CLASS, RESOURCE CLASS
Part B - Statement of Additional Information
<TABLE>
<CAPTION>
Item No. Statement of Additional
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Information Location
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<S> <C> <C>
10. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page
11. Table of Contents . . . . . . . . . . . . . . . . . . Table of Contents
12. General Information and History . . . . . . . . . . . General Information About the Trust
13. Investment Objectives and Policies . . . . . . . . . Investment Program and Restrictions
14. Management of the Fund . . . . . . . . . . . . . . . General Information About the Trust - Trustees and
Officers
15. Control Persons and Principal Holders
of Securities . . . . . . . . . . . . . . . . . . . . General Information About the Trust - Principal Holders
of Securities
16. Investment Advisory and Other Services . . . . . . . General Information About the Trust - Investment Advisor
17. Brokerage Allocation and Other Practices . . . . . . Portfolio Transactions
18. Capital Stock and Other Securities . . . . . . . . . General Information About the Trust - The Trust 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>
4
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<TABLE>
<S> <C> <C>
22. Calculation of Performance Data . . . . . . . . . . . Performance Information
23. Financial Statements . . . . . . . . . . . . . . . . Not Applicable
</TABLE>
VII. TREASURY TAXADVANTAGE PORTFOLIO - INSTITUTIONAL 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
4. General Description of Registrant . . . . . . . . . . Cover Page; Summary; Investment Program; General
Information
5. Management of the Fund . . . . . . . . . . . . . . . Management of the Trust; 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>
VIII. TREASURY TAXADVANTAGE PORTFOLIO - PRIVATE INVESTMENT CLASS
Part A - Prospectus
<TABLE>
<CAPTION>
Item No. Prospectus Location
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<S> <C> <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 Trust; General Information
</TABLE>
5
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<TABLE>
<S> <C> <C>
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
Trust - Distribution Plan
8. Redemption or Repurchase . . . . . . . . . . . . . . Redemption of Shares
9. Pending Legal Proceedings . . . . . . . . . . . . . . Not Applicable
</TABLE>
IX. TREASURY TAXADVANTAGE PORTFOLIO - INSTITUTIONAL CLASS AND PERSONAL
INVESTMENT CLASS
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 Trust
13. Investment Objectives and Policies . . . . . . . . . Investment Program and Restrictions
14. Management of the Fund . . . . . . . . . . . . . . . General Information About the Trust - Trustees and
Officers
15. Control Persons and Principal Holders
of Securities . . . . . . . . . . . . . . . . . . . . General Information About the Trust - Principal Holders
of Securities
16. Investment Advisory and Other Services . . . . . . . General Information About the Trust - Investment Advisor
17. Brokerage Allocation and Other Practices . . . . . . Portfolio Transactions
18. Capital Stock and Other Securities . . . . . . . . . General Information About the Trust - The Trust 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>
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<PAGE> 8
X. 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.
7
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SHORT-TERM
INVESTMENTS TRUST
Prospectus
- --------------------------------------------------------------------------------
TREASURY The Treasury Portfolio is a money market fund
PORTFOLIO whose investment objective is the maximization of
current income to the extent consistent with the
CASH preservation of capital and the maintenance of
MANAGEMENT liquidity. The Treasury Portfolio seeks to achieve its
CLASS 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 "Trust"), an open-
end, diversified, series management investment company.
DECEMBER 17, 1997 This Prospectus relates solely to the Cash Manage-
ment 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.
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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 17, 1997, HAS BEEN FILED WITH THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION (THE "SEC")
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
SEC MAINTAINS A WEB SITE AT HTTP://WWW.SEC.GOV THAT
CONTAINS THE STATEMENT OF ADDITIONAL INFORMATION,
MATERIAL INCORPORATED BY REFERENCE, AND OTHER
INFORMATION REGARDING THE TRUST.
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS
OF, OR GUARANTEED OR ENDORSED BY, ANY BANK, AND THE
TRUST'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 TRUST INVOLVE
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
[LOGO APPEARS HERE]
Fund Management Company
11 Greenway Plaza
Suite 100
Houston, Texas 77046-1173
(800) 877-7745
<PAGE> 10
SUMMARY
THE PORTFOLIO AND ITS INVESTMENT OBJECTIVE
The Trust 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 Trust also offers shares of other
classes of shares of beneficial interest of the Portfolio: the Institutional
Class, Private Investment Class, Personal Investment Class and Resource Class,
representing an interest in the Portfolio. Such classes have different
distribution arrangements and are designed for institutional and other
categories of investors. The Trust 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 Trust are referred to collectively as the "Portfolios."
Because the Trust 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."
NET ASSET VALUE
The Trust 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, 1997, the Trust 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 Trust for its costs of performing
certain accounting and other administrative services for the Fund. See
"Management of the Trust -- Investment Advisor" and "-- Administrative
Services." Under a Transfer Agency and Service Agreement, A I M Insti-
2
<PAGE> 11
tutional Fund Services, Inc. ("Transfer Agent"), AIM's wholly owned subsidiary
and a registered transfer agent, receives a fee for its provision of transfer
agency, dividend distribution and disbursement, and shareholder services to the
Trust. It is currently anticipated that, effective on or about December 29,
1997, A I M Fund Services, Inc., a wholly owned subsidiary of AIM and a
registered transfer agent, will become the transfer agent to the Trust. See
"General Information -- Transfer Agent and Custodian."
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 Trust's
Board of Trustees, FMC receives a fee from the Trust 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 Trust's Board of Trustees. The Trust 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. There can be no assurance that the Portfolio will
be able to maintain a stable net asset value of $1.00 per share. 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, AIM Institutional Funds, La Familia AIM de
Fondos and La Familia AIM de Fondos and Design are registered service marks and
aimfunds.com and Invest With Discipline are service marks of A I M Management
Group Inc.
3
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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 -- 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.................................................. 0.02%
------
Total other expenses.............................. 0.03%
------
Total portfolio operating expenses -- Cash Management
Class**................................................ 0.17%
======
</TABLE>
- ---------------
* Beneficial owners of shares of the Class should consider the effect of any
charges imposed by their bank, broker-dealer or other financial institution
for various services.
** If there were no fee waivers, 12b-1 fees and Total portfolio operating
expenses would have been 0.10% and 0.19%, respectively.
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.................................................... $ 5
5 years.................................................... $10
10 years.................................................... $22
</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 Trust" below.) The expense figures
are based upon actual costs and fees charged to the Class for the fiscal year
ended August 31, 1997. The Table of Fees and Expenses reflects a voluntary
waiver of 12b-1 fees for the Class. Future waivers of fees (if any) may 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.
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 EXPENSES AND ACTUAL EXPENSES MAY
BE GREATER OR LESSER THAN THOSE SHOWN.
4
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FINANCIAL HIGHLIGHTS
Shown below are the per share data, ratios and supplemental data
(collectively, "data") for the four-year period ended August 31, 1997 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 on the financial statements and the related notes appears
in the Statement of Additional Information.
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period.......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income........... 0.05 0.05 0.05 0.03 0.001
------- ------- ------ ------ ------
Less distributions:
Dividends from net investment
income........................ (0.05) (0.05) (0.05) (0.03) (0.001)
------- ------- ------ ------ ------
Net asset value, end of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------ ------ ------
Total return...................... 5.39% 5.48% 5.57% 3.44% 2.91%(a)
======= ======= ====== ====== ======
Ratios/supplemental data:
Net assets, end of period (000s
omitted)...................... $829,243 $789,627 $81,219 $73,619 $8,681
======= ======= ====== ====== ======
Ratio of expenses to average net
assets(b)..................... 0.17%(c) 0.17% 0.18% 0.16% 0.16%(a)
======= ======= ====== ====== ======
Ratio of net investment income
to average net assets(d)...... 5.25%(c) 5.25% 5.42% 3.48% 3.00%(a)
======= ======= ====== ====== ======
</TABLE>
- ---------------
(a) Annualized.
(b) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
0.19%, 0.19%, 0.20%, 0.21% and 0.18% (annualized) for the periods 1997-1993,
respectively .
(c) Ratios are based on average net assets of $781,320,880.
(d) After fee waivers and/or expense reimbursements. Ratios of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements were 5.24%, 5.23%, 5.40%, 3.43% and 2.98% (annualized) for
the periods 1997-1993, respectively.
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.
5
<PAGE> 14
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 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 Trust'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. Repurchase transactions are limited to a term not to exceed 365 days.
The Portfolio may enter into repurchase agreements only with institutions
believed by the Trust'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. Reverse
repurchase transactions are limited to a term not to exceed 92 days. 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, liquid 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 liquid 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
6
<PAGE> 15
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.
INVESTMENT IN OTHER INVESTMENT COMPANIES. The Trust is permitted to invest in
other investment companies to the extent permitted by the 1940 Act, and rules
and regulations thereunder, and, if applicable, exemptive orders granted by the
SEC.
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
beneficial interest of the Trust.
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, and
except that the Portfolio may purchase securities of other investment
companies to the extent permitted by applicable law or exemptive order.
(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. 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 received by the Portfolio. As discussed
below, the Trust reserves the right to reject any purchase order. 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 Transfer Agent
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. Following the initial investment, subsequent purchases of shares of the
Class may also be made via AIM LINK--Registered Trademark-- Remote, a
7
<PAGE> 16
personal computer application software product. 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 Trust's custodian bank, are open
for business. The Portfolio, however, reserves the right to change the time for
which purchase and redemption requests must be submitted to the Portfolio for
execution on the same day or any day when the U.S. primary broker-dealer
community is closed for business or trading is restricted due to national
holidays. 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 Trust proxy statements, annual reports and other communications
to shareholders whose accounts are serviced by the Institution; and such other
services as the Trust may reasonably request. Institutions will be required to
certify to the Trust 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 the Transfer Agent, must be completed and sent to the
Transfer Agent at 11 Greenway Plaza, Suite 100, 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 the Transfer Agent. 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 Trust. The Portfolio will normally be required to make
immediate settlement in federal funds (member bank deposits with a Federal
Reserve Bank) for portfolio securities purchased. Accordingly, payment for
shares of the Class purchased by Institutions on behalf of their customers must
be in federal funds. If an investor's order to purchase shares of the Class is
paid for other than in federal funds, the Institution, acting on behalf of the
investor, completes the conversion into federal funds (which may take two
business days), or itself advances federal funds prior to conversion, and
promptly transmits the order and payment in the form of federal funds to the
Transfer Agent.
Subject to the conditions stated above and to the Trust's right to reject any
purchase order, orders will be accepted (i) when payment for shares of the Class
purchased is received by The Bank of New York, the Trust's custodian bank, in
the form described above and notice of such order is provided to the 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
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 Trust 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.
8
<PAGE> 17
The Trust 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 Trust. Redemption requests with respect to the Class may also be
made via AIM LINK--Registered Trademark--Remote. 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 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 Transfer Agent 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 the Transfer Agent 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. The Portfolio reserves the right to change the time for which
redemption requests must be submitted to and received by the Transfer Agent for
execution on the same day on any day when the U.S. primary broker-dealer
community is closed for business or trading is restricted due to national
holiday.
A shareholder may change the bank account designated to receive redemption
proceeds by written notice to the Trust. 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 Trust or the
Transfer Agent.
Shareholders may request a redemption by telephone. Neither the Transfer Agent
nor FMC will be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the Account Application if they reasonably believe such request to be
genuine but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures for
verification of telephone transactions may include recordings of telephone
transactions (maintained for six months), and mailings of confirmations promptly
after the transaction.
Payment for shares of the Class redeemed by mail and payment for telephone
redemptions in amounts of less than $1,000 may be made by check mailed within
seven days after receipt of the redemption request in proper form. The Trust 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 Trust unless
the Board of Trustees of the Trust determines in its sole discretion that
failure to so redeem may have materially adverse consequences to the
shareholders of the Trust.
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) Portfolio
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, and transfer agency fees. 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 in writing by the Institution to the Transfer
Agent at 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173 and will become
effective with dividends paid after its receipt by the Transfer Agent. 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.
9
<PAGE> 18
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 Trust incur or anticipate any unusual expense, loss or depreciation which
could adversely affect the income or net asset value of the Portfolio, the
Trust'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 Trust and each portfolio of the Trust 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 advisors concerning the application of
state, local or foreign taxes.
Foreign persons who file a United States tax return after December 31, 1996
for a U.S. tax refund and who are not eligible to obtain a social security
number must apply to the Internal Revenue Service ("IRS") for an individual
taxpayer identification number, using IRS Form W-7. For a copy of the IRS Form
W-7 and accompanying instructions, please contact your tax advisor or the
Transfer Agent.
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 Portfolio. 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.
10
<PAGE> 19
YIELD INFORMATION
Yield information for the Class can be obtained by calling the Trust 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, 1997, 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 5.49% and 5.64%, respectively. 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 or its affiliates 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 Trust 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 Trust's independent auditors.
Unless otherwise requested by the shareholder, each shareholder will be
provided by its Institution 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 TRUST
BOARD OF TRUSTEES
The overall management of the business and affairs of the Trust is vested with
its Board of Trustees. The Board of Trustees approves all significant agreements
between the Trust and persons or companies furnishing services to the Trust,
including agreements with the Trust's investment advisor, distributor, custodian
and transfer agent. The day-to-day operations of the Trust are delegated to the
Trust's officers and to AIM, subject always to the objective and policies of the
Trust and to the general supervision of the Trust's Board of Trustees.
Information concerning the Board of Trustees may be found in the Statement of
Additional Information. Certain trustees and officers of the Trust are
affiliated with AIM and A I M Management Group Inc. ("AIM Management"), the
parent corporation of AIM.
INVESTMENT ADVISOR
A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173,
acts as the investment advisor for the Portfolio pursuant to a Master Investment
Advisory Agreement dated as of February 28, 1997 (the "Advisory Agreement"). AIM
was organized in 1976 and, together with its affiliates, manages or advises 55
investment company portfolios. Certain of the directors and officers of AIM are
also trustees or executive officers of the Trust. AIM is a wholly owned
subsidiary of AIM Management. AIM Management is a holding company in the
financial services business. AIM Management is an indirect, wholly owned
subsidiary of AMVESCAP PLC, a publicly-traded holding company that, through its
subsidiaries, engages in the business of investment management on an
international basis.
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.
11
<PAGE> 20
For the fiscal year ended August 31, 1997, AIM received fees from the Trust,
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 0.17% of the Class's
average daily net assets.
ADMINISTRATIVE SERVICES
The Trust has entered into a Master Administrative Services Agreement dated as
of February 28, 1997 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 Trust 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.
FEE WAIVERS
AIM or its affiliates 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 for such
fee or expenses prior to the end of each 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. AIM voluntarily
reimbursed expenses of $24,200 on the Portfolio during the year ended August 31,
1997.
DISTRIBUTOR
The Trust has entered into a Master Distribution Agreement dated as of
February 28, 1997 (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 100, Houston, Texas 77046-1173. Certain trustees and officers of the Trust
are affiliated with FMC and AIM. The Distribution Agreement provides that FMC
has the exclusive right to distribute shares of the Trust 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 Trust has adopted a Master Distribution Plan (the "Plan") pursuant to Rule
12b-1 under the 1940 Act. The Plan provides that the Trust 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.
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 Trust
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 Trust 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 Trust 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.
12
<PAGE> 21
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 Trust 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 Trust is a Delaware business trust. The Trust was originally incorporated
in Maryland on January 24, 1977, but had no operations prior to November 10,
1980. Effective December 31, 1986, the Trust was reorganized as a Massachusetts
business trust; and effective October 15, 1993, the Trust 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 Trust
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 Trust 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
Trust may have different sales charges and other expenses which may affect
performance. An investor may obtain information concerning the Trust's other
classes by contacting FMC.
All shares of the Trust 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 Trust,
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 Trust
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.
13
<PAGE> 22
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 Trust's outstanding shares.
As of December 1, 1997, The Bank of New York was the owner of record of 48.53%
of the outstanding shares of the Class. As long as The Bank of New York owns
over 25% of such shares, it may be presumed to be in "control" of the Cash
Management Class of the Treasury Portfolio, as defined in the 1940 Act.
There are no preemptive or conversion rights applicable to any of the Trust's
shares. The Trust's shares, when issued, will be fully paid and non-assessable.
The Board of Trustees may create additional portfolios of the Trust without
shareholder approval.
TRANSFER AGENT AND CUSTODIAN
The Bank of New York, 90 Washington Street, 11th 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 100, Houston,
Texas 77046-1173, acts as transfer agent for the shares of the Class. It is
currently anticipated that, effective on or about December 29, 1997, A I M Fund
Services, Inc., a wholly owned subsidiary of AIM and a registered transfer
agent, will become the transfer agent to the Trust.
LEGAL COUNSEL
The law firm of Ballard Spahr Andrews & Ingersoll, Philadelphia, Pennsylvania,
serves as counsel to the Trust and passes upon legal matters for the Trust.
SHAREHOLDER INQUIRIES
Shareholder inquiries concerning the status of an account should be directed
to an investor's Institution, or to the Trust at 11 Greenway Plaza, Suite 100,
Houston, Texas 77046-1173, or may be made by calling (800) 877-7745.
14
<PAGE> 23
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<PAGE> 24
<TABLE>
<S> <C>
================================================== ===================================================
SHORT-TERM INVESTMENTS TRUST
11 Greenway Plaza, Suite 100 PROSPECTUS
Houston, Texas 77046-1173
(800) 877-7745
December 17, 1997
INVESTMENT ADVISOR
A I M ADVISORS, INC.
11 Greenway Plaza, Suite 100 SHORT-TERM
Houston, Texas 77046-1173 INVESTMENTS TRUST
(713) 626-1919
DISTRIBUTOR
FUND MANAGEMENT COMPANY ---------------------
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173 TREASURY PORTFOLIO
(800) 877-7745
---------------------
AUDITORS
KPMG PEAT MARWICK LLP
700 Louisiana
Houston, Texas 77002 CASH MANAGEMENT CLASS
CUSTODIAN
THE BANK OF NEW YORK
90 Washington Street,
11th Floor
New York, New York 10286
TABLE OF CONTENTS
TRANSFER AGENT
A I M INSTITUTIONAL FUND SERVICES, INC. PAGE
11 Greenway Plaza, Suite 100 Summary...................................... 2
Houston, Texas 77046-1173 Table of Fees and Expenses................... 4
Financial Highlights......................... 5
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY Suitability for Investors.................... 5
INFORMATION OR TO MAKE ANY REPRESENTATIONS Investment Program........................... 5
NOT CONTAINED IN THIS PROSPECTUS IN Purchase of Shares........................... 7
CONNECTION WITH THE OFFERING MADE BY THIS Redemption of Shares......................... 9
PROSPECTUS, AND IF GIVEN OR MADE, SUCH Dividends.................................... 9
INFORMATION OR REPRESENTATIONS MUST NOT BE Taxes........................................ 10
RELIED UPON AS HAVING BEEN AUTHORIZED BY Net Asset Value.............................. 10
THE TRUST OR THE DISTRIBUTOR. THIS Yield Information............................ 11
PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN Reports to Shareholders...................... 11
ANY JURISDICTION TO ANY PERSON TO WHOM Management of the Trust...................... 11
SUCH OFFERING MAY NOT LAWFULLY BE MADE. General Information.......................... 13
================================================== =====================================================
</TABLE>
<PAGE> 25
SHORT-TERM
INVESTMENTS TRUST
Prospectus
- --------------------------------------------------------------------------------
The Treasury Portfolio is a money market fund
TREASURY whose investment objective is the maximization of
PORTFOLIO current income to the extent consistent with the
INSTITUTIONAL 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 17, 1997 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 "Trust"), 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.
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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 17, 1997, HAS BEEN FILED WITH THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION THE
("SEC") AND IS HEREBY INCORPORATED BY REFERENCE. A
COPY OF THE STATEMENT OF ADDITIONAL INFORMATION IS
ATTACHED HERETO. THE SEC MAINTAINS A WEB SITE AT
HTTP://WWW.SEC.GOV THAT CONTAINS THE STATEMENT OF
ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY
REFERENCE, AND OTHER INFORMATION REGARDING THE TRUST.
THE TRUST'S SHARES ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY
BANK, AND THE TRUST'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 TRUST INVOLVE INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
[LOGO APPEARS HERE]
Fund Management Company
11 Greenway Plaza
Suite 100
Houston, Texas 77046-1173
(800) 659-1005
<PAGE> 26
SUMMARY
THE PORTFOLIO AND ITS INVESTMENT OBJECTIVE
The Trust 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 Trust also offers shares of other
classes of shares of beneficial interest of the Portfolio: the Personal
Investment Class, Private Investment Class, Cash Management Class and Resource
Class, representing an interest in the Portfolio. Such classes have different
distribution arrangements and are designed for institutional and other
categories of investors. The Trust also offers shares of two classes of another
portfolio, the Treasury TaxAdvantage Portfolio, each pursuant to a separate
prospectus. The portfolios of the Trust are referred to collectively as the
"Portfolios."
Because the Trust 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, 1997, the expenses of operation for the Class represented 0.09% 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."
NET ASSET VALUE
The Trust 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, 1997, the Trust 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
2
<PAGE> 27
advisor to investment companies. Under an Administrative Services Agreement, AIM
may be reimbursed by the Trust for its costs of performing certain accounting
and other administrative services for the Trust. See "Management of the Trust --
Investment Advisor" and "-- Administrative Services." Under a Transfer Agency
and Service Agreement, A I M Institutional Fund Services, Inc., ("Transfer
Agent"), AIM's wholly owned subsidiary and a registered transfer agent, receives
a fee for its provision of transfer agency, dividend distribution and
disbursement, and shareholder services to the Trust. It is currently anticipated
that, effective on or about December 29, 1997, A I M Fund Services, Inc., a
wholly owned subsidiary of AIM and a registered transfer agent, will become the
transfer agent to the Trust. See "General Information -- Transfer Agent and
Custodian."
DISTRIBUTOR
Fund Management Company ("FMC") acts as the exclusive distributor of the
Trust's shares. FMC does not receive any fee for distribution services from the
Trust. 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. There can be no assurance that the Portfolio will
be able to maintain a stable net asset value of $1.00 per share. 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, AIM Institutional Funds, La Familia AIM de
Fondos and La Familia AIM de Fondos and Design are registered service marks and
aimfunds.com and Invest With Discipline are service marks of A I M Management
Group Inc.
3
<PAGE> 28
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.................................................. 0.02%
------
Total other expenses................................. 0.03%
----
Total portfolio operating expenses -- Institutional
Class.................................................. 0.09%
====
</TABLE>
- ---------------
* Beneficial owners of shares of the Class should consider the effect of any
charges imposed by their bank or other financial institution for various
services.
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.................................................... $ 5
10 years.................................................... $12
</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 Trust" below.) The expense figures
are based upon actual costs and fees charged to the Class for the fiscal year
ended August 31, 1997. 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 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 EXPENSES AND ACTUAL EXPENSES MAY
BE GREATER OR LESSER THAN THOSE SHOWN.
4
<PAGE> 29
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, 1997. 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>
1997 1996 1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ---------- ---------- ----------
<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........ 0.05 0.05 0.06 0.04 0.03 0.05 0.07
---------- ---------- ---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment
income..................... (0.05) (0.05) (0.06) (0.04) (0.03) (0.05) (0.07)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of
period....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ========== ========== ==========
Total return.................. 5.47% 5.57% 5.66% 3.53% 3.22% 4.56% 7.04%
========== ========== ========== ========== ========== ========== ==========
Ratios/supplemental data:
Net assets, end of period
(000s omitted)............. $3,408,010 $2,335,441 $2,669,637 $2,452,389 $3,652,672 $3,835,387 $2,437,902
========== ========== ========== ========== ========== ========== ==========
Ratio of expenses to average
net assets................... 0.09%(a) 0.09% 0.10% 0.08% 0.08% 0.09% 0.10%
========== ========== ========== ========== ========== ========== ==========
Ratio of net investment income
to average net assets........ 5.35%(a) 5.43% 5.53% 3.39% 3.17% 4.38% 6.73%
========== ========== ========== ========== ========== ========== ==========
<CAPTION>
1990 1989 1988
---------- ---------- ----------
<S> <C> <C> <C>
Net asset value, beginning of
period....................... $ 1.00 $ 1.00 $ 1.00
Income from investment
operations:
Net investment income........ 0.08 0.09 0.07
---------- ---------- ----------
Less distributions:
Dividends from net investment
income..................... (0.08) (0.09) (0.07)
---------- ---------- ----------
Net asset value, end of
period....................... $ 1.00 $ 1.00 $ 1.00
========== ========== ==========
Total return.................. 8.52% 9.03% 6.98%
========== ========== ==========
Ratios/supplemental data:
Net assets, end of period
(000s omitted)............. $1,703,460 $1,189,822 $1,121,144
========== ========== ==========
Ratio of expenses to average
net assets................... 0.12% 0.11% 0.13%
========== ========== ==========
Ratio of net investment income
to average net assets........ 8.19% 8.69% 6.76%
========== ========== ==========
</TABLE>
- ---------------
(a) Ratios are based on average net assets of $2,873,371,753.
5
<PAGE> 30
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 record keeping. 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 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 Trust'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. Repurchase transactions are limited to a term not to exceed 365 days.
The Portfolio may enter into repurchase agreements only with institutions
believed by the Trust'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.
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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. Reverse
repurchase transactions are limited to a term not to exceed 92 days. 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, liquid 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 liquid 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.
INVESTMENT IN OTHER INVESTMENT COMPANIES. The Trust is permitted to invest in
other investment companies to the extent permitted by the 1940 Act, and rules
and regulations thereunder, and, if applicable, exemptive orders granted by the
SEC.
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
beneficial interest of the Trust.
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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, and
except that the Portfolio may purchase securities of other investment
companies to the extent permitted by applicable law or exemptive order; 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. 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 received by the Portfolio. As discussed
below, the Trust reserves the right to reject any purchase order. 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 Transfer Agent
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. Following the initial investment, subsequent purchases of shares of the
Class may also be made via AIM LINK(R) Remote, a personal computer application
software product. 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 Trust's custodian bank, are open
for business. The Portfolio, however, reserves the right to change the time for
which purchase and redemption requests must be submitted to the Portfolio for
execution on the same day on any day when the U.S. primary broker-dealer
community is closed for business or trading is restricted due to national
holidays. 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 Trust's right to reject any
purchase order, orders will be accepted (i) when payment for shares of the Class
purchased is received by The Bank of New York, the Trust's custodian bank, in
the form described below and notice of such order is provided to the 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.
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<PAGE> 33
Any funds received with respect to an order which is not accepted by the Trust
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 the Transfer Agent, 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Account Applications may
be obtained from the Transfer Agent. 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 the Transfer Agent.
Banks will be required to certify to the Trust that they comply with
applicable state law regarding registration as broker-dealers, or that they are
exempt from such registration.
The Trust 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 Trust. Redemption requests with respect to the Class may also be
made via AIM LINK(R) Remote. 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 are normally made by calling the
Trust.
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 Transfer Agent 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 the Transfer Agent 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. The Portfolio reserves the right to change the time for which
redemption requests must be submitted to and received by the Transfer Agent for
execution on the same day on any day when the U.S. primary broker-dealer
community is closed for business or trading is restricted due to national
holidays.
A shareholder may change the bank account designated to receive redemption
proceeds by written notice to the Trust. 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 Trust or the
Transfer Agent.
Shareholders may request a redemption by telephone. Neither the Transfer Agent
nor FMC will be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the Account Application if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures for
verification of telephone transactions may include recordings of telephone
transactions (maintained for six months), and mailings of confirmations promptly
after the transaction.
Payment for shares of the Class redeemed by mail and payment for telephone
redemptions in amounts of less than $1,000 may be made by check mailed within
seven days after receipt of the redemption request in proper form. The Trust 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 Trust unless
the Board of Trustees of the Trust determines in its sole discretion that
failure to so redeem may have materially adverse consequences to the
shareholders of the Trust.
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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) Portfolio
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, and transfer agency fees. 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 in writing by the institution to the
Transfer Agent, 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173 and will
become effective with dividends paid after its receipt by the Transfer Agent. 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 its net asset value per share
of the Portfolio at $1.00 for purposes of sales and redemptions. See "Net Asset
Value." Should the Trust incur or anticipate any unusual expense, loss or
depreciation which could adversely affect the income or net asset value of the
Portfolio, the Trust'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 Trust and each portfolio of the Trust 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 advisors concerning the application of
state, local or foreign taxes.
Foreign persons who file a United States tax return after December 31, 1996
for a U.S. tax refund and who are not eligible to obtain a social security
number must apply to the Internal Revenue Service ("IRS") for an individual
taxpayer identification number, using IRS Form W-7. For a copy of the IRS Form
W-7 and accompanying instructions, please contact your tax advisor or the
Transfer Agent.
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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 Portfolio. 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 Trust 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 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, 1997, 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 5.57% and 5.72%. 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 or its affiliates 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 Trust 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 Trust'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 TRUST
BOARD OF TRUSTEES
The overall management of the business and affairs of the Trust is vested with
its Board of Trustees. The Board of Trustees approves all significant agreements
between the Trust and persons or companies furnishing services to the Trust,
including agreements with the Trust's investment advisor, distributor, custodian
and transfer agent. The day-to-day operations of the Trust are delegated to the
Trust's officers and to AIM, subject always to the objectives and policies of
the Trust and to the general supervision of the Trust's Board of Trustees.
Information concerning the Board of Trustees may be found in the Statement of
Additional Information. Certain trustees and officers of the Trust are
affiliated with AIM and A I M Management Group Inc. ("AIM Management"), the
parent corporation of AIM.
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INVESTMENT ADVISOR
A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173,
acts as the investment advisor for the Portfolio pursuant to a Master Investment
Advisory Agreement dated as of February 28, 1997 (the "Advisory Agreement").
AIM, organized in 1976, together with its affiliates, manages or advises 55
investment company portfolios. Certain of the directors and officers of AIM are
also trustees or executive officers of the Fund. AIM is a wholly owned
subsidiary of AIM Management. AIM Management is a holding company engaged in the
financial services business. AIM Management is an indirect, wholly owned
subsidiary of AMVESCAP PLC, a publicly-traded holding company that, through its
subsidiaries, engages in the business of investment management on an
international basis.
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, 1997, AIM received fees from the Trust
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 0.09% of the Class' average daily net assets.
ADMINISTRATIVE SERVICES
The Trust has entered into a Master Administrative Services Agreement dated as
of February 28, 1997 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 Trust 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.
FEE WAIVERS
AIM or its affiliates 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 for such
fee or expenses prior to the end of each fiscal year. AIM voluntarily reimbursed
expenses of $24,200 on the Portfolio during the year ended August 31, 1997.
DISTRIBUTOR
The Trust has entered into a Master Distribution Agreement dated as of
February 28, 1997 (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 100, Houston, Texas 77046-1173. Certain trustees and officers of the Trust
are affiliated with FMC and AIM. The Distribution Agreement provides that FMC
has the exclusive right to distribute shares of the Trust 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.
12
<PAGE> 37
GENERAL INFORMATION
ORGANIZATION AND DESCRIPTION OF SHARES
The Trust is a Delaware business trust. The Trust was originally incorporated
in Maryland on January 24, 1977, but had no operations prior to November 10,
1980. Effective December 31, 1986, the Trust was reorganized as a Massachusetts
business trust; and effective October 15, 1993, the Trust 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 Trust
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 Trust 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 share. The other classes of the
Trust may have different sales charges and other expenses which may affect
performance. An investor may obtain information concerning the Trust's other
classes by contacting FMC.
All shares of the Trust 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 Trust,
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 Trust
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 Trust's outstanding shares.
There are no preemptive or conversion rights applicable to any of the Trust's
shares. The Trust's shares, when issued, will be fully paid and non-assessable.
The Board of Trustees may create additional portfolios of the Trust without
shareholder approval.
TRANSFER AGENT AND CUSTODIAN
The Bank of New York, 90 Washington Street, 11th 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 100, Houston,
Texas 77046-1173, acts as transfer agent for the shares of the Class. It is
currently anticipated that, effective on or about December 29, 1997, A I M Fund
Services, Inc., a wholly owned subsidiary of AIM and a registered transfer
agent, will become the transfer agent to the Trust.
LEGAL COUNSEL
The law firm of Ballard Spahr Andrews & Ingersoll, Philadelphia, Pennsylvania,
serves as counsel to the Trust and passes upon legal matters for the Trust.
SHAREHOLDER INQUIRIES
Shareholder inquiries concerning the status of an account should be directed
to the Trust at 11 Greenway Plaza, Suite 100, 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 Trust 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 Trust 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> 38
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<PAGE> 39
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 40
<TABLE>
- ------------------------------------------------------ ------------------------------------------------------
- ------------------------------------------------------ ------------------------------------------------------
<S> <C>
SHORT-TERM INVESTMENTS TRUST PROSPECTUS
11 Greenway Plaza, Suite 100 December 17, 1997
Houston, Texas 77046-1173 SHORT-TERM
(800) 659-1005 INVESTMENTS TRUST
---------------------
INVESTMENT ADVISOR
A I M ADVISORS, INC. TREASURY PORTFOLIO
11 Greenway Plaza, Suite 100 ---------------------
Houston, Texas 77046-1173
(713) 626-1919 INSTITUTIONAL CLASS
TABLE OF CONTENTS
DISTRIBUTOR
FUND MANAGEMENT COMPANY PAGE
11 Greenway Plaza, Suite 100 Summary.......................................... 2
Houston, Texas 77046-1173 Table of Fees and Expenses....................... 4
(800) 659-1005 Financial Highlights............................. 5
Suitability For Investors........................ 6
AUDITORS Investment Program............................... 6
KPMG PEAT MARWICK LLP Purchase of Shares............................... 8
700 Louisiana Redemption of Shares............................. 9
Houston, Texas 77002 Dividends........................................ 10
Taxes............................................ 10
CUSTODIAN Net Asset Value.................................. 11
THE BANK OF NEW YORK Yield Information................................ 11
90 Washington Street Reports to Shareholders.......................... 11
11th Floor Management of the Trust.......................... 11
New York, New York 10286 General Information.............................. 13
Appendix......................................... A-1
TRANSFER AGENT
A I M INSTITUTIONAL FUND SERVICES, INC.
11 Greenway Plaza, Suite 100
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 THE
PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE TRUST 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.
- ------------------------------------------------------ ------------------------------------------------------
- ------------------------------------------------------ ------------------------------------------------------
</TABLE>
<PAGE> 41
PROSPECTUS
PERSONAL INVESTMENT CLASS
OF THE
TREASURY PORTFOLIO
OF
SHORT-TERM INVESTMENTS TRUST
11 GREENWAY PLAZA, SUITE 100
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 "Trust"), 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.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------
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 17, 1997, HAS BEEN FILED
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE "SEC") 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 SEC MAINTAINS A WEB SITE AT HTTP://WWW.SEC.GOV THAT CONTAINS THE STATEMENT
OF ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND OTHER
INFORMATION REGARDING THE TRUST.
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND THE TRUST'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 TRUST INVOLVE INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
PROSPECTUS DATED: DECEMBER 17, 1997
<PAGE> 42
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE PAGE
---- ----
<S> <C> <S> <C>
SUMMARY........................... 2 DIVIDENDS.......................... 12
TABLE OF FEES AND EXPENSES........ 4 TAXES.............................. 12
FINANCIAL HIGHLIGHTS.............. 5 NET ASSET VALUE.................... 13
SUITABILITY FOR INVESTORS......... 6 YIELD INFORMATION.................. 14
INVESTMENT PROGRAM................ 6 REPORTS TO SHAREHOLDERS............ 14
PURCHASE OF SHARES................ 9 MANAGEMENT OF THE TRUST............ 14
REDEMPTION OF SHARES.............. 11 GENERAL INFORMATION................ 17
</TABLE>
SUMMARY
THE PORTFOLIO AND ITS INVESTMENT OBJECTIVE
The Trust 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 Trust also offers shares of other
classes of shares of beneficial interest of the Portfolio: the Institutional
Class, Private Investment Class, Cash Management Class and Resource Class,
representing an interest in the Portfolio. Such classes have different
distribution arrangements and are designed for institutional and other
categories of investors. The Trust also offers shares of two classes of another
portfolio, the Treasury TaxAdvantage Portfolio, each pursuant to a separate
prospectus. The portfolios of the Trust are referred to collectively as the
"Portfolios."
Because the Trust 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 Trust. 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."
2
<PAGE> 43
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."
NET ASSET VALUE
The Trust 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 Trust's investment advisor and
receives a fee based on the Trust's average daily net assets. During the fiscal
year ended August 31, 1997, 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 Trust for its costs of performing
certain accounting and other administrative services for the Trust. See
"Management of the Trust -- Investment Advisor" and "-- Administrative
Services." Under a Transfer Agency and Service Agreement, AIM Institutional
Fund Services, Inc. ("Transfer Agent"), AIM's wholly owned subsidiary and a
registered transfer agent, receives a fee for its provision of transfer agency,
dividend distribution and disbursement, and shareholder services to the Trust.
It is currently anticipated that, effective on or about December 29, 1997. A I M
Fund Services, Inc., a wholly owned subsidiary of AIM and a registered transfer
agent will become the transfer agent to the Trust. See "General Information --
Transfer Agent and Custodian."
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 Trust's Board of
Trustees, the Trust 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. There can be no assurance that the Portfolio
will be able to maintain a stable net asset value of $1.00 per share. 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, AIM Institutional Funds, La Familia AIM de
Fondos and La Familia AIM de Fondos and Design are registered service marks and
aimfunds.com and Invest With Discipline are service marks of A I M Management
Group Inc.
3
<PAGE> 44
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)**................. 0.05%
-------
Total other expenses.............................. 0.04%
----
Total portfolio -- operating expenses
Personal Investment Class**............................ 0.61%
====
</TABLE>
- ------------
* Beneficial owners of shares of the Class should consider the effect of any
charges imposed by their bank, broker-dealer or financial institution for
various services.
** Had there been no fee waivers and no expense reimbursements, 12b-1 fees,
Other expenses and Total portfolio operating expenses would have been 0.75%,
0.10% and 0.86%, 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.................................................... $20
5 years.................................................... $34
10 years.................................................... $76
</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 Trust" below.) The expense figures
are based upon actual costs and fees charged to the Class for the fiscal year
ended August 31, 1997, as stated to reflect current agreements. Future waivers
of fees (if any) may 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
4
<PAGE> 45
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 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 EXPENSES 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 six-year period ended August
31, 1997 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 on the financial statements and the related
notes appears in the Statement of Additional Information.
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993 1992 1991
-------- -------- -------- -------- -------- -------- -------
<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............ 0.05 0.05 0.05 0.03 0.03 0.04 0.003
-------- -------- -------- ------- ------- ------ ------
Less distributions:
Dividends (from net investment
income)........................ (0.05) (0.05) (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 $ 1.00 $ 1.00
======== ======== ======== ======= ======= ======= ======
Total return....................... 4.95% 5.04% 5.13% 3.02% 2.77% 4.07% 5.04%(a)
======== ======== ======== ======= ======= ======= ======
Ratios/supplemental data:
Net assets, end of period
(000s omitted)................... $322,971 $192,947 $114,527 $88,582 $69,867 $23,853 $ 330
======== ======== ======== ======= ======= ======= ======
Ratio of expenses to average net
asset(b)......................... 0.60%(c) 0.59% 0.60% 0.58% 0.53% 0.49% 0.81%(a)
======== ======== ======== ======= ======= ======= ======
Ratio of net investment income to
average net assets(d)............ 4.85%(c) 4.91% 5.03% 2.99% 2.70% 3.55% 5.03%(a)
======== ======== ======== ======= ======= ======= ======
</TABLE>
- ---------------
(a) Annualized.
(b) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to waiver of distribution fees and/or expense
reimbursements were 0.86%, 0.92%, 0.90%, 0.91%, 0.93%, 1.03% and 12.68% for
the periods 1997-1991, respectively.
(c) Ratios are based on average net assets of $242,057,960.
(d) After fee waivers and/or expense reimbursements. Ratios of net investment
income (loss) to average net assets prior to waiver of distribution fees
and/or expense reimbursements were 4.59%, 4.58%, 4.73%, 2.66%, 2.29%, 3.01%
and (6.84%) (annualized) for the periods 1997-1991, respectively.
5
<PAGE> 46
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 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 Trust'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. Repurchase transactions are limited to a term not to exceed 365 days.
The Portfolio may enter into repurchase agreements only with institutions
believed by the Trust'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
6
<PAGE> 47
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. Reverse
repurchase transactions are limited to a term not to exceed 92 days. 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
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of funds available for investment on the settlement date. Until the settlement
date, liquid 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 liquid 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.
INVESTMENT IN OTHER INVESTMENT COMPANIES. The Trust is permitted to invest
in other investment companies to the extent permitted by the 1940 Act, and rules
and regulations thereunder, and, if applicable, exemptive orders granted by the
SEC.
The investment policies above may be changed by the Board of Trustees
without the affirmative vote of a majority of the outstanding shares of
beneficial interest of the Trust.
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, and
except that the Portfolio may purchase securities of other investment
companies to the extent permitted by applicable law or exemptive order; 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. 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 received by the Portfolio. As discussed
below, the Trust reserves the right to reject any purchase order. 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 Transfer
Agent 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. Following the initial investment, subsequent purchases of
shares of the Class may also be made via AIM LINK--Registered Trademark--
Remote, a personal computer application software product. 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 Trust's custodian bank,
are open for business. The Portfolio, however, reserves the right to change the
time for which purchases and redemption requests must be submitted to the
Portfolio for execution on the same day or any day when the U.S. primary
broker-dealer community is closed for business or trading is restricted due to
national holidays. 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 Trust proxy statements, annual reports and other
communications to shareholders whose accounts are serviced by the Institution;
and such other services as the Trust may reasonably request. Institutions will
be required to certify to the Trust 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 the Transfer Agent, must be completed
and sent to the Transfer Agent at 11 Greenway Plaza, Suite 100, 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 the Transfer Agent. An investor must open an account in the Class through an
Institution in accordance with procedures established by such Institution.
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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 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 Trust. 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 the Transfer Agent.
Subject to the conditions stated above and to the Trust's right to reject
any purchase order, orders will be accepted (i) when payment for shares
purchased is received by The Bank of New York, the Trust's custodian bank, in
the form described above and notice of such order is provided to the Transfer
Agent 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 Trust 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.
The Trust 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 Trust. Redemption requests with respect to the Class may also be made
via AIM LINK--Registered Trademark-- Remote. 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 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 Transfer Agent 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 the Transfer Agent 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. The Portfolio reserves the right to change the time for which
redemption requests must be submitted to and received by the Transfer Agent for
execution on the same day on any day when the U.S. primary broker-dealer
community is closed for business or trading is restricted due to national
holidays.
A shareholder may change the bank account designated to receive redemption
proceeds by written notice to the Trust. 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 Trust or the
Transfer Agent.
Shareholders may request a redemption by telephone. Neither the Transfer
Agent nor FMC will be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the Account Application if they reasonably believe such request to be
genuine but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures for
verification of telephone transactions may include recordings of telephone
transactions (maintained for six months), and mailings of confirmations promptly
after the transaction.
Payment for shares of the Class redeemed by mail and payment for telephone
redemptions in amounts of less than $1,000 may be made by check mailed within
seven days after receipt of the redemption request in proper form. The Trust 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 Trust unless
the Board of Trustees of the Trust determines in its sole discretion that
failure to so redeem may have materially adverse consequences to the
shareholders of the Trust.
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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) Portfolio
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, and transfer agency fees. 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 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 in writing by the
Institution to the Transfer Agent, 11 Greenway Plaza, Suite 100, Houston, TX
77046-1173 and will become effective with dividends paid after its receipt by
the Transfer Agent. 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 the net asset value per
share of the Portfolio at $1.00 for purposes of sales and redemptions. See "Net
Asset Value." Should the Trust incur or anticipate any unusual expense, loss or
depreciation which could adversely affect the income or net asset value of the
Portfolio, the Trust'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.
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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 Trust and each portfolio of the Trust 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 advisors concerning the application of
state, local or foreign taxes.
Foreign persons who file a United States tax return after December 31, 1996
for a U.S. tax refund and who are not eligible to obtain a social security
number must apply to the Internal Revenue Service ("IRS") for an individual
taxpayer identification number, using IRS Form W-7. For a copy of the IRS Form
W-7 and accompanying instructions, please contact your tax advisor or the
Transfer Agent.
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 Portfolio. 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.
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YIELD INFORMATION
Yield information for the Class can be obtained by calling the Trust 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, 1997, 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 5.07% and 5.20%, respectively, excluding capital
gains distributions. 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 or its affiliates 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 Trust 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 Trust's independent auditors.
Unless otherwise requested by the shareholder, each shareholder will be
provided by its Institution 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 TRUST
BOARD OF TRUSTEES
The overall management of the business and affairs of the Trust is vested
with the Board of Trustees. The Board of Trustees approves all significant
agreements between the Trust and persons or companies furnishing services to the
Trust, including agreements with the Trust's investment advisor, distributor,
custodian and transfer agent. The day-to-day operations of the Trust are
delegated to the Trust's officers and to AIM, subject always to the objective
and policies of the Trust and to the general supervision of the Trust's Board of
Trustees. Information concerning the Board of Trustees may be found in the
Statement of Additional Information. Certain trustees and officers of the Trust
are affiliated with AIM and A I M Management Group Inc. ("AIM Management"), the
parent corporation of AIM.
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INVESTMENT ADVISOR
A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas
77046-1173, acts as the investment advisor for the Portfolio pursuant to a
Master Investment Advisory Agreement dated as of February 28, 1997 (the
"Advisory Agreement"). AIM was organized in 1976 and, together with its
affiliates, manages or advises 55 investment company portfolios. Certain of the
directors and officers of AIM are also trustees or executive officers of the
Trust. AIM is a wholly owned subsidiary of AIM Management, a privately held
corporation. AIM Management is a holding company engaged in the financial
services business. AIM Management is an indirect, wholly owned subsidiary of
AMVESCAP PLC, a publicly-traded holding company that, through its subsidiaries,
engages in the business of investment management on an international basis.
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, 1997, AIM received fees with respect
to the Portfolio from the Trust 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 Trust has entered into a Master Administrative Services Agreement dated
as of February 28, 1997 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 Trust 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.
FEE WAIVERS
AIM or its affiliates 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 for such
fee or expenses 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 each fiscal year. AIM voluntarily
reimbursed expenses of $24,200 on the Portfolio during the year ended August 31,
1997.
DISTRIBUTOR
The Trust has entered into a Master Distribution Agreement dated as of
February 28, 1997 (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 100, Houston, Texas 77046-1173. Certain trustees and officers of the Trust
are affiliated with FMC. The Distribution Agreement provides that FMC has the
exclusive right to distribute shares of the Trust either directly or through
other broker-dealers. FMC is the distributor of several of the mutual funds
managed or advised by AIM.
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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 Trust has adopted a Master Distribution Plan (the "Plan") pursuant to
Rule 12b-1 under the 1940 Act. The Plan provides that the Trust 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 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 Trust 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 Trust 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 Trust 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 Trust's Board of Trustees, including a majority of the trustees
who are not "interested persons" (as defined in the 1940 Act) of the Trust and
who have no direct or indirect financial interest in the operation of the 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
Trust 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
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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.
GENERAL INFORMATION
ORGANIZATION AND DESCRIPTION OF SHARES
The Trust is a Delaware business trust. The Trust was originally
incorporated in Maryland on January 24, 1977, but had no operations prior to
November 10, 1980. Effective December 31, 1986, the Trust was reorganized as a
Massachusetts business trust; and effective October 15, 1993, the Trust 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 Trust 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 Trust 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 Trust may have different sales charges and other
expenses which may affect performance. An investor may obtain information
concerning the Trust's other classes by contacting FMC.
All shares of the Trust 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
17
<PAGE> 58
described in this Prospectus. In the event of liquidation or termination of the
Trust, 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 Trust 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 Trust's outstanding shares.
As of December 1, 1997, Cullen/Frost Discount Brokers was the owner of
record of 66.08%, and The Bank of New York was the owner of record of 27.42%, of
the outstanding shares of the Class. As long as each of Cullen/Frost Discount
Brokers and The Bank of New York owns over 25% of such shares, it may be
presumed to be in "control" of the Personal Investment Class of the Treasury
Portfolio as defined in the 1940 Act.
There are no preemptive or conversion rights applicable to any of the
Trust's shares. The Trust's shares, when issued, will be fully paid and
non-assessable. The Board of Trustees may create additional portfolios or
classes of the Trust without shareholder approval.
TRANSFER AGENT AND CUSTODIAN
The Bank of New York, 90 Washington Street, 11th 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 100, Houston,
Texas 77046-1173, acts as transfer agent for shares of the Class. It is
currently anticipated that, effective on or about December 29, 1997, A I M Fund
Services, Inc., a wholly owned subsidiary of AIM and a registered transfer
agent, will become the transfer agent to the Trust.
LEGAL COUNSEL
The law firm of Ballard Spahr Andrews & Ingersoll, Philadelphia,
Pennsylvania, serves as counsel to the Trust and passes upon legal matters for
the Trust.
SHAREHOLDER INQUIRIES
Shareholder inquiries concerning the status of an account should be
directed to the Trust at 11 Greenway Plaza, Suite 100, 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 Trust 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 Trust 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> 59
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 60
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 61
SHORT-TERM INVESTMENTS TRUST SHORT-TERM
11 Greenway Plaza, Suite 100 INVESTMENTS TRUST
Houston, Texas 77046-1173
(800) 877-4744 PERSONAL
INVESTMENT CLASS
OF THE
-------------------------------------------
INVESTMENT ADVISOR TREASURY PORTFOLIO PROSPECTUS
A I M ADVISORS, INC.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173 DECEMBER 17, 1997
(713) 626-1919
DISTRIBUTOR
FUND MANAGEMENT COMPANY
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
(800) 877-4744
AUDITORS
KPMG PEAT MARWICK LLP
700 Louisiana
Houston, Texas 77002
CUSTODIAN
THE BANK OF NEW YORK
90 Washington Street
11th Floor
New York, New York 10286
TRANSFER AGENT
A I M INSTITUTIONAL FUND
SERVICES, INC.
11 Greenway Plaza, Suite 100
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 [LOGO APPEARS HERE]
LAWFULLY BE MADE. FUND MANAGEMENT COMPANY
<PAGE> 62
PROSPECTUS
PRIVATE INVESTMENT CLASS
OF THE
TREASURY PORTFOLIO
OF
SHORT-TERM INVESTMENTS TRUST
11 GREENWAY PLAZA, SUITE 100
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 "Trust"), 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.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
------------------
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 17, 1997, HAS BEEN FILED
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE "SEC") 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 SEC MAINTAINS A WEB SITE AT HTTP://WWW.SEC.GOV THAT CONTAINS THE STATEMENT
OF ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND OTHER
INFORMATION REGARDING THE TRUST.
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND THE TRUST'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 TRUST INVOLVE INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
PROSPECTUS DATED: DECEMBER 17, 1997
<PAGE> 63
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.................................. 13
SUITABILITY FOR INVESTORS........................ 6 YIELD INFORMATION................................ 13
INVESTMENT PROGRAM............................... 6 REPORTS TO SHAREHOLDERS.......................... 14
PURCHASE OF SHARES............................... 9 MANAGEMENT OF THE TRUST.......................... 14
REDEMPTION OF SHARES............................. 10 GENERAL INFORMATION.............................. 17
</TABLE>
SUMMARY
THE PORTFOLIO AND ITS INVESTMENT OBJECTIVE
The Trust 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 Trust also offers other shares of
other classes of shares of beneficial interest of the Portfolio: the
Institutional Class, Cash Management Class, Personal Investment Class and
Resource Class, representing an interest in the Portfolio. Such classes have
different distribution arrangements and are designed for institutional and other
categories of investors. The Trust also offers shares of two classes of another
portfolio, the Treasury TaxAdvantage Portfolio, each pursuant to a separate
prospectus. The portfolios of the Trust are referred to collectively as
"Portfolios."
Because the Trust 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 Trust. 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."
2
<PAGE> 64
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."
NET ASSET VALUE
The Trust 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 Trust's investment advisor and
receives a fee based on the Trust's average daily net assets. During the fiscal
year ended August 31, 1997, the Trust 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 Trust for its costs of performing certain accounting
and other administrative services for the Trust. See "Management of the
Trust -- Investment Advisor" "-- Administrative Services." Under a Transfer
Agency and Service Agreement, A I M Institutional Fund Services, Inc. ("Transfer
Agent"), AIM's wholly owned subsidiary and a registered transfer agent, receives
a fee for its provision of transfer agency, dividend distribution and
disbursement, and shareholder services to the Trust. It is currently anticipated
that, effective on or about December 29, 1997. A I M Fund Services, Inc.,
a wholly owned subsidiary of AIM and a registered transfer agent will become
the transfer agent to the Trust. See "General Information -- Transfer Agent and
Custodian."
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 Trust's
Board of Trustees, the Trust 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. There can be no assurance that the Portfolio
will be able to maintain a stable net asset value of $1.00 per share. 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, AIM Institutional Funds, La Familia AIM de
Fondos and La Familia AIM de Fondos and Design are registered service marks and
aimfunds.com and Invest With Discipline are service marks of A I M Management
Group Inc.
3
<PAGE> 65
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............................................................. 0.02%
------
Total other expenses.......................................... 0.03%
------
Total portfolio operating expenses -- Private Investment Class**...... 0.39%
======
</TABLE>
- ---------------
* Beneficial owners of shares of the Class should consider the effect of any
changes imposed by their bank, broker-dealer or other financial institution for
various services.
** Had there been no fee waivers, 12b-1 fees would have been 0.50% and Total
portfolio operating expenses would have been 0.59%.
*** 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.................................................... $49
</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 Trust" below.) The expense figures
are based upon actual costs and fees charged to the Class for the fiscal year
ended August 31, 1997. The Table of Fees and Expenses
4
<PAGE> 66
reflects a voluntary waiver of 12b-1 fees for the Class. Future waivers of fees
(if any) may 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.
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 shown in the above table is based on the amounts listed under
"Annual Portfolio Expenses." THE EXAMPLE SHOULD NOT BE CONSIDERED TO BE AN
ACCURATE REPRESENTATION OF PAST OR FUTURE EXPENSES 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
five-year period ended August 31, 1997 and the period November 25, 1991 (date
operations commenced) through August 31, 1992. 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>
1997 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- --------
<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 0.05 0.05 0.03 0.03 0.03
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income.... (0.05) (0.05) (0.05) (0.03) (0.03) (0.03)
-------- -------- -------- -------- -------- --------
Net asset value, end of period............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total return.............................. 5.16% 5.25% 5.34% 3.22% 2.91% 3.92%(a)
======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s
omitted).............................. $463,441 $352,537 $394,585 $412,716 $204,281 $ 525
======== ======== ======== ======== ======== ========
Ratio of expenses to average net
assets(b)............................. 0.39%(c) 0.39% 0.40% 0.38% 0.38% 0.40%(a)
======== ======== ======== ======== ======== ========
Ratio of net investment income to
average net assets(d)................. 5.05%(c) 5.14% 5.23% 3.26% 2.81% 3.68%(a)
======== ======== ======== ======== ======== ========
</TABLE>
- ---------------
(a) Annualized.
(b) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to waiver of distribution fees and/or expense
reimbursements were 0.59%, 0.59%, 0.60%, 0.60%, 0.67% and 4.54% for the
periods 1997-1992, respectively.
(c) After fee waivers and/or expense reimbursements. Ratios are based on average
net assets of $398,566,784.
(d) Ratios of net investment income (loss) to average net assets prior to waiver
of distribution fees and/or expense reimbursements were 4.85%, 4.94%, 5.03%,
3.05%, 2.52% and (0.47%) for the periods 1997-1992, respectively.
5
<PAGE> 67
SUITABILITY FOR INVESTORS
The Class is intended for use primarily by customers of banks, certain
broker-dealers and other financial institutions who seek a convenient vehicle in
which to invest in an open-end diversified money market fund. The minimum
initial investment is $10,000.
Investors in the Class have the opportunity to receive a somewhat higher
yield than might be obtainable through direct investment in money market
instruments, and enjoy the benefits of diversification, economies of scale and
same-day liquidity. Generally, higher interest rates can be obtained on the
purchase of very large blocks of money market instruments. Of course, any such
relative increase in interest rates may be offset to some extent by the
operating expenses of the Class.
INVESTMENT PROGRAM
INVESTMENT OBJECTIVE
The investment objective of the Portfolio is the maximization of current
income to the extent consistent with the preservation of capital and the
maintenance of liquidity. The Portfolio seeks to achieve its objective by
investing in direct obligations of the U.S. Treasury and repurchase agreements
secured by such obligations. The money market instruments in which the Portfolio
invests are considered to carry very little risk and accordingly may not have as
high a yield as that available on money market instruments of lesser quality.
The Portfolio consists exclusively of money market instruments which have
maturities of 397 days or less from the date of purchase (except that securities
subject to repurchase agreements may have longer maturities).
INVESTMENT POLICIES
The Portfolio invests exclusively in direct obligations of the U.S.
Treasury, which include Treasury bills, notes and bonds, and repurchase
agreements relating to such securities. The Portfolio may also engage in certain
investment practices described below. The market values of the money market
instruments held by the Portfolio will be affected by changes in the yields
available on similar securities. If yields have increased since a security was
purchased, the market value of such security will generally have decreased.
Conversely, if yields have decreased, the market value of such security will
generally have increased.
REPURCHASE AGREEMENTS. The Portfolio intends to invest in repurchase
agreements with banks and broker-dealers pertaining to the securities described
above and which at the date of purchase are "First Tier" securities as defined
in Rule 2a-7 under the 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 Trust'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. Repurchase transactions are limited to a term not to exceed 365 days.
The Portfolio may enter into repurchase agreements only with institutions
believed by the Trust'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
6
<PAGE> 68
seeks to enforce its rights thereto, (b) possible subnormal levels of income and
lack of access to income during this period, and (c) expenses of enforcing its
rights. Repurchase agreements are considered to be loans by the Portfolio under
the 1940 Act.
BORROWING MONEY/REVERSE REPURCHASE AGREEMENTS. The Portfolio may borrow
money and enter into reverse repurchase agreements with respect to its portfolio
securities in amounts up to 10% of the value of its total assets at the time of
borrowing or entering into a reverse repurchase agreement. Reverse repurchase
agreements involve the sale by the Portfolio of a portfolio security at an
agreed-upon price, date and interest payment. The Portfolio will borrow money or
enter into reverse repurchase agreements solely for temporary or defensive
purposes, such as to facilitate the orderly sale of portfolio securities or to
accommodate abnormally heavy redemption requests should they occur. Reverse
repurchase transactions are limited to a term not to exceed 92 days. 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
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of funds available for investment on the settlement date. Until the settlement
date, liquid 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 liquid 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.
INVESTMENT IN OTHER INVESTMENT COMPANIES. The Trust is permitted to invest
in other investment companies to the extent permitted by the 1940 Act, and rules
and regulations thereunder, and, if applicable, exemptive orders granted by the
SEC.
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 beneficial interest of the Trust.
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, and
except that the Portfolio may purchase securities of other investment
companies to the extent permitted by applicable law or exemptive order; 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. A description of
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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 received by the Portfolio. As discussed
below, the Trust reserves the right to reject any purchase order. 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 Transfer Agent 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. Following the initial investment, subsequent
purchases of shares of the Class may also be made via AIM LINK--Registered
Trademark-- Remote, a personal computer application software product. 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 Trust's custodian bank,
are open for business. The Portfolio, however, reserves the right to change the
time for which purchase and redemption requests must be submitted to the
Portfolio for execution or the same day on any day when the U.S. primary
broker-dealer community is closed for business or trading is restricted due to
national holiday. 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
Trust proxy statements, annual reports and other communications to shareholders
whose accounts are serviced by the Institution; and such other services as the
Trust may reasonably request. Institutions will be required to certify to the
Trust 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 the Transfer Agent, must be completed
and sent to the Transfer Agent at 11 Greenway Plaza, Suite 100, 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 the Transfer Agent. 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,
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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 Trust. The Portfolio will normally be required to make
immediate settlement in federal funds (member bank deposits with a Federal
Reserve Bank) for portfolio securities purchased. Accordingly, payment for
shares of the Class purchased by Institutions on behalf of their customers must
be in federal funds. If an investor's order to purchase shares of the Class is
paid for other than in federal funds, the Institution, acting on behalf of the
investor, completes the conversion into federal funds (which may take two
business days), or itself advances federal funds prior to conversion, and
promptly transmits the order and payment in the form of federal funds to the
Transfer Agent.
Subject to the conditions stated above and to the Trust's right to reject
any purchase order, orders will be accepted (i) when payment for shares of the
Class purchased is received by The Bank of New York, the Trust's custodian bank,
in the form described above and notice of such order is provided to the 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.
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 Trust 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.
The Trust 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 Trust. Redemption requests with respect to the Class may also be
made via AIM LINK--Registered Trademark-- Remote. 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 are normally
made through a customer's Institution.
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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 Transfer Agent 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 the Transfer Agent 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. The Portfolio reserves the right to change the time of which
redemption requests must be submitted to and received by the Transfer Agent for
execution on the same day on any day when the U.S. primary broker-dealer
community is closed for business or trading is restricted due to national
holidays.
A shareholder may change the bank account designated to receive redemption
proceeds by written notice to the Trust. 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 Trust, or the
Transfer Agent.
Shareholders may request a redemption by telephone. Neither the Transfer
Agent nor FMC will be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the Account Application if they reasonably believe such request to be
genuine but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures for
verification of telephone transactions may include recordings of telephone
transactions (maintained for six months), and mailings of confirmations promptly
after the transaction.
Payment for shares of the Class redeemed by mail and payment for telephone
redemptions in amounts of less than $1,000 may be made by check mailed within
seven days after receipt of the redemption request in proper form. The Trust 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 Trust 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 Trust 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 Trust 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) Portfolio
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, and transfer agency fees. 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
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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 in writing by the
Institution to the Transfer Agent at 11 Greenway Plaza, Suite 100, Houston, TX
77046-1173 and will become effective with dividends paid after its receipt by
the Transfer Agent. 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 Trust incur or anticipate any unusual expense, loss or depreciation
which could adversely affect the income or net asset value of the Portfolio, the
Trust'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
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gains against the losses of the other portfolio of the Trust and each portfolio
of the Trust 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 advisors concerning the application of
state, local or foreign taxes.
Foreign persons who file a United States tax return after December 31, 1996
for a U.S. tax refund and who are not eligible to obtain a social security
number must apply to the Internal Revenue Service ("IRS") for an individual
taxpayer identification number, using IRS Form W-7. For a copy of the IRS Form
W-7 and accompanying instructions, please contact your tax advisor or the
Transfer Agent.
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 Portfolio. 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 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 Trust 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, 1997, 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 5.27% and 5.41%, 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.
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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 or its affiliates 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 Trust 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 Trust's independent auditors.
Unless otherwise requested by the shareholder, each shareholder will be
provided with a written confirmation for each transaction by its Institution.
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 TRUST
BOARD OF TRUSTEES
The overall management of the business and affairs of the Trust is vested
with its Board of Trustees. The Board of Trustees approves all significant
agreements between the Trust and persons or companies furnishing services to the
Trust, including agreements with the Trust's investment advisor, distributor,
custodian and transfer agent. The day-to-day operations of the Trust are
delegated to the Trust's officers and to AIM, subject always to the objectives
and policies of the Trust and to the general supervision of the Trust's Board of
Trustees. Information concerning the Board of Trustees may be found in the
Statement of Additional Information. Certain trustees and officers of the Trust
are affiliated with AIM and A I M Management Group Inc. ("AIM Management"), the
parent corporation of AIM.
INVESTMENT ADVISOR
A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas
77046-1173, acts as the investment advisor for the Portfolio pursuant to a
Master Investment Advisory Agreement dated as of February 28, 1997 (the
"Advisory Agreement"). AIM was organized in 1976 and, together with its
affiliates, manages or advises 55 investment company portfolios. Certain of the
directors and officers of AIM are also trustees or executive officers of the
Trust. AIM is a wholly owned subsidiary of AIM Management. AIM Management is a
holding company engaged in the financial services business. AIM Management is an
indirect, wholly owned subsidiary of AMVESCAP PLC, a publicly-traded holding
company that, through its subsidiaries, engages in the business of investment
management on an international basis.
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, 1997, AIM received fees from the Trust
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 0.39% of the Class' average daily net assets.
ADMINISTRATIVE SERVICES
The Trust has entered into a Master Administrative Services Agreement
effective February 28, 1997 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 Trust 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.
FEE WAIVERS
AIM or its affiliates 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 for such
fee or expenses 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 each fiscal year. AIM voluntarily
reimbursed expenses of $24,200 on the Portfolio during the year ended August 31,
1997.
DISTRIBUTOR
The Trust has entered into a Master Distribution Agreement dated as of
February 28, 1997 (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 100, Houston, Texas 77046-1173. Certain trustees and officers of the Trust
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 Trust has adopted a Master Distribution Plan (the "Plan") pursuant to
Rule 12b-1 under the 1940 Act. The Plan provides that the Trust may compensate
FMC in connection with the distribution of shares of
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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 Trust 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 Trust 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 Trust 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 Trust 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.
16
<PAGE> 78
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 Trust is a Delaware business trust. The Trust was originally
incorporated in Maryland on January 24, 1977, but had no operations prior to
November 10, 1980. Effective December 31, 1986, the Trust was reorganized as a
Massachusetts business trust; and effective October 15, 1993, the Trust 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 Trust 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 Trust 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 Trust may have different sales charges and other
expenses which may affect performance. An investor may obtain information
concerning the Trust's other classes by contacting FMC.
All shares of the Trust 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 Trust, 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 Trust
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 Trust's outstanding shares.
As of December 1, 1997, Liberty Bank & Trust Company of Tulsa, N.A. was the
owner of record of 50.06% of the outstanding shares of the Class. As long as
Liberty Bank & Trust Company of Tulsa, N.A. owns
17
<PAGE> 79
over 25% of such shares, it may be presumed to be in "control" of the Private
Investment Class of the Treasury Portfolio, as defined in the 1940 Act.
There are no preemptive or conversion rights applicable to any of the
Trust's shares. The Trust's shares, when issued, will be fully paid and
non-assessable. The Board of Trustees may create additional portfolios and
classes of the Trust without shareholder approval.
TRANSFER AGENT AND CUSTODIAN
The Bank of New York, 90 Washington Street, 11th 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 100, Houston,
Texas 77046-1173, acts as transfer agent for the shares of the Class. It is
currently anticipated that, effective on or about December 29, 1997, A I M Fund
Services, Inc., a wholly owned subsidiary of AIM and a registered transfer
agent, will become the transfer agent to the Trust.
LEGAL COUNSEL
The law firm of Ballard Spahr Andrews & Ingersoll, Philadelphia,
Pennsylvania, serves as counsel to the Trust and passes upon legal matters for
the Trust.
SHAREHOLDER INQUIRIES
Shareholder inquiries concerning the status of an account should be
directed to an investor's Institution, or to the Trust at 11 Greenway Plaza,
Suite 100, 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 Trust 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 Trust 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> 80
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 81
<TABLE>
<S> <C>
SHORT-TERM INVESTMENTS TRUST SHORT-TERM
11 Greenway Plaza, Suite 100 INVESTMENTS TRUST
Houston, Texas 77046-1173
(800) 877-7748 PRIVATE
INVESTMENT CLASS
INVESTMENT ADVISOR OF THE
A I M ADVISORS, INC. ------------------------------------------------------
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173 TREASURY PORTFOLIO PROSPECTUS
(713) 626-1919
DECEMBER 17, 1997
DISTRIBUTOR
FUND MANAGEMENT COMPANY
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
(800) 877-7748
AUDITORS
KPMG PEAT MARWICK LLP
700 Louisiana
Houston, Texas 77002
CUSTODIAN
THE BANK OF NEW YORK
90 Washington Street
11th Floor
New York, New York 10286
TRANSFER AGENT
A I M INSTITUTIONAL FUND
SERVICES, INC.
11 Greenway Plaza, Suite 100
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 TRUST OR THE
DISTRIBUTOR. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN
ANY JURISDICTION TO ANY PERSON
TO WHOM SUCH OFFERING MAY NOT [LOGO APPEARS HERE]
LAWFULLY BE MADE. FUND MANAGEMENT COMPANY
</TABLE>
<PAGE> 82
SHORT-TERM
INVESTMENTS TRUST
Prospectus
- --------------------------------------------------------------------------------
TREASURY 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
U.S. Treasury and repurchase agreements secured by such
DECEMBER 17, 1997 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 "Trust"), 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.
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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 17,
1997, HAS BEEN FILED WITH THE UNITED STATES SECURITIES
AND EXCHANGE COMMISSION (THE "SEC") 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 SEC MAINTAINS
A WEB SITE AT HTTP://WWW.SEC.GOV THAT CONTAINS THE
STATEMENT OF ADDITIONAL INFORMATION, MATERIAL
INCORPORATED BY REFERENCE, AND OTHER INFORMATION
REGARDING THE TRUST.
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS
OF, OR GUARANTEED OR ENDORSED BY, ANY BANK, AND THE
TRUST'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 TRUST INVOLVE
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
[LOGO APPEARS HERE]
Fund Management Company
11 Greenway Plaza
Suite 100
Houston, Texas 77046-1173
(800) 825-6858
<PAGE> 83
SUMMARY
THE PORTFOLIO AND ITS INVESTMENT OBJECTIVE
The Trust 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 Trust also offers shares of other
classes of shares of beneficial interest of the Portfolio: the Institutional
Class, Private Investment Class, Personal Investment Class and Cash Management
Class, representing an interest in the Portfolio. Such classes have different
distribution arrangements and are designed for institutional and other
categories of investors. The Trust 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 Trust are referred to collectively as the "Portfolios."
Because the Trust 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."
NET ASSET VALUE
The Trust 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, 1997, the Trust 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 Trust for its costs of performing
certain accounting and other administrative services for the Fund. See
"Management of the Trust -- Investment Advisor" and "-- Administrative
Services." Under a Transfer Agency and Service Agreement, A I M Insti-
2
<PAGE> 84
tutional Fund Services, Inc. ("Transfer Agent"), AIM's wholly owned subsidiary
and a registered transfer agent, receives a fee for its provision of transfer
agency, dividend distribution and disbursement, and shareholder services to the
Trust. It is currently anticipated that, effective on or about December 29,
1997, A I M Fund Services, Inc., a wholly owned subsidiary of AIM and a
registered transfer agent will become the transfer agent to the Trust. See
"General Information -- Transfer Agent and Custodian."
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 Trust's
Board of Trustees, FMC receives a fee from the Trust 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 Trust's Board of Trustees. The Trust 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. There can be no assurance that the Portfolio will
be able to maintain a stable net asset value of $1.00 per share. 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, AIM Institutional Funds, La Familia AIM de
Fondos and La Familia AIM de Fondos and Design are registered service marks and
aimfunds.com and Invest With Discipline are service marks of A I M Management
Group Inc.
3
<PAGE> 85
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.................................................. 0.02%
------
Total other expenses.............................. 0.03%
------
Total portfolio operating expenses -- Resource Class**.... 0.25%
======
</TABLE>
- ---------------
* Beneficial owners of shares of the Class should consider the effect of any
charges imposed by their bank, broker-dealer or other financial institution
for various services.
** Had there been no fee waivers, 12b-1 fees and Total portfolio operating
expenses would have been 0.20% and 0.30%, respectively.
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
5 years.................................................... $14
10 years.................................................... $32
</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 Trust" below.) The expense figures
ended August 31, 1997. 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. Future waivers of fees (if any) may
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.
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 EXPENSES AND ACTUAL EXPENSES MAY
BE GREATER OR LESSER THAN THOSE SHOWN.
4
<PAGE> 86
FINANCIAL HIGHLIGHTS
Shown below are the per share data, ratios and supplemental data for the
fiscal year ended August 31, 1997 and for the period March 12, 1996 (date
operations commenced) through August 31, 1996. 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>
1997 1996
-------- -------
<S> <C> <C>
Net asset value, beginning of period........................ $ 1.00 $ 1.00
Income from investment operations:
Net investment income..................................... 0.05 0.03
-------- -------
Less distributions:
Dividends from net investment income...................... (0.05) (0.03)
-------- -------
Net asset value, end of period............................ $ 1.00 $ 1.00
======== =======
Total return.............................................. 5.30% 5.09%(a)
======== =======
Ratios/supplemental data:
Net assets, end of period (000s omitted).................. $237,123 $33,339
======== =======
Ratio of expenses to average net assets(b)................ 0.25%(c) 0.25%(a)
======== =======
Ratio of net investment income to average net assets(d)... 5.19%(c) 5.07%(a)
======== =======
</TABLE>
- ---------------
(a) Annualized.
(b) After fee waivers and/or expense reimbursements. Ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursement was
0.29% and 0.29% (annualized) for the periods 1997-1996, respectively.
(c) Ratios are based on average net assets of $197,440,644.
(d) After fee waivers and/or expense reimbursements. Ratio of net investment
income to average net assets prior to fee waivers and/or expense
reimbursement was 5.15% and 5.03% (annualized) for the periods 1997-1996,
respectively.
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).
5
<PAGE> 87
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 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 Trust'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. Repurchase transactions are limited to a term not to exceed 365 days.
The Portfolio may enter into repurchase agreements only with institutions
believed by the Trust'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. Reverse
repurchase transactions are limited to a term not to exceed 92 days. 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, liquid 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 liquid 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.
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<PAGE> 88
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.
INVESTMENT IN OTHER INVESTMENT COMPANIES. The Trust permitted to invest in
other investment companies to the extent permitted by the 1940 Act, and rules
and regulations thereunder, and, if applicable, exemptive orders granted by the
SEC.
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 beneficial interest of the Trust.
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, and
except that the Portfolio may purchase securities of other investment
companies to the extent permitted by applicable law or exemptive order; 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. 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 received by the Portfolio. As discussed
below, the Trust reserves the right to reject any purchase order. 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 Transfer Agent
prior to 4:00 p.m. Eastern
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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. Following the initial
investment, subsequent purchases of shares of the Class may also be made
via AIM LINK--Registered Trademark-- Remote, a personal computer application
software product. 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 Trust's custodian bank, are open
for business. The Portfolio, however, reserves the right to change the time for
which purchase and redemption request must be submitted to the Portfolio for
execution on the same day or any day when the U.S. primary broker-dealer
community is closed for business or trading is restricted due to national
holidays. 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 Trust proxy statements, annual reports and other communications
to shareholders whose accounts are serviced by the Institution; and such other
services as the Trust may reasonably request. Institutions will be required to
certify to the Trust 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 the Transfer Agent, must be completed and sent to the
Transfer Agent at 11 Greenway Plaza, Suite 100, 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 the Transfer Agent.
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 Trust. The Portfolio will normally be required to make
immediate settlement in federal funds (member bank deposits with a Federal
Reserve Bank) for portfolio securities purchased. Accordingly, payment for
shares of the Class purchased by Institutions on behalf of their customers must
be in federal funds. If an investor's order to purchase shares of the Class is
paid for other than in federal funds, the Institution, acting on behalf of the
investor, completes the conversion into federal funds (which may take two
business days), or itself advances federal funds prior to conversion, and
promptly transmits the order and payment in the form of federal funds to the
Transfer Agent.
Subject to the conditions stated above and to the Trust's right to reject any
purchase order, orders will be accepted (i) when payment for shares of the Class
purchased is received by The Bank of New York, the Trust's custodian bank, in
the form described above and notice of such order is provided to the 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
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 Trust and any funds received
for which an order has not
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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.
The Trust 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 Trust. Redemption requests with respect to the Class may also be made via
AIM LINK--Registered Trademark-- Remote. 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 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 Transfer Agent 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 the Transfer Agent 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. The Portfolio reserves the right to change the time for which
redemption requests must be submitted to and received by the Transfer Agent for
execution on the same day on any day when the U.S. primary broker-dealer
community is closed for business or trading is restricted due to national
holidays.
A shareholder may change the bank account designated to receive redemption
proceeds by written notice to the Trust. 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 Trust or the
Transfer Agent.
Shareholders may request a redemption by telephone. Neither the Transfer Agent
nor FMC will be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the Account Application if they reasonably believe such request to be
genuine but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures for
verification of telephone transactions may include recordings of telephone
transactions (maintained for six months), and mailings of confirmations promptly
after the transaction.
Payment for shares of the Class redeemed by mail and payment for telephone
redemptions in amounts of less than $1,000 may be made by check mailed within
seven days after receipt of the redemption request in proper form. The Trust 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 Trust unless
the Board of Trustees of the Trust determines in its sole discretion that
failure to so redeem may have materially adverse consequences to the
shareholders of the Trust.
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) Portfolio
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, and transfer agency fees. 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 in writing by the Institution to the Transfer
Agent at 11 Greenway Plaza, Suite 100, Hous-
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ton, TX 77046-1173 and will become effective with dividends paid after its
receipt by the Transfer Agent. 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 Trust incur or anticipate any unusual expense, loss or depreciation which
could adversely affect the income or net asset value of the Portfolio, the
Trust'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 Trust and each portfolio of the Trust 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 advisors concerning the application of
state, local or foreign taxes.
Foreign persons who file a United States tax return after December 31, 1996
for a U.S. tax refund and who are not eligible to obtain a social security
number must apply to the Internal Revenue Service ("IRS") for an individual
taxpayer identification number, using IRS Form W-7. For a copy of the IRS Form
W-7 and accompanying instructions, please contact your tax advisor or the
Transfer Agent.
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 Portfolio. 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.
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YIELD INFORMATION
Yield information for the Class can be obtained by calling the Trust 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.
For the seven day period ended August 31, 1997 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.
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 or its affiliates 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 Trust 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 Trust's independent auditors.
Unless otherwise requested by the shareholder, each shareholder will be
provided by its Institution 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 TRUST
BOARD OF TRUSTEES
The overall management of the business and affairs of the Trust is vested with
its Board of Trustees. The Board of Trustees approves all significant agreements
between the Trust and persons or companies furnishing services to the Trust,
including agreements with the Trust's investment advisor, distributor, custodian
and transfer agent. The day-to-day operations of the Trust are delegated to the
Trust's officers and to AIM, subject always to the objective and policies of the
Trust and to the general supervision of the Trust's Board of Trustees.
Information concerning the Board of Trustees may be found in the Statement of
Additional Information. Certain trustees and officers of the Trust are
affiliated with AIM and A I M Management Group Inc. ("AIM Management"), the
parent corporation of AIM.
INVESTMENT ADVISOR
A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173,
acts as the investment advisor for the Portfolio pursuant to a Master Investment
Advisory Agreement dated as of February 28, 1997 (the "Advisory Agreement"). AIM
was organized in 1976 and, together with its affiliates, manages or advises 55
investment company portfolios. Certain of the directors and officers of AIM are
also trustees or executive officers of the Trust. AIM is a wholly owned
subsidiary of AIM Management. AIM Management is a holding company engaged in the
financial services business. AIM Management is an indirect, wholly owned
subsidiary of AMVESCAP PLC, a publicly-traded holding company that, through its
subsidiaries, engages in the business of investment management on an
international basis.
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, 1997, AIM received fees from the Trust,
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 0.25% of the Class's
average daily net assets.
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ADMINISTRATIVE SERVICES
The Trust has entered into a Master Administrative Services Agreement dated as
of February 28, 1997 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 Trust 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.
FEE WAIVERS
AIM or its affiliates 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 for such
fee or expenses prior to the end of each 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. AIM voluntarily
reimbursed expenses of $24,200 on the Portfolio during the year ended August 31,
1997.
DISTRIBUTOR
The Trust has entered into a Master Distribution Agreement dated as of
February 28, 1997 (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 100, Houston, Texas 77046-1173. Certain trustees and officers of the Trust
are affiliated with FMC and AIM. The Distribution Agreement provides that FMC
has the exclusive right to distribute shares of the Trust 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 Trust has adopted a Master Distribution Plan (the "Plan") pursuant to Rule
12b-1 under the 1940 Act. The Plan provides that the Trust 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 Trust
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 Trust 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 Trust 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 Trust 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
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factors and determined that there is a reasonable likelihood that the Plan
will benefit the Trust 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 Trust is a Delaware business trust. The Trust was originally incorporated
in Maryland on January 24, 1977, but had no operations prior to November 10,
1980. Effective December 31, 1986, the Trust was reorganized as a Massachusetts
business trust; and effective October 15, 1993, the Trust 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 Trust
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 Trust 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
Trust may have different sales charges and other expenses which may affect
performance. An investor may obtain information concerning the Trust's other
classes by contacting FMC.
All shares of the Trust 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 Trust,
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 Trust
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 Trust's outstanding shares.
13
<PAGE> 95
December 1, 1997 Corestates Capital Markets was the owner of record of 80.37%
of the outstanding shares of the Class. As long as Corestates Capital Markets
owns over 25% of such shares, it may be presumed to be in "control" of the
Resource Class of the Treasury Portfolio, as defined in the 1940 Act.
There are no preemptive or conversion rights applicable to any of the Trust's
shares. The Trust's shares, when issued, will be fully paid and non-assessable.
The Board of Trustees may create additional portfolios of the Trust without
shareholder approval.
TRANSFER AGENT AND CUSTODIAN
The Bank of New York, 90 Washington Street, 11th 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 100, Houston,
Texas 77046-1173, acts as transfer agent for the shares of the Class. It is
currently anticipated that, effective on or about December 29, 1997, A I M Fund
Services, Inc., a wholly owned subsidiary of AIM and a registered transfer agent
will become the transfer agent to the Trust.
LEGAL COUNSEL
The law firm of Ballard Spahr Andrews & Ingersoll, Philadelphia, Pennsylvania,
serves as counsel to the Trust and passes upon legal matters for the Trust.
SHAREHOLDER INQUIRIES
Shareholder inquiries concerning the status of an account should be directed
to an investor's Institution, or to the Trust at 11 Greenway Plaza, Suite 100,
Houston, Texas 77046-1173, or may be made by calling (800) 825-6858.
14
<PAGE> 96
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 97
<TABLE>
<S> <C>
======================================================= =======================================================
SHORT-TERM INVESTMENTS TRUST
11 Greenway Plaza, Suite 100 PROSPECTUS
Houston, Texas 77046-1173
(800) 825-6858
December 17, 1997
INVESTMENT ADVISOR
A I M ADVISORS, INC.
11 Greenway Plaza, Suite 100 SHORT-TERM
Houston, Texas 77046-1173 INVESTMENTS TRUST
(713) 626-1919
---------------------
DISTRIBUTOR
FUND MANAGEMENT COMPANY TREASURY PORTFOLIO
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173 ---------------------
(800) 877-7745
AUDITORS
KPMG PEAT MARWICK LLP
700 Louisiana
Houston, Texas 77002
CUSTODIAN
THE BANK OF NEW YORK
90 Washington Street TABLE OF CONTENTS
11th Floor
New York, New York 10286 PAGE
----
TRANSFER AGENT Summary........................................... 2
A I M INSTITUTIONAL FUND SERVICES, INC. Table of Fees and Expenses........................ 4
11 Greenway Plaza, Suite 100 Financial Highlights.............................. 5
Houston, Texas 77046-1173 Suitability for Investors......................... 5
Investment Program................................ 5
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION Purchase of Shares................................ 7
OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS Redemption of Shares.............................. 9
PROSPECTUS IN CONNECTION WITH THE OFFERING MADE BY THIS Dividends......................................... 9
PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR Taxes............................................. 10
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN Net Asset Value................................... 10
AUTHORIZED BY THE TRUST OR THE DISTRIBUTOR. THIS Yield Information................................. 11
PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY Reports to Shareholders........................... 11
JURISDICTION TO ANY PERSON TO WHOM SUCH OFFERING MAY Management of the Trust........................... 11
NOT LAWFULLY BE MADE. General Information............................... 14
======================================================= =======================================================
</TABLE>
<PAGE> 98
STATEMENT OF
ADDITIONAL INFORMATION
SHORT-TERM INVESTMENTS TRUST
TREASURY PORTFOLIO
(CASH MANAGEMENT CLASS)
(INSTITUTIONAL CLASS)
(PERSONAL INVESTMENT CLASS)
(PRIVATE INVESTMENT CLASS)
(RESOURCE CLASS)
11 GREENWAY PLAZA
SUITE 100
HOUSTON, TEXAS 77046-1173
(800) 659-1005
---------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS.
IT SHOULD BE READ IN CONJUNCTION WITH A PROSPECTUS OF EACH OF THE ABOVE NAMED
FUNDS,
COPIES OF WHICH MAY BE OBTAINED BY WRITING
FUND MANAGEMENT COMPANY, 11 GREENWAY PLAZA,
SUITE 100, HOUSTON, TEXAS 77046-1173
OR CALLING (800) 659-1005
---------------------
STATEMENT OF ADDITIONAL INFORMATION DATED DECEMBER 17, 1997
RELATING TO THE PROSPECTUS OF EACH OF THE FOLLOWING CLASSES OF THE TREASURY
PORTFOLIO:
CASH MANAGEMENT CLASS PROSPECTUS DATED DECEMBER 17, 1997,
INSTITUTIONAL CLASS PROSPECTUS DATED DECEMBER 17, 1997,
PERSONAL INVESTMENT CLASS PROSPECTUS DATED DECEMBER 17, 1997,
PRIVATE INVESTMENT CLASS PROSPECTUS DATED DECEMBER 17, 1997
AND RESOURCE CLASS PROSPECTUS DATED DECEMBER 17, 1997
<PAGE> 99
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Introduction................................................ 3
General Information about the Trust......................... 3
The Trust and Its Shares............................... 3
Management.................................................. 5
Trustees and Officers.................................. 5
Remuneration of Trustees............................... 8
Investment Advisor..................................... 9
Administrative Services................................ 10
Expenses............................................... 11
Banking Regulations.................................... 11
Transfer Agent and Custodian........................... 11
Reports................................................ 12
Fee Waivers............................................ 12
Principal Holders of Securities........................ 12
Purchases and Redemptions................................... 14
Net Asset Value Determination.......................... 15
Distribution Agreement................................. 15
Distribution Plan...................................... 15
Performance Information................................ 16
Investment Program and Restrictions......................... 17
Investment Program..................................... 17
Eligible Securities.................................... 17
Investment Restrictions................................ 17
Other Investment Policies.............................. 18
Portfolio Transactions...................................... 18
Tax Matters................................................. 19
Qualification as a Regulated Investment Company........ 19
Excise Tax on Regulated Investment Companies........... 20
Portfolio Distributions................................ 20
Sale or Redemption of Shares........................... 20
Foreign Shareholders................................... 21
Effect of Future Legislation; Local Tax
Considerations........................................ 21
Financial Statements........................................ FS
</TABLE>
2
<PAGE> 100
INTRODUCTION
The Treasury Portfolio (the "Portfolio") is an investment portfolio of
Short-Term Investments Trust (the "Trust"), 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 Cash Management Class Prospectus dated December
17, 1997, the Institutional Class Prospectus dated December 17, 1997, the
Personal Investment Class Prospectus dated December 17, 1997, the Private
Investment Class Prospectus dated December 17, 1997 and the Resource Class
Prospectus dated December 17, 1997 (each a "Prospectus"). Additional copies of
each Prospectus and this Statement of Additional Information may be obtained
without charge by writing the principal distributor of the Trust's shares, Fund
Management Company ("FMC"), 11 Greenway Plaza, Suite 100, 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 each class of the Portfolio.
Some of the information required to be in this Statement of Additional
Information is also included in each Prospectus; and, in order to avoid
repetition, reference will be made to sections of the applicable Prospectus.
Additionally, each 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 each
Prospectus and this Statement of Additional Information, may be obtained from
the SEC by paying the charges prescribed under its rules and regulations.
GENERAL INFORMATION ABOUT THE TRUST
THE TRUST AND ITS SHARES
The Trust 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 Trust was reorganized as a business trust under the laws of the
Commonwealth of Massachusetts on December 31, 1986. The Trust 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 Trust 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 Trust 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 Trust are
redeemable at the net asset value thereof at the option of the shareholder or at
the option of the Trust in certain circumstances. For information concerning the
methods of redemption and the rights of share ownership, investors should
consult each Prospectus under the caption "General Information" and "Redemption
of Shares."
The Trust 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: Cash Management Class, Institutional Class, Personal
Investment Class, Private Investment Class and Resource Class. Each class of
shares is sold pursuant to a separate Prospectus and this joint Statement of
Additional Information. Each such class has different shareholder qualifications
and bears expenses differently. This Statement of Additional Information relates
to each class of the Portfolio. The classes of the Treasury TaxAdvantage
Portfolio are offered pursuant to separate prospectuses and a separate statement
of additional information.
Shares of beneficial interest of the Trust will be redeemable at the net asset
value thereof at the option of the shareholder or at the option of the Trust 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 Trust, a particular portfolio or a particular class means, respectively, the
vote of the lesser of (i) 67% or more of the shares of the Trust, such portfolio
or such class present at a meeting of the Trust's shareholders, if the holders
of more than 50% of the outstanding shares of the Trust, such portfolio or such
class are present or represented by proxy, or (ii) more than 50% of the
outstanding shares of the Trust, such portfolio or such class.
Shareholders of the Trust 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.
3
<PAGE> 101
The Declaration of Trust provides for the perpetual existence of the Trust.
The Trust, 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 Trust, such Portfolio and such class,
respectively; provided, however, that the Board of Trustees may terminate, with
such shareholder approval, the Trust, either Portfolio and any class thereof
with respect to which there are fewer than 100 holders of record.
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 Trust. 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 Trust.
The assets received by the Trust 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 Trust. While certain expenses of the Trust 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 Trust.
Under Delaware law, shareholders of a Delaware business trust shall be
entitled to the same limitations of liability extended to shareholders of
private for-profit corporations, however, there is a remote possibility that
shareholders could, under certain circumstances, be held liable for the
obligations of the Trust to the extent the courts of another state which does
not recognize such limited liability were to apply the laws of such state to a
controversy involving such obligations. However, the Declaration of Trust
disclaims shareholder liability for acts or obligations of the Trust and
requires that notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by the Trust or the trustees to all
parties, and each party thereto must expressly waive all rights of action
directly against shareholders of the Trust. The Declaration of Trust provides
for indemnification out of the Trust's property for all losses and expenses of
any shareholder of the Trust 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 Trust 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 Trust of
the trustees and the officers of the Trust 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 Trust. Such person
may not be indemnified against any liability to the Trust or to the Trust's
shareholders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office. The Declaration of Trust also authorizes
the purchase of liability insurance on behalf of trustees and officers.
As described in the Prospectus, the Trust 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 Trust and filed with the Trust'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 Trust.
4
<PAGE> 102
MANAGEMENT
TRUSTEES AND OFFICERS
The trustees and officers of the Trust and their principal occupations during
at least the last five years are set forth below.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
POSITIONS HELD
NAME, ADDRESS AND AGE WITH REGISTRANT PRINCIPAL OCCUPATION DURING AT LEAST THE PAST 5 YEARS
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
*CHARLES T. BAUER (78) Trustee and Chairman of the Board of Directors, A I M Management
11 Greenway Plaza, Suite 100 Chairman Group Inc., A I M Advisors, Inc., A I M Capital
Houston, TX 77046 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
Chairman and Director, AMVESCAP PLC.
- ------------------------------------------------------------------------------------------------------------------
BRUCE L. CROCKETT (53) Trustee Director, ACE Limited (insurance company). Formerly,
906 Frome Lane Director, President and Chief Executive Officer,
McLean, VA 22102 COMSAT Corporation; and Chairman, Board of Governors
of INTELSAT (international communications company).
- ------------------------------------------------------------------------------------------------------------------
OWEN DALY II (73) Trustee Director, Cortland Trust Inc. (investment company).
Six Blythewood Road Formerly, Director, CF & I Steel Corp., Monumental
Baltimore, MD 21210 Life Insurance Company and Monumental General
Insurance Company; and Chairman of the Board of
Equitable Bancorporation.
- ------------------------------------------------------------------------------------------------------------------
JACK M. FIELDS (45) Trustee Formerly, Member of the U.S. House of
Texana Global, Inc. Representatives.
8810 Will Clayton Parkway
Jetero Plaza, Suite E
Humble, TX 77338
- ------------------------------------------------------------------------------------------------------------------
**CARL FRISCHLING (60) Trustee Partner, Kramer, Levin, Naftalis & Frankel (law
919 Third Avenue firm); and Director, ERD Waste, Inc. (waste
New York, NY 10022 management company), Aegis Consumer Finance (auto
leasing company) and Lazard Funds, Inc. (investment
companies). Formerly, Partner, Reid & Priest (law
firm); and, prior thereto, Partner, Spengler Carlson
Gubar Brodsky & Frischling (law firm).
- ------------------------------------------------------------------------------------------------------------------
*ROBERT H. GRAHAM (51) Trustee and Director, President and Chief Executive Officer,
11 Greenway Plaza, Suite 100 President A I M Management Group Inc.; Director and President,
Houston, TX 77046 A I M Advisors, Inc.; and Director and Senior Vice
President, 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 Director, AMVESCAP PLC, Chairman of the
Board of Directors, AIM Funds Group Canada Inc.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
* A trustee who is an "interested person" of the Trust and AIM as defined in
the 1940 Act.
** A trustee who is an "interested person" of the Trust as defined in the 1940
Act.
5
<PAGE> 103
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
POSITIONS HELD
NAME, ADDRESS AND AGE WITH REGISTRANT PRINCIPAL OCCUPATION DURING AT LEAST THE PAST 5 YEARS
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
JOHN F. KROEGER (72) Trustee Director, Flag Investors International Fund, Inc.,
37 Pippins Way Flag Investors Emerging Growth Fund, Inc., Flag
Morristown, NJ 07960 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 (55) Trustee Attorney in private practice in Houston, Texas.
6363 Woodway, Suite 825
Houston, TX 77057
- ------------------------------------------------------------------------------------------------------------------
IAN W. ROBINSON (74) Trustee Formerly, Executive Vice President and Chief
183 River Drive Financial Officer, Bell Atlantic Management Services,
Tequesta, FL 33469 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 (58) Trustee Executive Vice President, Development and Operations,
Transco Tower, 50th Floor Hines Interests Limited Partnership (real estate
2800 Post Oak Blvd. development).
Houston, TX 77056
- ------------------------------------------------------------------------------------------------------------------
***JOHN J. ARTHUR (53) Senior Vice Director, Senior Vice President and Treasurer, A I M
11 Greenway Plaza, Suite 100 President and Advisors, Inc.; and Vice President and Treasurer,
Houston, TX 77046 Treasurer A I M Management Group Inc., A I M Capital
Management, Inc., A I M Distributors, Inc., A I M
Fund Services, Inc., A I M Institutional Fund
Services Inc. and Fund Management Company.
- ------------------------------------------------------------------------------------------------------------------
GARY T. CRUM (50) Senior Vice Director and President, A I M Capital Management,
11 Greenway Plaza, Suite 100 President Inc.; Director and Senior Vice President, A I M
Houston, TX 77046 Management Group Inc., A I M Advisors, Inc.; and
Director, A I M Distributors, Inc. and AMVESCAP PLC.
- ------------------------------------------------------------------------------------------------------------------
***CAROL F. RELIHAN (43) Senior Vice Director, Senior Vice President, General Counsel and
11 Greenway Plaza, Suite 100 President and Secretary, A I M Advisors, Inc.; Vice President,
Houston, TX 77046 Secretary General Counsel and Secretary, A I M Management Group
Inc.; Director, Vice President and General Counsel,
Fund Management Company; General Counsel and Vice
President, A I M Fund Services, Inc. and A I M
Institutional Fund Services, Inc.; Vice President,
A I M Capital Management, Inc., A I M
Distributors,Inc.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
*** Mr. Arthur and Ms. Relihan are married to each other.
6
<PAGE> 104
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
POSITIONS HELD
NAME, ADDRESS AND AGE WITH REGISTRANT PRINCIPAL OCCUPATION DURING AT LEAST THE PAST 5 YEARS
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
DANA R. SUTTON (38) Vice President Vice President and Fund Controller, A I M Advisors,
11 Greenway Plaza, Suite 100 and Assistant Inc.; and Assistant Vice President and Assistant
Houston, TX 77046 Treasurer Treasurer, Fund Management Company.
- ------------------------------------------------------------------------------------------------------------------
MELVILLE B. COX (54) Vice President Vice President and Chief Compliance Officer, A I M
11 Greenway Plaza, Suite 100 Advisors, Inc., A I M Capital Management, Inc., A I M
Houston, TX 77046 Distributors, Inc., A I M Fund Services, Inc., A I M
Institutional Fund Services, Inc. and Fund Management
Company.
- ------------------------------------------------------------------------------------------------------------------
KAREN DUNN KELLEY (37) Vice President Senior Vice President, A I M Capital Management,
11 Greenway Plaza, Suite 100 Inc.; and Vice President, A I M Advisors, Inc.
Houston, TX 77046
- ------------------------------------------------------------------------------------------------------------------
J. ABBOTT SPRAGUE (42) Vice President Director and President, Fund Management Company;
11 Greenway Plaza, Suite 100 Director and Senior Vice President, A I M Advisors,
Houston, TX 77046 Inc. and A I M Institutional Fund Services, Inc.; and
Senior Vice President, A I M Management Group Inc.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
The standing committees of the Board of Trustees are the Audit Committee, the
Investments Committee, and the Nominating and Compensation Committee.
The members of the Audit Committee are Messrs. Crockett, Daly, Fields,
Frischling, Kroeger, (Chairman), Pennock, Robinson and Sklar. The Audit
Committee is responsible for meeting with the Trust'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 Trust'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), Fields, Frischling, Kroeger, Pennock, Robinson and Sklar. The
Investments Committee is responsible for reviewing portfolio compliance,
brokerage allocation, portfolio investment pricing issues, interim dividend and
distribution issues, 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.
7
<PAGE> 105
The members of the Nominating and Compensation Committee are Messrs. Crockett,
Daly, Fields, Kroeger, Pennock (Chairman), Robinson and Sklar. The Nominating
and Compensation Committee is responsible for considering and nominating
individuals to stand for election as trustees who are not interested persons as
long as the Trust maintains a distribution plan pursuant to Rule 12b-1 under the
1940 Act, reviewing from time to time the compensation payable to the
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 Trust'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. Most of the Trust's executive
officers hold similar offices with some or all of such investment companies.
REMUNERATION OF TRUSTEES
Each trustee is reimbursed for expenses incurred in connection with each
meeting of the Board of Trustees or any committee thereof. Each trustee who is
not an officer of the Trust is compensated for his services according to a fee
schedule which recognizes the fact that such trustee also serves as a director
or trustee of other regulated investment companies managed, administered or
distributed by AIM or its affiliates (the "AIM Funds"). Each such trustee
receives a fee, allocated among the AIM Funds for which he serves as a director
or trustee, which consists of an annual retainer component and a meeting fee
component.
Set forth below is information regarding compensation paid or accrued for each
trustee of the Trust:
<TABLE>
<CAPTION>
RETIREMENT
AGGREGATE BENEFITS TOTAL
COMPENSATION ACCRUED COMPENSATION
FROM BY ALL FROM ALL
TRUSTEE TRUST(1) AIM FUNDS(2) AIM FUNDS(3)
------- ------------ ------------ ------------
<S> <C> <C> <C>
Charles T. Bauer.................................. $ 0 $ 0 $ 0
Bruce L. Crockett................................. 4,880 38,621 68,000
Owen Daly II...................................... 4,879 82,607 68,000
Jack Fields(4).................................... 2,466 0 0
Carl Frischling................................... 4,880 56,683 68,000(5)
Robert H. Graham.................................. 0 0 0
John F. Kroeger................................... 4,879 83,654 66,000
Lewis F. Pennock.................................. 4,879 33,702 67,000
Ian W. Robinson................................... 4,880 64,973 68,000
Louis S. Sklar.................................... 4,815 47,593 66,500
</TABLE>
- ---------------
(1) The total amount of compensation deferred by all Trustees of the Trust
during the fiscal year ended August 31, 1997, including interest earned
thereon, was $23,027
(2) During the fiscal year ended August 31, 1997, the total amount of expenses
allocated to the Trust in respect of such retirement benefits was $30,214.
Data reflects compensation for the calendar year ended December 31, 1996.
(3) Each serves as a Director or Trustee of a total of 11 registered investment
companies advised by AIM (comprised of 47 portfolios). Data reflects total
compensation for the calendar year ended December 31, 1996.
(4) Mr. Fields was not serving as a Director during the calendar year ending
December 31, 1996.
(5) See also page 12 regarding fees earned by Mr. Frischling's law firm.
AIM Funds Retirement Plan for Eligible Directors/Trustees
Under the terms of the AIM Funds Retirement Plan for Eligible
Directors/Trustees (the "Plan"), each trustee (who is not an employee of any of
the AIM Funds, A I M Management Group Inc. or any of their affiliates) may be
entitled to certain benefits upon retirement from the Board of Trustees.
Pursuant to the Plan, the normal retirement date is the date on which the
eligible trustee has attained age 65 and has completed at least five years of
continuous service with one or more of the AIM Funds. Each eligible trustee 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 75% of the retainer paid or accrued by the AIM Funds for such trustee
during the twelve-month period immediately preceding the trustee's retirement
(including amounts deferred under a separate agreement between the AIM Funds and
the trustee) for the number of such trustee's years of service (not in excess of
10 years of service) completed with respect to any of the AIM Funds. Such
benefit is payable to each eligible trustee in quarterly installments. If an
eligible trustee dies after attaining the normal retirement date but before
receipt of any benefits under the Plan commences, the trustee's surviving spouse
(if any) shall receive a quarterly survivor's benefit equal to 50% of the amount
8
<PAGE> 106
payable to the deceased trustee, for no more than ten years beginning the first
day of the calendar quarter following the date of the trustee's death. Payments
under the Plan are not secured or funded by any AIM Fund.
Set forth below is a table that shows the estimated annual benefits payable to
an eligible trustee upon retirement assuming a specified level of compensation
and years of service classifications. The estimated credited years of service
for Messrs. Crockett, Daly, Fields, Frischling, Kroeger, Pennock, Robinson and
Sklar are 10, 10, 0, 20, 19, 15, 10 and 7 years, respectively.
ANNUAL RETAINER UPON RETIREMENT
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
NUMBER OF
YEARS OF
SERVICE WITH ANNUAL RETAINER PAID BY ALL AIM FUNDS
THE AIM FUNDS $80,000
<S> <C> <C> <C>
- --------------------------------------------------------------------------
10 $60,000
- --------------------------------------------------------------------------
9 $54,000
- --------------------------------------------------------------------------
8 $48,000
- --------------------------------------------------------------------------
7 $42,000
- --------------------------------------------------------------------------
6 $36,000
- --------------------------------------------------------------------------
5 $30,000
- --------------------------------------------------------------------------
</TABLE>
Deferred Compensation Agreements
Messrs. Daly, Frischling, Kroeger, Robinson and Sklar (for purposes of this
paragraph only, the "deferring trustees") have each executed a Deferred
Compensation Agreement (collectively, the "Agreements"). Pursuant to the
Agreements, the deferring trustees may elect to defer receipt of up to 100% of
their compensation payable by the Trust, and such amounts are placed into a
deferral account. Currently, the deferring trustees may select various AIM Funds
in which all or part of their deferral accounts shall be deemed to be invested.
Distributions from the deferring trustees' deferral accounts will be paid in
cash, generally in equal quarterly installments over a period of five (5) or ten
(10) years (depending on the Agreement) beginning on the date the deferring
trustee's retirement benefits commence under the Plan. The Trust's Board of
Trustees, in its sole discretion, may accelerate or extend the distribution of
such deferral accounts after the deferring trustee's termination of service as a
trustee of the Trust. If a deferring trustee dies prior to the distribution of
amounts in his deferral account, the balance of the deferral account will be
distributed to his designated beneficiary in a single lump sum payment as soon
as practicable after such deferring trustee's death. The Agreements are not
funded and, with respect to the payments of amounts held in the deferral
accounts, the deferring trustees have the status of unsecured creditors of the
Trust and of each other AIM Fund from which they are deferring compensation.
The Portfolio paid legal fees of $13,565 for the year ended August 31, 1997
for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to the
Board of Trustees. Carl Frischling, a trustee of the Trust, is a member of that
firm.
INVESTMENT ADVISOR
A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173,
acts as the investment advisor of the Portfolio pursuant to a Master Investment
Advisory Agreement dated as of February 28, 1997 (the "Advisory Agreement"). AIM
was organized in 1976, and together with its affiliates advises or manages 55
investment company portfolios.
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 Trust's Board of Trustees. AIM shall not be
liable to the Trust or to its shareholders for any act or omission by AIM or for
any loss sustained by the Trust or its shareholders except in the case of
willful misfeasance, bad faith, gross negligence or reckless disregard of duty.
AIM and the Trust 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.
9
<PAGE> 107
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 Trust'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 the Advisory Agreement between the Trust and AIM, currently in
effect, AIM received fees from the Trust for the fiscal years ended August 31,
1997, 1996 and 1995 with respect to the Portfolio in the amounts of $2,666,379,
$2,227,788 and $1,925,198, respectively. For the fiscal years ended August 31,
1997, 1996 and 1995, AIM waived no advisory fees with respect to the Portfolio.
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
February 28, 1999, and from year to year thereafter, provided that it is
specifically approved at least annually by the Trust'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 Trust 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 100, Houston, Texas 77046-1173. AIM
Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire
Square, London EC2M 4YR, United Kingdom. AMVESCAP PLC and its subsidiaries are
an independent investment management group engaged in institutional investment
management and retail fund business in the United States, Europe and the Pacific
Region. Certain of the directors and officers of AIM are also executive officers
of the Trust and their affiliations are shown under "Trustees and Officers." The
address of each director and officer of AIM is 11 Greenway Plaza, Suite 100,
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 February 28, 1997 between AIM and
the Trust (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 Trust and of
persons working under his supervision for maintaining the financial accounts and
books and records of the Trust, 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 Trust's
Board of Trustees.
Under the Administrative Services Agreement, AIM was reimbursed for the fiscal
years ended August 31, 1997, 1996 and 1995, $99,273, $86,796 and $135,387,
respectively, for fund accounting services for the Portfolio.
Under the terms of a Transfer Agency and Service Agreement, dated September
16, 1994, as amended, between the Trust and A I M Institutional Fund Services,
Inc. ("AIFS"), a registered transfer agent and wholly owned subsidiary of AIM,
as well as under previous agreements, AIFS received $414,190, $256,535 and
$114,179, for the fiscal years ended August 31, 1997, 1996 and 1995
respectively, for the provision of certain shareholder services for the
Portfolio.
10
<PAGE> 108
EXPENSES
In addition to fees paid to AIM pursuant to the Agreement and the expenses
reimbursed to AIM under the Administrative Services Agreement, the Trust also
pays or causes to be paid all other expenses of the Trust, including, without
limitation: the charges and expenses of any registrar, any custodian or
depository appointed by the Trust for the safekeeping of its cash, portfolio
securities and other property, and any transfer, dividend or accounting agent or
agents appointed by the Trust; brokers' commissions chargeable to the Trust in
connection with portfolio securities transactions to which the Trust is a party;
all taxes, including securities issuance and transfer taxes, and fees payable by
the Trust to federal, state or other governmental agencies; the costs and
expenses of engraving or printing of certificates representing shares of the
Trust; all costs and expenses in connection with the registration and
maintenance of registration of the Trust 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 Trust and supplements thereto to the Trust'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 Trust's shares; charges and expenses
of legal counsel, including counsel to the trustees of the Trust who are not
"interested persons" (as defined in the 1940 Act) of the Trust or AIM, and of
independent accountants in connection with any matter relating to the Trust;
membership dues of industry associations; interest payable on Trust borrowings;
postage; insurance premiums on property or personnel (including officers and
trustees) of the Trust 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 Trust) 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 Trust's shares.
Expenses of the Trust which are not directly attributable to the operations of
any class of shares or portfolio of the Trust are prorated among all classes of
the Trust. Expenses of the Trust except those listed in the next sentence are
prorated among all classes of such Portfolio. Expenses of the Trust 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 Trust and alternate means for continuing
the servicing of such shareholders would be sought. In such event, changes in
the operation of the Trust 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 ("BONY") acts as custodian for the portfolio securities
and cash of the Portfolio. BONY receives such compensation from the Trust for
its services in such capacity as is agreed to from time to time by BONY and the
Trust. The address of BONY is 90 Washington Street, 11th Floor, New York, New
York 10286.
A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 100,
Houston, Texas 77046-1173, acts as transfer agent for the shares of each class
of the Portfolio and receives an annual fee from the Trust for its services in
such capacity in the amount of .009% of average daily net assets of the Trust,
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 Trust. It is currently
anticipated that, effective on or about December 29, 1997, A I M Fund Services,
Inc., a wholly owned subsidiary of AIM and a registered transfer agent, will
become the transfer agent to the Fund.
11
<PAGE> 109
REPORTS
The Trust furnishes shareholders with semi-annual reports containing
information about the Trust and its operations, including a schedule of
investments held in the Portfolio and its financial statements. The annual
financial statements are audited by the Trust's independent auditors. The Board
of Trustees has selected KPMG Peat Marwick LLP, 700 Louisiana, Houston, Texas
77002, as the independent auditors to audit the financial statements and review
the tax returns of the Portfolio.
FEE WAIVERS
AIM or its affiliates may, from time to time, agree to waive voluntarily all
or any portion of its fees or reimburse the Portfolio for certain of its
expenses. Such waivers or reimbursements may be discontinued at any time.
PRINCIPAL HOLDERS OF SECURITIES
TREASURY PORTFOLIO
To the best of the knowledge of the Trust, the names and addresses of the
holders of 5% or more of the outstanding shares of any class of the Portfolio as
of December 1, 1997, and the percentage of such shares owned by such
shareholders as of such date are as follows:
CASH MANAGEMENT CLASS
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
---------------- --------------
<S> <C>
The Bank of New York...................................... 48.53%(b)
4 Fisher lane
White Plains, NY 10603
Fund Services Associates.................................. 19.16%
11835 West Olympic Boulevard
Suite 205
Los Angeles, CA 90064
Texas Commerce Bank....................................... 12.25%
Mutual Fund Unit/16 Hcb 09
P.O. Box 2558
Houston, TX 77252-2558
Cullen/Frost Discount Brokers............................. 5.27%
100 W. Houston St.
San Antonio, TX 78205
</TABLE>
INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
---------------- --------------
<S> <C>
U.S. Bank of Washington.................................. 11.39%
P.O. Box 3168
Portland, OR 97208
Trust Company Bank........................................ 9.66%
P.O. Box 105504
Atlanta, GA 30348
City of New York Deferred Compensation Plan............... 7.34%
40 Rector Street, 3rd Floor
New York, NY 10006
Liberty Registration Co. of Oklahoma...................... 7.08%
P.O. Box 25848
Oklahoma City, OK 73125
</TABLE>
- ---------------
(a) The Trust 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> 110
PERSONAL INVESTMENT CLASS
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
---------------- ------------
<S> <C> <C>
Cullen/Frost Discount Brokers................................................ 66.08%(b)
P.O. Box 2358
San Antonio, TX 78299
The Bank of New York....................................................... 27.42%(b)
4 Fisher Lane
White Plains, NY 10603
</TABLE>
PRIVATE INVESTMENT CLASS
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
---------------- ------------
<S> <C> <C>
Liberty Bank and Trust Co. of Tulsa, N.A. ................................... 50.06%(b)
P.O. Box 25848
Oklahoma City, OK 73125
The Bank of New York....................................................... 13.89%
4 Fisher Lane
White Plains, NY 10603
Huntington Capital Corp.................................................... 12.29%
41 S. High St., 9th Floor
Columbus, Ohio 43287
First Trust/VAR & Co....................................................... 5.73%
Funds Control Suite 0404
180 E. 5th Street
St. Paul, MN 55101
</TABLE>
RESOURCE CLASS
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
---------------- ------------
<S> <C> <C>
Corestates Capital Markets.................................................. 80.37%(b)
1345 Chestnut Street
Philadelphia, PA 19101
Mellon Bank............................................................... 16.37%
Three Mellon Center, Room 3840
Pittsburgh, PA 15259-0001
</TABLE>
- ---------------
(a) The Trust 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> 111
TREASURY TAXADVANTAGE PORTFOLIO
To the best of the knowledge of the Trust, 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 December 1, 1997, 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>
Peoples Two Ten Company.................................................. 33.84%(b)
c/o Summit Bank
Trust Operations, 7th Floor
P.O. Box 821
Hackensack, NJ 07602
First Trust/VAR & Co. ................................................. 26.57%(b)
Funds Control Suite 0404
180 East 5th Street
St. Paul, MN 55101
Liberty Registration Co. of Oklahoma................................... 17.14%
P.O. Box 25848
Oklahoma City, OK 73125
NationsBank............................................................ 5.16%
1401 Elm Street, 11th Floor
P.O. Box 831000
Dallas, TX 75202-2911
</TABLE>
PRIVATE INVESTMENT CLASS
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
---------------- ------------
<S> <C>
The Bank of New York................................................... 37.29%(b)
4 Fisher Lane
White Plains, NY 10603
Huntington Capital Corp.............................................. 27.31%(b)
41 S. High St., 9th Floor
Columbus, OH 43287
First National Bank of Chicago....................................... 25.49%(b)
Mail Suite 0126
Chicago, IL 60670-0126
Corestates Capital Markets........................................... 7.74%
1345 Chestnut St.
FC 1-1-9-49
Philadelphia, PA 19101
</TABLE>
- ---------------
(a) The Trust 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 Trust, as of December 1, 1997, the
trustees and officers of the Trust beneficially owned less than 1% of each class
of the Trust's outstanding shares.
PURCHASES AND REDEMPTIONS
A complete description of the manner by which shares of a particular class
may be purchased, redeemed or exchanged appears in the Prospectus under the
heading "Purchase of Shares."
The right of redemption may be suspended or the date of payment postponed when
(a) trading on the New York Stock Exchange ("NYSE") is restricted, as determined
by applicable rules and regulations of the SEC, (b) the NYSE is closed for other
14
<PAGE> 112
than customary weekend and holiday closings, (c) the SEC has by order permitted
such suspension, or (d) an emergency as determined by the SEC exists making
disposition of portfolio securities or the valuation of the net assets of the
Fund not reasonably practicable.
A "business day" of the Portfolio is any day on which commercial banks in the
New York Federal Reserve district are open for business. The Portfolio, however,
reserves the right to change the time for which purchase and redemption requests
must be submitted to the Portfolio for execution on the same day on any day when
the U.S. primary broker-dealer community is closed for business or trading is
restricted due to national holidays.
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 Trust to adhere to certain
conditions. These rules require that the Trust 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 Trust'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 Trust'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 Trust has entered into a Master Distribution Agreement dated as of
February 28, 1997 (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 each class of the Portfolio. The address of FMC is
11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. See "General
Information About the Trust -- Trustees and Officers" and "-- Investment
Advisor" for information as to the affiliation of certain trustees and officers
of the Trust with FMC, AIM and AIM Management.
The Distribution Agreement provides that FMC has the exclusive right to
distribute shares of each class 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 Trust 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 Portfolio.
The Distribution Agreement will remain in effect until February 28, 1999, and
it will continue in effect from year to year thereafter only if such
continuation is specifically approved at least annually by the Trust'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 Trust and FMC, with terms substantially the same as those of the
Distribution Agreement was in effect through October 15, 1993. The Trust 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 Trust has adopted a Master Distribution Plan (the "Plan") pursuant to Rule
12b-1 under the 1940 Act. Pursuant to the Plan, the Trust 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 Cash Management Class, Personal
Investment Class, Private Investment Class and Resource 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 ad-
15
<PAGE> 113
dresses; (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 Trust 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, 1997, FMC received compensation pursuant
to the Plan in the amount of $625,057, or an amount equal to 0.08% of the
average daily net assets of the Cash Management Class, $1,210,290, or an amount
equal to 0.50% of the average daily net assets of the Personal Investment Class,
$1,195,700, or an amount equal to 0.30% of the average daily net assets of the
Private Investment Class, and $315,905, or an amount equal to 0.16% of the
average daily net assets of the Resource Class. With respect to the Cash
Management Class, $623,035 of such amount (or an amount equal to 0.08% of the
average daily net assets of the class) was paid to dealers and financial
institutions and $1,879 (or an amount equal to 0% of the average daily net
assets of the class) was retained by FMC. With respect to the Personal
Investment Class, $979,963 of such amount (or an amount equal to 0.40% of the
average daily net assets of the class) was paid to dealers and financial
institutions and $230,044 (or an amount equal to 0.10% of the average daily net
assets of the class) was retained by FMC. With respect to the Private Investment
Class, $1,023,839 of such amount (or an amount equal to 0.26% of the average
daily net assets of the class) was paid to dealers and financial institutions
and $172,395 (or an amount equal to 0.04% of the average daily net assets of the
class) was retained by FMC. With respect to the Resource Class, $315,899 of such
amount (or an amount equal to 0.16% of the average daily net assets of the
class) was paid to dealers and financial institutions and none of such
compensation 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 Trust, owns shares
of AIM Management and Robert H. Graham, a Trustee and President of the Trust,
also owns shares of AIM Management.
PERFORMANCE INFORMATION
As stated under the caption "Yield Information" in the Prospectus, yield
information for the shares of each class of the Portfolio may be obtained by
calling the Trust at (800) 659-1005. The current yield quoted will be the net
average annualized yield for an identified period, such as seven days or a
month. 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 Trust 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, 1997, 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) were 5.49% and 5.64%, for the Cash Management Class, were 5.57% and
5.72%, for the Institutional Class, were 5.07% and 5.20%, for the Personal
Investment Class, were 5.27% and 5.41%, for the Private Investment Class and
were 5.41% and 5.56%, for the Resource Class 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 Trust may compare the performance of a 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").
16
<PAGE> 114
The principal value and interest rate of CDs and money market securities are
fixed at the time of purchase whereas a 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 Trust may reference the growth and variety of money market mutual funds
and AIM's innovation and participation in the industry.
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
The Trust will invest in "Eligible Securities" as defined in Rule 2a-7 under
the 1940 Act, which the Trust's Board of Trustees has determined to present
minimal credit risk.
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 Trust -- The Trust and its Shares"), the Portfolio may
not:
(1) concentrate more than 25% of the value of its total assets in the
securities of one or more issuers conducting their principal business
activities in the same industry, provided that there is no limitation with
respect to investments in obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities and bank instruments, such as
CDs, bankers' acceptances, time deposits and bank repurchase agreements;
(2) 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 amended from time to time, and except that the
Portfolio may purchase securities of other investment companies to the
extent permitted by applicable law or exemptive order; or
(3) 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;
(4) 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;
(5) 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;
(6) 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;
(7) 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;
17
<PAGE> 115
(8) purchase or sell commodities or commodity futures contracts,
purchase securities on margin, make short sales or invest in puts or
calls; or
(9) invest in any obligation not payable as to principal and interest
in United States currency.
OTHER INVESTMENT POLICIES
The Portfolio does not intend to invest in companies for the purpose of
exercising control or management, except that the Portfolio may purchase
securities of other investment companies to the extent permitted by applicable
law or exemptive order. 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.
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. Research services
received from broker-dealers supplement AIM's own research (and the research of
sub-advisors to other clients of AIM), and may include the following types of
information: statistical and background information on the U.S. and foreign
economies, industry groups and individual companies; forecasts and
interpretations with respect to U.S. and foreign economies, securities, markets,
specific industry groups and individual companies; information on federal,
state, local and foreign political developments; portfolio management
strategies, performance information on securities, indexes and investment
accounts; information concerning prices of securities; and information supplied
by specialized services to AIM and to the Trust's trustees with respect to the
performance, investment activities and fees and expenses of other mutual funds.
Such information may be communicated electronically, orally or in written form.
Research services may also include the providing of equipment used to
communicate research information, the providing of specialized consultations
with AIM personnel with respect to computerized systems and data furnished to
AIM as a component of other research services, the arranging of meetings with
management of companies and the providing of access to consultants who supply
research information. 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 Trust 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 Trust.
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.
18
<PAGE> 116
Provisions of the 1940 Act and rules and regulations thereunder have been
construed to prohibit the Trust 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 Trust has
obtained an order of exemption from the SEC which permits the Trust to engage in
certain transactions with certain 5% holders, if the Trust 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, certain persons affiliated with the Trust 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 Trust from purchasing a
security being publicly underwritten by a syndicate of which certain persons
affiliated with the Trust are members except in accordance with certain
conditions. These conditions may restrict the ability of 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 Trust 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 Trust's Board of Trustees and any such purchases are reviewed at
least quarterly by the Trust'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 Trust was fair and reasonable in
relation to the fees charged by others performing similar services. During the
fiscal year ended August 31, 1997, 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 (1) must 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) must satisfy an asset
diversification test in order to qualify for tax purposes as a regulated
investment company (the "Asset Diversification Test"). Under the Asset
Diversification 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. Govern-
19
<PAGE> 117
ment 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.
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
in accordance with the guidance that has been provided by the Internal Revenue
Service.
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 Trust 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 a 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 a 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.
20
<PAGE> 118
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 a
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 December
17, 1997. 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 Trust.
21
<PAGE> 119
FINANCIAL STATEMENTS
FS
<PAGE> 120
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, 1997, and the related
statement of operations for the year then ended, the statement of changes in net
assets for each of the years in the two-year period then ended, and the
financial highlights for each of the years in the five-year period then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1997 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Treasury Portfolio as of August 31, 1997, the results of its operations for the
year then ended, the changes in its net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the five-year period then ended, in conformity with generally accepted
accounting principles.
/s/ KPMG PEAT MARWICK LLP
KPMG Peat Marwick LLP
Houston, Texas
October 3, 1997
FS-1
<PAGE> 121
SCHEDULE OF INVESTMENTS
August 31, 1997
<TABLE>
<CAPTION>
MATURITY PAR (000) VALUE
<S> <C> <C> <C>
U.S. TREASURY SECURITIES-12.94%
U.S. TREASURY BILLS(a)-5.80%
5.33% 10/02/97 $ 50,000 $ 49,770,514
- ----------------------------------------------------------------------------------------
5.325% 01/08/98 25,000 24,522,969
- ----------------------------------------------------------------------------------------
5.28% 03/05/98 40,000 38,914,667
- ----------------------------------------------------------------------------------------
5.665% 04/02/98 25,000 24,162,052
- ----------------------------------------------------------------------------------------
5.53% 04/30/98 50,000 48,148,987
- ----------------------------------------------------------------------------------------
5.52% 05/28/98 50,000 47,937,667
- ----------------------------------------------------------------------------------------
5.235% 06/25/98 25,000 23,920,281
- ----------------------------------------------------------------------------------------
5.215% 07/23/98 25,000 23,823,004
- ----------------------------------------------------------------------------------------
5.245% 07/23/98 25,000 23,816,233
- ----------------------------------------------------------------------------------------
305,016,374
- ----------------------------------------------------------------------------------------
U.S. TREASURY NOTES-7.14%
5.75% 09/30/97 50,000 50,012,312
- ----------------------------------------------------------------------------------------
8.75% 10/15/97 50,000 50,197,174
- ----------------------------------------------------------------------------------------
5.25% 12/31/97 50,000 49,944,119
- ----------------------------------------------------------------------------------------
7.875% 01/15/98 75,000 75,554,919
- ----------------------------------------------------------------------------------------
5.125% 03/31/98 50,000 49,757,722
- ----------------------------------------------------------------------------------------
5.125% 06/30/98 50,000 49,796,720
- ----------------------------------------------------------------------------------------
6.25% 06/30/98 25,000 25,133,372
- ----------------------------------------------------------------------------------------
8.25% 07/15/98 25,000 25,549,378
- ----------------------------------------------------------------------------------------
375,945,716
- ----------------------------------------------------------------------------------------
Total U.S. Treasury Securities 680,962,090
- ----------------------------------------------------------------------------------------
Total Investments (excluding Repurchase
Agreements) 680,962,090
- ----------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS-87.34%(b)
BT Securities Corp. 5.55%(c) 09/02/97 200,000 200,000,000
- ----------------------------------------------------------------------------------------
BZW Securities Inc. 5.57%(d) 09/02/97 200,000 200,000,000
- ----------------------------------------------------------------------------------------
Bear, Stearns & Co. Inc.
5.58%(e) -- 200,000 200,000,000
- ----------------------------------------------------------------------------------------
5.58%(f) -- 200,000 200,000,000
- ----------------------------------------------------------------------------------------
CIBC-Wood Gundy Securities Corp. 5.56%(g) 09/02/97 200,000 200,000,000
- ----------------------------------------------------------------------------------------
CS First Boston Corp. 5.53%(h) 09/02/97 200,000 200,000,000
- ----------------------------------------------------------------------------------------
Chase Securities, Inc. 5.55%(i) 09/02/97 200,000 200,000,000
- ----------------------------------------------------------------------------------------
Deutsche Morgan Grenfell/C.J. Lawrence, Inc.
5.58%(j) -- 560,000 560,000,000
- ----------------------------------------------------------------------------------------
Goldman, Sachs & Co. 5.56%(k) 09/02/97 434,729 434,728,794
- ----------------------------------------------------------------------------------------
Greenwich Capital Markets, Inc. 5.57%(l) 09/02/97 200,000 200,000,000
- ----------------------------------------------------------------------------------------
HSBC Securities, Inc. 5.58%(m) 09/02/97 200,000 200,000,000
- ----------------------------------------------------------------------------------------
</TABLE>
FS-2
<PAGE> 122
<TABLE>
<CAPTION>
MATURITY PAR (000) VALUE
<S> <C> <C> <C>
REPURCHASE AGREEMENTS-(continued)
Merrill Lynch Government Securities Inc. 5.57%(n) 09/02/97 $200,000 $ 200,000,000
- ----------------------------------------------------------------------------------------
Morgan (J.P.) Securities Inc. 5.56%(o) 09/02/97 300,000 300,000,000
- ----------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. 5.58%(p) 09/02/97 200,000 200,000,000
- ----------------------------------------------------------------------------------------
Nesbitt Burns Securities Inc. 5.57%(q) -- 200,000 200,000,000
- ----------------------------------------------------------------------------------------
SBC Capital Markets Inc. 5.57%(r) 09/02/97 500,000 500,000,000
- ----------------------------------------------------------------------------------------
Sanwa Securities (USA) Co., L.P. 5.56%(s) 09/02/97 200,000 200,000,000
- ----------------------------------------------------------------------------------------
UBS Securities LLC 5.56%(t) -- 200,000 200,000,000
- ----------------------------------------------------------------------------------------
Total Repurchase Agreements 4,594,728,794
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENTS-100.28% 5,275,690,884(u)
- ----------------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-(0.28)% (14,902,379)
- ----------------------------------------------------------------------------------------
NET ASSETS-100.00% $5,260,788,505
========================================================================================
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(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, including the Portfolio's pro-rata
interest in joint repurchase agreements, is taken into possession by the
Portfolio upon entering into the repurchase agreement. The collateral is
marked to market daily to ensure its market value as being 102% of the sales
price of the repurchase agreement. The investments in some repurchase
agreements are through participation in joint accounts with other mutual
funds, private accounts and certain non-registered investment companies
managed by the investment advisor or its affiliates.
(c) Entered into 08/29/97 with a maturing value of $200,123,333. Collateralized
by $163,725,000 U.S. Treasury obligations, 8.875% due 02/15/19 with a market
value at 08/31/97 of $204,764,696.
(d) Entered into 08/29/97 with a maturing value of $200,123,778. Collateralized
by $184,335,000 U.S. Treasury obligations, 0% to 11.25% due 12/04/97 to
02/15/15 with an aggregate market value at 08/31/97 of $204,000,005.
(e) Open repurchase agreement. Either party may terminate the agreement upon
demand. Interest rates, par and collateral are redetermined daily.
Collateralized by $821,051,000 U.S. Treasury obligations, 0% to 8.75% due
11/15/99 to 08/15/25 with an aggregate market value at 08/31/97 of
$206,717,583.
(f) Open repurchase agreement. Either party may terminate the agreement upon
demand. Interest rates, par and collateral are redetermined daily.
Collateralized by $500,628,000 U.S. Treasury obligations, 0% due 02/15/06 to
11/15/21 with an aggregate market value at 08/31/97 of $204,356,857.
(g) Entered into 08/29/97 with a maturing value of $200,123,556. Collateralized
by $194,543,000 U.S. Treasury obligations, 5.375% to 11.25% due 08/31/97 to
11/15/26 with an aggregate market value at 08/31/97 of $204,001,930.
(h) Entered into 08/29/97 with a maturing value of $200,122,889. Collateralized
by $208,810,000 U.S. Treasury obligations, 0% to 6.25% due 09/04/97 to
06/30/02 with an aggregate market value at 08/31/97 of $205,012,084.
(i) Entered into 08/29/97 with a maturing value of $200,123,333. Collateralized
by $193,386,000 U.S. Treasury obligations, 5.50% to 8.875% due 02/15/00 to
08/15/27 with an aggregate market value at 08/31/97 of $204,004,690.
(j) Open repurchase agreement. Either party may terminate the agreement upon
demand. Interest rates, par and collateral are redetermined daily.
Collateralized by $537,574,000 U.S. Treasury obligations 5.25% to 7.875%,
due 12/31/97 to 11/15/04 with an aggregate market value at 08/31/97 of
$571,200,459.
(k) Joint repurchase agreement entered into 08/29/97 with a maturing value of
$750,463,333. Collateralized by $698,212,000 U.S. Treasury obligations,
4.75% to 14.00% due 02/28/98 to 08/15/25 with an aggregate market value at
08/31/97 of $765,753,716.
(l) Entered into 08/29/97 with a maturing value of $200,123,778. Collateralized
by $137,530,000 U.S. Treasury obligations, 11.25% due 02/15/15 with a market
value at 08/31/97 of $204,003,754.
(m) Entered into 08/29/97 with a maturing value of $200,124,000. Collateralized
by $209,292,000 U.S. Treasury obligations, 0% due 02/19/98 to 02/26/98 with
an aggregate market value at 08/31/97 of $204,003,111.
(n) Entered into 08/29/97 with a maturing value of $200,123,778. Collateralized
by $534,773,000 U.S. Treasury obligations, 0% to 12.00% due 11/15/97 to
02/15/27 with an aggregate market value at 08/31/97 of $204,002,655.
FS-3
<PAGE> 123
(o) Entered into 08/29/97 with a maturing value of $300,185,333. Collateralized
by $293,232,000 U.S. Treasury obligations, 5.625% to 13.25% due 11/15/97 to
05/15/14 with an aggregate market value at 08/31/97 of $306,000,820.
(p) Entered into 08/29/97 with a maturing value of $200,124,000. Collateralized
by $192,551,000 U.S. Treasury obligations, 7.00% to 8.75% due 04/15/99 to
02/15/23 with an aggregate market value at 08/31/97 of $204,014,896.
(q) Open repurchase agreement. Either party may terminate the agreement upon
demand. Interest rates, par and collateral are redetermined daily.
Collateralized by $598,149,000 U.S. Treasury obligations, 0% to 6.375% due
11/15/97 to 11/15/26 with an aggregate market value at 08/31/97 of
$204,000,427.
(r) Entered into 08/29/97 with a maturing value of $500,309,444. Collateralized
by $672,387,000 U.S. Treasury obligations, 0% to 6.875% due 11/13/97 to
08/15/20 with an aggregate market value at 08/31/97 of $511,373,725.
(s) Entered into 08/29/97 with a maturing value of $200,123,556. Collateralized
by $195,073,000 U.S. Treasury obligations, 4.75% to 11.875% due 11/30/97 to
11/15/22 with an aggregate market value at 08/31/97 of $204,000,425.
(t) Open repurchase agreement. Either party may terminate the agreement upon
demand. Interest rates, par and collateral are redetermined daily.
Collateralized by $196,654,000 U.S. Treasury obligations, 5.50% to 8.75% due
08/15/00 to 02/28/01 with an aggregate market value at 08/31/97 of
$204,000,926.
(u) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
FS-4
<PAGE> 124
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments, excluding repurchase agreements, at value
(amortized cost) $ 680,962,090
- ----------------------------------------------------------------------------
Repurchase agreements 4,594,728,794
- ----------------------------------------------------------------------------
Interest receivable 8,635,412
- ----------------------------------------------------------------------------
Investment for deferred compensation plan 62,529
- ----------------------------------------------------------------------------
Other assets 139,530
- ----------------------------------------------------------------------------
Total assets 5,284,528,355
- ----------------------------------------------------------------------------
LIABILITIES:
Payables for:
Dividends 22,897,610
- ----------------------------------------------------------------------------
Deferred compensation 62,529
- ----------------------------------------------------------------------------
Accrued advisory fees 248,343
- ----------------------------------------------------------------------------
Accrued distribution fees 358,768
- ----------------------------------------------------------------------------
Accrued transfer agent fees 48,453
- ----------------------------------------------------------------------------
Accrued trustees' fees 5,067
- ----------------------------------------------------------------------------
Accrued administrative services fees 8,834
- ----------------------------------------------------------------------------
Accrued operating expenses 110,246
- ----------------------------------------------------------------------------
Total liabilities 23,739,850
- ----------------------------------------------------------------------------
NET ASSETS $5,260,788,505
============================================================================
NET ASSETS:
Institutional Class $3,408,009,911
- ----------------------------------------------------------------------------
Private Investment Class $ 463,440,813
- ----------------------------------------------------------------------------
Personal Investment Class $ 322,971,027
- ----------------------------------------------------------------------------
Cash Management Class $ 829,243,407
- ----------------------------------------------------------------------------
Resource Class $ 237,123,347
- ----------------------------------------------------------------------------
SHARES OF BENEFICIAL INTEREST, $.01 PAR VALUE PER SHARE:
Institutional Class 3,407,493,098
- ----------------------------------------------------------------------------
Private Investment Class 463,369,076
- ----------------------------------------------------------------------------
Personal Investment Class 322,922,450
- ----------------------------------------------------------------------------
Cash Management Class 829,111,747
- ----------------------------------------------------------------------------
Resource Class 237,087,410
- ----------------------------------------------------------------------------
NET ASSET VALUE PER SHARE:
Net asset value, offering and redemption price per share $ 1.00
============================================================================
</TABLE>
See Notes to Financial Statements.
FS-5
<PAGE> 125
STATEMENT OF OPERATIONS
For the year ended August 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $244,075,766
- ----------------------------------------------------------------------------
EXPENSES:
Advisory fees 2,666,379
- ----------------------------------------------------------------------------
Custodian fees 280,405
- ----------------------------------------------------------------------------
Administrative services fees 99,273
- ----------------------------------------------------------------------------
Trustees' fees and expenses 32,668
- ----------------------------------------------------------------------------
Transfer agent fees 414,190
- ----------------------------------------------------------------------------
Distribution fees (Note 2) 4,984,471
- ----------------------------------------------------------------------------
Other 480,366
- ----------------------------------------------------------------------------
Total expenses 8,957,752
- ----------------------------------------------------------------------------
Less: Fee waivers and expense reimbursements (1,661,719)
- ----------------------------------------------------------------------------
Net expenses 7,296,033
- ----------------------------------------------------------------------------
Net investment income 236,779,733
- ----------------------------------------------------------------------------
Net realized gain on sales of investments 215,978
- ----------------------------------------------------------------------------
Net increase in net assets resulting from operations $236,995,711
============================================================================
</TABLE>
See Notes to Financial Statements.
FS-6
<PAGE> 126
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 236,779,733 $ 193,348,214
- ----------------------------------------------------------------------------------------
Net realized gain on sales of investments 215,978 490,127
- ----------------------------------------------------------------------------------------
Net increase in net assets resulting from
operations 236,995,711 193,838,341
- ----------------------------------------------------------------------------------------
Distributions to shareholders from net investment
income:
Institutional Class (153,610,717) (135,680,200)
- ----------------------------------------------------------------------------------------
Private Investment Class (20,120,440) (20,937,989)
- ----------------------------------------------------------------------------------------
Personal Investment Class (11,733,992) (6,998,307)
- ----------------------------------------------------------------------------------------
Cash Management Class (41,058,376) (28,729,956)
- ----------------------------------------------------------------------------------------
Resource Class (10,256,208) (1,001,762)
- ----------------------------------------------------------------------------------------
Distributions to shareholders from net realized
gains (59,575) --
- ----------------------------------------------------------------------------------------
Share transactions-net 1,556,740,962 443,432,341
- ----------------------------------------------------------------------------------------
Net increase in net assets 1,556,897,365 443,922,468
- ----------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 3,703,891,140 3,259,968,672
- ----------------------------------------------------------------------------------------
End of period $5,260,788,505 $3,703,891,140
========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $5,259,983,781 $3,703,242,819
- ----------------------------------------------------------------------------------------
Undistributed net realized gain on sales of
investments 804,724 648,321
- ----------------------------------------------------------------------------------------
$5,260,788,505 $3,703,891,140
========================================================================================
</TABLE>
See Notes to Financial Statements.
FS-7
<PAGE> 127
NOTES TO FINANCIAL STATEMENTS
August 31, 1997
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 five
different classes of shares: the Institutional Class, the Private Investment
Class, the Personal Investment Class, the Cash Management Class and the Resource
Class. Matters affecting each class are voted on exclusively by the shareholders
of each class. The 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 following is a summary of significant accounting policies followed by the
Portfolio in the preparation of its financial statements. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
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-Distribution and transfer agency expenses directly attributable to a
class of shares are charged to that class' operations. All other expenses are
allocated among the classes.
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>
<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>
During the year ended August 31, 1997, AIM voluntarily reimbursed expenses of
$24,200.
FS-8
<PAGE> 128
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, 1997, the
Fund reimbursed AIM $99,273 for such services.
The Portfolio, pursuant to a transfer agency and service agreement, has agreed
to pay A I M Institutional Fund Services, Inc. ("AIFS") a fee for providing
transfer agent and shareholder services to the Portfolio. During the year ended
August 31, 1997, the Portfolio paid AIFS $414,190 for such services. On
September 19, 1997, the Board of Trustees of the Fund approved the appointment
of A I M Fund Services, Inc. ("AFS") as transfer agent of the Fund to be
effective in late 1997 or early 1998.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Fund, FMC acts as the exclusive distributor of the
Fund's shares. The Fund has adopted a master distribution plan (the "Plan")
pursuant to Rule 12b-1 under the 1940 Act with respect to the Private Investment
Class, the Personal Investment Class, the Cash Management Class and the Resource
Class of the Portfolio. The Plan provides that the Private Investment Class, the
Personal Investment Class, the Cash Management Class and the Resource Class pay
up to a 0.50%, 0.75%, 0.10%, and 0.20%, 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, (b) 0.10% of the average daily net
assets of the Cash Management Class and (c) 0.20% of the average daily net
assets of the Resource 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, the Cash Management Class or the Resource 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 each class. During the year ended August 31, 1997, the
Private Investment Class, the Personal Investment Class, the Cash Management
Class and the Resource Class paid $1,195,700, $1,210,290, $625,057, and
$315,905, respectively, as compensation under the Plan. FMC waived fees of
$1,637,519 for the same period. Certain officers and trustees of the Trust are
officers of AIM, FMC, AIFS and AFS.
During the year ended August 31, 1997, the Portfolio paid legal fees of
$13,565 for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to
the Board of Trustees. A member of that firm is a trustee of the Fund.
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.
FS-9
<PAGE> 129
NOTE 4-SHARE INFORMATION
Changes in shares outstanding during the years ended August 31, 1997 and 1996
were as follows:
<TABLE>
<CAPTION>
1997 1996
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Sold:
Institutional Class 15,820,439,672 $15,820,439,672 15,527,980,642 $15,527,980,642
- -----------------------------------------------------------------------------------------------
Private Investment
Class 2,377,066,232 2,377,066,232 2,472,141,697 2,472,141,697
- -----------------------------------------------------------------------------------------------
Personal Investment
Class 2,585,293,225 2,585,293,225 1,088,591,830 1,088,591,830
- -----------------------------------------------------------------------------------------------
Cash Management Class 4,354,698,981 4,354,698,981 4,232,083,227 4,232,083,227
- -----------------------------------------------------------------------------------------------
Resource Class* 2,558,140,941 2,558,140,941 157,958,663 157,958,663
- -----------------------------------------------------------------------------------------------
Issued as reinvestment
of dividends:
Institutional Class 15,531,436 15,531,436 9,763,491 9,763,491
- -----------------------------------------------------------------------------------------------
Private Investment
Class 3,858,592 3,858,592 3,211,766 3,211,766
- -----------------------------------------------------------------------------------------------
Personal Investment
Class 9,897,559 9,897,559 4,455,140 4,455,140
- -----------------------------------------------------------------------------------------------
Cash Management Class 12,944,226 12,944,226 8,200,664 8,200,664
- -----------------------------------------------------------------------------------------------
Resource Class* 9,274,277 9,274,277 789,507 789,507
- -----------------------------------------------------------------------------------------------
Reacquired:
Institutional Class (14,763,510,184) (14,763,510,184) (15,872,219,385) (15,872,219,385)
- -----------------------------------------------------------------------------------------------
Private Investment
Class (2,270,031,466) (2,270,031,466) (2,517,444,015) (2,517,444,015)
- -----------------------------------------------------------------------------------------------
Personal Investment
Class (2,465,181,087) (2,465,181,087) (1,014,656,105) (1,014,656,105)
- -----------------------------------------------------------------------------------------------
Cash Management Class (4,328,020,236) (4,328,020,236) (3,532,010,008) (3,532,010,008)
- -----------------------------------------------------------------------------------------------
Resource Class* (2,363,661,206) (2,363,661,206) (125,414,773) (125,414,773)
- -----------------------------------------------------------------------------------------------
Net increase 1,556,740,962 $ 1,556,740,962 443,432,341 $ 443,432,341
===============================================================================================
</TABLE>
* The Resource Class commenced operations on March 12, 1996.
FS-10
<PAGE> 130
NOTE 5-FINANCIAL HIGHLIGHTS
CASH MANAGEMENT CLASS:
Shown below are the financial highlights for a share outstanding of the Cash
Management Class during each of the years in the four-year period ended August
31, 1997 and the period August 17, 1993 (date operations commenced) through
August 31, 1993.
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
-------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------- -------- -------- ------- ------- -------
Income from investment operations:
Net investment income 0.05 0.05 0.05 0.03 0.001
- ------------------------------------- -------- -------- ------- ------- -------
Less distributions:
Dividends from net investment
income (0.05) (0.05) (0.05) (0.03) (0.001)
- ------------------------------------- -------- -------- ------- ------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
===================================== ======== ======== ======= ======= =======
Total return 5.39% 5.48% 5.57% 3.44% 2.91%(a)
===================================== ======== ======== ======= ======= =======
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $829,243 $789,627 $81,219 $73,619 $ 8,681
===================================== ======== ======== ======= ======= =======
Ratio of expenses to average net
assets(b) 0.17%(c) 0.17% 0.18% 0.16% 0.16%(a)
===================================== ======== ======== ======= ======= =======
Ratio of net investment income to
average net assets(d) 5.25%(c) 5.25% 5.42% 3.48% 3.00%(a)
===================================== ======== ======== ======= ======= =======
</TABLE>
(a) Annualized.
(b) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
0.19%, 0.19%, 0.20%, 0.21% and 0.18% (annualized) for the periods 1997-1993,
respectively.
(c) Ratios are based on average net assets of $781,320,880.
(d) After fee waivers and/or expense reimbursements. Ratios of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements were 5.24%, 5.23%, 5.40%, 3.43% and 2.98% (annualized) for
the periods 1997-1993, respectively.
FS-11
<PAGE> 131
INSTITUTIONAL CLASS:
Shown below are the financial highlights for a share outstanding of the
Institutional Class during each of the years in the five-year period ended
August 31, 1997.
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------- ---------- ---------- ---------- ---------- ----------
Income from investment
operations:
Net investment income 0.05 0.05 0.06 0.04 0.03
- ----------------------------- ---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net
investment income (0.05) (0.05) (0.06) (0.04) (0.03)
- ----------------------------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============================= ========== ========== ========== ========== ==========
Total return 5.47% 5.57% 5.66% 3.53% 3.22%
============================= ========== ========== ========== ========== ==========
Ratios/supplemental data:
Net assets, end of period
(000s omitted) $3,408,010 $2,335,441 $2,669,637 $2,452,389 $3,652,672
============================= ========== ========== ========== ========== ==========
Ratio of expenses to average
net assets 0.09%(a) 0.09% 0.10% 0.08% 0.08%
============================= ========== ========== ========== ========== ==========
Ratio of net investment
income to average net
assets 5.35%(a) 5.43% 5.53% 3.39% 3.17%
============================= ========== ========== ========== ========== ==========
</TABLE>
(a) Ratios are based on average net assets of $2,873,371,753.
PERSONAL INVESTMENT CLASS:
Shown below are the financial highlights for a share outstanding of the Personal
Investment Class during each of the years in the five-year period ended August
31, 1997.
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
-------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------- -------- -------- -------- ------- -------
Income from investment operations:
Net investment income 0.05 0.05 0.05 0.03 0.03
- -------------------------------------- -------- -------- -------- ------- -------
Less distributions:
Dividends from net investment income (0.05) (0.05) (0.05) (0.03) (0.03)
- -------------------------------------- -------- -------- -------- ------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====================================== ======== ======== ======== ======= =======
Total return 4.95% 5.04% 5.13% 3.02% 2.77%
====================================== ======== ======== ======== ======= =======
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $322,971 $192,947 $114,527 $88,582 $69,867
====================================== ======== ======== ======== ======= =======
Ratio of expenses to average net
assets(a) 0.60%(b) 0.59% 0.60% 0.58% 0.53%
====================================== ======== ======== ======== ======= =======
Ratio of net investment income to
average net assets(c) 4.85%(b) 4.91% 5.03% 2.99% 2.70%
====================================== ======== ======== ======== ======= =======
</TABLE>
(a) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
0.86%, 0.92%, 0.90%, 0.91% and 0.93% for the periods 1997-1993,
respectively.
(b) Ratios are based on average net assets of $242,057,960.
(c) After fee waivers and/or expense reimbursements. Ratios of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements were 4.59%, 4.58%, 4.73%, 2.66% and 2.29% for the periods
1997-1993, respectively.
FS-12
<PAGE> 132
PRIVATE INVESTMENT CLASS:
Shown below are the financial highlights for a share outstanding of the Private
Investment Class during each of the years in the five-year period ended August
31, 1997.
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.05 0.05 0.05 0.03 0.03
- --------------------------------------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment
income (0.05) (0.05) (0.05) (0.03) (0.03)
- --------------------------------------- -------- -------- -------- -------- --------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------- -------- -------- -------- -------- --------
Total return 5.16% 5.25% 5.34% 3.22% 2.91%
======================================= ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $463,441 $352,537 $394,585 $412,716 $204,281
======================================= ======== ======== ======== ======== ========
Ratio of expenses to average net
assets(a) 0.39%(b) 0.39% 0.40% 0.38% 0.38%
======================================= ======== ======== ======== ======== ========
Ratio of net investment income to
average net assets(c) 5.05%(b) 5.14% 5.23% 3.26% 2.81%
======================================= ======== ======== ======== ======== ========
</TABLE>
(a) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
0.59%, 0.59%, 0.60%, 0.60%, and 0.67% for the periods 1997-1993,
respectively.
(b) Ratios are based on average net assets of $398,566,784.
(c) After fee waivers and/or expense reimbursements. Ratios of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements were 4.85%, 4.94%, 5.03%, 3.05%, and 2.52% for the periods
1997-1993, respectively.
RESOURCE CLASS:
Shown below are the financial highlights for a share outstanding of the Resource
Class during the year ended August 31, 1997 and the period March 12, 1996 (date
operations commenced) through August 31, 1996.
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00
- ------------------------------------------------------------ -------- --------
Income from investment operations:
Net investment income 0.05 0.03
- ------------------------------------------------------------ -------- --------
Less distributions:
Dividends from net investment income (0.05) (0.03)
- ------------------------------------------------------------ -------- --------
Net asset value, end of period $ 1.00 $ 1.00
============================================================ ======== ========
Total return 5.30% 5.09%(a)
============================================================ ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $237,123 $ 33,339
============================================================ ======== ========
Ratio of expenses to average net assets(b) 0.25%(c) 0.25%(a)
============================================================ ======== ========
Ratio of net investment income to average net assets(d) 5.19%(c) 5.07%(a)
============================================================ ======== ========
</TABLE>
(a) Annualized.
(b) After fee waivers and/or expense reimbursements. Ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursement was
0.29% and 0.29% (annualized) for the periods 1997-1996, respectively.
(c) Ratios are based on average net assets of $197,440,644.
(d) After fee waivers and/or expense reimbursements. Ratio of net investment
income to average net assets prior to fee waivers and/or expense
reimbursement was 5.15% and 5.03% (annualized) for the periods 1997-1996,
respectively.
FS-13
<PAGE> 133
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
maintenance of liquidity. The Treasury TaxAdvantage
INSTITUTIONAL CLASS 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
"Trust"), an open-end diversified series management
DECEMBER 17, 1997 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.
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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
17, 1997, HAS BEEN FILED WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION (THE "SEC") AND IS
HEREBY INCORPORATED BY REFERENCE. A COPY OF THE
STATEMENT OF ADDITIONAL INFORMATION IS ATTACHED
HERETO. THE SEC MAINTAINS A WEB SITE AT
HTTP://WWW.SEC.GOV THAT CONTAINS THE STATEMENT OF
ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY
REFERENCE, AND OTHER INFORMATION REGARDING THE TRUST.
THE TRUST'S SHARES ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY,
ANY BANK, AND THE TRUST'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 TRUST INVOLVE
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
[LOGO APPEARS HERE]
Fund Management Company
11 Greenway Plaza
Suite 100
Houston, Texas 77046-1173
(800) 659-1005
<PAGE> 134
SUMMARY
THE PORTFOLIO AND ITS INVESTMENT OBJECTIVE
The Trust is an open-end diversified series management investment company.
Pursuant to this Prospectus, the Trust 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 Trust offers shares of another class of
shares of beneficial interest of the Portfolio: the Private Investment Class
representing an interest in the Portfolio. Such class has a different
distribution arrangement and is designed for another category of investors. The
Trust also offers shares of several classes of the Trust representing an
interest in another portfolio, the Treasury Portfolio. The portfolios of the
Trust are referred to collectively as the "Portfolios."
Because the Trust 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 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."
NET ASSET VALUE
The Trust 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."
2
<PAGE> 135
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, 1997, the Trust paid AIM fees with respect to the Portfolio 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 Trust -- Investment Advisor." Under a separate
administrative services agreement with the Trust, AIM may receive reimbursement
of its costs to perform certain accounting and other administrative services for
the Portfolio. See "Management of the Trust -- Investment Advisor" and
"-- Administrative Services." Under a Transfer Agency and Service Agreement,
A I M Institutional Fund Services, Inc. ("Transfer Agent"), AIM's wholly owned
subsidiary and a registered transfer agent, receives a fee for its provision of
transfer agency, dividend distribution and disbursement, and shareholder
services to the Trust. It is currently anticipated that, effective on or about
December 29, 1997, A I M Fund Services, Inc., a wholly owned subsidiary of AIM
and a registered transfer agent will become the transfer agent to the Trust. See
"General Information -- Transfer Agent and Custodian."
DISTRIBUTOR
Fund Management Company ("FMC") acts as the exclusive distributor of the
shares of the Class. FMC does not receive any fee for distribution services from
the Trust. 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. There can be no assurance that the Portfolio will be able to
maintain a stable net asset value of $1.00 per share. 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, AIM Institutional Funds, La Familia AIM de
Fondos and La Familia AIM de Fondos and Design are registered service marks and
aimfunds.com and Invest With Discipline are service marks of A I M Management
Group Inc.
3
<PAGE> 136
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>
- ------------
* Beneficial owners of shares of the Class should consider the effect of any
charges imposed by their bank or other financial institution for various
services.
** Had there been no fee waivers, Management fees and Total portfolio operating
expenses would have been 0.18% and 0.23%, respectively.
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 Trust" below. The expense figures are based
upon actual costs and fees charged to the Class for the fiscal year ended August
31, 1997. Future waivers of fees (if any) may 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' 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 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 EXPENSES AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN.
4
<PAGE> 137
FINANCIAL HIGHLIGHTS
Shown below are the per share ratios and supplemental data (collectively
"data") for the years in the seven-year period ended August 31, 1997 and the
period August 17, 1990 (date operations commenced)through August 31, 1990. 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>
AUGUST 31,
---------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment
operations:
Net investment income.......... 0.05 0.05 0.05 0.03 0.03 0.04 0.07 0.003
-------- -------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment
income....................... (0.05) (0.05) (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 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ======== ========
Total return..................... 5.13% 5.19% 5.35% 3.29% 2.96% 4.32% 6.70% 7.79%(a)
======== ======== ======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s
omitted)..................... $258,251 $407,218 $394,376 $403,882 $434,693 $573,283 $403,846 $ 16,201
======== ======== ======== ======== ======== ======== ======== ========
Ratio of expenses to average
net assets(b)................ 0.20%(c) 0.20% 0.20% 0.20% 0.20% 0.17% 0.14% 0.10%(a)
======== ======== ======== ======== ======== ======== ======== ========
Ratio of net investment income
to average net assets(d)..... 5.00%(c) 5.06% 5.21% 3.23% 2.93% 4.16% 6.16% 7.74%(a)
======== ======== ======== ======== ======== ======== ======== ========
</TABLE>
- ------------
(a) Annualized.
(b) Ratios of expenses to average net assets prior to waiver of advisory fees
were 0.23% for the periods 1997-1994, respectively, and 0.21%, 0.25% and
1.24% for the periods 1992-1990, respectively.
(c) Ratios are based on average net assets of $337,228,562.
(d) Ratios of net investment income to average net assets prior to waiver of
advisory fees were 4.97%, 5.04%, 5.18% and 3.20% for the periods 1997-1994,
respectively, and 4.13%, 6.04% and 6.60% for the periods 1992-1990,
respectively.
5
<PAGE> 138
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 record keeping. It is anticipated
that most institutions will perform their own subaccounting. 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 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.
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. Reverse repurchase
transactions are limited to a term not to exceed 92 days. 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
6
<PAGE> 139
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.
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, liquid 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 liquid 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.
INVESTMENT IN OTHER INVESTMENT COMPANIES. The Trust is permitted to invest in
other investment companies to the extent permitted by the 1940 Act, and rules
and regulations thereunder, and, if applicable, exemptive orders granted by the
SEC.
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
beneficial interest of the Trust.
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.
7
<PAGE> 140
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 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 continuous basis at their net asset value
next determined after an order has been received by the Portfolio. As discussed
below, the Trust reserves the right to reject any purchase order. 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 Transfer Agent 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. Following the initial investment, subsequent
purchases of shares of the Class may also be made via AIM LINK--Registered
Trademark-- Remote, a personal computer application software product. 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 Trust's custodian, are open for
business. The Portfolio, however, reserves the right to change the time for
which purchase and redemption requests must be submitted to the Portfolio for
execution on the same day or any day when the U.S. primary broker-dealer
community is closed for business or trading is restricted due to national
holidays. 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 Trust's right to reject any
purchase order, orders will be accepted (i) when payment for shares of the Class
purchased is received by The Bank of New York, the Trust's custodian bank, in
the form described below and notice of such order is provided to the Transfer
Agent or (ii) at the time the order is placed, if the Trust 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 the Transfer Agent, 11 Greenway Plaza, Suite 100, Houston,
Texas 77046-1173. Account Applications may be obtained from the Transfer Agent.
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 the Transfer
Agent.
The Trust 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.
8
<PAGE> 141
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 Trust. Redemption requests with respect to the Class may also be
made via AIM LINK(R) Remote. 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 are normally made by calling the
Trust.
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 the Transfer Agent 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 the Transfer Agent 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. The Portfolio reserves
the right to change the time for which redemption requests must be submitted to
and received by the Transfer Agent for execution on the same day or any day when
the U.S. primary broker-dealer community is closed for business or trading is
restricted due to national holidays.
A shareholder may change the bank account designated to receive redemption
proceeds by written notice to the Trust. 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 Trust or the
Transfer Agent.
Shareholders may request a redemption by telephone. Neither the Transfer Agent
nor FMC will be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the Account Application if they reasonably believe such request to be
genuine but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures for
verification of telephone transactions may include recordings of telephone
transactions (maintained for six months), and mailings of confirmations promptly
after the transaction.
Payment for shares of the Class redeemed by mail and payment for telephone
redemptions in amounts under $1,000 may be made by check mailed within seven
days after receipt of the redemption request in proper form. The Trust 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 Trust unless
the Board of Trustees of the Trust determines in its sole discretion that
failure to so redeem may have materially adverse consequences to the
shareholders of the Trust.
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) Portfolio 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, and
transfer agency fees. 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 in writing by the
shareholder to the Transfer Agent at P.O. Box 4497, Houston, Texas 77210-4497
and will become effective with dividends paid after its receipt by the Transfer
Agent. 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 Portfolio 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 Trust incur or anticipate any unusual expense, loss or
depreciation which could adversely affect the income or net asset value of the
Portfolio, the Trust'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 exam-
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ple, 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 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 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 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 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 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 Trust and each portfolio of the Trust 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.
Foreign persons who file a United States tax return after December 31, 1996
for a U.S. tax refund and who are not eligible to obtain a social security
number must apply to the Internal Revenue Service ("IRS") for an individual
taxpayer identification number, using IRS Form W-7. For a copy of the IRS Form
W-7 and accompanying instructions, please contact your tax advisor or AIFS.
STATE AND LOCAL TAXATION
Distributions and other Trust 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 or 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 Portfolio. 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.
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YIELD INFORMATION
Yield information for the Class can be obtained by calling the Trust 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 TRUST 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, 1997, 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 5.10% and 5.23%, 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 or its affiliates 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 Trust 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 Trust'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 TRUST
BOARD OF TRUSTEES
The overall management of the business and affairs of the Trust is vested with
its Board of Trustees. The Board of Trustees approves all significant agreements
between the Trust and persons or companies furnishing services to the Trust,
including agreements with the Trust's investment advisor, distributor, custodian
and transfer agent. The day-to-day operations of the Trust are delegated to the
Trust's officers and to AIM, subject always to the objective and policies of the
Trust and to the general supervision of the Trust's Board of Trustees.
Information concerning the Board of Trustees may be found in the Statement of
Additional Information. Certain trustees and officers of the Trust are
affiliated with AIM and A I M Management Group Inc. ("AIM Management"), the
parent corporation of AIM.
INVESTMENT ADVISOR
A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173,
acts as the investment advisor for the Portfolio pursuant to a Master Investment
Advisory Agreement dated as of February 28, 1997 (the "Advisory Agreement").
AIM, organized in 1976, together with its affiliates, manages or advises 55
investment company portfolios. Certain of the directors and officers of AIM are
also trustees or executive officers of the Trust. AIM is a wholly owned
subsidiary of AIM Management. AIM Management is a holding company in the
financial services business. AIM Management is an indirect, wholly owned
subsidiary of AMVESCAP PLC, a publicly-traded holding company that, through its
subsidiaries, engages in the business of investment management on an
international basis.
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.
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For the fiscal year ended August 31, 1997, AIM received fees from the Trust
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 Trust has entered into a Master Administrative Services Agreement dated as
of February 28, 1997 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 Trust 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.
FEE WAIVERS
AIM or its affiliates 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 for such
fee or expenses prior to the end of each fiscal year. AIM voluntarily waived
advisory fees of $123,468 on the Portfolio and assumed expenses of $4,800.
DISTRIBUTOR
The Trust has entered into a Master Distribution Agreement dated as of
February 28, 1997 (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 100, Houston, Texas 77046-1173. Certain trustees and officers of
the Trust are affiliated with FMC and AIM. The Distribution Agreement provides
that FMC has the exclusive right to distribute shares of the Trust 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 Trust is a Delaware business trust. The Trust was originally incorporated
in Maryland on January 24, 1977, but had no operations prior to November 10,
1980. Effective December 31, 1986, the Trust was reorganized as a Massachusetts
business trust; and effective October 15, 1993, the Trust 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
Trust and STIC. All historical financial and other information contained in this
Prospectus for periods prior to Oc-
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tober 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 Trust 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 Trust may have different sales charges and other expenses which
may affect performance. An investor may obtain information concerning the
Trust's other classes by contacting FMC.
All shares of the Trust 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 Trust,
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 Trust
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 Trust's outstanding shares.
As of December 1, 1997 Peoples Two Ten Company was the owner of record of
33.84% and First Trust/VAR & Co. was the owner of record of 26.57% of the
outstanding shares of the Class. As long as each of Peoples Two Ten Company and
First Trust/VAR & Co. owns over 25% of such shares, it may be presumed to be in
"control" of the Institutional Class of the Treasury TaxAdvantage Portfolio, as
defined in the 1940 Act.
There are no preemptive or conversion rights applicable to any of the Trust's
shares. The Trust'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 Trust without shareholder approval.
TRANSFER AGENT AND CUSTODIAN
The Bank of New York, 90 Washington Street, 11th 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 100, Houston,
Texas 77046-1173, acts as transfer agent for the shares of the Class. It is
currently anticipated that, effective on or about December 29, 1997, A I M Fund
Services, Inc., a wholly owned subsidiary of AIM and a registered transfer
agent, will become the transfer agent to the Trust.
LEGAL COUNSEL
The law firm of Ballard Spahr Andrews & Ingersoll, Philadelphia, Pennsylvania,
serves as counsel to the Trust and has passed upon legal matters for the Trust.
SHAREHOLDER INQUIRIES
Shareholder inquiries concerning the status of an account should be directed
to the Trust at 11 Greenway Plaza, Suite 100, 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 Trust 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 Trust 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>
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======================================================== ========================================================
SHORT-TERM INVESTMENTS TRUST PROSPECTUS
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
(800) 659-1005 December 17, 1997
INVESTMENT ADVISOR
A I M ADVISORS, INC.
11 Greenway Plaza, Suite 100 SHORT-TERM
Houston, Texas 77046-1173 INVESTMENTS TRUST
(713) 626-1919
DISTRIBUTOR ---------------------
FUND MANAGEMENT COMPANY
11 Greenway Plaza, Suite 100 TREASURY TAXADVANTAGE
Houston, Texas 77046-1173 PORTFOLIO
(800) 659-1005
---------------------
AUDITORS
KPMG PEAT MARWICK LLP INSTITUTIONAL CLASS
700 Louisiana
Houston, Texas 77002
CUSTODIAN
THE BANK OF NEW YORK
90 Washington Street
11th Floor TABLE OF CONTENTS
New York, New York 10286
PAGE
TRANSFER AGENT Summary.......................................... 2
A I M INSTITUTIONAL FUND SERVICES, INC. Table of Fees and Expenses....................... 4
11 Greenway Plaza, Suite 100 Financial Highlights............................. 5
Houston, Texas 77046-1173 Suitability For Investors........................ 6
Investment Program............................... 6
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY Purchase of Shares............................... 8
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT Redemption of Shares............................. 8
CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH Dividends........................................ 9
THE OFFERING MADE BY THE PROSPECTUS, AND IF GIVEN Taxes............................................ 9
OR MADE, SUCH INFORMATION OR REPRESENTATIONS Net Asset Value.................................. 10
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED Yield Information................................ 10
BY THE TRUST OR THE DISTRIBUTOR. THIS PROSPECTUS Reports to Shareholders.......................... 11
DOES NOT CONSTITUTE AN OFFER IN ANY JURISDICTION Management of the Trust.......................... 11
TO ANY PERSON TO WHOM SUCH OFFERING MAY NOT General Information.............................. 12
LAWFULLY BE MADE. Appendix......................................... A-1
======================================================== ========================================================
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<PAGE> 148
PROSPECTUS
PRIVATE INVESTMENT CLASS
OF THE
TREASURY TAXADVANTAGE PORTFOLIO
OF
SHORT-TERM INVESTMENTS TRUST
11 GREENWAY PLAZA, SUITE 100
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 "Trust"), 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.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
------------------
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 17, 1997, HAS
BEEN FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE "SEC")
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 SEC MAINTAINS A WEB SITE AT HTTP://WWW.SEC.GOV THAT CONTAINS THE
STATEMENT OF ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND
OTHER INFORMATION REGARDING THE TRUST.
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND THE TRUST'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 TRUST INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
PROSPECTUS DATED: DECEMBER 17, 1997
<PAGE> 149
TABLE OF CONTENTS
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PAGE PAGE
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SUMMARY.......................................... 2 DIVIDENDS........................................ 12
TABLE OF FEES AND EXPENSES....................... 5 TAXES............................................ 13
FINANCIAL HIGHLIGHTS............................. 6 NET ASSET VALUE.................................. 14
SUITABILITY FOR INVESTORS........................ 7 YIELD INFORMATION................................ 14
INVESTMENT PROGRAM............................... 7 REPORTS TO SHAREHOLDERS.......................... 14
PURCHASE OF SHARES............................... 9 MANAGEMENT OF THE TRUST.......................... 15
REDEMPTION OF SHARES............................. 11 GENERAL INFORMATION.............................. 18
</TABLE>
SUMMARY
THE PORTFOLIO AND ITS INVESTMENT OBJECTIVE
The Trust 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 Trust also offers other shares of
another class of shares of beneficial interest of the Portfolio: the
Institutional Class, representing an interest in the Portfolio. Such class has
different distribution arrangements and is designed for institutional investors.
The Trust 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 Trust 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 Trust. See "Purchase of Shares."
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<PAGE> 150
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 Trust 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 Trust's investment advisor and
receives a fee based on the Trust's average daily net assets. During the fiscal
year ended August 31, 1997, the Trust 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 Trust for its costs of performing certain accounting
and other administrative services for the Trust. See "Management of the
Trust -- Investment Advisor" "-- Administrative Services." Under a Transfer
Agency and Service Agreement, A I M Institutional Fund Services, Inc., AIM's
wholly owned subsidiary and a registered transfer agent, receives a fee for its
provision of transfer agency, dividend distribution and disbursement, and
shareholder services to the Trust. It is currently anticipated that, effective
on or about December 29, 1997, A I M Fund Services, Inc., a wholly owned
subsidiary of AIM and a registered transfer agent, will become the transfer
agent to the Trust. See "General Information -- Transfer Agent and Custodian."
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 Trust's
Board of Trustees, the Trust 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."
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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. There can be no assurance that the Portfolio will be able to
maintain a stable net asset value of $1.00 per share. 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, AIM Institutional Funds, La Familia AIM de
Fondos and La Familia AIM de Fondos and Design are registered service marks and
aimfunds.com and Invest With Discipline are 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 -- 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............................................................. 0.05%
------
Total other expenses......................................... 0.06%
------
Total portfolio operating expenses -- Private Investment Class** .... 0.46%
======
</TABLE>
- ---------------
* Beneficial owners of shares of the Class should consider the effect of any
charges imposed by their bank, broker-dealer or financial institution for
various services.
** Had there been no fee waivers, Management fees, 12b-1 fees and Total
portfolio operating expenses would have been 0.18%, 0.50% and 0.74%,
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.................................................... $15
5 years.................................................... $26
10 years.................................................... $58
</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 Trust" below.) The expense figures
are based upon actual costs and fees charged to the Class for the fiscal year
ended August 31, 1997 as restated to reflect current
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<PAGE> 153
agreements. The Table of Fees and Expenses reflects voluntary waivers for the
Class. Future waivers of fees (if any) may 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 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 EXPENSES 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 fiscal year ended August 31, 1997 and 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 on the financial statements and the related notes appears
in the Statement of Additional Information.
<TABLE>
<CAPTION>
1997 1996 1995
------- ------- ------
<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 0.05 0.04
------- ------- ------
Less distributions:
Dividends from net investment income..................... (0.05) (0.05) (0.04)
------- ------- ------
Net asset value, end of period............................. $ 1.00 $ 1.00 $ 1.00
======= ======= ======
Total return............................................... 4.87% 4.93% 5.32%(a)
======= ======= ======
Ratios/supplemental data:
Net assets, end of period (000s omitted)................. $39,312 $49,978 $5,423
======= ======= ======
Ratio of expenses to average net assets(b)............... 0.45%(c) 0.45% 0.45%(a)
======= ======= ======
Ratio of net investment income to average net
assets(d)............................................. 4.75%(c) 4.72% 5.21%(a)
======= ======= ======
</TABLE>
- ---------------
(a) Annualized.
(b) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
0.74%, 0.85% and 1.02% (annualized) for the periods 1997-1995, respectively.
(c) Ratios are based on average net assets of $49,702,532.
(d) After fee waivers and/or expense reimbursements. Ratios of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements were 4.46%, 4.32% and 4.64% (annualized) for the periods
1997-1995, respectively.
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<PAGE> 154
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.
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. Reverse repurchase
transactions are limited to a term not to exceed 92 days. 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
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<PAGE> 155
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.
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, liquid 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 liquid 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.
INVESTMENT IN OTHER INVESTMENT COMPANIES. The Trust is permitted to invest
in other investment companies to the extent permitted by the 1940 Act, and
rules and regulations thereunder, and, if applicable, exemptive orders granted
by the SEC.
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 beneficial interest of the Trust.
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<PAGE> 156
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. 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 received by the Portfolio. As discussed
below, the Trust reserves the right to reject any purchase order. 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 Transfer Agent
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. Following the initial investment, subsequent purchases of shares of the
Class may also be made via AIM LINK--Registered Trademark-- Remote, a personal
computer application software product. 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 Trust's custodian bank,
are open for business. The Portfolio, however, reserves the right to change the
time for which purchase and redemption requests must be submitted to the
Portfolio for execution on the same day or any day when the U.S. primary
broker-dealer community is closed for business or trading is restricted due to
national holiday. 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
9
<PAGE> 157
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
Trust proxy statements, annual reports and other communications to shareholders
whose accounts are serviced by the Institution; and such other services as the
Trust may reasonably request. Institutions will be required to certify to the
Trust 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 the Transfer Agent, must be completed
and sent to the Transfer Agent at 11 Greenway Plaza, Suite 100, 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 the Transfer Agent. 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 Trust. The Portfolio will normally be required to make
immediate settlement in federal funds (member bank deposits with a Federal
Reserve Bank) for portfolio securities purchased. Accordingly, payment for
shares of the Class purchased by Institutions on behalf of their customers must
be in federal funds. If an investor's order to purchase shares of the Class is
paid for other than in federal funds, the Institution, acting on behalf of the
investor, completes the conversion into federal funds (which may take two
business days), or itself advances federal funds prior to conversion, and
promptly transmits the order and payment in the form of federal funds to the
Transfer Agent.
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<PAGE> 158
Subject to the conditions stated above and to the Trust's right to reject
any purchase order, orders will be accepted (i) when payment for shares of the
Class purchased is received by The Bank of New York, the Trust's custodian bank,
in the form described above and notice of such order is provided to the 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
1:00 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 Trust 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.
The Trust 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 Trust. Redemption requests with respect to the Class may also be made
via AIM LINK--Registered Trademark-- Remote. 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 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 Transfer Agent 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 Transfer Agent 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. The Portfolio reserves the right to change the time for which
redemption requests must be submitted to and received by the Transfer Agent for
execution on the same day on any day when the U.S. primary broker-dealer
community is closed for business or trading is restricted due to national
holidays.
A shareholder may change the bank account designated to receive redemption
proceeds by written notice to the Trust. 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 Trust or the
Transfer Agent.
Shareholders may request a redemption by telephone. Neither the Transfer
Agent nor FMC will be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the Account Application if they reasonably believe such request to be
genuine but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures for
verification of
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<PAGE> 159
telephone transactions may include recordings of telephone transactions
(maintained for six months), and mailings of confirmations promptly after the
transaction.
Payment for shares of the Class redeemed by mail and payment for telephone
redemptions in amounts of less than $1,000 may be made by check mailed within
seven days after receipt of the redemption request in proper form. The Trust 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 Trust may call for the redemption of, or refuse to
transfer or issue, shares of the Class in order to comply with the law or to
further the purposes for which the Trust 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 Trust 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) Portfolio
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, and transfer agency fees. 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 1:00 p.m. Eastern Time on the last business day of the month.
Such election, or any revocation thereof, must be made in writing by the
Institution to the Transfer Agent at 11 Greenway Plaza, Suite 100, Houston, TX
77046-1173, and will become effective with dividends paid after its receipt by
the Transfer Agent. 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 Trust incur or anticipate any unusual expense, loss or depreciation
which could adversely affect the income or net asset value of the Portfolio, the
Trust'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.
12
<PAGE> 160
TAXES
FEDERAL TAXATION
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 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 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 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 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 Trust and each portfolio of the Trust 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.
Foreign persons who file a United States tax return after December 31, 1996
for a U.S. tax refund and who are not eligible to obtain a social security
number must apply to the Internal Revenue Service ("IRS") for an individual
taxpayer identification number, using IRS Form W-7. For a copy of the IRS Form
W-7 and accompanying instructions, please contact your tax advisor or the
Transfer Agent.
STATE AND LOCAL TAXATION
Distributions and other Trust 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 or foreign
taxes.
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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 Portfolio. 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 Trust 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, 1997, 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 4.85% and 4.97%, 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 or its affiliates 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 Trust 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 Trust's independent auditors.
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Unless otherwise requested by the shareholder, each shareholder will be
provided with a written confirmation for each transaction by its Institution.
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 TRUST
BOARD OF TRUSTEES
The overall management of the business and affairs of the Trust is vested
with its Board of Trustees. The Board of Trustees approves all significant
agreements between the Trust and persons or companies furnishing services to the
Trust, including agreements with the Trust's investment advisor, distributor,
custodian and transfer agent. The day-to-day operations of the Trust are
delegated to the Trust's officers and to AIM, subject always to the objectives
and policies of the Trust and to the general supervision of the Trust's Board of
Trustees. Information concerning the Board of Trustees may be found in the
Statement of Additional Information. Certain trustees and officers of the Trust
are affiliated with AIM and A I M Management Group Inc. ("AIM Management"), the
parent corporation of AIM.
INVESTMENT ADVISOR
A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas
77046-1173, acts as the investment advisor for the Portfolio pursuant to a
Master Investment Advisory Agreement dated as of February 28, 1997 (the
"Advisory Agreement"). AIM was organized in 1976 and, together with its
affiliates, manages or advises 55 investment company portfolios. Certain of the
directors and officers of AIM are also trustees or executive officers of the
Trust. AIM is a wholly owned subsidiary of AIM Management. AIM Management is a
holding company in the financial services business. AIM Management is an
indirect, wholly owned subsidiary of AMVESCAP PLC, a publicly-traded holding
company that, through its subsidiaries, engages in the business of investment
management on an international basis.
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, 1997, AIM received fees from the Trust
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 Trust 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 Trust has entered into a Master Administrative Services Agreement dated
as of February 28, 1997 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
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services of a principal financial officer of the Trust 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.
FEE WAIVERS
AIM or its affiliates 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
such fee or expenses prior to the end of each 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 for such fee or expenses prior to the end of
each fiscal year. AIM voluntarily waived advisory fees of $123,468 on the
Portfolio and assumed expenses of $4,800.
DISTRIBUTOR
The Trust has entered into a Master Distribution Agreement dated as of
February 28, 1997 (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 100, Houston, Texas 77046-1173. Certain trustees and officers of the Trust
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 Trust has adopted a Master Distribution Plan (the "Plan") pursuant to
Rule 12b-1 under the 1940 Act. The Plan provides that the Trust 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
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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 Trust 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 Trust 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 Trust 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 Trust 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 Trust 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.
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 Trust is a Delaware business trust. The Trust was originally
incorporated in Maryland on January 24, 1977, but had no operations prior to
November 10, 1980. Effective December 31, 1986, the Trust was reorganized as a
Massachusetts business trust; and effective October 15, 1993, the Trust 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 Trust 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 Trust 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 Trust may have different
sales charges and other expenses which may affect performance. An investor may
obtain information concerning the Trust's other classes by contacting FMC.
All shares of the Trust 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 Trust, 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 Trust
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 Trust's outstanding shares.
As of December 1, 1997, The Bank of New York was the owner of record of
37.29%, Huntington Capital Corp. was owner of record of 27.31% and First
National Bank of Chicago was the owner of record of 25.49% of the outstanding
shares of the Class. As long as each of The Bank of New York, Huntington Capital
Corp. and First National Bank of Chicago owns over 25% of such shares, it may be
presumed to be in "control" of the Private Investment Class of the Treasury
TaxAdvantage Portfolio, as defined in the 1940 Act.
There are no preemptive or conversion rights applicable to any of the
Trust's shares. The Trust's shares, when issued, will be fully paid and
non-assessable. The Board of Trustees may create additional portfolios and
classes of the Trust without shareholder approval.
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TRANSFER AGENT AND CUSTODIAN
The Bank of New York, 90 Washington Street, 11th 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 100, Houston,
Texas 77046-1173, acts as transfer agent for the shares of the Portfolio. It
is currently anticipated that, effective on or about December 29, 1997, A I M
Fund Services, Inc., a wholly owned subsidiary of AIM and registered transfer
agent, will become the transfer agent to the Trust.
LEGAL COUNSEL
The law firm of Ballard Spahr Andrews & Ingersoll, Philadelphia,
Pennsylvania, serves as counsel to the Trust and passes upon legal matters for
the Trust.
SHAREHOLDER INQUIRIES
Shareholder inquiries concerning the status of an account should be
directed to an investor's Institution, or to the Trust at 11 Greenway Plaza,
Suite 100, 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 Trust 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 Trust 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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<PAGE> 168
<TABLE>
<S> <C>
SHORT-TERM INVESTMENTS TRUST SHORT-TERM
11 Greenway Plaza, Suite 100 INVESTMENTS TRUST
Houston, Texas 77046-1173
(800) 877-7748 PRIVATE
INVESTMENT CLASS
INVESTMENT ADVISOR OF THE
A I M ADVISORS, INC. --------------------------------------------
11 Greenway Plaza, Suite 100 TREASURY
Houston, Texas 77046-1173 TAXADVANTAGE
(713) 626-1919 PORTFOLIO PROSPECTUS
DISTRIBUTOR
FUND MANAGEMENT COMPANY
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
(800) 877-7748
DECEMBER 17, 1997
AUDITORS
KPMG PEAT MARWICK LLP
700 Louisiana
Houston, Texas 77002
CUSTODIAN
THE BANK OF NEW YORK
90 Washington Street
11th Floor
New York, New York 10286
TRANSFER AGENT
A I M INSTITUTIONAL FUND
SERVICES, INC.
11 Greenway Plaza, Suite 100
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 TRUST OR THE DISTRIBUTOR. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN
ANY JURISDICTION TO ANY PERSON TO WHOM SUCH [LOGO APPEARS HERE]
OFFERING MAY NOT LAWFULLY BE MADE. FUND MANAGEMENT COMPANY
</TABLE>
<PAGE> 169
STATEMENT OF
ADDITIONAL INFORMATION
SHORT-TERM INVESTMENTS TRUST
TREASURY TAXADVANTAGE PORTFOLIO
(INSTITUTIONAL CLASS)
(PRIVATE INVESTMENT CLASS)
11 GREENWAY PLAZA
SUITE 100
HOUSTON, TEXAS 77046-1173
(800) 659-1005
---------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS.
IT SHOULD BE READ IN CONJUNCTION WITH A PROSPECTUS
OF EACH OF THE ABOVE-NAMED FUNDS,
COPIES OF WHICH MAY BE OBTAINED BY WRITING
FUND MANAGEMENT COMPANY, 11 GREENWAY PLAZA,
SUITE 100, HOUSTON, TEXAS 77046-1173
OR CALLING (800) 659-1005
---------------------
STATEMENT OF ADDITIONAL INFORMATION DATED DECEMBER 17, 1997
RELATING TO THE PROSPECTUS OF EACH OF THE FOLLOWING CLASSES OF THE
TREASURY TAXADVANTAGE PORTFOLIO:
INSTITUTIONAL CLASS PROSPECTUS DATED DECEMBER 17, 1997
AND PRIVATE INVESTMENT CLASS PROSPECTUS DATED DECEMBER 17, 1997
<PAGE> 170
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Introduction................................................ 3
General Information about the Trust......................... 3
The Trust and Its Shares............................... 3
Management.................................................. 5
Trustees and Officers.................................. 5
Remuneration of Trustees............................... 8
Investment Advisor..................................... 9
Administrative Services................................ 10
Expenses............................................... 11
Banking Regulations.................................... 11
Transfer Agent and Custodian........................... 11
Reports................................................ 12
Fee Waivers............................................ 12
Principal Holders of Securities........................ 12
Purchases and Redemptions................................... 15
Net Asset Value Determination.......................... 15
Distribution Agreement................................. 15
Distribution Plan...................................... 16
Performance Information................................ 16
Investment Program and Restrictions......................... 17
Investment Program..................................... 17
Eligible Securities.................................... 17
Investment Restrictions................................ 17
Other Investment Policies.............................. 17
Portfolio Transactions...................................... 18
Tax Matters................................................. 19
Qualifications as a Regulated Investment Company....... 19
Excise Tax on Regulated Investment Companies........... 19
Portfolio Distributions................................ 20
Sale or Redemption of Shares........................... 20
Foreign Shareholders................................... 20
Effect of Future Legislation; State and Local Tax
Considerations........................................ 21
Financial Statements........................................ FS
</TABLE>
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INTRODUCTION
The Treasury TaxAdvantage Portfolio (the "Portfolio") is an investment
portfolio of Short-Term Investments Trust (the "Trust"), 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 Institutional Class Prospectus
dated December 17, 1997 and the Private Investment Class Prospectus dated
December 17, 1997 (each a "Prospectus"). Copies of each Prospectus and
additional copies of this Statement of Additional Information may be obtained
without charge by writing the principal distributor of the Trust's shares, Fund
Management Company ("FMC"), 11 Greenway Plaza, Suite 100, 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 each class of the Portfolio.
Some of the information required to be in this Statement of Additional
Information is also included in each Prospectus; and, in order to avoid
repetition, reference will be made to sections of the applicable Prospectus.
Additionally, each 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 each
Prospectus and this Statement of Additional Information, may be obtained from
the SEC by paying the charges prescribed under its rules and regulations.
GENERAL INFORMATION ABOUT THE TRUST
THE TRUST AND ITS SHARES
The Trust 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 Trust was reorganized as a business trust under the laws of the
Commonwealth of Massachusetts on December 31, 1986. The Trust 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 ("Declaration
of Trust") establishing the Trust is on file with the SEC. 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 Trust 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 Trust are redeemable at the
net asset value thereof at the option of the shareholder or at the option of the
Trust 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 Trust 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 class of shares is sold
pursuant to a separate prospectus and this joint Statement of Additional
Information. The Treasury Portfolio consists of the following five classes of
shares: Cash Management Class, Institutional Class, Personal Investment Class,
Private Investment Class and Resource Class. Each such class has different
shareholder qualifications and bears expenses differently. This Statement of
Additional Information relates to the shares of each class of the Portfolio.
Shares of the five classes of the Treasury Portfolio are offered pursuant to
separate prospectuses and a separate statement of additional information.
Shares of beneficial interest of the Trust will be redeemable at the net asset
value thereof at the option of the shareholder or at the option of the Trust 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 Trust, a particular portfolio or a particular class means, respectively, the
vote of the lesser of (i) 67% or more of the shares of the Trust, such portfolio
or such class present at a meeting of the Trust's shareholders, if the holders
of more than 50% of the outstanding shares of the Trust, such portfolio or such
class are present or represented by proxy, or (ii) more than 50% of the
outstanding shares of the Trust, such portfolio or such class.
Shareholders of the Trust 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 Trust.
The Trust, 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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standing shares of the Trust, such Portfolio and such class, respectively;
provided, however that the Board of Trustees may terminate, with such
shareholder approval, the Trust, either Portfolio and any class thereof with
respect to which there are fewer than 100 holders of record.
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 Trust. 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
Trust.
The assets received by the Trust 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 Trust. While certain expenses of the Trust 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 Trust.
Under Delaware law, shareholders of a Delaware business trust shall be
entitled to the same limitations of liability extended to shareholders of
private for-profit corporations, however, there is a remote possibility that
shareholders could, under certain circumstances, be held liable for the
obligations of the Trust to the extent the courts of another state which does
not recognize such limited liability were to apply the laws of such state to a
controversy involving such obligations. However, the Declaration of Trust
disclaims shareholder liability for acts or obligations of the Trust and
requires that notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by the Trust or the trustees to all
parties, and each party thereto must expressly waive all rights of action
directly against shareholders of the Trust. The Declaration of Trust provides
for indemnification out of the Trust's property for all losses and expenses of
any shareholder of the Trust 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 Trust 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 Trust of
the trustees and the officers of the Trust 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 Trust. Such person
may not be indemnified against any liability to the Trust or to the Trust's
shareholders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office. The Declaration of Trust also authorizes
the purchase of liability insurance on behalf of trustees and officers.
As described in the Prospectus, the Trust 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 Trust and filed with the Trust'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 Trust.
4
<PAGE> 173
MANAGEMENT
TRUSTEES AND OFFICERS
The trustees and officers of the Trust and their principal occupations during
at least the last five years are set forth below.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
POSITIONS HELD
NAME, ADDRESS AND AGE WITH REGISTRANT PRINCIPAL OCCUPATION DURING AT LEAST THE PAST 5 YEARS
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
*CHARLES T. BAUER (78) Trustee and Chairman of the Board of Directors, A I M Management
11 Greenway Plaza, Suite 100 Chairman Group Inc., A I M Advisors, Inc., A I M Capital
Houston, TX 77046 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
Chairman and Director, AMVESCAP PLC.
- ------------------------------------------------------------------------------------------------------------------
BRUCE L. CROCKETT (53) Trustee Director, ACE Limited (insurance company). Formerly,
906 Frome Lane Director, President and Chief Executive Officer,
McLean, VA 22102 COMSAT Corporation; and Chairman, Board of Governors
of INTELSAT (international communications company).
- ------------------------------------------------------------------------------------------------------------------
OWEN DALY II (73) Trustee Director, Cortland Trust Inc. (investment company).
Six Blythewood Road Formerly, Director, CF & I Steel Corp., Monumental
Baltimore, MD 21210 Life Insurance Company and Monumental General
Insurance Company; and Chairman of the Board of
Equitable Bancorporation.
- ------------------------------------------------------------------------------------------------------------------
JACK M. FIELDS (45) Trustee Formerly, Member of the U.S. House of
Texana Global, Inc. Representatives.
8810 Will Clayton Parkway
Jetero Plaza, Suite E
Humble, TX 77338
- ------------------------------------------------------------------------------------------------------------------
**CARL FRISCHLING (60) Trustee Partner, Kramer, Levin, Naftalis & Frankel (law
919 Third Avenue firm); and Director, ERD Waste, Inc. (waste
New York, NY 10022 management company), Aegis Consumer Finance (auto
leasing company) and Lazard Funds, Inc. (investment
companies). Formerly, Partner, Reid & Priest (law
firm); and, prior thereto, Partner, Spengler Carlson
Gubar Brodsky & Frischling (law firm).
- ------------------------------------------------------------------------------------------------------------------
*ROBERT H. GRAHAM (51) Trustee and Director, President and Chief Executive Officer,
11 Greenway Plaza, Suite 100 President A I M Management Group Inc.; Director and President,
Houston, TX 77046 A I M Advisors, Inc.; Director and Senior Vice
President, A I M Capital Management, Inc., A I M
Distributors, Inc., A I M Fund Services, Inc., A I M
Institutional Fund Services, Inc. and Fund Management
Company; and Director, AMVESCAP PLC; Chairman of the
Board of Directors AIM Funds Group Canada Inc.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
*A trustee who is an "interested person" of the Trust and AIM as defined in the
1940 Act.
**A trustee who is an "interested person" of the Trust as defined in the 1940
Act.
5
<PAGE> 174
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
POSITIONS HELD
NAME, ADDRESS AND AGE WITH REGISTRANT PRINCIPAL OCCUPATION DURING AT LEAST THE PAST 5 YEARS
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
JOHN F. KROEGER (73) Trustee Director, Flag Investors International Fund, Inc.,
37 Pippins Way Flag Investors Emerging Growth Fund, Inc., Flag
Morristown, NJ 07960 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 (55) Trustee Attorney in private practice in Houston, Texas.
6363 Woodway, Suite 825
Houston, TX 77057
- ------------------------------------------------------------------------------------------------------------------
IAN W. ROBINSON (74) Trustee Formerly, Executive Vice President and Chief
183 River Drive Financial Officer, Bell Atlantic Management Services,
Tequesta, FL 33469 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 (58) Trustee Executive Vice President, Development and Operations,
Transco Tower, 50th Floor Hines Interests Limited Partnership (real estate
2800 Post Oak Blvd. development).
Houston, TX 77056
- ------------------------------------------------------------------------------------------------------------------
***JOHN J. ARTHUR (53) Senior Vice Director, Senior Vice President and Treasurer, A I M
11 Greenway Plaza, Suite 100 President and Advisors, Inc.; and Vice President and Treasurer,
Houston, TX 77046 Treasurer A I M Management Group Inc., A I M Capital
Management, Inc., A I M Distributors, Inc., A I M
Fund Services, Inc., A I M Institutional Fund
Services, Inc. and Fund Management Company.
- ------------------------------------------------------------------------------------------------------------------
GARY T. CRUM (50) Senior Vice Director and President, A I M Capital Management,
11 Greenway Plaza, Suite 100 President Inc.; Director and Senior Vice President, A I M
Houston, TX 77046 Management Group Inc. and A I M Advisors, Inc.; and
Director, A I M Distributors, Inc. and AMVESCAP PLC.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
***Mr. Arthur and Ms. Relihan are married to each other.
6
<PAGE> 175
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
POSITIONS HELD
NAME, ADDRESS AND AGE WITH REGISTRANT PRINCIPAL OCCUPATION DURING AT LEAST THE PAST 5 YEARS
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
***CAROL F. RELIHAN (43) Senior Vice Director, Senior Vice President, General Counsel and
11 Greenway Plaza, Suite 100 President and Secretary, A I M Advisors, Inc.; Vice President,
Houston, TX 77046 Secretary General Counsel and Secretary, A I M Management Group
Inc.; Director, Vice President and General Counsel,
Fund Management Company; General Counsel and Vice
President, A I M Fund Services, Inc. and A I M
Institutional Fund Services, Inc.; Vice President,
A I M Capital Management, Inc., A I M Distributors,
Inc.
- ------------------------------------------------------------------------------------------------------------------
DANA R. SUTTON (38) Vice President Vice President and Fund Controller, A I M Advisors,
11 Greenway Plaza, Suite 100 and Assistant Inc.; and Assistant Vice President and Assistant
Houston, TX 77046 Treasurer Treasurer, Fund Management Company.
- ------------------------------------------------------------------------------------------------------------------
MELVILLE B. COX (54) Vice President Vice President and Chief Compliance Officer, A I M
11 Greenway Plaza, Suite 100 Advisors, Inc., A I M Capital Management, Inc., A I M
Houston, TX 77046 Distributors, Inc., A I M Fund Services, Inc., A I M
Institutional Fund Services, Inc. and Fund Management
Company.
- ------------------------------------------------------------------------------------------------------------------
KAREN DUNN KELLEY (37) Vice President Senior Vice President, A I M Capital Management, Inc.
11 Greenway Plaza, Suite 100 and Vice President, A I M Advisors, Inc.
Houston, TX 77046
- ------------------------------------------------------------------------------------------------------------------
J. ABBOTT SPRAGUE (42) Vice President Director and President, Fund Management Company;
11 Greenway Plaza, Suite 100 Director and Senior Vice President, A I M Advisors,
Houston, TX 77046 Inc. and A I M Institutional Fund Services, Inc.; and
Senior Vice President A I M Management Group Inc.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
***Mr. Arthur and Ms. Relihan are married to each other.
The standing committees of the Board of Trustees are the Audit Committee, the
Investments Committee, and the Nominating and Compensation Committee.
The members of the Audit Committee are Messrs. Crockett, Daly, Fields,
Frischling, Kroeger (Chairman), Pennock, Robinson and Sklar. The Audit Committee
is responsible for meeting with the Trust'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 Trust'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), Fields, Frischling, Kroeger, Pennock, Robinson and Sklar. The
Investments Committee is responsible for reviewing portfolio compliance,
brokerage allocation, portfolio investment pricing issues, interim dividend and
distribution issues, 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, Fields, Kroeger, Pennock (Chairman), Robinson and Sklar. The Nominating
and Compensation Committee is responsible for considering and nominating
individuals to stand for election as trustees who are not interested persons as
long as the Trust maintains a distribution plan pursuant to Rule 12b-1 under the
1940 Act, reviewing from time to time the compensation payable to the
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.
7
<PAGE> 176
All of the Trust's trustees also serve as directors or trustees of some or all
of the other investment companies managed or advised by A I M Advisors, Inc.
("AIM") or distributed and administered by FMC. Most of the Trust's executive
officers hold similar offices with some or all of such investment companies.
REMUNERATION OF TRUSTEES
Each trustee is reimbursed for expenses incurred in connection with each
meeting of the Board of Trustees or any committee thereof. Each trustee who is
not an officer of the Trust is compensated for his services according to a fee
schedule which recognizes the fact that such trustee also serves as a director
or trustee of other regulated investment companies managed, administered or
distributed by AIM or its affiliates (the "AIM Funds"). Each such trustee
receives a fee, allocated among the AIM Funds for which he serves as a director
or trustee, which consists of an annual retainer component and a meeting fee
component.
Set forth below is information regarding compensation paid or accrued for each
trustee of the Trust:
<TABLE>
<CAPTION>
Retirement
Benefits Total
Aggregate Accrued Compensation
Compensation By All from all
Trustee from Trust(1) AIM Funds(2) AIM Funds(3)
------- ------------- ------------- ------------
<S> <C> <C> <C>
Charles T. Bauer................................ $ -0- $ -0- $ -0-
Bruce L. Crockett............................... 4,880 38,621 68,000
Owen Daly II.................................... 4,879 82,607 68,000
Jack Fields(4).................................. 2,466 -0- -0-
Carl Frischling................................. 4,880 56,683 68,000(5)
Robert H. Graham................................ -0- -0- -0-
John F. Kroeger................................. 4,879 83,654 66,000
Lewis F. Pennock................................ 4,879 33,702 67,000
Ian W. Robinson................................. 4,880 64,973 68,000
Louis S. Sklar.................................. 4,815 47,593 66,500
</TABLE>
- ---------------
(1) The total amount of compensation deferred by all Trustees of the Trust
during the fiscal year ended August 31, 1997, including interest earned
thereon, was 23,027.
(2) During the fiscal year ended August 31, 1997, the total amount of expenses
allocated to the Trust in respect of such retirement benefits was $30,214.
Data reflects compensation for the calendar year ended December 31, 1996.
(3) Each serves as a Director or Trustee of a total of 11 registered investment
companies advised by AIM (comprised of 47 portfolios). Data reflects total
compensation for the calendar year ended December 31, 1996.
(4) Mr. Fields was not serving as a Director during the calendar year ending
December 31, 1996.
(5) See also page 9 regarding fees earned by Mr. Frischling's law firm.
AIM Funds Retirement Plan for Eligible Directors/Trustees
Under the terms of the AIM Funds Retirement Plan for Eligible
Directors/Trustees (the "Plan"), each trustee (who is not an employee of any of
the AIM Funds, A I M Management Group Inc. or any of their affiliates) may be
entitled to certain benefits upon retirement from the Board of Trustees.
Pursuant to the Plan, the normal retirement date is the date on which the
eligible trustee has attained age 65 and has completed at least five years of
continuous service with one or more of the AIM Funds. Each eligible trustee 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 75% of the retainer paid or accrued by the AIM Funds for such trustee
during the twelve-month period immediately preceding the trustee's retirement
(including amounts deferred under separate agreement between the AIM Funds and
the trustee) for the number of such trustee's years of service (not in excess of
10 years of service) completed with respect to any of the AIM Funds. Such
benefit is payable to each eligible trustee in quarterly installments. If an
eligible trustee dies after attaining the normal retirement date but before
receipt of any benefits under the Plan commences, the trustee's surviving spouse
(if any) shall receive a quarterly survivor's benefit equal to 50% of the amount
payable to the deceased trustee, for no more than ten years beginning the first
day of the calendar quarter following the date of the trustee's death. Payments
under the Plan are not secured or funded by any AIM Fund.
8
<PAGE> 177
Set forth below is a table that shows the estimated annual benefits payable to
an eligible director upon retirement assuming a specified level of compensation
and years of service classifications. The estimated credited years of service
for Messrs. Crockett, Daly, Fields, Frischling, Kroeger, Pennock, Robinson and
Sklar are 10, 10, 0, 20, 19, 15, 10, and 7 years, respectively.
ANNUAL RETAINER UPON RETIREMENT
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
NUMBER OF
YEARS OF
SERVICE WITH ANNUAL RETAINER PAID BY ALL AIM FUNDS
THE AIM FUNDS $80,000
- ---------------------------------------------------------------------------
<S> <C> <C>
10 $60,000
- ---------------------------------------------------------------------------
9 $54,000
- ---------------------------------------------------------------------------
8 $48,000
- ---------------------------------------------------------------------------
7 $42,000
- ---------------------------------------------------------------------------
6 $36,000
- ---------------------------------------------------------------------------
5 $30,000
- ---------------------------------------------------------------------------
</TABLE>
Deferred Compensation Agreements
Messrs. Daly, Frischling, Kroeger, Robinson and Sklar (for purposes of this
paragraph only, the "deferring trustees") have each executed a Deferred
Compensation Agreement (collectively, the "Agreements"). Pursuant to the
Agreements, the deferring trustees may elect to defer receipt of up to 100% of
their compensation payable by the Trust, and such amounts are placed into a
deferral account. Currently, the deferring trustees may select various AIM Funds
in which all or part of their deferral accounts shall be deemed to be invested.
Distributions from the deferring trustees' deferral accounts will be paid in
cash, generally in equal quarterly installments over a period of five (5) or ten
(10) years (depending on the Agreement) beginning on the date the deferring
trustee's retirement benefits commence under the Plan. The Trust's Board of
Trustees, in its sole discretion, may accelerate or extend the distribution of
such deferral accounts after the deferring trustee's termination of service as a
trustee of the Trust. If a deferring trustee dies prior to the distribution of
amounts in his deferral account, the balance of the deferral account will be
distributed to his designated beneficiary in a single lump sum payment as soon
as practicable after such deferring trustee's death. The Agreements are not
funded and, with respect to the payments of amounts held in the deferral
accounts, the deferring trustees have the status of unsecured creditors of the
Trust and of each other AIM Fund from which they are deferring compensation.
The Portfolio paid legal fees of $4,209 for the year ended August 31, 1997 for
services rendered by Kramer, Levin, Naftalis & Frankel as counsel to the Board
of Trustees. Carl Frischling, a trustee of the Trust, is a member of that firm.
INVESTMENT ADVISOR
A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173,
acts as the investment advisor of the Portfolio pursuant to a Master Investment
Advisory Agreement dated as of February 28, 1997 (the "Advisory Agreement"). AIM
was organized in 1976, and together with its subsidiaries advises or manages 55
investment company portfolios.
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 Trust's Board of Trustees. AIM shall not be
liable to the Trust or to its shareholders for any act or omission by AIM or for
any loss sustained by the Trust or its shareholders except in the case of
willful misfeasance, bad faith, gross negligence or reckless disregard of duty.
AIM and the Trust 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.
9
<PAGE> 178
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 the Advisory Agreement between the Trust and AIM currently in
effect, AIM received fees (net of fee waivers, if any) from the Trust for the
fiscal years ended August 31, 1997, 1996 and 1995, with respect to the Portfolio
in the amounts of $705,397, $675,795 and $596,449 , respectively. For the fiscal
years ended August 31, 1997, 1996 and 1995, AIM waived fees with respect to the
Portfolio in the amounts of $123,468, $116,126, and $117,100, 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
February 28, 1999 and from year to year thereafter provided that it is
specifically approved at least annually by the Trust'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 Trust 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 100, Houston, Texas 77046-1173, a holding
company that has been engaged in the financial service business since 1976. AIM
Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire
Square, London EC2M 4YR, United Kingdom. AMVESCAP PLC and its subsidiaries are
an independent investment management group engaged in institutional investment
management and retail fund business in the United States, Europe and the Pacific
Region. Certain of the directors and officers of AIM are also executive officers
of the Trust and their affiliations are shown under "Trustees and Officers." The
address of each director and officer of AIM is 11 Greenway Plaza, Suite 100,
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 Portfolio.
ADMINISTRATIVE SERVICES
AIM also provides certain services pursuant to a Master Administrative
Services Agreement dated as of February 28, 1997 between AIM and the Trust (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 Trust and of
persons working under his supervision for maintaining the financial accounts and
books and records of the Trust, 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 Trust's
Board of Trustees.
Under the Administrative Services Agreement, AIM was reimbursed for the fiscal
years ended August 31, 1997, 1996 and 1995, in the amounts of 56,844, $30,056
and $42,823, respectively, for fund accounting services for the Portfolio.
Under the terms of a Transfer Agency and Service Agreement, dated September
16, 1994, as amended, between the Trust and A I M Institutional Fund Services,
Inc. ("AIFS"), a registered transfer agent and wholly owned subsidiary of AIM,
as well as under previous agreements, AIFS received $35,426 and $33,534 for the
fiscal years ended August 31, 1997 and 1996, respectively, for the provision of
certain shareholder services for the Trust.
10
<PAGE> 179
EXPENSES
In addition to fees paid to AIM pursuant to the Agreement and the expenses
reimbursed to AIM under the Administrative Services Agreement, the Trust also
pays or causes to be paid all other expenses of the Trust, including, without
limitation: the charges and expenses of any registrar, any custodian or
depository appointed by the Trust for the safekeeping of its cash, portfolio
securities and other property, and any transfer, dividend or accounting agent or
agents appointed by the Trust; brokers' commissions chargeable to the Trust in
connection with portfolio securities transactions to which the Trust is a party;
all taxes, including securities issuance and transfer taxes, and fees payable by
the Trust to federal, state or other governmental agencies; the costs and
expenses of engraving or printing of certificates representing shares of the
Trust; all costs and expenses in connection with the registration and
maintenance of registration of the Trust 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 Trust and supplements thereto to the Trust'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 Trust's shares; charges and expenses
of legal counsel, including counsel to the trustees of the Trust who are not
"interested persons" (as defined in the 1940 Act) of the Trust or AIM, and of
independent accountants in connection with any matter relating to the Trust;
membership dues of industry associations; interest payable on Trust borrowings;
postage; insurance premiums on property or personnel (including officers and
trustees) of the Trust 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 Trust) 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 Trust's shares.
Expenses of the Trust which are not directly attributable to the operations of
any class of shares or portfolio of the Trust are prorated among all classes of
the Trust. Expenses of the Trust except those listed in the next sentence are
prorated among all classes of such Portfolio. Distribution and service fees,
transfer agency fees and shareholder recordkeeping fees 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 Trust and alternate means for continuing
the servicing of such shareholders would be sought. In such event, changes in
the operation of the Trust 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 ("BONY") acts as custodian for the portfolio securities
and cash of the Portfolio. BONY receives such compensation from the Trust for
its services in such capacity as is agreed to from time to time by BONY and the
Trust. The address of BONY is 90 Washington Street, 11th Floor, New York, New
York 10286.
A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 100,
Houston, Texas 77046-1173, acts as transfer agent for the shares of each class
of the Portfolio and receives an annual fee from the Trust for its services in
such capacity in the amount of .007% of average daily net assets of the Trust,
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 Trust. It is currently
anticipated that, effective on or about December 29, 1997, A I M Fund Services,
Inc., a wholly owned subsidiary of A I M and a registered transfer agent, will
become the transfer agent to the Trust.
11
<PAGE> 180
REPORTS
The Trust furnishes shareholders with semi-annual reports containing
information about the Trust and its operations, including a schedule of
investments held in the Portfolio and its financial statements. The annual
financial statements are audited by the Trust's independent auditors. The Board
of Trustees has selected KPMG Peat Marwick LLP, 700 Louisiana, Houston, Texas
77002, as the independent auditors to audit the financial statements and review
the tax returns of the Portfolio.
FEE WAIVERS
AIM or its affiliates may, from time to time, agree to waive voluntarily all
or any portion of its fees or reimburse the Portfolio for certain of its
expenses. Such waivers or reimbursements may be discontinued at any time.
PRINCIPAL HOLDERS OF SECURITIES
TREASURY PORTFOLIO
To the best of the knowledge of the Trust, the names and addresses of the
holders of 5% or more of the outstanding shares of any class of the Portfolio as
of December 1, 1997, and the percentage of such shares owned by such
shareholders as of such date are as follows:
CASH MANAGEMENT CLASS
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
---------------- ------------
<S> <C>
The Bank of New York...................................... 48.53%(b)
4 Fisher Lane
White Plains, NY 10603
Fund Services Associates.................................. 19.16%
11835 West Olympic Boulevard
Suite 205
Los Angeles, CA 90064
Texas Commerce Bank....................................... 12.25%
Mutual Fund Unit/16 Hcb 09
P.O. Box 2558
Houston, TX 77252-2558
Cullen/Frost Discount Brokers............................. 5.27%
100 W. Houston St.
San Antonio, TX 78205
</TABLE>
- ---------------
(a) The Trust 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> 181
INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
---------------- ------------
<S> <C>
U.S. Bank of Washington.................................. 11.39%
P.O. Box 3168
Portland, OR 97208
Trust Company Bank........................................ 9.66%
P.O. Box 105504
Atlanta, GA 30348
City of New York Deferred Compensation Plan............... 7.34%
40 Rector Street, 3rd Floor
New York, NY 10006
Liberty Registration Co. of Oklahoma...................... 7.08%
P.O. Box 25848
Oklahoma City, OK 73125
</TABLE>
PERSONAL INVESTMENT CLASS
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
---------------- ------------
<S> <C>
Cullen/Frost Discount Brokers................................. 66.08%(b)
P.O. Box 2358
San Antonio, TX 78299
The Bank of New York........................................ 27.42%(b)
4 Fisher Lane
White Plains, NY 10603
</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. of Tulsa, N.A. .................... 50.06%(b)
P.O. Box 25848
Oklahoma City, OK 73125
The Bank of New York........................................ 13.85%
4 Fisher Lane
White Plains, NY 10603
Huntington Capital Corp..................................... 12.29%
41 S. High St., 9th Floor
Columbus, Ohio 43287
First Trust/VAR & Co........................................ 5.73%
Funds Control Suite 0404
180 E. 5th Street
St. Paul, MN 55101
</TABLE>
RESOURCE CLASS
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
---------------- ------------
<S> <C>
Corestates Capital Markets.................................... 80.37%(b)
1345 Chestnut Street
Philadelphia, PA 19101
Mellon Bank................................................. 16.39%
Three Mellon Center, Room 3840
Pittsburgh, PA 15259-0001
</TABLE>
- ---------------
(a) The Trust 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> 182
TREASURY TAXADVANTAGE PORTFOLIO
To the best of the knowledge of the Trust, 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 December 1, 1997, 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>
Peoples Two Ten Company..................................... 33.84%(b)
c/o Summit Bank
Trust Operations, 7th Floor
P.O. Box 821
Hackensack, NJ 07602
First Trust/VAR & Co. ...................................... 26.57%(b)
180 East 5th Street
St. Paul, MN 55101
Liberty Registration Co. of Oklahoma...................... 17.14%
P.O. Box 25848
Oklahoma City, OK 73125
NationsBank................................................. 5.16%
101 Elm Street, 11th Floor
P.O. Box 831000
Dallas, TX 75202-2911
</TABLE>
PRIVATE INVESTMENT CLASS
<TABLE>
<CAPTION>
Percent
Name and Address Owned of
of Record Owner Record Only(a)
---------------- --------------
<S> <C>
The Bank of New York........................................ 37.29%(b)
4 Fisher Lane
White Plains, NY 10603
Huntington Capital Corp..................................... 27.31%(b)
41 S. High St., 9th Floor
Columbus, OH 43287
First National Bank of Chicago.............................. 25.49%(b)
Mail Suite 0126
Chicago, IL 60670-0126
Corestates Capital Markets.................................. 7.74%
1345 Chestnut St.
FC 1-1-9-49
Philadelphia, PA 19101
</TABLE>
- ---------------
(a) The Trust 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> 183
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 Trust, as of December 1, 1997, the
trustees and officers of the Trust beneficially owned less than 1% of each class
of the Trust's outstanding shares.
PURCHASES AND REDEMPTIONS
A complete description of the manner by which shares of a particular class
may be purchased, redeemed or exchanged appears in the Prospectus under the
heading "Purchase of Shares."
The right of redemption may be suspended or the date of payment postponed when
(a) trading on the New York Stock Exchange ("NYSE") is restricted, as determined
by applicable rules and regulations of the SEC, (b) the NYSE is closed for other
than customary weekend and holiday closings, (c) the SEC has by order permitted
such suspension, or (d) an emergency as determined by the SEC exists making
disposition of portfolio securities or the valuation of the net assets of the
Fund not reasonably practicable.
A "business day" of the Portfolio is any day on which commercial banks in the
New York Federal Reserve district are open for business. The Portfolio, however,
reserves the right to change the time for which purchase and redemption requests
must be submitted to the Portfolio for execution on the same day on any day when
the U.S. primary broker-dealer community is closed for business or trading is
restricted due to national holidays.
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 Trust 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 Trust'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 Trust has entered into a Master Distribution Agreement dated as of
February 28, 1997 (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 each class of the Portfolio. The address of FMC is
11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. See "General
Information About the Trust -- Trustees and Officers" and "-- Investment
Advisor" for information as to the affiliation of certain trustees and officers
of the Trust with FMC, AIM and AIM Management.
The Distribution Agreement provides that FMC has the exclusive right to
distribute shares of each class 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 Trust 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 Portfolio.
FMC does not receive any fees with respect to the shares of the Institutional
Class pursuant to the Distribution Agreement.
The Distribution Agreement will remain in effect until February 28, 1999, and
it will continue in effect from year to year thereafter only if such
continuation is specifically approved at least annually by the Trust'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
15
<PAGE> 184
cast in person at a meeting called for such purpose. A prior distribution
agreement between the Trust and FMC, with terms substantially the same as those
of the Distribution Agreement, was in effect through October 15, 1993. The Trust
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 Trust has adopted a Master Distribution Plan (the "Plan") pursuant to Rule
12b-1 under the 1940 Act. Pursuant to the Plan, the Trust 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 Private Investment 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 Trust 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, 1997, FMC received compensation pursuant
to the Plan in the amount of $124,256, or an amount equal to 0.25% of the
average daily net assets of the Private Investment Class. With respect to the
Private Investment Class, all of such amount was paid to dealers and financial
institutions and none of such compensation 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 Trust, owns shares
of AIM Management and Robert H. Graham, a Trustee and President of the Trust,
also owns shares of AIM Management.
PERFORMANCE INFORMATION
As stated under the caption "Yield Information" in the Prospectus, yield
information for the shares of each class of the Portfolio may be obtained by
calling the Trust at (800) 659-1005. The current yield quoted will be the net
average annualized yield for an identified period, such as seven days or a
month. 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 Trust 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, 1997, the current yield and the
effective yield (which assumes the reinvestment of dividends for a 365-day year
and a return for the entire year equal to the annualized current yield for the
period) for the Institutional Class were 5.10% and 5.23% and for the Private
Investment Class were 4.85% and 4.97%, 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 Trust may compare the performance of a 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 a class' yield will fluctuate. Unlike some
CDs and certain other money market securities, money market mutual funds are not
insured by
16
<PAGE> 185
the FDIC. Investors should give consideration to the quality and maturity of the
Portfolio's securities when comparing investment alternatives.
The Trust may reference the growth and variety of money market mutual funds
and AIM's innovation and participation in the industry.
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 Trust will invest in "Eligible Securities" as defined in Rule 2a-7 under
the 1940 Act, which the Trust's Board of Trustees has determined to present
minimal credit risk.
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 Trust -- The Trust and its Shares"), the Portfolio may
not:
(1) concentrate more than 25% of the value of its total assets in the
securities of one or more issuers conducting their principal business
activities in the same industry, provided that there is no limitation with
respect to investments in obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities and bank instruments, such as
CDs, bankers' acceptances, time deposits and bank repurchase agreements;
(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;
or
(8) invest in any obligation not payable as to principal and interest
in United States currency.
OTHER INVESTMENT POLICIES
The Portfolio does not intend to invest in companies for the purpose of
exercising control or management, except that the Portfolio may purchase
securities of other investment companies to the extent permitted by applicable
law or exemptive order. 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.
17
<PAGE> 186
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. Research services
received from broker-dealers supplement AIM's own research (and the research of
sub-advisors to other clients of AIM), and may include the following types of
information: statistical and background information on the U.S. and foreign
economies, industry groups and individual companies; forecasts and
interpretations with respect to U.S. and foreign economies, securities, markets
specific industry groups and individual companies; information on federal,
state, local and foreign political developments; portfolio management
strategies, performance information on securities, indexes and investment
accounts; information concerning prices of securities; and information supplied
by specialized services to AIM and to the Trust's trustees with respect to the
performance, investment activities and fees and expenses of other mutual funds.
Such information may be communicated electronically, orally or in written form.
Research services may also include the providing of equipment used to
communicate research information, the providing of specialized consultations
with AIM personnel with respect to computerized systems and data furnished to
AIM as a component of other research services, the arranging of meetings with
management of companies and the providing of access to consultants who supply
research information. 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 Trust 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 Trust.
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 Trust 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 Trust has
obtained an order of exemption from the SEC which permits the Trust to engage in
certain transactions with certain 5% holders, if the Trust 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 Port-
18
<PAGE> 187
folio 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, certain persons affiliated with the Trust 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 Trust from purchasing a
security being publicly underwritten by a syndicate of which certain persons
affiliated with the Trust are members except in accordance with certain
conditions. These conditions may restrict the ability of 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 Trust 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 Trust's Board of Trustees and any such
purchases are reviewed at least quarterly by the Trust'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
Trust was fair and reasonable in relation to the fees charged by others
performing similar services. During the fiscal year ended August 31, 1997, 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 (1) must 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) must satisfy an asset
diversification test in order to qualify for tax purposes as a regulated
investment company (the "Asset Diversification Test"). Under the Asset
Diversification 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.
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<PAGE> 188
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 in accordance with the guidance that has been
provided by the Internal Revenue Service.
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,
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 a 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 a 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 a
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.
20
<PAGE> 189
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; 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 December
17, 1997. 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.
21
<PAGE> 190
FINANCIAL STATEMENTS
FS
<PAGE> 191
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, 1997, and the
related statement of operations for the year then ended, the statements 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. 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, 1997, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Treasury TaxAdvantage Portfolio as of August 31, 1997, the results of its
operations for the year then ended, the changes in its net assets for each of
the years in the two-year period then ended, and the financial highlights for
each of the years in the five-year period then ended, in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Houston, Texas
October 3, 1997
FS-1
<PAGE> 192
SCHEDULE OF INVESTMENTS
August 31, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MATURITY PAR (000) VALUE
U.S. TREASURY SECURITIES-97.50%
U.S. TREASURY BILLS(a)-50.07%
5.08% 09/04/97 $ 1,260 $ 1,259,467
- ----------------------------------------------------------------------------------------
5.10% 09/11/97 5,325 5,317,456
- ----------------------------------------------------------------------------------------
5.12% 09/11/97 3,700 3,694,738
- ----------------------------------------------------------------------------------------
5.27% 09/11/97 3,540 3,534,818
- ----------------------------------------------------------------------------------------
5.39% 09/15/97 35,330 35,261,234
- ----------------------------------------------------------------------------------------
4.985% 10/02/97 8,115 8,080,165
- ----------------------------------------------------------------------------------------
5.10% 10/23/97 20,000 19,852,667
- ----------------------------------------------------------------------------------------
5.145% 11/06/97 15,000 14,858,513
- ----------------------------------------------------------------------------------------
5.16% 11/06/97 5,800 5,745,132
- ----------------------------------------------------------------------------------------
5.155% 11/13/97 30,000 29,686,404
- ----------------------------------------------------------------------------------------
5.05% 11/28/97 20,000 19,755,917
- ----------------------------------------------------------------------------------------
5.08% 11/28/97 1,970 1,945,536
- ----------------------------------------------------------------------------------------
148,992,047
- ----------------------------------------------------------------------------------------
U.S. TREASURY NOTES-47.43%
5.75% 09/30/97 28,000 28,007,430
- ----------------------------------------------------------------------------------------
8.75% 10/15/97 30,885 31,006,112
- ----------------------------------------------------------------------------------------
5.625% 10/31/97 32,000 32,009,268
- ----------------------------------------------------------------------------------------
8.875% 11/15/97 19,000 19,123,626
- ----------------------------------------------------------------------------------------
5.375% 11/30/97 31,000 30,989,280
- ----------------------------------------------------------------------------------------
141,135,716
- ----------------------------------------------------------------------------------------
Total U.S. Treasury Securities 290,127,763
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENTS-97.50% 290,127,763(b)
- ----------------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-2.50% 7,435,017
- ----------------------------------------------------------------------------------------
NET ASSETS-100.00% $297,562,780
========================================================================================
</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) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
FS-2
<PAGE> 193
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments, at value (amortized cost) $290,127,763
- ----------------------------------------------------------------------------
Cash 4,236
- ----------------------------------------------------------------------------
Receivables for:
Interest 3,233,140
- ----------------------------------------------------------------------------
Investments sold 60,588,116
- ----------------------------------------------------------------------------
Investment for deferred compensation plan 19,053
- ----------------------------------------------------------------------------
Other assets 4,805
- ----------------------------------------------------------------------------
Total assets 353,977,113
- ----------------------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 55,017,151
- ----------------------------------------------------------------------------
Dividends 1,280,331
- ----------------------------------------------------------------------------
Deferred compensation 19,053
- ----------------------------------------------------------------------------
Accrued advisory fees 38,536
- ----------------------------------------------------------------------------
Accrued distribution fees 7,613
- ----------------------------------------------------------------------------
Accrued transfer agent fees 2,500
- ----------------------------------------------------------------------------
Accrued trustees' fees 684
- ----------------------------------------------------------------------------
Accrued administrative services fees 4,679
- ----------------------------------------------------------------------------
Accrued operating expenses 43,786
- ----------------------------------------------------------------------------
Total liabilities 56,414,333
- ----------------------------------------------------------------------------
NET ASSETS $297,562,780
============================================================================
NET ASSETS:
Institutional Class $258,251,179
============================================================================
Private Investment Class $ 39,311,601
============================================================================
SHARES OF BENEFICIAL INTEREST, $.01 PAR VALUE PER SHARE:
Institutional Class 258,076,160
============================================================================
Private Investment Class 39,285,316
============================================================================
NET ASSET VALUE PER SHARE:
Net asset value, offering and redemption price per share $ 1.00
============================================================================
</TABLE>
See Notes to Financial Statements.
FS-3
<PAGE> 194
STATEMENT OF OPERATIONS
For the year ended August 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $20,141,650
- -------------------------------------------------------------------------
EXPENSES:
Advisory fees 705,397
- -------------------------------------------------------------------------
Custodian fees 24,390
- -------------------------------------------------------------------------
Administrative services fees 56,844
- -------------------------------------------------------------------------
Trustees' fees and expenses 9,331
- -------------------------------------------------------------------------
Transfer agent fees 35,426
- -------------------------------------------------------------------------
Distribution fees (Note 2) 248,512
- -------------------------------------------------------------------------
Other 71,762
- -------------------------------------------------------------------------
Total expenses 1,151,662
- -------------------------------------------------------------------------
Less: Fee waivers and expense reimbursements (252,524)
- -------------------------------------------------------------------------
Net expenses 899,138
- -------------------------------------------------------------------------
Net investment income 19,242,512
- -------------------------------------------------------------------------
Net realized gain on sales of investments 77,371
- -------------------------------------------------------------------------
Net increase in net assets resulting from operations $19,319,883
=========================================================================
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
For the years ended August 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 19,242,512 $ 22,487,304
- -----------------------------------------------------------------------------------------
Net realized gain on sales of investments 77,371 55,902
- -----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 19,319,883 22,543,206
- -----------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Institutional Class (16,879,485) (21,490,375)
- -----------------------------------------------------------------------------------------
Private Class (2,363,027) (996,929)
- -----------------------------------------------------------------------------------------
Share transactions-net (159,710,741) 57,341,150
- -----------------------------------------------------------------------------------------
Net increase (decrease) in net assets (159,633,370) 57,397,052
- -----------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 457,196,150 399,799,098
- -----------------------------------------------------------------------------------------
End of period $297,562,780 $457,196,150
- -----------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Shares of beneficial interest $297,361,476 $457,072,217
- -----------------------------------------------------------------------------------------
Undistributed net realized gain on sales of investments 201,304 123,933
- -----------------------------------------------------------------------------------------
$297,562,780 $457,196,150
=========================================================================================
</TABLE>
See Notes to Financial Statements.
FS-4
<PAGE> 195
NOTES TO FINANCIAL STATEMENTS
August 31, 1997
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 TaxAdvantage Portfolio (the "Portfolio") with assets, liabilities and
operations of each portfolio accounted for separately. The Portfolio consists of
two different classes of shares: the Institutional Class and the Private
Investment Class. Matters affecting each class are voted on exclusively by the
shareholders of each class. The 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 following is a summary of the significant accounting policies followed by
the Portfolio in the preparation of its financial statements. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of these financial statements and
the reported amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
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-Distribution and transfer agency expenses directly attributable
to a class of shares are charged to that class' operations. All other
expenses are allocated among the classes.
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>
<S> <C>
NET ASSETS RATE
- ---------------------------------------------------------------------
First $250 million 0.20%
- ---------------------------------------------------------------------
Over $250 million to $500 million 0.15%
- ---------------------------------------------------------------------
Over $500 million 0.10%
- ---------------------------------------------------------------------
</TABLE>
During the year ended August 31, 1997, AIM voluntarily waived advisory fees of
$123,468 and assumed expenses of $4,800.
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, 1997,
the Portfolio reimbursed AIM $56,844 for such services.
The Portfolio, pursuant to a transfer agency and service agreement, has agreed
to pay AIM Institutional Fund Services, Inc. ("AIFS") a fee for providing
transfer agent and shareholder services to the Fund.
FS-5
<PAGE> 196
During the year ended August 31, 1997, the Portfolio paid AIFS $35,426 for such
services. On September 19, 1997, the Board of Trustees of the Fund approved the
appointment of A I M Fund Services, Inc. ("AFS") as transfer agent of the Fund
to be effective in late 1997 or early 1998.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Fund, FMC acts as the exclusive distributor of the
Fund's shares. The Fund has adopted a master distribution plan (the "Plan")
pursuant to Rule 12b-1 under the 1940 Act with respect to the Private Investment
Class. 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 Fund
may pay a service fee of 0.25% of the average daily net assets of the Private
Investment 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. 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,
1997, the Private Investment Class paid $124,256 as compensation under the Plan.
FMC waived fees of $124,256 for the same period. Certain officers and trustees
of the Trust are officers of AIM, FMC, AFS and AIFS.
During the year ended August 31, 1997, the Portfolio paid legal fees of $4,209
for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to the
Board of Trustees. A member of that firm is a trustee of the Fund.
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, 1997, and 1996 were
as follows:
<TABLE>
<CAPTION>
1997 1996
-------------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Sold:
Institutional Class 1,249,698,433 $ 1,249,698,433 1,931,081,349 $ 1,931,081,349
- ---------------------------------------------------------------------------------------------------
Private Investment Class 274,981,089 274,981,089 173,175,235 173,175,235
- ---------------------------------------------------------------------------------------------------
Issued as reinvestment of
dividends:
Institutional Class 425,111 425,111 279,901 279,901
- ---------------------------------------------------------------------------------------------------
Private Investment Class 479,712 479,712 215,983 215,983
- ---------------------------------------------------------------------------------------------------
Reacquired:
Institutional Class (1,399,155,040) (1,399,155,040) (1,918,562,346) (1,918,562,346)
- ---------------------------------------------------------------------------------------------------
Private Investment Class (286,140,046) (286,140,046) (128,848,972) (128,848,972)
- ---------------------------------------------------------------------------------------------------
Net increase (decrease) (159,710,741) $ (159,710,741) 57,341,150 $ 57,341,150
===================================================================================================
</TABLE>
FS-6
<PAGE> 197
NOTE 5-FINANCIAL HIGHLIGHTS
INSTITUTIONAL CLASS:
Shown below are the financial highlights for a share outstanding of the
Institutional Class for each of the years in the five-year period ended August
31, 1997.
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment
operations:
Net investment income 0.05 0.05 0.05 0.03 0.03
-------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income (0.05) (0.05) (0.05) (0.03) (0.03)
-------- -------- -------- -------- --------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total return 5.13% 5.19% 5.35% 3.29% 2.96%
======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period
(000s omitted) $258,251 $407,218 $394,376 $403,882 $434,693
======== ======== ======== ======== ========
Ratio of expenses to average
net assets(a) 0.20%(b) 0.20% 0.20% 0.20% 0.20%
======== ======== ======== ======== ========
Ratio of net investment income
to average net assets(c).... 5.00%(b) 5.06% 5.21% 3.23% 2.93%
======== ======== ======== ======== ========
</TABLE>
(a) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
0.23% for the periods 1997-1994, respectively.
(b) Ratios are based on average net assets of $337,228,562.
(c) After fee waivers and/or expense reimbursements. Ratios of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements were 4.97%, 5.04%, 5.18% and 3.20% for the periods 1997-1994,
respectively.
PRIVATE INVESTMENT CLASS:
Shown below are the financial highlights for a share outstanding of the Private
Investment Class for each of the years in the two-year period ended August 31,
1997 and the period December 21, 1994 (date operations commenced) through August
31, 1995.
<TABLE>
<CAPTION>
1997 1996 1995
------- ------- ------
<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 0.05 0.04
======================================================= ======= ======= ======
Less distributions:
Dividends from net investment income (0.05) (0.05) (0.04)
======================================================= ======= ======= ======
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00
======================================================= ======= ======= ======
Total return 4.87% 4.93% 5.32%(a)
======================================================= ======= ======= ======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $39,312 $49,978 $5,423
======================================================= ======= ======= ======
Ratio of expenses to average net assets(b) 0.45%(c) 0.45% 0.45%(a)
======================================================= ======= ======= ======
Ratio of net investment income to average net assets(d) 4.75%(c) 4.72% 5.21%(a)
======================================================= ======= ======= ======
</TABLE>
(a) Annualized.
(b) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
0.74%, 0.85% and 1.02% (annualized) for the periods 1997-1995, respectively.
(c) Ratios are based on average net assets of $49,702,532.
(d) After fee waivers and/or expense reimbursements. Ratios of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements were 4.46%, 4.32% and 4.64% (annualized) for the periods
1997-1995, respectively.
FS-7
<PAGE> 198
PART C
OTHER INFORMATION
Item 24.
(a) Financial Statements
<TABLE>
<S> <C> <C>
1. Treasury Portfolio - Cash Management Class
In Part A: Financial Highlights as of August 31, 1997
(audited)
In Part B: (1) Independent Auditors' Report
(2) Financial Statements as of August 31,
1997 (audited)
In Part C: None
2. Treasury Portfolio - Institutional Class
In Part A: Financial Highlights as of August 31, 1997
(audited)
In Part B: (1) Independent Auditors' Report
(2) Financial Statements as of August 31,
1997 (audited)
In Part C: None
3. Treasury Portfolio - Personal Investment Class
In Part A: Financial Highlights as of August 31, 1997
(audited)
In Part B: (1) Independent Auditors' Report
(2) Financial Statements as of August 31,
1997 (audited)
In Part C: None
4. Treasury Portfolio - Private Investment Class
In Part A: Financial Highlights as of August 31, 1997
(audited)
In Part B: (1) Independent Auditors' Report
(2) Financial Statements as of August 31,
1997 (audited)
In Part C: None
5. Treasury Portfolio - Resource Class
In Part A: Financial Highlights as of August 31, 1997
(audited)
In Part B: (1) Independent Auditors' Report
(2) Financial Statements as of August 31,
1997 (audited)
In Part C: None
</TABLE>
1
<PAGE> 199
<TABLE>
<S> <C> <C>
6. Treasury TaxAdvantage Portfolio - Institutional Class
In Part A: Financial Highlights as of August 31, 1997
(audited)
In Part B: (1) Independent Auditors' Report
(2) Financial Statements as of August 31,
1997 (audited)
In Part C: None
7. Treasury TaxAdvantage Portfolio - Private Investment Class
In Part A: Financial Highlights as of August 31, 1997
(audited)
In Part B: (1) Independent Auditors' Report
(2) Financial Statements as of August 31,
1997 (audited)
In Part C: None
</TABLE>
(b) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ ------------------------------------------------------------------
<S> <C> <C> <C>
(1) - (a) Certificate of Trust of Registrant was filed as an exhibit
to Registrant's Post-Effective Amendment No. 26 on October
15, 1993, and is filed electronically herewith.
(b) Agreement and Declaration of Trust of Registrant was filed
as an exhibit to Registrant's Post-Effective Amendment No.
26 on October 15, 1993, and was filed electronically as an
Exhibit to Registrant's Post-Effective Amendment No. 28 on
November 13, 1995, and is hereby incorporated by
reference.
(c) 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 was filed electronically as an
Exhibit to Registrant's Post-Effective Amendment No. 28 on
November 13, 1995, and is hereby incorporated by
reference.
(d) Second Amendment, dated August 4, 1994, to the
Registrant's Agreement and Declaration of Trust was filed
electronically as an Exhibit to Registrant's
Post-Effective Amendment No. 28 on November 13, 1995, and
is hereby incorporated by reference.
(e) Third Amendment, dated September 19, 1995, to the
Registrant's Agreement and Declaration of Trust was filed
electronically as an Exhibit to Registrant's Post-
Effective Amendment No. 29 on December 18, 1996, and is
hereby incorporated by reference.
(f) Fourth Amendment, dated June 12, 1997, to the Registrant's
Agreement and Declaration of Trust, is filed herewith
electronically.
</TABLE>
2
<PAGE> 200
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ ------------------------------------------------------------------
<S> <C> <C>
(2) - (a) By-Laws of Registrant was filed as an exhibit to
Registrant's Post-Effective Amendment No. 26 on October
15, 1993, and was filed electronically as an Exhibit to
Registrant's Post-Effective Amendment No. 28 on November
13, 1995.
(b) Amendment to the By-Laws of Registrant, adopted December
2, 1993, was filed electronically as an Exhibit to
Registrant's Post-Effective Amendment No. 28 on November
13, 1995.
(c) Second Amendment to the By-Laws of Registrant, dated March
14, 1995, was filed as an Exhibit to Registrants Post-
Effective Amendment No. 29 on December 18, 1996.
(d) Amended and Restated By-Laws of Registrant, dated December
11, 1996, is filed herewith electronically.
(3) - Certain Voting Trust Agreements - None.
(4) - (a) Form of 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) Form of 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) Form of 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) Form of 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) Form of 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.
(f) Form of 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) Form of Specimen Certificate representing shares of the
Resource Class of the Treasury Portfolio was filed
electronically as an Exhibit to Registrant's
Post-Effective Amendment No. 28 on November 13, 1995, and
is hereby incorporated by reference.
</TABLE>
3
<PAGE> 201
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ ------------------------------------------------------------------------
<S> <C> <C> <C>
(5) - (a) 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.
(b) Master Investment Advisory Agreement, dated February 28,
1997, between AIM Advisors, Inc. and Registrant with
respect to the Treasury Portfolio and the Treasury
TaxAdvantage Portfolio is filed herewith electronically.
(6) - (a) 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 was
filed electronically as an Exhibit to Registrant's
Post-Effective Amendment No. 28 on November 13, 1995.
(b) Amendment No. 1, dated December 8, 1994, to Master
Distribution Agreement, dated October 18, 1993, between
Fund Management Company and Registrant was filed
electronically as an Exhibit to Registrant's
Post-Effective Amendment No. 28 on November 13, 1995.
(c) Amendment No. 2, dated September 19, 1995, to the Master
Distribution Agreement, dated October 18, 1993, between
Fund Management Company and Registrant was filed
electronically as an Exhibit to Registrant's Post-
Effective Amendment No. 29 on December 18, 1996.
(d) Master Distribution Agreement, dated February 28, 1997
between Registrant and Fund Management Company with
respect to the Treasury and Treasury TaxAdvantage
Portfolio 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 is filed herewith
electronically.
(8) - (a) Custodian Agreement, dated October 15, 1993, between The
Bank of New York and Registrant, was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 27 on
November 14, 1994 and is hereby incorporated by reference.
(b) Amendment, dated July 30, 1996, to the Custodian
Agreement, dated October 15, 1993, between The Bank of New
York and Registrant was filed as an Exhibit to Post-
Effective Amendment No. 29 on December 18, 1996 and is
hereby incorporated by reference.
(9) - (a) Transfer Agency and Service Agreement, dated September 16,
1994, between A I M Institutional Fund Services, Inc. and
Registrant was filed electronically as an Exhibit to
Registrant's Post-Effective Amendment No. 28 on November
13, 1995, and is hereby incorporated by reference.
</TABLE>
4
<PAGE> 202
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ ------------------------------------------------------------------------
<S> <C> <C>
(b) 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 was filed electronically as an Exhibit to
Registrant's Post-Effective Amendment No. 28 on November
13, 1995, and is hereby incorporated by reference.
(c) Amendment No. 2, dated July 1, 1996, to the Transfer
Agency and Service Agreement, dated September 16, 1994,
between A I M Institutional Fund Services, Inc. and
Registrant, is filed electronically herewith.
(d) Amendment No. 3, dated July 1, 1997, to the Transfer
Agency and Service Agreement, dated September 16, 1994
between A I M Institutional Fund Services, Inc. and
Registrant, is filed electronically herewith.
(e) Transfer Agency and Service Agreement, dated December 29,
1997, between AIM Fund Services, Inc. and Registrant is
filed herewith electronically.
(f) 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 was filed
electronically as an Exhibit to Registrant's
Post-Effective Amendment No. 28 on November 13, 1995.
(g) Amendment No. 1, dated November 2, 1995, to the 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. 29
on December 18, 1996.
(h) Master Administrative Services Agreement, dated February
28, 1997, between A I M Advisors, Inc. and 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, 1996.
(11) - (a) Consent of Ballard Spahr Andrews & Ingersoll is filed
herewith electronically.
(b) Consent of KPMG Peat Marwick LLP is filed herewith
electronically.
(12) - Other Financial Statements - None.
(13) - Agreement Concerning Initial Capitalization - None.
(14) - Retirement Plans - None.
(15) - (a) Master Distribution Plan pursuant to Rule 12b-1, effective
as of August 6, 1993, as amended as of December 8, 1994,
as further amended as of September 19, 1995, and as
further amended as of December 5, 1995, and related forms
of agreement with respect to the Personal Investment
Class, Private Investment Class, Resource Class and the
Cash Management Class of the Treasury Portfolio and the
Private Investment Class of the Treasury TaxAdvantage
Portfolio was filed as an Exhibit to Post-Effective
Amendment No. 29 on December 18, 1996.
</TABLE>
5
<PAGE> 203
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ ------------------------------------------------------------------------
<S> <C> <C>
(b) Amended and Restated Master Distribution Plan to Rule
12b-1, effective as of June 30, 1997 and form of related
agreement with respect to the Treasury and Treasury
TaxAdvantage Portfolios 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.
(18) - (a) Multiple Class (Rule 18f-3) Plan was filed as an Exhibit
to Post-Effective Amendment No. 29 on December 18, 1996.
(b) Amended and Restated Multiple Class (Rule 18f-3) Plan is
filed herewith electronically.
(c) Second Amended and Restated Multiple Class (Rule 18f-3)
Plan is filed herewith electronically.
(27) - Financial Data Schedule is filed electronically herewith.
</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 December 1, 1997
-------------------------------- ----------------
<S> <C>
Treasury Portfolio
Cash Management Class 12
Institutional Class 91
Personal Investment Class 7
Private Investment Class 18
Resource Class 7
Treasury TaxAdvantage Portfolio
Institutional Class 16
Private Investment Class 6
</TABLE>
6
<PAGE> 204
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 $25,000,000 limit of liability.
Item 28. Business and Other Connections of Investment Advisor
Describe any other business, profession, vocation or employment
of a substantial nature in which each investment advisor of the Registrant, and
each director, officer or partner of any such investment advisor, is or has
been, at any time during the past two fiscal years, engaged for his own account
or in the capacity of director, officer, employee, partner, or trustee.
See each Statement of Additional Information, Part B under
headings "General Information About the Trust - 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 Classes)
7
<PAGE> 205
AIM Investment Securities Funds (AIM Limited Maturity
Treasury Fund - Institutional Shares)
Short-Term Investments Co.
Tax-Free 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 Chairman & Trustee
Directors and Director
J. Abbott Sprague President & Director Vice President
Robert H. Graham Senior Vice President & Director President & Trustee
Mark D. Santero Senior Vice President None
John J. Arthur Vice President & Treasurer Senior Vice President
& Treasurer
Jesse H. Cole Vice President None
Melville B. Cox Vice President & Chief Vice President
Compliance Officer
Carol F. Relihan Vice President, Director Senior Vice President
& General Counsel & Secretary
Stephen I. Winer Vice President, Assistant Secretary
Assistant General Counsel &
Assistant Secretary
Nancy A. Beck Vice President None
David E. Hessel Assistant Vice President, None
Assistant Treasurer &
Controller
Jeffrey L. Horne Assistant Vice President None
Robert Morris Assistant Vice President None
Ann M. Srubar Assistant Vice President None
Dana R. Sutton Assistant Vice President & Vice President &
Assistant Treasurer Assistant Treasurer
</TABLE>
- ----------------------------------
* 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173
8
<PAGE> 206
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Principal Underwriter with Registrant
- ---------------- -------------------------- ---------------
<S> <C> <C>
Nicholas D. White Assistant Vice President None
Nancy L. Martin Assistant General Counsel & Assistant Secretary
Assistant Secretary
Ofelia M. Mayo Assistant General Counsel & Assistant Secretary
Assistant Secretary
Samuel D. Sirko Assistant General Counsel & Assistant Secretary
Assistant Secretary
Kathleen J. Pflueger 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 100, Houston, Texas
77046-1173, will maintain physical possession of each such account, book
or other document of the Registrant at its principal executive offices,
except for those maintained by the Custodian, The Bank of New York, 90
Washington Street, 11th Floor, New York, New York 10286; and the
Transfer Agent and Dividend Paying Agent, A I M Institutional Fund
Services, Inc., 11 Greenway Plaza, Suite 100, 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
(b) None.
- --------------------
* 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173
9
<PAGE> 207
(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.
10
<PAGE> 208
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this Amendment
to its Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized, in the city of Houston, Texas on the 17th day of
December, 1997.
Registrant: SHORT-TERM INVESTMENTS TRUST
By: /s/ ROBERT H. GRAHAM
Robert H. Graham, President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/S/ CHARLES T. BAUER Chairman & Trustee December 17, 1997
(Charles T. Bauer)
/S/ ROBERT H. GRAHAM Trustee & President December 17, 1997
(Robert H. Graham) (Principal Executive Officer)
/S/ BRUCE L. CROCKETT Trustee December 17, 1997
(Bruce L. Crockett)
/S/ OWEN DALY Trustee December 17, 1997
(Owen Daly II)
/S/ JACK FIELDS Trustee December 17, 1997
(Jack Fields)
/S/ CARL FRISCHLING Trustee December 17, 1997
(Carl Frischling)
/S/ JOHN F. KROEGER Trustee December 17, 1997
(John F. Kroeger)
/S/ LEWIS F. PENNOCK Trustee December 17, 1997
(Lewis F. Pennock)
/S/ IAN W. ROBINSON Trustee December 17, 1997
(Ian W. Robinson)
/S/ LOUIS S. SKLAR Trustee December 17, 1997
(Louis S. Sklar)
Senior Vice President &
/S/ JOHN J. ARTHUR Treasurer (Principal Financial December 17, 1997
(John J. Arthur) and Accounting Officer)
</TABLE>
<PAGE> 209
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number
------
<S> <C>
1(f) Fourth Amendment to Agreement and Declaration of Turst, dated June 12, 1997
2(d) Amended and Restated By-Laws of Registrant, dated December 11, 1996
5(b) Master Investment Advisory Agreement, dated February 28, 1997, between
Registrant and A I M Advisors, Inc.
6(d) Master Distribution Agreement, dated February 28, 1997, between Registrant and
Fund Management Company
7(b) Form of Deferred Compensation Agreement
9(c) Amendment No. 2, dated July 1, 1996, to the Transfer Agency and Service
Agreement, dated September 16, 1994, between Registrant and A I M Institutional
Fund Services, Inc.
9(d) Amendment No. 3, dated July 1, 1997, to the Transfer Agency and Service
Agreement, dated September 16, 1994, between Registrant and A I M Institutional
Fund Services, Inc.
9(e) Transfer Agency and Service Agreement, dated December 29, 1997 between
Registrant and AIM Fund Services, Inc.
9(h) Master Administrative Services Agreement, dated February 28, 1997,
between Registrant and A I M Advisors, Inc.
11(a) Consent of Ballard Spahr Andrews & Ingersoll
11(b) Consent of KPMG Peat Marwick LLP
15(b) Amended and Restated Master Distribution Plan to Rule 12b-1, effective as of
June 30, 1997 and form of related agreement
18(b) Amended and Restated Multiple Class (Rule 18f-3) Plan
18(c) Second Amended and Restated Multiple Class (Rule 18f-3) Plan
27 Financial Data Schedule
</TABLE>
11
<PAGE> 1
EXHIBIT 1(f)
FOURTH AMENDMENT
TO
AGREEMENT AND DECLARATION OF TRUST
OF
SHORT-TERM INVESTMENTS TRUST
THIS FOURTH AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST
OF SHORT-TERM INVESTMENTS TRUST (the "Amendment") is entered into the 12th day
of June, 1997, among Charles T. Bauer, Bruce L. Crockett, Owen Daly II, Jack
Fields, Carl Frischling, Robert H. Graham, John F. Kroeger, Lewis F. Pennock,
Ian W. Robinson and Louis S. Sklar, as Trustees, and each person who became or
becomes a Shareholder in accordance with the terms set forth in that certain
Agreement and Declaration of Trust of AIM Investment Securities Funds 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 12th day of
June, 1997, 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. New Section 9.9 is hereby added in full as follows:
"Section 9.9. Shareholders' Right to Inspect Shareholder
List. One or more persons who together and for at least six months have been
Shareholders of at least five percent (5%) of the outstanding Shares of any
Class may present to any officer or resident agent of the Trust a written
request for a list of its Shareholders. Within twenty (20) days after such
request is made, the Trust shall prepare and have available on file at its
principal office a list verified under oath by one of its officers or its
transfer agent or registrar which sets forth the name and address of each
Shareholder and the number of Shares of each Class which the Shareholder holds.
The rights provided for herein shall not extend to any person who is a
beneficial owner but not also a record owner of Shares of the Trust."
3. With the exception of the amendment in the preceding
paragraph 2 of this Amendment, the Agreement shall in all other respects remain
in full force and effect.
4. This Amendment may be executed in 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 Fourth Amendment to Agreement and
Declaration of Trust of Short-Term Investments Trust as of the day first above
written.
/s/ CHARLES T. BAUER /s/ BRUCE L. CROCKETT
- --------------------------- ---------------------------
Charles T. Bauer, Trustee Bruce L. Crockett, Trustee
/s/ OWEN DALY II /s/ JACK FIELDS
- --------------------------- ---------------------------
Owen Daly II, Trustee Jack Fields, Trustee
/s/ CARL FRISCHLING /s/ ROBERT H. GRAHAM
- --------------------------- ---------------------------
Carl Frischling, Trustee Robert H. Graham, Trustee
/s/ JOHN F. KROEGER /s/ LEWIS F. PENNOCK
- --------------------------- ---------------------------
John F. Kroeger, Trustee Lewis F. Pennock, Trustee
/s/ IAN W. ROBINSON /s/ LOUIS S. SKLAR
- --------------------------- ---------------------------
Ian W. Robinson, Trustee Louis S. Sklar, Trustee
[THIS IS THE SIGNATURE PAGE FOR
THE FOURTH AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST
OF SHORT-TERM INVESTMENTS TRUST]
<PAGE> 1
EXHIBIT 2(d)
AMENDED AND RESTATED BYLAWS
OF
SHORT-TERM INVESTMENTS TRUST,
A DELAWARE BUSINESS TRUST
ADOPTED EFFECTIVE DECEMBER 11, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I
OFFICES ........................................... 1
Section 1. Registered Office........................................................................... 1
Section 2. Other Offices............................................................................... 1
ARTICLE II
TRUSTEES ........................................... 1
Section 1. Number...................................................................................... 1
Section 2. Term........................................................................................ 1
Section 3. Vacancy..................................................................................... 2
Section 4. Delegation of Power......................................................................... 2
Section 5. Inability to Serve Full Term................................................................ 2
Section 6. Powers...................................................................................... 2
Section 7. Meetings of the Trustees.................................................................... 3
Section 8. Regular Meetings............................................................................ 3
Section 9. Notice of Regular Meeting................................................................... 3
Section 10. Notice of Special Meeting.................................................................. 3
Section 11. Quorum..................................................................................... 3
Section 12. Action Without Meeting..................................................................... 3
Section 13. Designation, Powers and Name of Committees................................................. 3
Section 14. Minutes of Committee....................................................................... 3
Section 15. Compensation of Trustees................................................................... 4
ARTICLE III
OFFICERS ........................................... 4
Section 1. Executive Officers.......................................................................... 4
Section 2. Term of Office.............................................................................. 4
Section 3. President................................................................................... 4
Section 4. Chairman of the Board....................................................................... 4
Section 5. Other Officers.............................................................................. 4
Section 6. Secretary................................................................................... 5
Section 7. Treasurer................................................................................... 5
ARTICLE IV
MEETINGS OF SHAREHOLDERS ................................... 5
Section 1. Purpose..................................................................................... 5
Section 2. Nominations of Trustees..................................................................... 6
Section 3. Election of Trustees........................................................................ 6
Section 4. Notice of Meeting........................................................................... 6
Section 5. Voting List................................................................................. 6
Section 6. Special Meetings............................................................................ 6
Section 7. Notice of Special Meeting................................................................... 6
Section 8. Conduct of Special Meeting.................................................................. 6
Section 9. Quorum...................................................................................... 7
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 10. Organization of Meetings................................................................... 7
Section 11. Voting Standard............................................................................ 7
Section 12. Voting Procedure........................................................................... 7
Section 13. Action Without Meeting..................................................................... 8
ARTICLE V
NOTICES ........................................... 8
Section 1. Methods of Giving Notice.................................................................... 8
Section 2. Written Waiver.............................................................................. 8
ARTICLE VI
CERTIFICATES OF SHARES ................................... 9
Section 1. Issuance.................................................................................... 9
Section 2. Countersignature............................................................................ 9
Section 3. Lost Certificates........................................................................... 9
Section 4. Transfer of Shares.......................................................................... 9
Section 5. Fixing Record Date.......................................................................... 9
Section 6. Registered Shareholders.................................................................... 10
ARTICLE VII
GENERAL PROVISIONS ..................................... 10
Section 1. Dividends and Distributions................................................................ 10
Section 2. Redemptions................................................................................ 10
Section 3. Indemnification............................................................................ 10
Section 4. Seal....................................................................................... 10
ARTICLE VIII
AMENDMENTS.......................................... 11
Section 1. Amendments................................................................................. 11
</TABLE>
ii
<PAGE> 4
AMENDED AND RESTATED BYLAWS
OF
SHORT-TERM INVESTMENTS TRUST,
A DELAWARE BUSINESS TRUST
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. Registered Office. The registered office of
Short-Term Investments Trust (the "Trust") shall be in the County of New
Castle, State of Delaware.
Section 2. Other Offices. The Trust may also have offices at
such other places both within and without the State of Delaware as the Trustees
may from time to time determine or the business of the Trust may require.
ARTICLE II
TRUSTEES
Section 1. Number. The number of Trustees shall initially be
three, and thereafter shall be such number as shall be fixed from time to time
by resolution of the Board of Trustees; provided, however, that the number of
Trustees shall in no event be less than three nor more than fifteen.
Section 2. Term. 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 date as is specified therein; (b) that any Trustee may be removed at any
time by written instrument, signed by at least two-thirds of the number of
Trustees prior to such removal, specifying the date when such removal shall
become effective; (c) that any Trustee who has died, become physically or
mentally incapacitated by reason of disease or otherwise, or is otherwise
unable to serve, may be retired by written instrument signed by a majority of
the other Trustees, specifying the date of his retirement; and (d) that a
Trustee may be removed at any meeting of the shareholders of the Trust.
1
<PAGE> 5
Section 3. Vacancy. In case of the declination to serve,
death, resignation, retirement or removal of a Trustee, or a Trustee is
otherwise unable to serve, or an increase in the number of Trustees, a vacancy
shall occur. Whenever a vacancy in the Trustees shall occur, until such vacancy
is filled, the other Trustees shall have all the powers hereunder and the
certification of 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
of the Trustees, whereupon the appointment shall take effect.
An appointment of a Trustee may be made by the Trustees then
in office in anticipation of a vacancy to occur by reason of retirement,
resignation or increase in number of Trustees effective at a later date,
provided that said appointment shall become effective only at or after the
effective date of said retirement, resignation or increase in number of
Trustees. As soon as any Trustee appointed pursuant to Sections 2 and 3 of
Article II of these Bylaws 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. Delegation of Power. Any Trustee may, by power of
attorney, delegate his power for a period not exceeding six months at any one
time to any other Trustee or Trustees, provided that in no case shall less than
two Trustees personally exercise the other powers hereunder except as herein
otherwise expressly provided.
Section 5. Inability to Serve Full Term. The declination to
serve, death, resignation, retirement, removal, incapacity, or inability of the
Trustees, or any one of them, shall not operate to terminate the Trust or to
revoke any existing agency created pursuant to the terms of the Agreement and
Declaration of Trust.
Section 6. Powers. The Trustees shall have exclusive and
absolute control over the trust property and over the business of the Trust to
the same extent as if the Trustees were the sole owners of the trust property
and business in their own right, but with such powers of delegation as may be
permitted by the Agreement 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 may by the Trustees
in good faith shall be conclusive. In construing the provisions of these Bylaws
and the Agreement and Declaration of Trust, the presumption shall be in favor
of a grant of power to the Trustees.
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Section 7. Meetings of the Trustees. The Trustees of the
Trust may hold meetings, both regular and special, either within or without the
State of Delaware.
Section 8. Regular Meetings. Regular meetings of the Board
of Trustees shall be held each year, at such time and place as the Board of
Trustees may determine.
Section 9. Notice of Regular Meeting. 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. Notice of Special Meeting. 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. Quorum. At all meetings of the Trustees one-third
of the Trustees then in office (but in no event less than two Trustees) shall
constitute a quorum for the transaction of business and the act of a majority
of the Trustees present at any meeting at which there is a quorum shall be the
act of the Board of Trustees, except as may be otherwise specifically provided
by applicable law or by the Agreement and Declaration of Trust or these Bylaws.
If a quorum shall not be present at any meeting of the Board of Trustees, the
Trustees present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 12. Action Without Meeting. Unless otherwise
restricted by the Agreement and Declaration of Trust or these Bylaws, any
action required or permitted to be taken at any meeting of the Board of
Trustees or of any committee thereof may be taken without a meeting, 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.
Section 13. Designation, Powers and Name of Committees. The
Board of Trustees may, by resolution passed by a majority of the whole Board,
designate one or more committees, each committee to consist of three or more of
the Trustees of the Trust. The Board may designate one or more Trustee as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of such committee. Each committee, to the extent provided
in the resolution, shall have and may exercise the powers of the Board of
Trustees in the management of the business and affairs of the Trust; provided,
however, that in the absence or disqualification of any member of such
committee or committees, the member or members thereof present at any meeting
and not disqualified from voting, whether or not such members constitute a
quorum, may unanimously appoint another member of the Board of Trustees to act
at the meeting in the place of any such absent or disqualified member. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the Board of Trustees.
Section 14. Minutes of Committee. Each committee shall keep
regular minutes of its meetings and report the same to the Board of Trustees
when required.
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Section 15. Compensation of Trustees. The Trustees as such
shall be entitled to reasonable compensation for their services as determined
from time to time by the Board of Trustees. Nothing herein shall in any way
prevent the employment of any Trustee for advisory, management, administrative,
legal, accounting, investment banking, underwriting, brokerage, or investment
dealer or other services and the payment for the same by the Trust.
ARTICLE III
OFFICERS
Section 1. Executive Officers. The initial executive officers
of the Trust shall be elected by the Board of Trustees as soon as practicable
after the organization of the Trust. The executive officers may include a
Chairman of the Board, and shall include a President, one or more Vice
Presidents (the number thereof to be determined by the Board of Trustees), a
Secretary and a Treasurer. The Chairman of the Board, if any, shall be selected
from among the Trustees. The Board of Trustees may also in its discretion
appoint Assistant Vice Presidents, Assistant Secretaries, Assistant Treasurers,
and other officers, agents and employees, who shall have such authority and
perform such duties as the Board may determine. The Board of Trustees may fill
any vacancy which may occur in any office. Any two offices, except for those of
President and Vice President, may be held by the same person, but no officer
shall execute, acknowledge or verify any instrument on behalf of the Trust in
more than one capacity, if such instrument is required by law or by these
Bylaws to be executed, acknowledged or verified by two or more officers.
Section 2. Term of Office. Unless otherwise specifically
determined by the Board of Trustees, the officers shall serve at the pleasure
of the Board of Trustees. If the Board of Trustees in its judgment finds that
the best interests of the Trust will be served, the Board of Trustees may
remove any officer of the Trust at any time with or without cause.
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
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the President, the powers and duties of the President not otherwise assigned by
the Board of Trustees or the President shall devolve upon the Chairman of the
Board, or in the Chairman's absence, the Vice Presidents in the order of their
election.
Section 6. Secretary. The Secretary shall (a) have custody of
the seal of the Trust; (b) attend meetings of the shareholders, the Board of
Trustees, and any committees of Trustees and keep the minutes of such meetings
of shareholders, Board of Trustees and any committees thereof; and (c) issue
all notices of the Trust. The Secretary shall have charge of the shareholder
records and such other books and papers as the Board may direct, and shall
perform such other duties as may be incidental to the office or which are
assigned by the Board of Trustees. The Secretary shall also keep or cause to be
kept a shareholder book, which may be maintained by means of computer systems,
containing the names, alphabetically arranged, of all persons who are
shareholders of the Trust, showing their places of residence, the number and
class or series of any class of shares of beneficial interest held by them,
respectively, and the dates when they became the record owners thereof, and
such book shall be open for inspection as prescribed by the laws of the State
of Delaware.
Section 7. Treasurer. The Treasurer shall have the care and
custody of the funds and securities of the Trust and shall deposit the same in
the name of the Trust in such bank or banks or other depositories, subject to
withdrawal in such manner as these Bylaws or the Board of Trustees may
determine. The Treasurer shall, if required by the Board of Trustees, give such
bond for the faithful discharge of duties in such form as the Board of Trustees
may require.
ARTICLE IV
MEETINGS OF SHAREHOLDERS
Section 1. Purpose. All meetings of the shareholders for the
election of Trustees shall be held at such place as may be fixed from time to
time by the Trustees, or at such other place either within or without the State
of Delaware as shall be designated from time to time by the Trustees and stated
in the notice indicating that a meeting has been called for such purpose.
Meetings of shareholders may be held for any purpose determined by the Trustees
and may be held at such time and place, within or without the State of Delaware
as shall be stated in the notice of the meeting or in a duly executed waiver of
notice thereof. At all meetings of the shareholders, every shareholder of
record entitled to vote thereat shall be entitled to vote at such meeting
either in person or by written proxy signed by the shareholder or by his duly
authorized attorney in fact. A shareholder may duly authorize such attorney in
fact through written, electronic, telephonic, computerized, facsimile,
telecommunication, telex or oral communication or by any other form of
communication. Unless a proxy provides otherwise, such proxy is not valid more
than eleven months after its date. A proxy with respect to shares held in the
name of two or more persons shall be valid if executed by any one of them
unless at or prior to exercise of the proxy the Trust receives a specific
written notice to the contrary from any one of them. A proxy purporting to be
executed by or on behalf of a shareholder shall be deemed valid unless
challenged at or prior to its exercise and the burden of proving invalidity
shall rest on the challenger.
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Section 2. Nominations of Trustees. Nominations of
individuals for election to the board of trustees shall be made by the Board of
Trustees or a nominating committee of the Board of Trustees, if one has been
established (the "Nominating Committee"). Any shareholder of the Trust may
submit names of individuals to be considered by the Nominating Committee or the
Board of Trustees, as applicable, provided, however, (i) that such person was a
shareholder of record at the time of submission of such names and is entitled
to vote at the meeting, and (ii) that the Nominating Committee or the Board of
Trustees, as applicable, shall make the final determination of persons to be
nominated.
Section 3. Election of Trustees. All meetings of shareholders
for the purpose of electing Trustees shall be held on such date and at such
time as shall be designated from time to time by the Trustees and stated in the
notice of the meeting, at which the shareholders shall elect by a plurality
vote any number of Trustees as the notice for such meeting shall state are to
be elected, and transact such other business as may properly be brought before
the meeting in accordance with Section 1 of this Article IV.
Section 4. Notice of Meeting. Written notice of any meeting
stating the place, date, and hour of the meeting shall be given to each
shareholder entitled to vote at such meeting not less than ten days before the
date of the meeting in accordance with Article V hereof.
Section 5. Voting List. 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 the 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.
Section 6. Special Meetings. 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 of removing one or more Trustees,
when requested in writing so to do by the record holders of not less than ten
percent of the outstanding shares of the Trust.
Section 7. Notice of Special Meeting. Written notice of a
special meeting stating the place, date, and hour of the meeting and the
purpose of purposes for which the meeting is called, shall be given not less
than ten days before the date of the meeting, to each shareholder entitled to
vote at such meeting.
Section 8. Conduct of Special Meeting. Business transacted
at any special meeting of shareholders shall be limited to the purpose stated
in the notice.
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Section 9. Quorum. The holders of one-third of the shares of
beneficial interests that are issued and outstanding and entitled to vote
thereat, present in person or represented by proxy, shall constitute a quorum
at all meetings of the shareholders for the transaction of business except as
otherwise provided by applicable law or by the Agreement and Declaration of
Trust. If, however, such quorum shall not be present or represented at any
meeting of the shareholders, the vote of the holders of a majority of shares
cast shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting, at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified.
Section 10. Organization of Meetings.
(a) The Chairman of the Board of Trustees shall
preside at each meeting of shareholders. In the absence of the Chairman of the
Board, the meeting shall be chaired by the President, or if the President shall
not be present, by a Vice President. In the absence of all such officers, the
meeting shall be chaired by a person elected for such purpose at the meeting.
The Secretary of the Trust, if present, shall act as Secretary of such
meetings, or if the Secretary is not present, an Assistant Secretary of the
Trust shall so act, and if no Assistant Secretary is present, then a person
designated by the Secretary of the Trust shall so act, and if the Secretary has
not designated a person, then the meeting shall elect a secretary for the
meeting.
(b) The Board of Trustees of the Trust shall be
entitled to make such rules and regulations for the conduct of meetings of
shareholders as it shall deem necessary, appropriate or convenient. Subject to
such rules and regulations of the Board of Trustees, if any, the chairman of
the meeting shall have the right and authority to prescribe such rules,
regulations and procedures and to do all such acts as, in the judgment of such
chairman, are necessary, appropriate or convenient for the proper conduct of
the meeting, including, without limitation, establishing: an agenda or order of
business for the meeting; rules and procedures for maintaining order at the
meeting and the safety of those present; limitations on participation in such
meeting to shareholders of record of the Trust and their duly authorized and
constituted proxies, and such other persons as the chairman shall permit;
restrictions on entry to the meeting after the time fixed for the commencement
thereof; limitations on the time allotted to questions or comments by
participants; and regulation of the opening and closing of the polls for
balloting on matters which are to be voted on by ballot, unless and to the
extent the Board of Trustees or the chairman of the meeting determines that
meetings of shareholders shall not be required to be held in accordance with
the rules of parliamentary procedure.
Section 11. Voting Standard. When a quorum is present at any
meeting, the vote of the holders of a majority of the shares cast shall decide
any question brought before such meeting, unless the question is one on which
by express provision of applicable law, the Agreement and Declaration of Trust
or these Bylaws, a different vote is required in which case such express
provision shall govern and control the decision of such question.
Section 12. Voting Procedure. Each whole share shall be
entitled to one vote, and each fractional share shall be entitled to a
proportionate fractional vote. On any matter
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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 13. Action Without Meeting. 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 having not less than the minimum number of votes that would
be necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice of the taking of
any such action without a meeting by less than unanimous written consent shall
be given to those shareholders who have not consented in writing.
ARTICLE V
NOTICES
Section 1. Methods of Giving Notice. Whenever, under the
provisions of applicable law or of the Agreement and Declaration of Trust or of
these Bylaws, notice is required to be given to any Trustee or shareholder, it
shall not, unless otherwise provided herein, be construed to mean personal
notice, but such notice may be given orally in person, or by telephone
(promptly confirmed in writing) or in writing, by mail addressed to such
Trustee or shareholder, at his address as it appears on the records of the
Trust, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to Trustees or members of a committee may also be given by telex,
telegram, telecopier or via overnight courier. If sent by telex or telecopier,
notice to a Trustee or member of a committee shall be deemed to be given upon
transmittal; if sent by telegram, notice to a Trustee or member of a committee
shall be deemed to be given when the telegram, so addressed, is delivered to
the telegraph company, and if sent via overnight courier, notice to a Trustee
or member of a committee shall be deemed to be given when delivered against a
receipt therefor.
Section 2. Written Waiver. Whenever any notice is required to
be given under the provisions of applicable law or of the Agreement and
Declaration of Trust or of these Bylaws, a waiver thereof in writing, signed by
the person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto.
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ARTICLE VI
CERTIFICATES OF SHARES
Section 1. Issuance. Upon request, every holder of shares in
the Trust shall be entitled to have a certificate, signed by, or in the name of
the Trust by, a Trustee, certifying the number of shares owned by him in the
Trust.
Section 2. Countersignature. Where a certificate is
countersigned (1) by a transfer agent other than the Trust or its employee, or,
(2) by a registrar other than the Trust or its employee, the signature of the
Trustee may be a facsimile.
Section 3. Lost Certificates. The Board of Trustees may
direct a new certificate or certificates to be issued in place of any
certificate or certificates therefore issued by the Trust alleged to have been
lost, stolen or destroyed, upon the making of an affidavit of the fact by the
person claiming the certificate to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Trustees may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and/or to give the Trust a bond in such sum as it may
direct as indemnity against any claim that may be made against the Trust with
respect to the certificate alleged to have been lost, stolen or destroyed.
Section 4. Transfer of Shares. The Trustees shall make such
rules as they consider appropriate for the transfer of shares and similar
matters. To the extent certificates are issued in accordance with Section 1 of
this Article VI, upon surrender to the Trust or the transfer agent of the Trust
of such certificate for shares duly endorsed or accompanied by proper evidence
of succession, assignment or authority to transfer, it shall be the duty of the
Trust to issue a new certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon its books.
Section 5. Fixing Record Date. In order that the Trustees may
determine the shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or to express consent to action in
writing without a meeting, or entitled to receive payment of any dividend or
other distribution of allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of beneficial interests
or for the purpose of any other lawful action, the Board of Trustees may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Trustees, and
which record date shall not be more than ninety nor less than ten days before
the date of such meeting, nor more than ten days after the date upon which the
resolution fixing the record date is adopted by the Board of Trustees for
action by shareholder consent in writing without a meeting, nor more than
ninety days prior to any other action. A determination of shareholders of
record entitled to notice of or to vote at a meeting of shareholders shall
apply to any adjournment of the meeting; provided, however, that the Board of
Trustees may fix a new record date for the adjourned meeting.
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Section 6. Registered Shareholders. The Trust shall be
entitled to recognize the exclusive right of a person registered on its books
as the owner of shares to receive dividends, and to vote as such owner, and to
hold liable for calls and assessments a person registered on its books as the
owner of shares, and shall not be bound to recognize any equitable or other
claim to interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice hereof, except as
otherwise provided by the laws of Delaware.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends and 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 2. Redemptions. Any holder of record of shares of a
particular Portfolio, or Class thereof, shall have the right to require the
Trust to redeem his shares, or any portion thereof, subject to the terms and
conditions set forth in the registration statement in effect from time to time.
The redemption price may in any case or cases be paid wholly
or partly in kind if the Trustees determine that such payment is advisable in
the interest of the remaining shareholders of the Portfolio or Class thereof
for which the shares are being redeemed. Subject to the foregoing, the fair
value, selection and quantity of securities or other property so paid or
delivered as all or part of the redemption price may be determined by or under
authority of the Trustees. In no case shall the Trust be liable for any delay
of any 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 VII. The Trustees may
refuse to transfer or issue shares to any person to the extent that the same is
necessary to comply with applicable law or advisable to further the purposes
for which the Trust is formed.
If, at any time when a request for transfer or redemption of
shares of any Portfolio is received by the Trust or its agent, the value of the
shares of such Portfolio in a shareholder's account is less than Five Hundred
Dollars ($500.00), after giving effect to such transfer or redemption, the
Trust may cause the remaining shares of such Portfolio in such shareholder's
account to be redeemed in accordance with such procedures set forth above.
Section 3. Indemnification. Every person who is, or has been,
a Trustee or officer of the Trust shall be indemnified by the Trust to the
fullest extent permitted by the Delaware Business Trust Act, these Bylaws and
other applicable law.
Section 4. Seal. The business seal shall have inscribed
thereon the name of the business trust, the year of its organization and the
word "Business Seal, Delaware". The seal
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may be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.
ARTICLE VIII
AMENDMENTS
Section 1. Amendments. These Bylaws may be altered or
repealed at any regular or special meeting of the Board of Trustees without
prior notice. These Bylaws may also be altered or repaired 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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EXHIBIT 5(b)
SHORT-TERM INVESTMENTS TRUST
MASTER INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 28th day of February, 1997, by and between
Short-Term Investments Trust, a Delaware business trust (the "Company") with
respect to its series of shares shown on the Appendix A attached hereto, as the
same may be amended from time to time, and A I M Advisors, Inc., a Delaware
corporation (the "Advisor").
RECITALS
WHEREAS, the Company is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end, diversified management
investment company;
WHEREAS, the Advisor is registered under the Investment Advisers Act
of 1940, as amended (the "Advisers Act"), as an investment advisor and engages
in the business of acting as an investment advisor;
WHEREAS, the Company's Agreement and Declaration of Trust authorizes
the Board of Trustees of the Company to classify or reclassify authorized but
unissued shares of the Company, and as of the date of this Agreement, the
Company's Board of Trustees has authorized the issuance of two series of shares
representing interests in two investment portfolios (such portfolios and any
other portfolios hereafter added to the Company being referred to collectively
herein as the "Funds"); and
WHEREAS, the Company and the Advisor desire to enter into an agreement
to provide for investment advisory services to the Funds upon the terms and
conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. Advisory Services. The Advisor shall act as investment advisor for
the Funds and shall, in such capacity, supervise all aspects of the Funds'
operations, including the investment and reinvestment of cash, securities or
other properties comprising the Funds' assets, subject at all times to the
policies and control of the Company's Board of Trustees. The Advisor shall give
the Company and the Funds the benefit of its best judgment, efforts and
facilities in rendering its services as investment advisor.
2. Investment Analysis and Implementation. In carrying out its
obligations under Section 1 hereof, the Advisor shall:
(a) supervise all aspects of the operations of the Funds;
(b) obtain and evaluate pertinent information about
significant developments and economic, statistical and financial data,
domestic, foreign or otherwise, whether affecting the economy
generally or the Funds, and whether concerning the individual issuers
whose securities are included in the assets of the Funds or the
activities in which such issuers
<PAGE> 2
engage, or with respect to securities which the Advisor considers
desirable for inclusion in the Funds' assets;
(c) determine which issuers and securities shall be
represented in the Funds' investment portfolios and regularly report
thereon to the Company's Board of Trustees; and
(d) formulate and implement continuing programs for the
purchases and sales of the securities of such issuers and regularly
report thereon to the Company's Board of Trustees;
and take, on behalf of the Company and the Funds, all actions which appear to
the Company and the Funds necessary to carry into effect such purchase and sale
programs and supervisory functions as aforesaid, including but not limited to
the placing of orders for the purchase and sale of securities for the Funds.
3. Delegation of Responsibilities. Subject to the approval of the
Board of Trustees and the shareholders of the Funds, the Advisor may delegate
to a sub-advisor certain of its duties enumerated in Section 2 hereof, provided
that the Advisor shall continue to supervise the performance of any such
sub-advisor.
4. Control by Board of Trustees. Any investment program undertaken by
the Advisor pursuant to this Agreement, as well as any other activities
undertaken by the Advisor on behalf of the Funds, shall at all times be subject
to any directives of the Board of Trustees of the Company.
5. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and the Advisers
Act and any rules and regulations adopted thereunder;
(b) the provisions of the registration statement of the Company,
as the same may be amended from time to time under the Securities Act
of 1933 and the 1940 Act;
(c) the provisions of the Agreement and Declaration of Trust of
the Company, as the same may be amended from time to time;
(d) the provisions of the by-laws of the Company, as the same may
be amended from time to time; and
(e) any other applicable provisions of state, federal or foreign
law.
6. Broker-Dealer Relationships. The Advisor is responsible for
decisions to buy and sell securities for the Funds, broker-dealer selection,
and negotiation of brokerage commission rates. The Advisor's primary
consideration in effecting a security transaction will be to obtain execution
at the most favorable price. In selecting a broker-dealer to execute each
particular transaction, the Advisor will take the following into consideration:
the best net price available; the reliability, integrity and financial
condition of the broker-dealer; the size of and the difficulty in executing the
order; and the value of the expected contribution of the broker-dealer to the
investment performance of the Funds on a continuing basis. Accordingly, the
price to the Funds in any transaction may be less favorable than that available
from another broker-dealer if the difference is reasonably justified by other
aspects of the fund execution services offered. Subject to such policies
as the Board of Trustees may from time to time determine, the Advisor shall not
be deemed to have acted unlawfully
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or to have breached any duty created by this Agreement or otherwise solely by
reason of its having caused the Funds to pay a broker or dealer that provides
brokerage and research services to the Advisor an amount of commission for
effecting a fund investment transaction in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction, if
the Advisor determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of either that particular
transaction or the Advisor's overall responsibilities with respect to a
particular Fund, other Funds of the Company, and to other clients of the
Advisor as to which the Advisor exercises investment discretion. The Advisor is
further authorized to allocate the orders placed by it on behalf of the Funds
to such brokers and dealers who also provide research or statistical material,
or other services to the Funds, to the Advisor, or to any sub-advisor. Such
allocation shall be in such amounts and proportions as the Advisor shall
determine and the Advisor will report on said allocations regularly to the
Board of Trustees of the Company indicating the brokers to whom such
allocations have been made and the basis therefor. In making decisions
regarding broker-dealer relationships, the Advisor may take into consideration
the recommendations of any sub-advisor appointed to provide investment research
or advisory services in connection with the Funds, and may take into
consideration any research services provided to such sub-advisor by
broker-dealers.
7. Compensation. The Company shall pay the Advisor as compensation for
services rendered hereunder an annual fee, payable monthly, based upon the
average daily net assets of the Funds as the same is set forth in Appendix A
attached hereto. The average daily net asset value of the Funds shall be
determined in the manner set forth in the Agreement and Declaration of Trust
and registration statement of the Company, as amended from time to time.
8. Additional Services. Upon the request of the Company's Board of
Trustees, the Advisor may perform certain accounting, shareholder servicing or
other administrative services on behalf of the Funds which are not required by
this Agreement. Such services will be performed on behalf of the Funds and the
Advisor may receive from the Funds such reimbursement for costs or reasonable
compensation for such services as may be agreed upon between the Advisor and
the Company's Board of Trustees based on a finding by the Board of Trustees
that the provision of such services by the Advisor is in the best interests of
the Company and its shareholders. Payment or assumption by the Advisor of any
Fund expense that the Advisor is not otherwise required to pay or assume under
this Agreement shall not relieve the Advisor of any of its obligations to the
Funds nor obligate the Advisor to pay or assume any similar Fund expense on any
subsequent occasions. Such services may include, but are not limited to:
(a) the services of a principal financial officer of the Company
(including applicable office space, facilities and equipment) whose
normal duties consist of maintaining the financial accounts and books
and records of the Company and the Funds, including the review and
calculation of daily net asset value and the preparation of tax
returns; and the services (including applicable 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 Advisor; changing account designations or changing addresses;
assisting in the purchase or redemption of shares; supervising the
operations of the custodian, transfer agent(s) or dividend disbursing
agent(s) for the Funds; or otherwise providing services to
shareholders of the Funds; and
3
<PAGE> 4
(c) such other administrative services as may be furnished from
time to time by the Advisor to the Company or the Funds at the request
of the Company's Board of Trustees.
9. Expenses of the Funds. All of the ordinary business expenses
incurred in the operations of the Funds and the offering of their shares shall
be borne by the Funds unless specifically provided otherwise in this Agreement.
These expenses borne by the Funds include but are not limited to brokerage
commissions, taxes, legal, accounting, auditing, or governmental fees, the cost
of preparing share certificates, custodian, transfer and shareholder service
agent costs, expenses of issue, sale, redemption and repurchase of shares,
expenses of registering and qualifying shares for sale, expenses relating to
directors and shareholder meetings, the cost of preparing and distributing
reports and notices to shareholders, the fees and other expenses incurred by
the Company on behalf of the Funds in connection with membership in investment
company organizations and the cost of printing copies of prospectuses and
statements of additional information distributed to the Funds' shareholders.
10. Expense Limitation. If, for any fiscal year of the Company, the
total of all ordinary business expenses of the Funds, including all investment
advisory fees, but excluding brokerage commissions and fees, taxes, interest
and extraordinary expenses, such as litigation costs, would exceed the
applicable expense limitations imposed by state securities regulations in any
state in which the Funds' shares are qualified for sale, as such limitations
may be raised or lowered from time to time, the aggregate of all such
investment advisory fees shall be reduced by the amount of such excess. The
amount of any such reduction to be borne by the Advisor shall be deducted from
the monthly investment advisory fee otherwise payable to the Advisor during
such fiscal year. If required pursuant to such state securities regulations,
the Advisor will, not later than the last day of the first month of the next
succeeding fiscal year, reimburse the Funds for any such annual operating
expenses (after reduction of all investment advisory fees in excess of such
limitation). For the purposes of this Section, the term "fiscal year" shall
exclude the portion of the current fiscal year which shall have elapsed prior
to the date hereof and shall include the portion of the then current fiscal
year which shall have elapsed at the date of termination of this Agreement. The
application of expense limitations shall be applied to each Fund of the Company
separately unless the laws or regulations of any state shall require that the
expense limitations be imposed with respect to the Company as a whole.
11. Non-Exclusivity. The services of the Advisor to the Company and
the Funds are not to be deemed to be exclusive, and the Advisor shall be free
to render investment advisory and administrative or other services to others
(including other investment companies) and to engage in other activities. It is
understood and agreed that officers or directors of the Advisor may serve as
officers or directors of the Company, and that officers or directors of the
Company may serve as officers or directors of the Advisor to the extent
permitted by law; and that the officers and directors of the Advisor are not
prohibited from engaging in any other business activity or from rendering
services to any other person, or from serving as partners, officers, directors
or trustees of any other firm or trust, including other investment advisory
companies.
12. Term and Approval. This Agreement shall become effective with
respect to a Fund if approved by the shareholders of such Fund, and if so
approved, this Agreement shall thereafter continue in force and effect until
February 28, 1999, and may be continued from year to year thereafter, provided
that the continuation of the Agreement 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 such Fund (as
defined in Section 2(a)(42) of the 1940 Act); and
4
<PAGE> 5
(b) by the affirmative vote of a majority of the trustees who are
not parties to this Agreement or "interested persons" (as defined in
the 1940 Act) of a party to this Agreement (other than as Company
trustees), by votes cast in person at a meeting specifically called
for such purpose.
13. Termination. This Agreement may be terminated as to the Company or
as to any one or more of the Funds at any time, without the payment of any
penalty, by vote of the Company's Board of Trustees or by vote of a majority of
the outstanding voting securities of the applicable Fund, or by the Advisor, on
sixty (60) days' written notice to the other party. The notice provided for
herein may be waived by the party entitled to receipt thereof. This Agreement
shall automatically terminate in the event of its assignment, the term
"assignment" for purposes of this paragraph having the meaning defined in
Section 2(a)(4) of the 1940 Act.
14. Liability of Advisor and Indemnification. In the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Advisor or any of its
officers, directors or employees, the Advisor shall not be subject to liability
to the Company or to the Funds or to any shareholder of the Funds for any act
or omission in the course of, or connected with, rendering services hereunder
or for any losses that may be sustained in the purchase, holding or sale of any
security.
15. Liability of Shareholders. Notice is hereby given that, as
provided by applicable law, the obligations of or arising out of this Agreement
are not binding upon any of the shareholders of the Company individually but
are binding only upon the assets and property of the Company and that the
shareholders shall be entitled, to the fullest extent permitted by applicable
law, to the same limitation on personal liability as stockholders of private
corporations for profit.
16. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered, telecopied or mailed postage paid, to the other party
entitled to receipt thereof at such address as such party may designate for the
receipt of such notice. Until further notice to the other party, it is agreed
that the address of the Company shall be and that of the Advisor shall be
Eleven Greenway Plaza, Suite 1919, Houston, Texas 77046.
17. Questions of Interpretation. Any question of interpretation of any
term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act or the Advisers Act shall be
resolved by reference to such term or provision of the 1940 Act or the Advisers
Act and to interpretations thereof, if any, by the United States Courts or in
the absence of any controlling decision of any such court, by rules,
regulations or orders of the Securities and Exchange Commission issued pursuant
to said Acts. In addition, where the effect of a requirement of the 1940 Act or
the Advisers Act reflected in any provision of the Agreement is revised by
rule, regulation or order of the Securities and Exchange Commission, such
provision shall be deemed to incorporate the effect of such rule, regulation or
order. Subject to the foregoing, this Agreement shall be governed by and
construed in accordance with the laws (without reference to conflicts of law
provisions) of the State of Texas.
18. License Agreement. The Company shall have the non-exclusive right
to use the name "AIM" to designate any current or future series of shares only
so long as A I M Advisors, Inc. serves as investment manager or advisor to the
Company with respect to such series of shares.
5
<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in duplicate by their respective officers on the day and year first
written above.
SHORT-TERM INVESTMENTS TRUST
(a Delaware business trust)
Attest:
/s/ DAVID L. KITE By: /s/ ROBERT H. GRAHAM
- ----------------------------------- ---------------------------------
Assistant Secretary President
(SEAL)
A I M Advisors, Inc.
Attest:
/s/ OFELIA M. MAYO By: /s/ ROBERT H. GRAHAM
- ----------------------------------- ---------------------------------
Assistant Secretary President
(SEAL)
6
<PAGE> 7
APPENDIX A
TO
MASTER INVESTMENT ADVISORY AGREEMENT
OF
SHORT-TERM INVESTMENTS TRUST
The Company shall pay the Advisor, out of the assets of a Fund, as
full compensation for all services rendered and all facilities furnished
hereunder, a management fee for such Fund set forth below. Such fee shall be
calculated by applying the following annual rates to the average daily net
assets of such Fund for the calendar year computed in the manner used for the
determination of the net asset value of shares of such Fund.
TREASURY PORTFOLIO
<TABLE>
<CAPTION>
NET ASSETS ANNUAL RATE
<S> <C>
First $300 million.........................................................................................0.15%
Over $300 million up to and including $1.5 billion.........................................................0.06%
Over $1.5 billion..........................................................................................0.05%
</TABLE>
TREASURY TAXADVANTAGE PORTFOLIO
<TABLE>
<CAPTION>
NET ASSETS ANNUAL RATE
<S> <C>
First $250 million.........................................................................................0.20%
Over $250 million up to and including $500 million.........................................................0.15%
Over $500 million..........................................................................................0.10%
</TABLE>
7
<PAGE> 1
EXHIBIT 6(d)
MASTER DISTRIBUTION AGREEMENT
BETWEEN
SHORT-TERM INVESTMENTS TRUST
AND
FUND MANAGEMENT COMPANY
THIS AGREEMENT is made this 28th day of February, 1997, 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 directly and through investment dealers
and financial institutions 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
(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.
-1-
<PAGE> 2
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 and financial institutions 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 agreements with
investment dealers and financial institutions selected by the Distributor,
authorizing such investment dealers and financial institutions to offer and
sell Shares of the Company to the public upon the terms and conditions set
forth therein, which shall not be inconsistent with the provisions of this
Agreement. Each agreement shall provide that the investment dealer and
financial institution shall act as a principal, and not as an agent of the
Company.
SIXTH: The 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 (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.
-2-
<PAGE> 3
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.
(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 as of the date hereof,
shall continue until February 28, 1999, 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.
-3-
<PAGE> 4
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.
FIFTEENTH: Copies of the Agreement and Declaration of Trust, as
amended, establishing the Company are on file with the Secretary of State of
the State of Delaware, and notice is hereby given that, as provided by
applicable law, the obligations of or arising out of this Agreement are not
binding upon any of the shareholders of the Company individually, but are
binding only upon the assets and property of the Company and that the
shareholders shall be entitled, to the fullest extent permitted by applicable
law, to the same limitation on personal liability as stockholders of private
corporations for profit.
-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/ ROBERT H. GRAHAM
-----------------------------------
Name: Robert H. Graham
Title: President
Attest:
/s/ DAVID L. KITE
- -----------------------------------
Name: David L. Kite
Title: Assistant Secretary
FUND MANAGEMENT COMPANY
By: /s/ J. ABBOTT SPRAGUE
------------------------------------
Name: J. Abbott Sprague
Title: President
Attest:
/s/ OFELIA M. MAYO
- -----------------------------------
Name: Ofelia M. Mayo
Title: Assistant Secretary
-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
Resource Class
Treasury TaxAdvantage Portfolio
Institutional Class
Private Investment Class
-6-
<PAGE> 1
EXHIBIT 7(b)
DEFERRED COMPENSATION AGREEMENT
SUMMARY
Your Deferred Compensation Agreement (the "Agreement") allows
you to defer some or all of your annual trustee's fees otherwise payable by the
Funds. Deferred fees are deemed invested in certain mutual funds selected by
you. The deferral is pre-tax, and the deferred amount and the credited gains,
losses and income are not subject to tax until paid out to you.
Your deferrals (and investment experience) are posted to a
bookkeeping account maintained by the Funds in your name. In order for you to
enjoy the tax deferral, the payments due under the Agreement will be paid from
the Funds' general assets, and you are considered a general unsecured creditor
of the Funds; you may not transfer your right to receive payments under the
Agreement to any other person, nor may you pledge that right to secure any debt
or other obligation; finally, an election to defer must be made in writing
before the first day of the calendar year for which the fees are earned (the
"Election Date") and elections can be changed only prospectively, effective for
the next calendar year.
An important change has been made to your Agreement to give
you greater flexibility to select the time and method of payment of amounts
that you defer: for amounts previously deferred and for future elections you
now designate a specific Payment Date and payment method which generally may be
changed with at least one year's advance notice.
PAYMENT DATE ELECTION
Deferred fees (and the income, gains and losses credited
during the deferral period) generally will be paid out as elected by you in
installments or a single sum in cash within 30 days of the Payment Date
elected. (For payments in connection with your termination of service as a
trustee, see below.)
Deferrals must be for a minimum two year period (unless your
retirement date under the Retirement Plan is earlier). Thus, the Payment Date
may be the first day of any calendar quarter that follows the second
anniversary of the applicable Election Date or your retirement date. Thus, fees
previously deferred and fees payable for the calendar year beginning January 1,
1997 may be deferred to the first day of any calendar quarter in any year from
1999.
EXTENDING A PAYMENT DATE
At least one year prior to any Payment Date, you may extend
that Date, provided that the additional period of deferral is at least two
years. You may make this change in Payment Date only once.
-1-
<PAGE> 2
PAYMENT METHOD
The value of your deferrals (based on your election as to how
your deferral account is to be considered invested) will be paid in cash, in
one lump sum or in annual installments (over a period not to exceed 10 years)
as you select at the time you select your Payment Date. You may change this
election, but the change will not be given effect unless it is made at least
one year before your Payment Date or your ceasing to be a trustee (whichever
occurs first). This one year requirement is waived in the case of your death
(see Termination of Service, below).
TERMINATION OF SERVICE
Upon your death, your account under the Agreement will be paid
out as elected by you in installments or in a single sum in cash as soon as
practicable. Payment will be made to your designated Beneficiary or
Beneficiaries or to your estate if there is no surviving Beneficiary.
Upon termination of your service as trustee for any reason
other than death or your retirement (as defined in the Retirement Plan), your
account will be paid to you as a single sum (or in installments if you had
timely elected that method) in cash within three months following the end of
the fiscal year in which you terminate, regardless of the Payment Dates you
elected.
-2-
<PAGE> 3
DEFERRED COMPENSATION AGREEMENT
-------------------------------
AGREEMENT, made on this __ day of _______, 19__, by and
between the registered open-end investment companies listed on Appendix A
hereto (the "Funds"), and
________________________________________________________________ (the
"Director") residing at ___________________________________________________.
WHEREAS, the Funds and the Director have entered into
agreements pursuant to which the Director will serve as a director/trustee of
the Funds; and
WHEREAS, if the Funds and the Director have previously entered
into an additional agreement whereby the Funds will provide to the Director a
vehicle under which the Director can defer receipt of directors' fees payable
by the Funds and now desire to amend and restate such agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations set forth in this Agreement, the Funds and the Director hereby
agree as follows:
1. DEFINITION OF TERMS AND CONSTRUCTION
------------------------------------
1.1 Definitions. Unless a different meaning is plainly implied by
the context, the following terms as used in this Agreement shall have the
following meanings:
(a) "Beneficiary" shall mean such person or persons
designated pursuant to Section 4.3 hereof to receive benefits after the death
of the Director.
(b) "Boards of Directors" shall mean the respective
Boards of Directors of the Funds.
(c) "Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time, or any successor statute.
(d) "Compensation" shall mean the amount of directors'
fees paid by each of the Funds to the Director during a Deferral Year prior to
reduction for Compensation Deferrals made under this Agreement.
(e) "Compensation Deferral" shall mean the amount or
amounts of the Director's Compensation deferred under the provisions of Section
3 of this Agreement.
-1-
<PAGE> 4
(f) "Deferral Accounts" shall mean the accounts
maintained to reflect the Director's Compensation Deferrals made pursuant to
Section 3 hereof (or pursuant to any prior agreement) and any other credits or
debits thereto.
(g) "Deferral Year" shall mean each calendar year during
which the Director makes, or is entitled to make, Compensation Deferrals under
Section 3 hereof.
(h) "Retirement" shall have the same meaning as set forth
under the Retirement Plan.
(i) "Retirement Plan" shall mean the "AIM Funds
Retirement Plan for Eligible Directors/Trustees."
(j) "Valuation Date" shall mean the last business day of
each calendar year and any other day upon which the Funds makes valuations of
the Deferral Accounts.
1.2 Plurals and Gender. Where appearing in this Agreement the
singular shall include the plural and the masculine shall include the feminine,
and vice versa, unless the context clearly indicates a different meaning.
1.3 Directors and Trustees. Where appearing in this Agreement,
"Director" shall also refer to "Trustee" and "Board of Directors" shall also
refer to "Board of Trustees."
1.4 Headings. The headings and sub-headings in this Agreement are
inserted for the convenience of reference only and are to be ignored in any
construction of the provisions hereof.
1.5 Separate Agreement for Each Fund. This Agreement is drafted,
and shall be construed, as a separate agreement between the Director and each
of the Funds.
2. PERIOD DURING WHICH COMPENSATION DEFERRALS ARE PERMITTED
--------------------------------------------------------
2.1 Commencement of Compensation Deferrals. The Director may
elect, on a form provided by, and submitted to, the Presidents of the
respective Funds, to commence Compensation Deferrals under Section 3 hereof for
the period beginning on the later of (i) the date this Agreement is executed or
(ii) the date such form is submitted to the Presidents of the Funds.
2.2 Termination of Deferrals. The Director shall not be eligible
to make Compensation Deferrals after the earliest of the following dates:
(a) The date on which he ceases to serve as a Director of
all of the Funds; or
(b) The effective date of the termination of this
Agreement.
-2-
<PAGE> 5
3. COMPENSATION DEFERRALS
----------------------
3.1 Compensation Deferral Elections.
(a) On or prior to the first day of any Deferral Year,
the Director may elect, on the form described in Section 2.1 hereof, to defer
the receipt of all or a portion of his Compensation for such Deferral Year.
Such writing shall set forth the amount of such Compensation Deferral (in whole
percentage amounts). Such election shall continue in effect for all subsequent
Deferral Years unless it is canceled or modified as provided below.
(b) Compensation Deferrals shall be withheld from each
payment of Compensation by the Funds to the Director based upon the percentage
amount elected by the Director under Section 3.1(a) hereof.
(c) The Director may cancel or modify the amount of his
Compensation Deferrals on a prospective basis by submitting to the Presidents
of the Funds a revised Compensation Deferral election form. Such change will
be effective as of the first day of the Deferral Year following the date such
revision is submitted to the Presidents of the Funds.
3.2 Valuation of Deferral Account.
(a) Each Fund shall establish a bookkeeping Deferral
Account to which will be credited an amount equal to the Director's
Compensation Deferrals under this Agreement made with respect to Compensation
earned from each such Fund. Compensation Deferrals shall be allocated to the
Deferral Accounts on the first business day following the date such
Compensation Deferrals are withheld from the Director's Compensation. As of
the date of this Agreement, the Deferral Accounts also shall be credited with
the amounts credited to the Director under each other outstanding elective
deferred compensation agreement entered into by and between the Funds and the
Director which is superseded by this Agreement pursuant to Section 6.11 hereof.
The Deferral Accounts shall be debited to reflect any distributions from such
Accounts. Such debits shall be allocated to the Deferral Accounts as of the
date such distributions are made.
(b) As of each Valuation Date, income, gain and loss
equivalents (determined as if the Deferral Accounts are invested in the manner
set forth under Section 3.3, below) attributable to the period following the
next preceding Valuation Date shall be credited to and/or deducted from the
Director's Deferral Accounts.
3.3 Investment of Deferral Account Balances.
(a) (1) The Director may select, from various options
made available by the Funds, the investment media in which all or part of his
Deferral Accounts shall be deemed to be invested.
-3-
<PAGE> 6
(2) The Director shall make an investment
designation on a form provided by the Presidents of the Funds which shall
remain effective until another valid direction has been made by the Director as
herein provided. The Director may amend his investment designation by giving
written direction to the Presidents of the Funds in such manner and at such
time as the Funds may pemit, but no less frequently than quarterly on thirty
(30) days' notice prior to the end of a calendar quarter. A timely change to a
Director's investment designation shall become effective as soon as practicable
following receipt by the Presidents of the Funds.
(3) The investment media deemed to be made
available to the Director, and any limitation on the maximum or minimum
percentages of the Director's Deferral Accounts that may be invested any
particular medium, shall be the same as from time-to-time communicated to the
Director by the Presidents of the Funds.
(b) Except as provided below, the Director's Deferral
Accounts shall be deemed to be invested in accordance with his investment
designations, provided such designations conform to the provisions of this
Section. If -
(1) the Director does not furnish the Presidents
of the Funds with complete, written investment instructions, or
(2) the written investment instructions from the
Director are unclear,
then the Director's election to make Compensation Deferrals hereunder shall be
held in abeyance and have no force or effect until such time as the Director
shall provide the Presidents of the Funds with complete investment
instructions. Notwithstanding the above, the Boards of Directors, in their
sole discretion, may disregard the Director's election and determine that all
Compensation Deferrals shall be deemed to be invested in a fund determined by
the Boards of Directors. In the event that any fund under which any portion of
the Director's Deferral Accounts is deemed to be invested ceases to exist, such
portion of the Deferral Accounts thereafter shall be held in the successor to
such fund, subject to subsequent deemed investment elections.
The Fund shall provide an annual statement to the Director
showing such information as is appropriate, including the aggregate amount in
the Deferral Accounts, as of a reasonably current date.
-4-
<PAGE> 7
4. DISTRIBUTIONS FROM DEFERRAL ACCOUNTS
------------------------------------
4.1 Payment Date and Methods.
(a) Designation of Date. Each deferral direction given
pursuant to Section 3.1 shall include designation of the Payment Date for the
value of the amount deferred. Such Payment Date shall be the first day of any
calendar quarter, subject to the limitation set forth in paragraph 4.1(c).
(b) Extension Date. At least one year before the Payment
Date initially designated pursuant to paragraph 4.1(a) above, the Participant
may irrevocably elect to extend such Payment Date to the first day of any
calendar quarter, subject to the limitation set forth in paragraph 4.1(c).
(c) Limitation. The Director shall select a Payment Date
(or extended Payment Date) that is no sooner than the earlier of (i) the
January 1 that follows the second anniversary of the Participant's deferral
election made pursuant to paragraph 4.1(a) or (b) or (ii) the January 1 of the
year after the Participant's Retirement.
(d) Methods of Payment. Distributions from the
Director's Deferral Accounts shall be paid in cash in a single sum unless the
Participant elects, at the time a Payment Date is selected pursuant to
paragraph 4.1(a) or 4.1(b), to receive the amount payable in generally equal
quarterly installments over a period not to exceed ten (10) years. In
addition, as least one year before the Payment Date, a Director may change the
method of payment previously selected.
(e) Irrevocability. Except as provided in paragraph
4.1(b) and 4.1(d), a designation of a Payment Date and an election of
installment payments shall be irrevocable; provided, however, that payment
shall be made or begin on a different date as follows:
(1) Upon the Director's death, payment shall be
made in accordance with Section 4.2,
(2) Upon the Director's ceasing to serve as a
director of all of the Funds for reasons other than death or Retirement,
payment shall be made or begin within three months after the end of the
calendar year in which such termination occurs in accordance with the method
elected by the Director pursuant to paragraph 4.1(d) provided the designation
of such method had been made at least one year before such termination occurred,
except that the Boards of Directors, in their sole discretion, may accelerate
the distribution of such Deferral Accounts,
(3) Upon termination of this Agreement, payment
shall be made in accordance with Section 5.2, and
-5-
<PAGE> 8
(4) In the event of the liquidation, dissolution
or winding up of a Fund or the distribution of all or substantially all of a
Fund's assets and property relating to one or more series of its shares to
the shareholders of such series (for this purpose a sale, conveyance or
transfer of a Fund's assets to a trust, partnership, association or
corporation in exchange for cash, shares or other securities with the
transfer being made subject to, or with the assumption by the transferee of,
the liabilities of the Fund shall not be deemed a termination of the Fund or
such a distribution), all unpaid balances of the Deferral Accounts related to
such Fund as of the effective date thereof shall be paid in a lump sum on
such effective date.
4.2 Death Prior to Complete Distribution of Deferral Accounts.
Upon the death of the Director prior to the commencement of the distribution of
the amounts credited to his Deferral Accounts, the balance of such Accounts
shall be distributed to his Beneficiary in accordance with the method of
payment selected pursuant to paragraph 4.1(d), commencing as soon as practicable
after the Director's death. In the event of the death of the Director after
the commencement of such distribution, but prior to the complete distribution
of his Deferral Accounts, the balance of the amounts credited to his Deferral
Accounts shall be distributed to his Beneficiary over the remaining period
during which such amounts were distributable to the Director under Section 4.1
hereof. Notwithstanding the above, the Boards of Directors, in their sole
discretion, may accelerate the distribution of the Deferral Accounts.
4.3 Designation of Beneficiary. For purposes of Section 4.2
hereof, the Director's Beneficiary shall be the person or persons so designated
by the Director in a written instrument submitted to the Presidents of the
Funds. In the event the Director fails to properly designate a Beneficiary,
his Beneficiary shall be the person or persons in the first of the following
classes of successive preference Beneficiaries surviving at the death of the
Director: the Director's (1) surviving spouse or (2) estate.
4.4 Payments Due Missing Persons. The Funds shall make a
reasonable effort to locate all persons entitled to benefits under this
Agreement. However, notwithstanding any provisions of this Agreement to the
contrary, if, after a period of five (5) years from the date such benefit shall
be due, any such persons entitled to benefits have not been located, their
rights under this Agreement shall stand suspended. Before this provision
becomes operative, the Funds shall send a certified letter to all such persons
to their last known address advising them that their benefits under this
Agreement shall be suspended. Any such suspended amounts shall be held by the
Funds for a period of three (3) additional years (or a total of eight (8) years
from the time the benefits first become payable) and thereafter, if unclaimed,
such amounts shall be forfeited.
-6-
<PAGE> 9
5. AMENDMENTS AND TERMINATION
--------------------------
5.1 Amendments.
(a) The Funds and the Director may, by a written
instrument signed by, or on behalf of, such parties, amend this Agreement at
any time and in any manner.
(b) The Funds reserve the right to amend, in whole or in
part, and in any manner, any or all of the provisions of this Agreement by
action of their Boards of Directors for the purposes of complying with any
provision of the Code or any other technical or legal requirements, provided
that:
(1) No such amendment shall make it possible for
any part of the Director's Deferral Accounts to be used for, or diverted to,
purposes other than for the exclusive benefit of the Director or his
Beneficiaries, except to the extent otherwise provided in this Agreement;
and
(2) No such amendment may reduce the amount of
the Director's Deferral Accounts as of the effective date of such amendment.
5.2 Termination. The Director and the Funds may, by written
instrument signed by, or on behalf of, such parties, terminate this Agreement
at any time. In the event of the termination of this Agreement, the Boards of
Directors, in their sole discretion, may choose to pay out the Director's
Deferral Accounts prior to the designated Payment Dates. Otherwise, following
a termination of this Agreement, such Accounts shall continue to be maintained
in accordance with the provisions of this Agreement until the time they are
paid out.
6. MISCELLANEOUS.
--------------
6.1 Rights of Creditors.
(a) This Agreement is unfunded. Neither the Director nor
any other persons shall have any interest in any specific asset or assets of
the Funds by reason of any Deferral Accounts hereunder, nor any rights to
receive distribution of his Deferral Accounts except and as to the extent
expressly provided hereunder. The Funds shall not be required to purchase,
hold or dispose of any investments pursuant to this Agreement; however, if in
order to cover their obligations hereunder the Funds elect to purchase any
investments the same shall continue for all purposes to be a part of the
general assets and property of the Funds, subject to the claims of their
general creditors and no person other than the Funds shall by virtue of the
provisions of this Agreement have any interest in such assets other than an
interest as a general creditor.
-7-
<PAGE> 10
(b) The rights of the Director and the Beneficiaries to
the amounts held in the Deferral Accounts are unsecured and shall be subject to
the creditors of the Funds. With respect to the payment of amounts held under
the Deferral Accounts, the Director and his Beneficiaries have the status of
unsecured creditors of the Funds. This Agreement is executed on behalf of the
Funds by an officer, or other representative, of the Funds as such and not
individually. Any obligation of the Funds hereunder shall be an unsecured
obligation of the Funds and not of any other person.
6.2 Agents. The Funds may employ agents and provide for such
clerical, legal, actuarial, accounting, advisory or other services as it deems
necessary to perform their duties under this Agreement. The Funds shall bear
the cost of such services and all other expenses they incur in connection with
the administration of this Agreement.
6.3 Liability and Indemnification. Except for their own gross
negligence, willful misconduct or willful breach of the terms of this
Agreement, the Funds shall be indemnified and held harmless by the Director
against liability or losses occurring by reason of any act or omission of the
Funds or any other person.
6.4 Incapacity. If the Funds shall receive evidence satisfactory
to them that the Director or any Beneficiary entitled to receive any benefit
under the Agreement is, at the time when such benefit becomes payable, a minor,
or is physically or mentally incompetent to receive such benefit and to give a
valid release therefor, and that another person or an institution is then
maintaining or has custody of the Director or Beneficiary and that no guardian,
committee or other representative of the estate of the Director or Beneficiary
shall have been duly appointed, the Funds may make payment of such benefit
otherwise payable to the Director or Beneficiary to such other person or
institution, including a custodian under a Uniform Gifts to Minors Act, or
corresponding legislation (who shall be an adult, a guardian of the minor or a
trust company), and the release of such other person or institution shall be a
valid and complete discharge for the payment of such benefit.
6.5 Cooperation of Parties. All parties to this Agreement and any
person claiming any interest hereunder agree to perform any and all acts and
execute any and all documents and papers which are necessary or desirable for
carrying out this Agreement or any of its provisions.
6.6 Governing Law. This Agreement is made and entered into in the
State of Texas and all matters concerning its validity, construction and
administration shall be governed by the laws of the State of Texas.
6.7 Nonguarantee of Directorship. Nothing contained in this
Agreement shall be construed as a contract or guarantee of the right of the
Director to be, or remain as, a director of any of the Funds or to receive any,
or any particular rate of, Compensation from any of the Funds.
-8-
<PAGE> 11
6.8 Counsel. The Funds may consult with legal counsel with
respect to the meaning or construction of this Agreement, their obligations or
duties hereunder or with respect to any action or proceeding or any question of
law, and they shall be fully protected with respect to any action taken or
omitted by them in good faith pursuant to the advice of legal counsel.
6.9 Spendthrift Provision. The Director's and Beneficiaries'
interests in the Deferral Accounts may not be anticipated, sold, encumbered,
pledged, mortgaged, charged, transferred,
alienated, assigned nor become subject to execution, garnishment or
attachment and any attempt to do so by any person shall render the Deferral
Accounts immediately forfeitable.
6.10 Notices. For purposes of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered personally or mailed by
United States registered or certified mail, return receipt requested, postage
prepaid, or by nationally recognized overnight delivery service providing for a
signed return receipt, addressed to the Director at the home address set forth
in the Funds' records and to the Funds at the address set forth on the first
page of this Agreement, provided that all notices to the Funds shall be
directed to the attention of the Presidents of the Funds or to such other
address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.
6.11 Entire Agreement. This Agreement contains the entire
understanding between the Funds and the Director with respect to the payment of
non-qualified elective deferred compensation by the Fund to the Director.
Effective as of the date hereof, this Agreement replaces, and supersedes, all
other non-qualified elective deferred compensation agreements by and between
the Director and the Funds.
6.12 Interpretation of Agreement. Interpretations of, and
determinations (including factual determinations) related to, this Agreement
made by the Funds in good faith, including any determinations of the amounts of
the Deferral Accounts, shall be conclusive and binding upon all parties; and
the Funds shall not incur any liability to the Director for any such
interpretation or determination so made or for any other action taken by it in
connection with this Agreement in good faith.
6.13 Successors and Assigns. This Agreement shall be binding upon,
and shall inure to the benefit of, the Funds and their successors and assigns
and to the Director and his heirs, executors, administrators and personal
representatives.
6.14 Severability. In the event any one or more provisions of this
Agreement are held to be invalid or unenforceable, such illegality or
unenforceability shall not affect the validity or enforceability of the other
provisions hereof and such other provisions shall remain in full force and
effect unaffected by such invalidity or unenforceability.
-9-
<PAGE> 12
6.15 Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same instrument.
-10-
<PAGE> 13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
The Funds
________________________ By:_________________________
Witness Name:
Title:
________________________ ____________________________
Witness Director
-11-
<PAGE> 14
APPENDIX A
----------
AIM ADVISOR FUNDS, INC.
AIM EQUITY FUNDS, INC.
AIM FUNDS GROUP
AIM INTERNATIONAL FUNDS, INC.
AIM INVESTMENT SECURITIES FUNDS
AIM SUMMIT FUND, INC.
AIM TAX-EXEMPT FUNDS, INC.
AIM VARIABLE INSURANCE FUNDS, INC.
SHORT-TERM INVESTMENTS CO.
SHORT-TERM INVESTMENTS TRUST
TAX-FREE INVESTMENTS CO.
<PAGE> 15
DEFERRED COMPENSATION AGREEMENT
DEFERRAL ELECTION FORM
-------------------------------
TO: Presidents of the AIM Funds
FROM:
DATE:
With respect to the Deferred Compensation agreement (the
"Agreement") dated as of ________________ by and between the undersigned and
the AIM Funds, I hereby make the following elections:
Deferral of Compensation
------------------------
Starting with Compensation to be paid to me with respect to
services provided by me to the AIM Funds after the date this election Form is
received by the AIM Funds, I hereby elect that 50 percent (50%) of my
Compensation (as defined under the Agreement) be reduced and that the Fund
establish a bookkeeping account credited with amounts equal to the amount so
reduced (the "Deferral Account"). The Deferral Account shall be further
credited with income equivalents as provided under the Agreement. I understand
that this election will remain in effect with respect to Compensation I earn in
subsequent years unless I modify or revoke it. I further understand that such
modification or revocation will be effective only prospectively and will apply
commencing with the Compensation I earn in the calendar year that begins after
the change is received by you.
Payment Date
------------
I hereby designate ________ 1 (select the first month in any
calendar quarter) in the year ______ (select a year that is at least two years
after the year this election is made) as the Payment Date for the amounts
credited to my Deferral Account pursuant to the election made above. If my
Retirement (as defined in the Agreement) occurs sooner, I o do o do not (check
the appropriate box) want payment of such amounts to commence effective the
January 1 following my Retirement. I understand that amounts credited to my
Deferral Account may be paid to me prior to the Payment Date as provided in the
Agreement.
-5-
<PAGE> 16
Payment Method
--------------
I hereby elect to receive the amounts credited to my Deferral
Account in (check one)
o a single payment in cash
o quarterly installments for a period of ____ years (select no more
than 10 years)
o annual installments for a period of ____ (select no more than 10
years)
beginning within 30 days following the payment date selected above.
I understand that the amounts credited to my Deferral Account
shall remain the general assets of the AIM Funds and that, with respect to the
payment of such amounts, I am merely a general creditor of the AIM Funds. I
may not sell, encumber, pledge, assign or otherwise alienate the amounts
credited to my Deferral Account.
I hereby agree that the terms of the Agreement are
incorporated herein and are made a part hereof. Dated as of the day and year
first above written.
WITNESS: DIRECTOR:
_________________________ ______________________________
WITNESS: RECEIVED:
_________________________ AIM Funds
By:___________________________
Date:_________________________
-6-
<PAGE> 17
DEFERRED COMPENSATION AGREEMENT
BENEFICIARY DESIGNATION FORM
-------------------------------
TO: Presidents of the AIM Funds
FROM:
DATE:
With respect to the Deferred Compensation Agreement (the
"Agreement") dated as of _____________ by and between the undersigned and the
AIM Funds, I hereby make the following beneficiary designations:
I. Primary Beneficiary
-------------------
I hereby appoint the following as my Primary Beneficiary(ies)
to receive at my death the amounts credited to my Deferral Account under the
Agreement. In the event I am survived by more than one Primary Beneficiary,
such Primary Beneficiaries shall share equally in such amounts unless I
indicate otherwise on an attachment to this form:
_________________________________________________________________
Name Relationship
_________________________________________________________________
Address
_________________________________________________________________
City State Zip
-1-
<PAGE> 18
II. Secondary Beneficiary
---------------------
In the event I am not survived by any Primary Beneficiary, I
hereby appoint the following as Secondary Beneficiary(ies) to receive death
benefits under the Agreement. In the event I am survived by more than one
Secondary Beneficiary, such Secondary Beneficiaries shall share equally unless
I indicate otherwise on an attachment to this form:
_________________________________________________________________
Name Relationship
_________________________________________________________________
Address
_________________________________________________________________
City State Zip
I understand that I may revoke or amend the above designations
at any time. I further understand that if I am not survived by a Primary or
Secondary Beneficiary, my Beneficiary shall be as set forth under the
Agreement.
WITNESS: DIRECTOR:
_________________________ ______________________________
WITNESS: RECEIVED:
_________________________ AIM Funds
By:___________________________
Date:_________________________
-2-
<PAGE> 1
EXHIBIT 9(c)
AMENDMENT NO. 2
TRANSFER AGENCY AND SERVICE AGREEMENT
The Transfer Agency and Service Agreement (the "Agreement"), dated
September 16, 1994, as amended July 1, 1995, 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 .009% 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."
All other terms and provisions of the Agreement not amended herein
shall remain in full force and effect.
Dated: July 1, 1996
SHORT-TERM INVESTMENTS TRUST
Attest: /s/ DAVID L. KITE By: /s/ ROBERT H. GRAHAM
------------------------------ ------------------------------
Assistant Secretary Robert H. Graham
President
(SEAL)
A I M INSTITUTIONAL FUND SERVICES, INC.
Attest: /s/ DAVID L. KITE By: /s/ J. ABBOTT SPRAGUE
------------------------------ ------------------------------
Assistant Secretary J. Abbott Sprague
President
(SEAL)
<PAGE> 1
EXHIBIT 9(d)
AMENDMENT NO. 3
TRANSFER AGENCY AND SERVICE AGREEMENT
The Transfer Agency and Service Agreement (the "Agreement"), dated
September 16, 1994, as amended on July 1, 1995 and July 1, 1996, 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) A new Section 2.03 to the Agreement is hereby added in its entirety as
follows: "In addition to the fee paid under Section 2.01 above, the Fund agrees
to reimburse the Transfer Agent for out-of-pocket expenses or advances incurred
by the Transfer Agent for the reconcilement of demand deposit accounts on
behalf of each of the Portfolios. In addition, any other expenses incurred by
the Transfer Agent at the request or with the consent of the Fund, will be
reimbursed by the Fund on behalf of the applicable Shares."
All other terms and provisions of the Agreement not amended herein
shall remain in full force and effect.
Dated: July 1,1997
SHORT-TERM INVESTMENTS TRUST
Attest: /s/ STEPHEN I. WINER By: /s/ ROBERT H. GRAHAM
------------------------------- -------------------------------
Assistant Secretary Robert H. Graham
President
(SEAL)
AIM INSTITUTIONAL FUND SERVICES, INC.
Attest: /s/ OFELIA M. MAYO By: /s/ JOHN CALDWELL
------------------------------- -------------------------------
Assistant Secretary John Caldwell
President
(SEAL)
<PAGE> 1
EXHIBIT 9(e)
TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
SHORT-TERM INVESTMENTS TRUST
AND
A I M FUND SERVICES, INC.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE 1 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 LIMITATION OF SHAREHOLDER LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 10 ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 11 AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 12 TEXAS LAW TO APPLY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 13 MERGER OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 14 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
</TABLE>
<PAGE> 3
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 29th day of December, 1997, by and between
SHORT-TERM INVESTMENTS TRUST, a Delaware business trust, having its principal
office and place of business at 11 Greenway Plaza, Suite 100, Houston, Texas
77046 (the "Fund"), and A I M Fund Services, Inc., a Delaware corporation
having its principal office and place of business at 11 Greenway Plaza, Suite
100, 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 1
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 and
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 an annual fee in the amount of .009% of average daily net
assets, payable monthly. Such fee and out-of-pocket expenses and advances
identified under Section 2.03 below may be changed from time to time subject
to mutual written agreement between the Fund and the Transfer Agent.
2
<PAGE> 5
2.02 The Fund agrees on behalf of each of the Portfolios to pay all
fees following the mailing of a billing notice.
2.03 In addition to the fee paid under Section 2.01 above, the Fund
agrees to reimburse the Transfer Agent for out-of-pocket expenses or advances
incurred by the Transfer Agent for the reconcilement of demand deposit accounts
on behalf of each of the Portfolios. In addition, any other expenses incurred
by the Transfer Agent at the request or with the consent of the Fund, will be
reimbursed by the Fund on behalf of the applicable Shares.
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 corporate 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, diversified management investment company
registered under the Investment Company Act of 1940, as amended.
3
<PAGE> 6
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.
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
4
<PAGE> 7
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.
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.
5
<PAGE> 8
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.
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 Portfolios.
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
LIMITATION OF SHAREHOLDER LIABILITY
9.01 Notice is hereby given that this Agreement is being executed
by the Fund by a duly authorized officer thereof acting as such and not
individually. The obligations of this Agreement are not binding upon any of
the trustees, officers, shareholders or the investment advisor of the Fund
individually but are binding only upon the assets and property belonging to the
Fund, on its own behalf or on behalf of a Portfolio, for the benefit of which
the trustees or directors have caused this Agreement to be executed.
ARTICLE 10
ASSIGNMENT
10.01 Except as provided in Section 10.03 below, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party.
10.02 This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and assigns.
10.03 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)");
6
<PAGE> 9
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 11
AMENDMENT
11.01 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 12
TEXAS LAW TO APPLY
12.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Texas.
ARTICLE 13
MERGER OF AGREEMENT
13.01 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 14
COUNTERPARTS
14.01 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.
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/ P. MICHELLE GRACE
- -----------------------
Assistant Secretary
A I M FUND SERVICES, INC.
By: ILLEGIBLE
President
ATTEST:
/S/ P. MICHELLE GRACE
- ------------------------
Assistant Secretary
8
<PAGE> 1
EXHIBIT 9(h)
MASTER ADMINISTRATIVE SERVICES AGREEMENT
This MASTER ADMINISTRATIVE SERVICES AGREEMENT (the "Agreement") is
made this 28th day of February, 1997 by and between A I M ADVISORS, INC., a
Delaware corporation (the "Administrator"), and SHORT-TERM INVESTMENTS TRUST, a
Delaware business trust (the "Company"), with respect to the separate series
set forth from time to time in Appendix A to this Agreement (the "Portfolios").
W I T N E S S E T H:
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 interest 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
<PAGE> 2
(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
director, officer or employee of the Administrator who may also be a director,
officer or employee of the Company to engage in any other business or to 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 February 28, 1999 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.
2
<PAGE> 3
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. Copies of the Agreement and Declaration of Trust establishing the
Company are on file with the Secretary of State of the State of Delaware, and
notice is hereby given that, as provided by applicable law, the obligations of
or arising out of this Agreement are not binding upon any of the shareholders
of the Company individually but are binding only upon the assets and property
of the Company and that the shareholders shall be entitled, to the fullest
extent permitted by applicable law, to the same limitation on personal
liability as stockholders of private corporations for profit.
10. 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.
11. 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.
12. 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/ DAVID L. KITE By: /s/ ROBERT H. GRAHAM
------------------------------ ------------------------------
Assistant Secretary President
(SEAL)
SHORT-TERM INVESTMENTS TRUST
Attest: /s/ OFELIA M. MAYO By: /s/ ROBERT H. GRAHAM
------------------------------ ------------------------------
Assistant Secretary President
(SEAL)
3
<PAGE> 4
SHORT-TERM INVESTMENTS TRUST
APPENDIX A TO MASTER ADMINISTRATIVE SERVICES AGREEMENT
FEBRUARY 28, 1997
Treasury Portfolio
Treasury TaxAdvantage Portfolio
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
Prospectus of each of the Cash Management Class, Institutional Class, Personal
Investment Class, Private Investment Class and Resource Class, each a class of
the Treasury Portfolio of Short-Term Investments Trust (the "Trust"), and in the
Prospectus of each of the Institutional Class and Private Investment Class, each
a class of the TaxAdvantage Portfolio of the Trust, which Prospecutses form a
part of Post-Effective Amendment No. 30 to the Registration Statement under the
Securities Act of 1933 (No. 2-58287) and Amendment No. 31 to the Registration
Statement under the Investment Company Act of 1940 (No. 811-2729) on Form N-1A
of the Company.
/s/Ballard Spahr Andrews & Ingersoll
Ballard Spahr Andrews & Ingersoll
Philadelphia, Pennsylvania
December 11, 1997
<PAGE> 1
EXHIBIT 11(b)
INDEPENDENT AUDITORS' CONSENT
The Board of Trustees and Shareholders
Short-Term Investments Trust
We consent to the use of our reports on the Treasury Portfolio and the Treasury
Tax Advantage Portfolio (portfolios of Short-Term Investments Trust) dated
October 4, 1997 included therein and to the references to our firm under the
headings "Financial Highlights" in the Prospectuses and "Financial Statements"
in the Statements of Additional Information.
/s/ KPMG PEAT MARWICK LLP
KPMG Peat Marwick LLP
Houston, Texas
December 17, 1997
<PAGE> 1
EXHIBIT 15(b)
AMENDED AND RESTATED
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, (hereinafter referred to as the
"Portfolios"); and
WHEREAS, the Portfolios 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 Portfolios to supply investment advice;
and
WHEREAS, the Trust on behalf of the Portfolios 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 Portfolios,
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 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, and (ii) as a service fee to certain broker-dealers, banks, and
other financial institutions ("Service Providers") who offer continuing personal
shareholder services to
<PAGE> 2
their customers who invest in the Shares, and who have entered into Shareholder
Service Agreements substantially in the form of Exhibit A hereto.
The maximum shareholder service fee payable to any Service Provider
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. No provision of this Plan shall be interpreted
to prohibit any payments by the Trust during periods when the Trust has
suspended or otherwise limited sales.
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 as asset-based sales charges or as a service fee in respect
of the Shares owned by shareholders with whom such Service Provider has a
shareholder servicing relationship. Shareholder servicing may include, among
other things: (i) answering client inquiries regarding the Shares and the
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 a
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 Portfolio and the Trust on behalf of the Shares in the normal
conduct of the Portfolio's business pursuant to the Master Investment Advisory
Agreement. However, to the extent any payments by the Trust on behalf of a
Portfolio to AIM or such Portfolio's shareholder servicing and transfer agent;
by AIM to any Service Providers pursuant to any Shareholder Service Agreement;
or, generally, by the Trust on behalf of the Portfolio to any party for the
Portfolio's operating expenses, are deemed to be payments for the financing of
any activity primarily intended to result in the sale of the 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.
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.
-2-
<PAGE> 3
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 a 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 negligence in the
performance of their duties hereunder, or by reason of their reckless disregard
of their obligations and duties hereunder.
-3-
<PAGE> 4
IN WITNESS WHEREOF, the undersigned has executed this document as
constituting a Plan pursuant to Rule 12b-1.
SHORT-TERM INVESTMENTS TRUST
Attest:/s/ OFELIA M. MAYO By: /s/ CAROL F. RELIHAN
------------------------------ ------------------------------
Assistant Secretary Senior Vice President
Effective as of August 6, 1993, as amended as of December 8, 1994, as further
amended as of September 19, 1995, and as further amended as of December 5,
1995.
Amended and restated as of June 30, 1997.
-4-
<PAGE> 5
APPENDIX A
TO
MASTER DISTRIBUTION PLAN
OF
SHORT-TERM INVESTMENTS TRUST
(DISTRIBUTION FEE)
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>
<S> <C>
TREASURY PORTFOLIO ANNUAL RATE
Personal Investment Class 0.75%
Private Investment Class 0.50%
Resource Class 0.20%
Cash Management Class 0.10%
TREASURY TAXADVANTAGE PORTFOLIO ANNUAL RATE
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.
-5-
<PAGE> 6
EXHIBIT A
[AIM LOGO APPEARS HERE] FUND MANAGEMENT COMPANY
SHAREHOLDER SERVICE AGREEMENT
Fund Management Company
(Broker-Dealers and 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 provision of continuing personal shareholder services to our
clients who are shareholders of, and/or 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 in accordance with
the requirements of Rule 12b-1. The terms and conditions of this Agreement will
be as follows:
1. We will provide continuing personal shareholder services and/or
administrative support services to our customers who may from time to
time beneficially own shares of the Funds, including but not limited
to, 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, forwarding
sales literature, 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
will pay us a fee periodically. We represent that we will accept
payment of fees hereunder only so long as we continue to provide such
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 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.
Exhibit A has been replaced as of (3/97)
<PAGE> 7
Shareholder Service Agreement Page 2
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 will 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 if we use AIM LINK(TM) we are solely responsible for
the registration of account information for FMC's and A I M
Institutional Fund Services, Inc.'s ("AIFS") subaccounting customers
through AIM LINK(TM), and that neither FMC, AIFS nor any Fund is
responsible for the accuracy of such information; and we will indemnify
and hold harmless FMC, AIFS and the Funds for any claims or expenses
resulting from the inaccuracy or inadequacy of such information.
7. We will 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 will 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 will participate, directly or indirectly, in any
compensation that we may receive from our clients in connection with
our acting on their behalf with respect to this Agreement.
9. In consideration of the services and facilities described herein, we
will 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 and administration 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 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 with the Securities and
<PAGE> 8
Shareholder Service Agreement Page 3
Exchange Commission (the "SEC") or in the state(s) in which we engage
in such activities, or (ii) we are registered as a broker-dealer with
the SEC and in the state(s) in which we engage in such activities.
12. If we are a broker-dealer registered with the SEC, 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.
13. 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 will 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.
14. 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 will not constitute a waiver of FMC's right to terminate at a
later date for any such cause. This Agreement will 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.
15. All communications to FMC will be sent to it at P.O. Box 4333, Houston,
Texas 77210-4333. Any notice to us will be duly given if mailed or
telegraphed to us at the address shown on this Agreement.
16. We agree that under this Agreement we will be acting as an independent
contractor and not as your employee or agent, nor as an employee or
agent of the Funds, and we may not hold ourselves out to any other
party as your agent with the authority to bind you or the Funds in any
manner.
17. We agree that this Agreement and the arrangement described herein are
intended to be non-exclusive and that either of us may enter into
similar agreements and arrangements with other parties.
<PAGE> 9
Shareholder Service Agreement Page 4
18. This Agreement will 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 will be governed by and construed under the
laws of the State of Texas.
-----------------------------------
(Firm Name)
-----------------------------------
(Address)
-----------------------------------
City/State/Zip/County
BY:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
Dated:
-------------------------------
For administrative convenience,
please supply the following
information, which may be updated
in writing at any time. Wiring
instructions for service fees
payable by FMC:
---------------- -----------------
(Bank Name) (Bank ABA Number)
-----------------------------------
(Reference Account Name and Number)
Contact person for operational
issues:
---------------- -----------------
(Name) (Phone Number)
ACCEPTED:
FUND MANAGEMENT COMPANY
BY:
----------------------------
Name:
----------------------------
Title:
----------------------------
Dated:
---------------------------
<PAGE> 10
Shareholder Service Agreement Page 5
SCHEDULE A
<TABLE>
<CAPTION>
FUNDS FEE
<S> <C>
Short-Term Investments Co.
Prime Portfolio - Personal Investment Class .40%*
Prime Portfolio - Private Investment Class .25%
Prime Portfolio - Resource Class .16%
Prime Portfolio - Cash Management Class .08%
Liquid Assets Portfolio - Private Investment Class .25%
Liquid Assets Portfolio - MSTC Cash Reserves Class .20%
Liquid Assets Portfolio - Cash Management Class .08%
Short-Term Investments Trust
Treasury Portfolio - Personal Investment Class .40%*
Treasury Portfolio - Private Investment Class .25%
Treasury Portfolio - Resource Class .16%
Treasury Portfolio - Cash Management Class .08%
Treasury TaxAdvantage Portfolio - Private Investment Class .25%
Tax-Free Investments Co.
Cash Reserve Portfolio - Private Investment Class .25%
</TABLE>
*Fees in excess of .25% are for services of an administrative
nature, as described in Paragraph 1 of this Agreement.
<PAGE> 11
Shareholder Service Agreement Page 6
SCHEDULE B
SUBACCOUNTING AND ADMINISTRATION FEES
We will be assessed a fee, payable monthly, in the amount of basis
points of our monthly average net assets managed by your affiliates. 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 and administration services
provided to us by AIFS.
<PAGE> 1
EXHIBIT 18(b)
AMENDED AND RESTATED MULTIPLE CLASS PLAN
OF
THE AIM FAMILY OF FUNDS
1. This Amended and Restated Multiple Class Plan (the "Plan") adopted in
accordance with Rule 18f-3 under the Act shall govern the terms and
conditions under which the Funds may issue separate Classes of Shares
representing interests in one or more Portfolios of each Fund.
2. Definitions. As used herein, the terms set forth below shall have the
meanings ascribed to them below.
a. Act - Investment Company Act of 1940, as amended.
b. CDSC - contingent deferred sales charge.
c. CDSC Period - the period of years following acquisition of
Shares during which such Shares may be assessed a CDSC upon
redemption.
d. Class - a class of Shares of a Fund representing an interest
in a Portfolio.
e. Class A Shares - shall mean those Shares designated as Class A
Shares in the Fund's organizing documents, as well as those
Shares deemed to be Class A Shares for purposes of this Plan.
f. Class B Shares - shall mean those Shares designated as Class B
Shares in the Fund's organizing documents.
g. Class C Shares - shall mean those Shares designated as Class C
Shares in the Fund's organizing documents, as well as those
Shares deemed to be Class C Shares for purposes of this Plan.
h. Directors - the directors or trustees of a Fund.
i. Distribution Expenses - expenses incurred in activities which
are primarily intended to result in the distribution and sale
of Shares as defined in a Plan of Distribution and/or
agreements relating thereto.
j. Distribution Fee - a fee paid by a Fund to the Distributor to
compensate the Distributor for Distribution Expenses.
k. Distributor - A I M Distributors, Inc. or Fund Management
Company, as applicable.
l. Fund - those investment companies advised by A I M Advisors,
Inc. which have adopted this Plan.
1
<PAGE> 2
m. Institutional Shares - shall mean Shares of a Fund
representing an interest in a Portfolio offered for sale to
institutional customers as may be approved by the Directors
from time to time and as set forth in the Fund's prospectus.
n. Plan of Distribution - Any plan adopted under Rule 12b-1 under
the Act with respect to payment of a Distribution Fee.
o. Portfolio - a series of the Shares of a Fund constituting a
separate investment portfolio of the Fund.
p. Service Fee - a fee paid to financial intermediaries for the
ongoing provision of personal services to Fund shareholders
and/or the maintenance of shareholder accounts.
q. Share - a share of common stock of or beneficial interest in
a Fund, as applicable.
3. Allocation of Income and Expenses.
a. Distribution and Service Fees - Each Class shall bear
directly any and all Distribution Fees and/or Service Fees
payable by such Class pursuant to a Plan of Distribution
adopted by the Fund with respect to such Class.
b. Transfer Agency and Shareholder Recordkeeping Fees - Each
Class shall bear directly the transfer agency fees and
expenses and other shareholder recordkeeping fees and
expenses specifically attributable to that Class.
c. Allocation of Other Expenses - Each Class shall bear
proportionately all other expenses incurred by a Fund based
on the relative net assets attributable to each such Class.
d. Allocation of Income, Gains and Losses - Except to the extent
provided in the following sentence, each Portfolio will
allocate income and realized and unrealized capital gains and
losses to a Class based on the relative net assets of each
Class. Notwithstanding the foregoing, each Portfolio that
declares dividends on a daily basis will allocate income on
the basis of settled shares.
e. Waiver and Reimbursement of Expenses - A Portfolio's adviser,
underwriter or any other provider of services to the
Portfolio may waive or reimburse the expenses of a particular
Class or Classes.
4. Distribution and Servicing Arrangements. The distribution and
servicing arrangements identified below will apply for the following
Classes offered by a Fund with respect to a Portfolio. The provisions
of the Fund's prospectus describing the distribution and servicing
arrangements in detail are incorporated herein by this reference.
a. Class A Shares. Class A Shares shall be offered at net asset
value plus a front-end sales charge as approved from time to
time by the Directors and set forth in the Fund's prospectus,
may be reduced or eliminated for certain money market fund
2
<PAGE> 3
shares, for larger purchases, under a combined
purchase privilege, under a right of accumulation,
under a letter of intent or for certain categories of
purchasers as permitted by Rule 22(d) of the Act and as set
forth in the Fund's prospectus. Class A Shares that are not
subject to a front-end sales charge as a result of the
foregoing shall be subject to a CDSC for the CDSC Period set
forth in Section 5(a) of this Plan if so provided in the
Fund's prospectus. The offering price of Shares subject to a
front-end sales charge shall be computed in accordance with
Rule 22c-1 and Section 22(d) of the Act and the rules and
regulations thereunder. Class A Shares shall be subject to
ongoing Service Fees and/or Distribution Fees approved from
time to time by the Directors and set forth in the Fund's
prospectus. Although AIM Cash Reserve Shares, AIM Limited
Maturity Treasury Shares, AIM Tax-Free Intermediate Shares
and shares of AIM Tax-Exempt Bond Fund of Connecticut and AIM
Tax Exempt Cash Fund are not designated as "Class A", they
are substantially similar to Class A Shares as defined herein
and shall be deemed to be Class A Shares for the purposes of
this Plan.
b. Class B Shares. Class B Shares shall be (i) offered at net
asset value, (ii) subject to a CDSC for the CDSC Period set
forth in Section 5(b), (iii) subject to ongoing Service Fees
and Distribution Fees approved from time to time by the
Directors and set forth in the Fund's prospectus, and (iv)
converted to Class A Shares eight years from the end of the
calendar month in which the shareholder's order to purchase
was accepted as set forth in the Fund's prospectus.
c. Class C Shares. Class C Shares shall be (i) offered at net
asset value, (ii) subject to a CDSC for the CDSC Period set
forth in Section 5(c), and (iii) subject to ongoing Service
Fees and Distribution Fees approved from time to time by the
Directors and set forth in the Fund's prospectus.
d. Institutional Shares. Institutional Shares shall be (i)
offered at net asset value, (ii) offered only to certain
categories of institutional customers as approved from time
to time by the Directors and as set forth in the Fund's
prospectus and (iii) may be subject to ongoing Service Fees
and/or Distribution Fees as approved from time to time by the
Directors and set forth in the Fund's prospectus.
5. CDSC. A CDSC shall be imposed upon redemptions of Class A Shares that
do not incur a front-end sales charge and of Class B Shares and Class
C Shares as follows:
a. Class A Shares. The CDSC Period for Class A Shares shall be 18
months. The CDSC Rate shall be as set forth in the Fund's
prospectus, the relevant portions of which are incorporated
herein by this reference. No CDSC shall be imposed on Class A
Shares unless so provided in a Fund's prospectus.
b. Class B Shares. The CDSC Period for the Class B Shares shall
be six years. The CDSC Rate for the Class B Shares shall be
as set forth in the Fund's prospectus, the relevant portions
of which are incorporated herein by this reference.
3
<PAGE> 4
c. Class C Shares. The CDSC Period for the Class C Shares shall
be one year. The CDSC Rate for the Class C Shares shall be as
set forth in the Fund's prospectus, the relevant portions of
which are incorporated herein by reference.
d. Method of Calculation. The CDSC shall be assessed on an
amount equal to the lesser of the then current market value
or the cost of the Shares being redeemed. No sales charge
shall be imposed on increases in the net asset value of the
Shares being redeemed above the initial purchase price. No
CDSC shall be assessed on Shares derived from reinvestment of
dividends or capital gains distributions. The order in which
Shares are to be redeemed when not all of such Shares would
be subject to a CDSC shall be determined by the Distributor
in accordance with the provisions of Rule 6c-10 under the Act.
e. Waiver. The Distributor may in its discretion waive a CDSC
otherwise due upon the redemption of Shares and disclosed in
the Fund's prospectus or statement of additional information
and, for the Class A Shares, as allowed under Rule 6c-10 under
the Act.
6. Exchange Privileges. Exchanges of Shares shall be permitted between
Funds as follows:
a. Class A Shares may be exchanged for Class A Shares of another
Portfolio, subject to certain limitations set forth in the
Fund's prospectus as it may be amended from time to time,
relevant portions of which are incorporated herein by this
reference.
b. Class B Shares may be exchanged for Class B Shares of another
Portfolio at their relative net asset value.
c. Class C Shares may be exchanged for Class C Shares of any
other Portfolio at their relative net asset value.
d. Depending upon the Portfolio from which and into which an
exchange is being made and when the shares were purchased,
shares being acquired in an exchange may be acquired at their
offering price, at their net asset value or by paying the
difference in sales charges, as disclosed in the Fund's
prospectus and statement of additional information.
e. CDSC Computation. The CDSC payable upon redemption of Class A
Shares, Class B Shares and Class C Shares subject to a CDSC
shall be computed in the manner described in the Fund's
prospectus.
7. Service and Distribution Fees. The Service Fee and Distribution Fee
applicable to any Class shall be those set forth in the Fund's
prospectus, relevant portions of which are incorporated herein by this
reference. All other terms and conditions with respect to Service Fees
and Distribution Fees shall be governed by the Plan of Distribution
adopted by the Fund with respect to such fees and Rule 12b-1 of the
Act.
4
<PAGE> 5
8. Conversion of Class B Shares.
a. Shares Received upon Reinvestment of Dividends and
Distributions - Shares purchased through the reinvestment of
dividends and distributions paid on Shares subject to
conversion shall be treated as if held in a separate
sub-account. Each time any Shares in a Shareholder's account
(other than Shares held in the sub-account) convert to Class A
Shares, a proportionate number of Shares held in the
sub-account shall also convert to Class A Shares.
b. Conversions on Basis of Relative Net Asset Value - All
conversions shall be effected on the basis of the relative
net asset values of the two Classes without the imposition of
any sales load or other charge.
c. Amendments to Plan of Distribution for Class A Shares - If
any amendment is proposed to the Plan of Distribution under
which Service Fees and Distribution Fees are paid with
respect to Class A Shares of a Fund that would increase
materially the amount to be borne by those Class A Shares,
then no Class B Shares shall convert into Class A Shares of
that Fund until the holders of Class B Shares of that Fund
have also approved the proposed amendment. If the holders of
such Class B Shares do not approve the proposed amendment, the
Directors of the Fund and the Distributor shall take such
action as is necessary to ensure that the Class voting
against the amendment shall convert into another Class
identical in all material respects to Class A Shares of the
Fund as constituted prior to the amendment.
9. This Plan shall not take effect until a majority of the Directors of a
Fund, including a majority of the Directors who are not interested
persons of the Fund, shall find that the Plan, as proposed and
including the expense allocations, is in the best interests of each
Class individually and the Fund as a whole.
10. This Plan may not be amended to materially change the provisions of
this Plan unless such amendment is approved in the manner specified in
Section 9 above.
5
<PAGE> 1
EXHIBIT 18(c)
SECOND AMENDED AND RESTATED MULTIPLE CLASS PLAN
OF
THE AIM FAMILY OF FUNDS
1. This Second Amended and Restated Multiple Class Plan (the "Plan")
adopted in accordance with Rule 18f-3 under the Act shall govern the
terms and conditions under which the Funds may issue separate Classes
of Shares representing interests in one or more Portfolios of each
Fund.
2. Definitions. As used herein, the terms set forth below shall have the
meanings ascribed to them below.
a. Act - Investment Company Act of 1940, as amended.
b. CDSC - contingent deferred sales charge.
c. CDSC Period - the period of years following acquisition of
Shares during which such Shares may be assessed a CDSC upon
redemption.
d. Class - a class of Shares of a Fund representing an interest
in a Portfolio.
e. Class A Shares - shall mean those Shares designated as Class
A Shares in the Fund's organizing documents, as well as those
Shares deemed to be Class A Shares for purposes of this Plan.
f. Class B Shares - shall mean those Shares designated as Class
B Shares in the Fund's organizing documents.
g. Class C Shares - shall mean those Shares designated as Class
C Shares in the Fund's organizing documents, as well as those
Shares deemed to be Class C Shares for purposes of this Plan.
h. Directors - the directors or trustees of a Fund.
i. Distribution Expenses - expenses incurred in activities which
are primarily intended to result in the distribution and sale
of Shares as defined in a Plan of Distribution and/or
agreements relating thereto.
j. Distribution Fee - a fee paid by a Fund to the Distributor
to compensate the Distributor for Distribution Expenses.
k. Distributor - A I M Distributors, Inc. or Fund Management
Company, as applicable.
l. Fund - those investment companies advised by A I M Advisors,
Inc. which have adopted this Plan.
1
<PAGE> 2
m. Institutional Shares - shall mean Shares of a Fund
representing an interest in a Portfolio offered for sale to
institutional customers as may be approved by the Directors
from time to time and as set forth in the Fund's prospectus.
n. Plan of Distribution - Any plan adopted under Rule 12b-1
under the Act with respect to payment of a Distribution Fee.
o. Portfolio - a series of the Shares of a Fund constituting a
separate investment portfolio of the Fund.
p. Service Fee - a fee paid to financial intermediaries for the
ongoing provision of personal services to Fund shareholders
and/or the maintenance of shareholder accounts.
q. Share - a share of common stock of or beneficial interest in
a Fund, as applicable.
3. Allocation of Income and Expenses.
a. Distribution and Service Fees - Each Class shall bear
directly any and all Distribution Fees and/or Service Fees
payable by such Class pursuant to a Plan of Distribution
adopted by the Fund with respect to such Class.
b. Transfer Agency and Shareholder Recordkeeping Fees - Each
Class shall bear directly the transfer agency fees and
expenses and other shareholder recordkeeping fees and
expenses specifically attributable to that Class; provided,
however, that where two or more Classes of a Portfolio pay
such fees and/or expenses at the same rate or in the same
amount, those Classes shall bear proportionately such fees
and expenses based on the relative net assets attributable to
each such Class.
c. Allocation of Other Expenses - Each Class shall bear
proportionately all other expenses incurred by a Fund based
on the relative net assets attributable to each such Class.
d. Allocation of Income, Gains and Losses - Except to the extent
provided in the following sentence, each Portfolio will
allocate income and realized and unrealized capital gains and
losses to a Class based on the relative net assets of each
Class. Notwithstanding the foregoing, each Portfolio that
declares dividends on a daily basis will allocate income on
the basis of settled shares.
e. Waiver and Reimbursement of Expenses - A Portfolio's adviser,
underwriter or any other provider of services to the
Portfolio may waive or reimburse the expenses of a particular
Class or Classes.
4. Distribution and Servicing Arrangements. The distribution and
servicing arrangements identified below will apply for the following
Classes offered by a Fund with respect to a Portfolio. The provisions
of the Fund's prospectus describing the distribution and servicing
arrangements in detail are incorporated herein by this reference.
2
<PAGE> 3
a. Class A Shares. Class A Shares shall be offered at net asset
value plus a front-end sales charge as approved from time to
time by the Directors and set forth in the Fund's prospectus,
may be reduced or eliminated for certain money market fund
shares, for larger purchases, under a combined purchase
privilege, under a right of accumulation, under a letter of
intent or for certain categories of purchasers as permitted
by Rule 22(d) of the Act and as set forth in the Fund's
prospectus. Class A Shares that are not subject to a
front-end sales charge as a result of the foregoing shall be
subject to a CDSC for the CDSC Period set forth in
Section 5(a) of this Plan if so provided in the Fund's
prospectus. The offering price of Shares subject to a
front-end sales charge shall be computed in accordance with
Rule 22c-1 and Section 22(d) of the Act and the rules and
regulations thereunder. Class A Shares shall be subject to
ongoing Service Fees and/or Distribution Fees approved from
time to time by the Directors and set forth in the Fund's
prospectus. Although AIM Cash Reserve Shares, AIM Limited
Maturity Treasury Shares, AIM Tax-Free Intermediate Shares
and shares of AIM Tax-Exempt Bond Fund of Connecticut and AIM
Tax Exempt Cash Fund are not designated as "Class A", they
are substantially similar to Class A Shares as defined herein
and shall be deemed to be Class A Shares for the purposes of
this Plan.
b. Class B Shares. Class B Shares shall be (i) offered at net
asset value, (ii) subject to a CDSC for the CDSC Period set
forth in Section 5(b), (iii) subject to ongoing Service Fees
and Distribution Fees approved from time to time by the
Directors and set forth in the Fund's prospectus, and (iv)
converted to Class A Shares eight years from the end of the
calendar month in which the shareholder's order to purchase
was accepted as set forth in the Fund's prospectus.
c. Class C Shares. Class C Shares shall be (i) offered at net
asset value, (ii) subject to a CDSC for the CDSC Period set
forth in Section 5(c), and (iii) subject to ongoing Service
Fees and Distribution Fees approved from time to time by the
Directors and set forth in the Fund's prospectus.
d. Institutional Shares. Institutional Shares shall be (i)
offered at net asset value, (ii) offered only to certain
categories of institutional customers as approved from time
to time by the Directors and as set forth in the Fund's
prospectus and (iii) may be subject to ongoing Service Fees
and/or Distribution Fees as approved from time to time by the
Directors and set forth in the Fund's prospectus.
5. CDSC. A CDSC shall be imposed upon redemptions of Class A Shares that
do not incur a front-end sales charge and of Class B Shares and Class
C Shares as follows:
a. Class A Shares. The CDSC Period for Class A Shares shall be
18 months. The CDSC Rate shall be as set forth in the Fund's
prospectus, the relevant portions of which are incorporated
herein by this reference. No CDSC shall be imposed on Class A
Shares unless so provided in a Fund's prospectus.
b. Class B Shares. The CDSC Period for the Class B Shares
shall be six years. The CDSC Rate for the Class B Shares
shall be as set forth in the Fund's prospectus, the relevant
portions of which are incorporated herein by this reference.
3
<PAGE> 4
c. Class C Shares. The CDSC Period for the Class C Shares shall
be one year. The CDSC Rate for the Class C Shares shall be as
set forth in the Fund's prospectus, the relevant portions of
which are incorporated herein by reference.
d. Method of Calculation. The CDSC shall be assessed on an
amount equal to the lesser of the then current market value
or the cost of the Shares being redeemed. No sales charge
shall be imposed on increases in the net asset value of the
Shares being redeemed above the initial purchase price. No
CDSC shall be assessed on Shares derived from reinvestment of
dividends or capital gains distributions. The order in which
Shares are to be redeemed when not all of such Shares would
be subject to a CDSC shall be determined by the Distributor
in accordance with the provisions of Rule 6c-10 under the
Act.
e. Waiver. The Distributor may in its discretion waive a CDSC
otherwise due upon the redemption of Shares and disclosed in
the Fund's prospectus or statement of additional information
and, for the Class A Shares, as allowed under Rule 6c-10
under the Act.
6. Exchange Privileges. Exchanges of Shares shall be permitted between
Funds as follows:
a. Class A Shares may be exchanged for Class A Shares of another
Portfolio, subject to certain limitations set forth in the
Fund's prospectus as it may be amended from time to time,
relevant portions of which are incorporated herein by this
reference.
b. Class B Shares may be exchanged for Class B Shares of another
Portfolio at their relative net asset value.
c. Class C Shares may be exchanged for Class C Shares of any
other Portfolio at their relative net asset value.
d. Depending upon the Portfolio from which and into which an
exchange is being made and when the shares were purchased,
shares being acquired in an exchange may be acquired at their
offering price, at their net asset value or by paying the
difference in sales charges, as disclosed in the Fund's
prospectus and statement of additional information.
e. CDSC Computation. The CDSC payable upon redemption of Class A
Shares, Class B Shares and Class C Shares subject to a CDSC
shall be computed in the manner described in the Fund's
prospectus.
7. Service and Distribution Fees. The Service Fee and Distribution Fee
applicable to any Class shall be those set forth in the Fund's
prospectus, relevant portions of which are incorporated herein by this
reference. All other terms and conditions with respect to Service Fees
and Distribution Fees shall be governed by the Plan of Distribution
adopted by the Fund with respect to such fees and Rule 12b-1 of the
Act.
4
<PAGE> 5
8. Conversion of Class B Shares.
a. Shares Received upon Reinvestment of Dividends and
Distributions - Shares purchased through the reinvestment of
dividends and distributions paid on Shares subject to
conversion shall be treated as if held in a separate
sub-account. Each time any Shares in a Shareholder's account
(other than Shares held in the sub-account) convert to
Class A Shares, a proportionate number of Shares held in the
sub-account shall also convert to Class A Shares.
b. Conversions on Basis of Relative Net Asset Value - All
conversions shall be effected on the basis of the relative
net asset values of the two Classes without the imposition of
any sales load or other charge.
c. Amendments to Plan of Distribution for Class A Shares - If
any amendment is proposed to the Plan of Distribution under
which Service Fees and Distribution Fees are paid with
respect to Class A Shares of a Fund that would increase
materially the amount to be borne by those Class A Shares,
then no Class B Shares shall convert into Class A Shares of
that Fund until the holders of Class B Shares of that Fund
have also approved the proposed amendment. If the holders of
such Class B Shares do not approve the proposed amendment,
the Directors of the Fund and the Distributor shall take such
action as is necessary to ensure that the Class voting
against the amendment shall convert into another Class
identical in all material respects to Class A Shares of the
Fund as constituted prior to the amendment.
9. This Plan shall not take effect until a majority of the Directors of a
Fund, including a majority of the Directors who are not interested
persons of the Fund, shall find that the Plan, as proposed and
including the expense allocations, is in the best interests of each
Class individually and the Fund as a whole.
10. This Plan may not be amended to materially change the provisions of
this Plan unless such amendment is approved in the manner specified in
Section 9 above.
5
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information for the Short-Term
Investments Trust Treasury Portfolio Cash Management Class for the annual
period ended August 31, 1997.
</LEGEND>
<CIK> 0000205007
<NAME> SHORT-TERM INVESTMENTS TRUST
<SERIES>
<NUMBER> 013
<NAME> TREASURY PORTFOLIO CASH MANAGEMENT CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 5275690884
<INVESTMENTS-AT-VALUE> 5275690884
<RECEIVABLES> 8635412
<ASSETS-OTHER> 202059
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5284528355
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 23739850
<TOTAL-LIABILITIES> 23739850
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5259983781
<SHARES-COMMON-STOCK> 5259983781
<SHARES-COMMON-PRIOR> 3703242819
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 804724
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 5260788505
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 244075766
<OTHER-INCOME> 0
<EXPENSES-NET> (7296033)
<NET-INVESTMENT-INCOME> 236779733
<REALIZED-GAINS-CURRENT> 215978
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 236995711
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (236779733)
<DISTRIBUTIONS-OF-GAINS> (59575)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 27695639051
<NUMBER-OF-SHARES-REDEEMED> (26190404179)
<SHARES-REINVESTED> 51506090
<NET-CHANGE-IN-ASSETS> 1556897365
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 648321
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2666379
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8957752
<AVERAGE-NET-ASSETS> 781320880
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.05)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.17
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information for the Short-Term
Investments Trust Treasury Portfolio Institutional Class for the annual
period ended August 31, 1997.
</LEGEND>
<CIK> 0000205007
<NAME> SHORT-TERM INVESTMENTS TRUST
<SERIES>
<NUMBER> 002
<NAME> TREASURY PORTFOLIO INSTITUTIONAL CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 5275690884
<INVESTMENTS-AT-VALUE> 5275690884
<RECEIVABLES> 8635412
<ASSETS-OTHER> 202059
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5284528355
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 23739850
<TOTAL-LIABILITIES> 23739850
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5259983781
<SHARES-COMMON-STOCK> 5259983781
<SHARES-COMMON-PRIOR> 3703242819
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 804724
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 5260788505
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 244075766
<OTHER-INCOME> 0
<EXPENSES-NET> (7296033)
<NET-INVESTMENT-INCOME> 236779733
<REALIZED-GAINS-CURRENT> 215978
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 236995711
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (236779733)
<DISTRIBUTIONS-OF-GAINS> (59575)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 27695639051
<NUMBER-OF-SHARES-REDEEMED> (26190404179)
<SHARES-REINVESTED> 51506090
<NET-CHANGE-IN-ASSETS> 1556897365
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 648321
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2666379
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8957752
<AVERAGE-NET-ASSETS> 2873371753
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.05)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.09
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information for the Short-Term
Investments Trust Treasury Portfolio Personal Investment Class for the annual
period ended August 31, 1997.
</LEGEND>
<CIK> 0000205007
<NAME> SHORT-TERM INVESTMENTS TRUST
<SERIES>
<NUMBER> 012
<NAME> TREASURY PORTFOLIO PERSONAL INVESTMENT CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 5275690884
<INVESTMENTS-AT-VALUE> 5275690884
<RECEIVABLES> 8635412
<ASSETS-OTHER> 202059
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5284528355
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 23739850
<TOTAL-LIABILITIES> 23739850
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5259983781
<SHARES-COMMON-STOCK> 5259983781
<SHARES-COMMON-PRIOR> 3703242819
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 804724
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 5260788505
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 244075766
<OTHER-INCOME> 0
<EXPENSES-NET> (7296033)
<NET-INVESTMENT-INCOME> 236779733
<REALIZED-GAINS-CURRENT> 215978
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 236995711
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (236779733)
<DISTRIBUTIONS-OF-GAINS> (59575)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 27695639051
<NUMBER-OF-SHARES-REDEEMED> (26190404179)
<SHARES-REINVESTED> 51506090
<NET-CHANGE-IN-ASSETS> 1556897365
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 648321
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2666379
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8957752
<AVERAGE-NET-ASSETS> 242057960
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.05)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<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
<LEGEND>
This schedule contains summary financial information for the Short-Term
Investments Trust Treasury Portfolio Private Investment Class for the annual
period ended August 31, 1997.
</LEGEND>
<CIK> 0000205007
<NAME> SHORT-TERM INVESTMENTS TRUST
<SERIES>
<NUMBER> 011
<NAME> TREASURY PORTFOLIO PRIVATE INVESTMENT CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 5275690884
<INVESTMENTS-AT-VALUE> 5275690884
<RECEIVABLES> 8635412
<ASSETS-OTHER> 202059
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5284528355
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 23739850
<TOTAL-LIABILITIES> 23739850
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5259983781
<SHARES-COMMON-STOCK> 5259983781
<SHARES-COMMON-PRIOR> 3703242819
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 804724
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 5260788505
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 244075766
<OTHER-INCOME> 0
<EXPENSES-NET> (7296033)
<NET-INVESTMENT-INCOME> 236779733
<REALIZED-GAINS-CURRENT> 215978
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 236995711
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (236779733)
<DISTRIBUTIONS-OF-GAINS> (59575)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 27695639051
<NUMBER-OF-SHARES-REDEEMED> (26190404179)
<SHARES-REINVESTED> 51506090
<NET-CHANGE-IN-ASSETS> 1556897365
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 648321
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2666379
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8957752
<AVERAGE-NET-ASSETS> 398566784
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.05)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.39
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information for the Short-Term
Investments Trust Treasury Portfolio Resource Class for the annual
period ended August 31, 1997.
</LEGEND>
<CIK> 0000205007
<NAME> SHORT-TERM INVESTMENTS TRUST
<SERIES>
<NUMBER> 015
<NAME> TREASURY PORTFOLIO RESOURCE CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 5275690884
<INVESTMENTS-AT-VALUE> 5275690884
<RECEIVABLES> 8635412
<ASSETS-OTHER> 202059
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5284528355
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 23739850
<TOTAL-LIABILITIES> 23739850
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5259983781
<SHARES-COMMON-STOCK> 5259983781
<SHARES-COMMON-PRIOR> 3703242819
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 804724
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 5260788505
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 244075766
<OTHER-INCOME> 0
<EXPENSES-NET> (7296033)
<NET-INVESTMENT-INCOME> 236779733
<REALIZED-GAINS-CURRENT> 215978
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 236995711
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (236779733)
<DISTRIBUTIONS-OF-GAINS> (59575)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 27695639051
<NUMBER-OF-SHARES-REDEEMED> (26190404179)
<SHARES-REINVESTED> 51506090
<NET-CHANGE-IN-ASSETS> 1556897365
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 648321
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2666379
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8957752
<AVERAGE-NET-ASSETS> 197440644
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.05)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information for the Short-Term
Investments Trust Treasury TaxAdvantage Portfolio Institutional Class for
the annual period ended August 31, 1997.
</LEGEND>
<CIK> 0000205007
<NAME> SHORT-TERM INVESMENTS TRUST
<SERIES>
<NUMBER> 007
<NAME> TREASURY TAXADVANTAGE PORTFOLIO INSTITUTIONAL CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 290127763
<INVESTMENTS-AT-VALUE> 290127763
<RECEIVABLES> 63821256
<ASSETS-OTHER> 28094
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 353977113
<PAYABLE-FOR-SECURITIES> 55017151
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1397182
<TOTAL-LIABILITIES> 56414333
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 297361476
<SHARES-COMMON-STOCK> 297361476
<SHARES-COMMON-PRIOR> 457072217
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 201304
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 297562780
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 20141650
<OTHER-INCOME> 0
<EXPENSES-NET> (899138)
<NET-INVESTMENT-INCOME> 19242512
<REALIZED-GAINS-CURRENT> 77371
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 19319883
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (19242512)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1524679522
<NUMBER-OF-SHARES-REDEEMED> (1685295086)
<SHARES-REINVESTED> 904823
<NET-CHANGE-IN-ASSETS> (159633370)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 123933
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 705397
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1151662
<AVERAGE-NET-ASSETS> 337228562
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.05)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.20
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information for the Short-Term
Investments Trust Treasury TaxAdvantage Portfolio Private Investment Class for
the annual period ended August 31, 1997.
</LEGEND>
<CIK> 0000205007
<NAME> SHORT-TERM INVESMENTS TRUST
<SERIES>
<NUMBER> 014
<NAME> TREASURY TAXADVANTAGE PORTFOLIO PRIVATE INVESTMENT CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 290127763
<INVESTMENTS-AT-VALUE> 290127763
<RECEIVABLES> 63821256
<ASSETS-OTHER> 28094
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 353977113
<PAYABLE-FOR-SECURITIES> 55017151
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1397182
<TOTAL-LIABILITIES> 56414333
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 297361476
<SHARES-COMMON-STOCK> 297361476
<SHARES-COMMON-PRIOR> 457072217
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 201304
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 297562780
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 20141650
<OTHER-INCOME> 0
<EXPENSES-NET> (899138)
<NET-INVESTMENT-INCOME> 19242512
<REALIZED-GAINS-CURRENT> 77371
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 19319883
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (19242512)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1524679522
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</TABLE>
