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As filed with the Securities and Exchange Commission on June 22, 1998
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. 31 X
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
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Amendment No. 32 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:
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Stephen I. Winer, Esquire Martha J. Hays, Esquire
A I M Advisors, Inc. Ballard Spahr Andrews & Ingersoll, LLP
11 Greenway Plaza, Suite 100 1735 Market Street, 51st Floor
Houston, Texas 77046-1173 Philadelphia, Pennsylvania 19103-7599
Approximate Date of Proposed Public Offering: As soon as practicable after the effective
date of this Amendment
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It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b)
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on (date) pursuant to paragraph (b)
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60 days after filing pursuant to paragraph (a)(1)
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on (date) pursuant to paragraph (a)(1)
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75 days after filing pursuant to paragraph (a)(2)
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X on September 1, 1998 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
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Title of Securities Being Registered: Shares of Beneficial Interest
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SHORT-TERM INVESTMENTS TRUST
Registration Statement on Form N-1A
CROSS REFERENCE SHEET
(as required by Rule 495)
Note: The Registrant currently offers three portfolios of investments, the
Treasury Portfolio, the Treasury TaxAdvantage Portfolio and the Government
Agency 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 - the Institutional Class and the Private Investment Class. 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. The Government Agency Portfolio is comprised of four
classes of shares - the Cash Management Class, the Institutional Class, the
Private Investment Class and the Resource Class. Each class of shares of the
Government Agency 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. GOVERNMENT AGENCY PORTFOLIO -CASH MANAGEMENT CLASS
Part A - Prospectus
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Item No. Prospectus Location
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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............... None
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
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II. GOVERNMENT AGENCY PORTFOLIO - INSTITUTIONAL CLASS
Part A - Prospectus
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Item No. Prospectus Location
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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............... None
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
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III. GOVERNMENT AGENCY PORTFOLIO - PRIVATE INVESTMENT CLASS
Part A - Prospectus
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Item No. Prospectus Location
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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............... None
6. Capital Stock and Other Securities........................ General Information; Dividends; Taxes
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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
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IV. GOVERNMENT AGENCY PORTFOLIO - RESOURCE CLASS
Part A - Prospectus
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Item No. Prospectus Location
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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............... None
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
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V. GOVERNMENT AGENCY PORTFOLIO - CASH MANAGEMENT CLASS, INSTITUTIONAL CLASS,
PRIVATE INVESTMENT CLASS, RESOURCE CLASS
Part B - Statement of Additional Information
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Statement of Additional
Item No. Information Location
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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
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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
22. Calculation of Performance Data........................... Performance Information
23. Financial Statements...................................... Not Applicable
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VI. 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.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there by any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to the registration or qualification under the securities
laws of any such state.
SUBJECT TO COMPLETION DATED JUNE 22, 1998
SHORT-TERM
INVESTMENTS TRUST
PROSPECTUS
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GOVERNMENT The Government Agency Portfolio is a money market
AGENCY fund whose investment objective is the maximization of
PORTFOLIO current income to the extent consistent with the
preservation of capital and the maintenance of
liquidity. The Government Agency Portfolio seeks to
achieve its objective by investing in direct
obligations of the U.S. Treasury and other securities
issued or guaranteed as to principal and interest by
the U.S. Government or by its agencies or
instrumentalities, as well as repurchase agreements
secured by such obligations. The instruments purchased
by the Government Agency Portfolio will have maturities
of 397 days or less.
CASH The Government Agency Portfolio is a series
MANAGEMENT portfolio of Short-Term Investments Trust (the
CLASS "Trust"), an open-end, diversified, series management
investment company. This Prospectus relates solely to
the Cash Management Class of the Government Agency
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
SEPTEMBER 1, 1998 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 GOVERNMENT
AGENCY PORTFOLIO AND SHOULD BE READ AND RETAINED FOR
FUTURE REFERENCE. A STATEMENT OF ADDITIONAL
INFORMATION, DATED SEPTEMBER 1, 1998, 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 GOVERNMENT
AGENCY 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
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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
Government Agency Portfolio (the "Portfolio"). The Portfolio is a money market
fund which invests in direct obligations of the U.S. Treasury and other
securities issued or guaranteed as to principal and interest by the U.S.
Government or by its agencies or instrumentalities, as well as 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, 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 the Treasury TaxAdvantage Portfolio and shares
of five classes of the Treasury 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
5:00 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 5:00 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 6:00 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. 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 Fund Services, Inc. ("Transfer Agent"), AIM's wholly owned
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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. 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 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, aimfunds.com, La
Familia AIM de Fondos and La Familia AIM de Fondos and Design are registered
service marks and Invest With Discipline and AIM BANK CONNECTION are service
marks of A I M Management Group Inc.
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TABLE OF FEES AND EXPENSES
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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***........................................ 0.00%
12b-1 fees (after fee waivers)***......................... 0.08%
Other expenses*** (estimated):
Custodian fees......................................... 0.01%
Other.................................................. 0.09%
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Total other expenses.............................. 0.10%
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Total portfolio operating expenses -- Cash Management
Class***............................................... 0.18%
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* 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.
** The expenses set forth in the table are based on estimated average net
assets of $200,000,000 during the Portfolios' current fiscal period.
*** If no fees were being waived or reimbursed, 12b-1 fees, Management fees,
Total other expenses and Total portfolio operating expenses would have been
0.10%, 0.10%, 0.11% and 0.31%, 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.
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1 year..................................................... $2
3 years.................................................... $5
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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 "Total portfolio
operating expenses -- Cash Management Class" figure is based upon cost and the
estimated size of the class and fees to be charged for the current fiscal
period. The other expenses and 12b-1 fees figure is based upon estimated costs
and the estimated size of the class and the Portfolio and estimate of fees to be
charged for the current fiscal year. Thus, actual expenses may be greater or
less than such estimates. The Table of Fees and Expenses reflects a voluntary
waiver of management fees and 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' overall
expense ratio and increasing its yield to investors.
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.
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SUITABILITY FOR INVESTORS
The shares of the Class are intended for use primarily by institutional
customers of banks, certain broker-dealers and other financial institutions who
seek a convenient vehicle in which to invest in an open-end diversified money
market fund. It is expected that the shares of the Class may be particularly
suitable investments for corporate cash managers, municipalities or other public
entities. The minimum initial investment is $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 other securities issued
or guaranteed as to principal and interest by the U.S. Government or by its
agencies or instrumentalities, as well as 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 in direct obligations of the U.S. Treasury, which
include Treasury bills, notes and bonds, and repurchase agreements relating to
such securities. In addition, the Portfolio invests in securities issued or
guaranteed as to principal and interest by the U.S. Government or by its
agencies or instrumentalities and repurchase agreements relating to such
securities. Such obligations are collectively referred to as "Money Market
Obligations." 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.
Money Market Obligations
GOVERNMENT OBLIGATIONS. The Portfolio may invest in securities issued or
guaranteed as to principal and interest by the U.S. Government or by its
agencies or instrumentalities. Such obligations may be supported (a) by the full
faith and credit of the U.S. Treasury (as in the case of Government National
Mortgage Association Certificates), (b) by the right of the issuer to borrow
from the U.S. Treasury (as in the case of obligations of the Federal Home Loan
Bank), (c) by discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality (as in the case of the Federal
National Mortgage Association), or (d) only by the credit of the agency or
instrumentality itself (as in the case of obligations of the Federal Farm Credit
Bank). No assurance can be given that the U.S. Government will provide financial
support to such U.S. Government sponsored agencies or instrumentalities in the
future and it is not obligated by law to renew, grant or extend future financial
support.
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.
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
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(c) expenses of enforcing its rights. Repurchase agreements are considered to be
loans under the Investment Company Act of 1940, as amended (the "1940 Act").
Investment Practices
BORROWING MONEY. The Portfolio may borrow money with respect to its portfolio
securities in amounts up to 10% of the value of its total assets at the time of
borrowing. The Portfolio will borrow money 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.
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 Portfolio is permitted to invest
in other investment companies to the extent permitted by the 1940 Act, the 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 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 the securities of any issuer if, as a result, the
Portfolio would fail to be a diversified company within the meaning of the
1940 Act, the rules and regulations promulgated thereunder, as such
statute, rules and regulations are amended from time to time; provided,
however, that the Portfolio may purchase securities of other investment
companies to the extent permitted by the 1940 Act and the rules and
regulations promulgated thereunder (as such statute, rules and regulations
are amended from time to time) or to the extent permitted by exemptive
order or other similar relief; or
(2) concentrate 25% or more of its total assets in the securities of
issuers in a particular industry; provided, however, that securities issued
or guaranteed by banks or subject to financial guaranty insurance are not
subject to this limitation; and provided further, that securities issued or
guaranteed by the U.S. Government, its agencies and instrumentalities
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and tax-exempt securities issued by state and local governments and their
political subdivisions, are not included within this restriction.
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 5:00 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.
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 P.O. Box 4497, Houston, Texas 77210-4497. 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.
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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 (a) 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 (b) 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
5:00 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 Government Agency 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.
Any request for correction to a transaction of Portfolio shares must be
submitted in writing to the Transfer Agent. The Transfer Agent reserves the
right to reject any such request. When a correction results in a dividend
adjustment, the institution must agree in writing to reimburse the Portfolio for
any loss resulting from the correction. Failure to deliver purchase proceeds on
the requested settlement date may result in a claim against the institution for
an amount equal to the overdraft charge incurred by the Portfolio.
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 5:00 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 5:00
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 5:00 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
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<PAGE> 14
(maintained for six months), and mailings of confirmations promptly after the
transaction. If a shareholder is unable to reach the Transfer Agent by
telephone, he may also request redemptions by telegraph or use overnight courier
services to expedite redemptions by mail, which will be effective on the
Business Day received by the Transfer Agent as long as such request is received
prior to 5:00 p.m. Eastern time.
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.
Any request for correction to a redemption transaction of Portfolio shares
must be submitted in writing to the Transfer Agent as described above in
"Purchase of Shares."
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
5:00 p.m. Eastern time on the day of declaration. Net income for dividend
purposes is determined daily as of 5:00 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 5:00 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 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 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
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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 portfolios 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 5:00
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)
877-7745. 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.
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 6:00 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 will furnish 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 will be 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.
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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.
For a discussion of AIM Management and its subsidiaries' Year 2000 Compliance
Project, see "General Information -- Year 2000 Compliance Project."
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, as amended, (the "Advisory
Agreement"). AIM was organized in 1976 and, together with its subsidiaries,
manages or advises over 90 investment company portfolios encompassing a broad
range of investment objectives. 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. For such services, AIM is entitled to receive a fee from the
Portfolio calculated at the maximum annual rate of 0.10% on all net assets.
ADMINISTRATIVE SERVICES
The Trust has entered into a Master Administrative Services Agreement dated as
of February 28, 1997, as amended, 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.
EXPENSES
In addition to fees paid to AIM pursuant to the Advisory Agreement and the
expenses reimbursed to AIM under the Administrative Services Agreement, the
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 state-
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ments 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.
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.
DISTRIBUTOR
The Trust has entered into a Master Distribution Agreement dated as of
February 28, 1997, as amended, (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.
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
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. 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.
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.
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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
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. In the event the Portfolio purchases securities traded
over-the-counter, the Portfolio deals directly with dealers who make markets in
the securities involved, except when better prices are available elsewhere.
Portfolio transactions placed through dealers who are primary market makers are
effected at net prices without commissions, but which include compensation in
the form of a mark up or mark down. 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. Shares of beneficial interest of the Trust are divided
into eleven classes. Four classes, including the Class, represent interests in
the Portfolio, five classes represent interest in the Treasury 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.
13
<PAGE> 19
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 Fund Services, Inc. P.O. Box 4497, Houston, Texas 77210-4497, acts as
transfer agent for the shares of the Class.
LEGAL COUNSEL
The law firm of Ballard Spahr Andrews & Ingersoll, LLP, 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.
YEAR 2000 COMPLIANCE PROJECT
In providing services to the AIM Funds, AIM Management and its subsidiaries
rely on both internal software systems as well as external software systems
provided by third parties. Many software systems in use today are unable to
distinguish between the year 2000 and the year 1900. This defect if not cured
will likely adversely affect the services that AIM Management, its subsidiaries
and other service providers provide the AIM Funds and their shareholders.
To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm Year 2000 compliance
upon installation.
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.
14
<PAGE> 20
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<PAGE> 21
<TABLE>
<S> <C> <C>
==================================== =======================================
SHORT-TERM INVESTMENTS TRUST PROSPECTUS
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173 September 1, 1998
(800) 877-7745
SHORT-TERM
INVESTMENT ADVISOR INVESTMENTS TRUST
A I M ADVISORS, INC.
11 Greenway Plaza, Suite 100 ---------------------
Houston, Texas 77046-1173
(713) 626-1919 GOVERNMENT AGENCY PORTFOLIO
DISTRIBUTOR ---------------------
FUND MANAGEMENT COMPANY
11 Greenway Plaza, Suite 100 CASH MANAGEMENT CLASS
Houston, Texas 77046-1173
(800) 877-7745
TABLE OF CONTENTS
AUDITORS
KPMG PEAT MARWICK LLP
</TABLE>
<TABLE>
700 Louisiana <CAPTION>
Houston, Texas 77002 PAGE
<S> <C>
CUSTODIAN Summary...................... 2
THE BANK OF NEW YORK Table of Fees and Expenses... 4
90 Washington Street, Suitability for Investors.... 5
11th Floor Investment Program........... 5
New York, New York 10286 Purchase of Shares........... 7
Dividends.................... 9
TRANSFER AGENT Taxes........................ 9
A I M FUND SERVICES, INC. Net Asset Value.............. 10
P.O. Box 4497 Yield Information............ 10
Houston, Texas 77210-4497 Management of the Trust...... 11
General Information.......... 13
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
LAWFULLY BE MADE.
==================================== =======================================
</TABLE>
<PAGE> 22
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
SUBJECT TO COMPLETION DATED JUNE 22, 1998
SHORT-TERM
INVESTMENTS TRUST
Prospectus
- --------------------------------------------------------------------------------
GOVERNMENT The Government Agency Portfolio is a money market
AGENCY fund whose investment objective is the maximization of
PORTFOLIO current income to the extent consistent with the
preservation of capital and the maintenance of
liquidity. The Government Agency Portfolio seeks to
achieve its objective by investing in direct
obligations of the U.S. Treasury and other securities
issued or guaranteed as to principal and interest by
the U.S. Government or by its agencies or
instrumentalities, as well as repurchase agreements
secured by such obligations. The instruments purchased
INSTITUTIONAL by the Government Agency Portfolio will have maturities
CLASS of 397 days or less.
The Government Agency Portfolio is a series
SEPTEMBER 1, 1998 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 Government Agency
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 GOVERNMENT
AGENCY PORTFOLIO AND SHOULD BE READ AND RETAINED FOR
FUTURE REFERENCE. A STATEMENT OF ADDITIONAL
INFORMATION, DATED SEPTEMBER 1, 1998, 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 GOVERNMENT
AGENCY 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> 23
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
Government Agency Portfolio (the "Portfolio"). The Portfolio is a money market
fund which invests in direct obligations of the U.S. Treasury and other
securities issued or guaranteed as to principal and interest by the U.S.
Government or by its agencies or instrumentalities, as well as 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: 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 the Treasury TaxAdvantage Portfolio and shares
of five classes of the Treasury 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."
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
5:00 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 5:00 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 6:00 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. 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
2
<PAGE> 24
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 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. 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 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, aimfunds.com, La
Familia AIM de Fondos and La Familia AIM de Fondos and Design are registered
service marks and Invest With Discipline and AIM Bank Connection are service
marks of A I M Management Group Inc.
3
<PAGE> 25
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***...................................... 0.00%
12b-1 fees................................................ None
Other expenses*** (estimated):
Custodian fees......................................... 0.01%
Other.................................................. 0.09%
------
Total other expenses................................. 0.10%
-------------
Total portfolio operating expenses -- Institutional
Class***............................................... 0.10%
=============
</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.
** The expenses set forth in the table are based on estimated average net
assets of $200,000,000 during the Portfolio's current fiscal period.
*** If no fees were being waived or reimbursed, Management fees would be 0.10%,
Total other expenses would be 0.11 and Total portfolio operating expenses
would be 0.21%.
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
</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 "Total portfolio
operating expenses -- Institutional Class" figure is based upon costs and the
estimated size of the Class and fees to be charged for the current fiscal
period. The Other expenses 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. The Table of Fees and Expenses reflects a voluntary waiver of
management 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' overall expense ratio and increasing its yield
to investors.
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> 26
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. The Class is 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 6:00 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 other securities issued
or guaranteed as to principal and interest by the U.S. Government or by its
agencies or instrumentalities, as well as 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 in direct obligations of the U.S. Treasury, which
include Treasury bills, notes and bonds, and repurchase agreements relating to
such securities. In addition, the Portfolio invests in securities issued or
guaranteed as to principal and interest by the U.S. Government or by its
agencies or instrumentalities, and repurchase agreements relating to such
securities. Such obligations are collectively referred to as "Money Market
Obligations". 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.
Money Market Obligations
GOVERNMENT OBLIGATIONS. The Portfolio may invest in securities issued or
guaranteed as to principal and interest by the U.S. Government or by its
agencies or instrumentalities. Such obligations may by supported (a) by the full
faith and credit of the U.S. Treasury (as in the case of Government National
Mortgage Association Certificates), (b) by the right of the issuer to borrow
from the U.S. Treasury (as in the case of obligations of the Federal Home Loan
Bank), (c) by discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality (as in the case of the Federal
National Mortgage Association), or (d) only by the credit of the agency or
instrumentality itself (as in the case of obligations of the Federal Farm Credit
Bank). No assurance can be given that the U.S. Government will provide financial
support to such U.S. Government sponsored agencies or instrumentalities in the
future and it is not obligated by law to renew, grant or extend future financial
support.
5
<PAGE> 27
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.
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 Investment Company Act of 1940, as amended (the "1940 Act").
Investment Practices
BORROWING MONEY. The Portfolio may borrow money with respect to its portfolio
securities in amounts up to 10% of the value of its total assets at the time of
borrowing. The Portfolio will borrow money 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.
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 Portfolio is permitted to invest
in other investment companies to the extent permitted by the 1940 Act, the 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 regulatory
limitations. These restrictions are designed to minimize certain risks
associated with investing in
6
<PAGE> 28
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 the securities of any issuer if, as a result, the
Portfolio would fail to be a diversified company within the meaning of the
1940 Act, the rules and regulations promulgated thereunder, as such
statute, rules and regulations are amended from time to time; provided,
however, that the Portfolio may purchase securities of other investment
companies to the extent permitted by the 1940 Act and the rules and
regulations promulgated thereunder (as such statute, rules and regulations
are amended from time to time) or to the extent permitted by exemptive
order or other similar relief; or
(2) concentrate 25% or more of its total assets in the securities of
issuers in a particular industry; provided, however, that securities issued
or guaranteed by banks or subject to financial guaranty insurance are not
subject to this limitation; and provided further, that securities issued or
guaranteed by the U.S. Government, its agencies and instrumentalities and
tax-exempt securities issued by state and local governments and their
political subdivisions, are not included within this restriction.
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 5:00 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.
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 (a) 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 (b) 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
5:00 p.m. Eastern time will earn the dividend declared on the date of purchase.
Payments for shares of the Class purchased must be in the form of federal
funds or other funds immediately available to the Portfolio. Federal Reserve
wires should be sent as early as possible in order to facilitate crediting to
the shareholder's account. Any funds received with respect to an order which is
not accepted by the 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 (a) for its own account, for the account of other
institutions and for
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accounts for which the institution acts as a fiduciary, and (b) 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, P.O. Box 4497, Houston, Texas
77210-4497. 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.
Any request for correction to a transaction of Portfolio shares must be
submitted in writing to the Transfer Agent. The Transfer Agent reserves the
right to reject any such request. When a correction results in a dividend
adjustment, the institution must agree in writing to reimburse the Portfolio for
any loss resulting from the correction. Failure to deliver purchase proceeds on
the requested settlement date may result in a claim against the institution for
an amount equal to the overdraft charge incurred by the Portfolio.
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 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 5:00 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 5:00
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 5:00 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. If a shareholder is unable to reach the Transfer Agent by
telephone, he may also request redemptions by telegraph or use overnight courier
services to expedite redemptions by mail, which will be effective on the
Business Day received by the Transfer Agent as long as such request is received
prior to 5:00 p.m. Eastern time.
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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Any request for correction to a redemption transaction of Portfolio shares
must be submitted in writing to the Transfer Agent as described above in
"Purchase of Shares."
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
5:00 p.m. Eastern time on the day of declaration. Net income for dividend
purposes is determined daily as of 5:00 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
5:00 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, 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 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.
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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 5:00
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.
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 6:00 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 will furnish 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 will be 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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For a discussion of AIM Management and its subsidiaries' Year 2000 Compliance
Project, see "General Information -- Year 2000 Compliance Project."
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, as amended, (the "Advisory
Agreement"). AIM, organized in 1976, together with its subsidiaries, manages or
advises over 90 investment company portfolios encompassing a broad range of
investment objectives. 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. For such services, AIM is entitled to receive a maximum fee from the
Portfolio calculated at the annual rate of 0.10% on all net assets.
ADMINISTRATIVE SERVICES
The Trust has entered into a Master Administrative Services Agreement dated as
of February 28, 1997, as amended, 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.
EXPENSES
In addition to fees paid to AIM pursuant to the Advisory Agreement and the
expenses reimbursed to AIM under the Administrative Services Agreement, the
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.
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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.
DISTRIBUTOR
The Trust has entered into a Master Distribution Agreement dated as of
February 28, 1997, as amended, (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.
PORTFOLIO TRANSACTIONS
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. In the event the Portfolio purchases securities
traded over-the-counter, the Portfolio deals directly with dealers who make
markets in the securities involved, except when better prices are available
elsewhere. Portfolio transactions placed through dealers who are primary market
makers are effected at net prices without commissions, but which include
compensation in the form of a mark up or mark down. 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. Shares of beneficial interest of the Trust are divided
into eleven classes of which four, including the Class, represent interests in
the Portfolio, five classes represent interests in the Treasury Portfolio and
two classes represent interest 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.
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<PAGE> 34
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 Fund Services, Inc., P.O. Box 4497, Houston, Texas 77210-4497, acts as
transfer agent for the shares of the Class.
LEGAL COUNSEL
The law firm of Ballard Spahr Andrews & Ingersoll, LLP, 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.
YEAR 2000 COMPLIANCE PROJECT
In providing services to the AIM Funds, AIM Management and its subsidiaries
rely on both internal software systems as well as external software systems
provided by third parties. Many software systems in use today are unable to
distinguish between the year 2000 and the year 1900. This defect if not cured
will likely adversely affect the services that AIM Management, its subsidiaries
and other service providers provide the AIM Funds and their shareholders.
To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are under-taking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm Year 2000 compliance
upon installation.
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 September 1, 1998
Houston, Texas 77046-1173 SHORT-TERM
(800) 659-1005 INVESTMENTS TRUST
---------------------
INVESTMENT ADVISOR
A I M ADVISORS, INC. GOVERNMENT AGENCY PORTFOLIO
11 Greenway Plaza, Suite 100 ---------------------
Houston, Texas 77046-1173
(713) 626-1919 INSTITUTIONAL CLASS
TABLE OF CONTENTS
DISTRIBUTOR
FUND MANAGEMENT COMPANY
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173 PAGE
(800) 659-1005 Summary........................ 2
Table of Fees and Expenses..... 4
AUDITORS Suitability For Investors...... 5
KPMG PEAT MARWICK LLP Investment Program............. 5
700 Louisiana Purchase of Shares............. 7
Houston, Texas 77002 Redemption of Shares........... 8
Dividends...................... 9
CUSTODIAN Taxes.......................... 9
THE BANK OF NEW YORK Net Asset Value................ 10
90 Washington Street Yield Information.............. 10
11th Floor Reports to Shareholders........ 10
New York, New York 10286 Management of the Trust........ 10
General Information............ 12
TRANSFER AGENT Appendix....................... A-1
A I M FUND SERVICES, INC.
P.O. Box 4497
Houston, Texas 77210-4497
==================================== ========================================
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> 37
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities law of
any such State.
SUBJECT TO COMPLETION DATED JUNE 22, 1998
SHORT-TERM
INVESTMENTS TRUST
PROSPECTUS
- --------------------------------------------------------------------------------
GOVERNMENT
AGENCY
PORTFOLIO
The Government Agency 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 Government Agency Portfolio seeks to achieve its
objective by investing in direct obligations of the U.S.
Treasury and other securities issued or guaranteed as to
principal and interest by the U.S. Government or by its
agencies or instrumentalities, as well as repurchase
agreements secured by such obligations. The instruments
purchased by the Government Agency Portfolio will have
maturities of 397 days or less.
PRIVATE
INVESTMENT
CLASS
The Government Agency 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 Government Agency 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.
SEPTEMBER 1, 1998
THIS PROSPECTUS SETS FORTH BASIC INFORMATION THAT A
PROSPECTIVE INVESTOR SHOULD KNOW BEFORE INVESTING IN
SHARES OF THE PRIVATE INVESTMENT CLASS OF THE GOVERNMENT
AGENCY PORTFOLIO AND SHOULD BE READ AND RETAINED FOR
FUTURE REFERENCE. A STATEMENT OF ADDITIONAL INFORMATION,
DATED SEPTEMBER 1, 1998, 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 GOVERNMENT
AGENCY 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) 877-7748
<PAGE> 38
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
Government Agency Portfolio (the "Portfolio"). The Portfolio is a money market
fund which invests in direct obligations of the U.S. Treasury and other
securities issued or guaranteed as to principal and interest by the U.S.
Government or by its agencies or instrumentalities, as well as 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, 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 the Treasury TaxAdvantage Portfolio and
shares of five classes of the Treasury 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
5:00 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 5:00 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 6:00 p.m. Eastern time on that day.
See "Dividends."
2
<PAGE> 39
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. 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 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. 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 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, aimfunds.com, La
Familia AIM de Fondos and La Familia AIM de Fondos and Design are registered
service marks and Invest With Discipline and AIM Bank Connection are service
marks of A I M Management Group Inc.
3
<PAGE> 40
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*** ...................................... 0.00%
12b-1 fees (after fee waivers)***......................... 0.30%****
Other expenses*** (estimated):
Custodian fees ........................................... 0.01%
Other.................................................. 0.09%
--------
Total other expenses.............................. 0.10%
--------
Total portfolio operating expenses -- Private Investment
Class***............................................... 0.40%
========
</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.
** The expenses set forth in the table are based on estimated average net
assets of $200,000,000 during the Portfolios' current fiscal period.
*** If no fees were being waived or reimbursed, Management fees would be 0.10%,
12b-1 fees would be 0.50%, Total other expenses would be 0.11% and Total
portfolio operating expenses would be 0.71%.
**** 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
</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 "Total portfolio
operating expenses -- Private Investment Class" figure is based upon costs and
the estimated size of the Class and fees to be charged for the due current
fiscal period. The Table of
4
<PAGE> 41
Fees and Expenses reflects a voluntary waiver of management fees and 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. The other expenses and 12b-1 fees
figure is based upon estimated costs and the estimated size of the Class and the
Portfolio and estimated fees to be charged for the current fiscal year. Thus,
actual expenses may be greater or less than such estimates. To the extent any
service providers assume expenses of the Class, such assumption of expenses will
have the effect of lowering the Class' overall expense ratio and increasing its
yield to investors.
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.
5
<PAGE> 42
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 other securities issued
or guaranteed as to principal and interest by the U.S. Government or by its
agencies or instrumentalities, as well as 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 in direct obligations of the U.S. Treasury, which
include Treasury bills, notes and bonds, and repurchase agreements relating to
such securities. In addition, the Portfolio invests in securities issued or
guaranteed as to principal and interest by the U.S. Government or by its
agencies or instrumentalities, and repurchase agreements relating to such
securities. Such obligations are collectively referred to as "Money Market
Obligations". 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.
Money Market Obligation
GOVERNMENT OBLIGATIONS. The Portfolio may invest in securities issued or
guaranteed as to principal and interest by the U.S. Government or by its
agencies or instrumentalities. Such obligations may be supported (a) by the full
faith and credit of the U.S. Treasury (as in the case of Government National
Mortgage Association Certificates), (b) by the right of the issuer to borrow
from the U.S. Treasury (as in the case of obligations of the Federal Home Loan
Bank), (c) by discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality (as in the case of the Federal
National Mortgage Association), or (d) only by the credit of the agency or
instrumentality itself (as in the case of obligations of the Federal Farm Credit
Bank). No assurance can be given that the U.S. Government will provide financial
support to such U.S. Government sponsored agencies or instrumentalities in the
future and it is not obligated by law to renew, grant or extend future financial
support.
6
<PAGE> 43
REPURCHASE AGREEMENTS. The Portfolio intends to invest in repurchase
agreements with banks and broker-dealers pertaining to the securities described
above and which at the date of purchase are "First Tier" securities as defined
in Rule 2a-7 under the Investment Company Act of 1940, as amended (the "1940
Act"), as such Rule may be amended from time to time. 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 by the Portfolio under the 1940
Act.
Investment Practices
BORROWING MONEY. The Portfolio may borrow money with respect to its
portfolio securities in amounts up to 10% of the value of its total assets at
the time of borrowing. The Portfolio will borrow money 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.
PORTFOLIO TRANSACTIONS. The Portfolio does not seek profits through
short-term trading and will generally hold portfolio securities to maturity, but
AIM may seek to enhance the yield of the Portfolio by taking advantage of yield
disparities or other factors that occur in the money markets. For example,
market conditions frequently result in similar securities trading at different
prices. AIM may dispose of any portfolio security prior to its maturity if such
disposition and reinvestment of proceeds are expected to enhance yield
consistent with AIM's judgment as to desirable portfolio maturity structure or
if such disposition is believed to be advisable due to other circumstances or
conditions. Securities held by the Portfolio will be disposed of prior to
maturity if an earlier disposition is deemed desirable by AIM to meet redemption
requests. In addition, AIM will continually monitor the creditworthiness of
issuers whose securities are held by the Portfolio, and securities held by the
Portfolio may be disposed of prior to maturity as a result of a revised credit
evaluation of the issuer or other circumstances or considerations. The
Portfolio's policy of investing in securities with maturities of 397 days or
less will result in high portfolio turnover. Since brokerage commissions are not
normally paid on investments of the type made by the Portfolio, the high
turnover rate should not adversely affect the Portfolio's net income.
PURCHASING DELAYED DELIVERY SECURITIES. In managing the Portfolio's
investments, AIM may indicate to dealers or issuers its interest in acquiring
certain securities for the Portfolio for settlement beyond a customary
settlement date. In some cases, the Portfolio may agree to purchase such
securities at stated prices and yields. In such cases, such securities are
considered "delayed delivery" securities when traded in the secondary market.
Since this is done to facilitate the acquisition of portfolio securities and is
not for the purpose of investment leverage, the amount of delayed delivery
securities involved may not exceed the estimated amount of funds available for
investment on the settlement date. Until the settlement date, 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.
7
<PAGE> 44
ILLIQUID SECURITIES. The Portfolio will invest no more than 10% of its net
assets in illiquid securities.
INVESTMENT IN OTHER INVESTMENT COMPANIES. The Portfolio is permitted to
invest in other investment companies to the extent permitted by the 1940 Act,
the 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 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 the securities of any issuer if, as a result, the
Portfolio would fail to be a diversified company within the meaning of the
1940 Act, the rules and regulations promulgated thereunder, as such
statute, rules and regulations are amended from time to time; provided,
however, that the Portfolio may purchase securities of other investment
companies to the extent permitted by the 1940 Act and the rules and
regulations promulgated thereunder (as such statute, rules and regulations
are amended from time to time) or to the extent permitted by exemptive
order or other similar relief; or
(2) concentrate 25% or more of its total assets in the securities of
issuers in a particular industry; provided, however, that securities issued
or guaranteed by banks or subject to financial guaranty insurance are not
subject to this limitation; and provided further, that securities issued or
guaranteed by the U.S. Government, its agencies and instrumentalities and
tax-exempt securities issued by state and local governments and their
political subdivisions, are not included within this restriction.
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,
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 5:00 p.m. Eastern time on a business day of the Portfolio. Purchase
orders received after such
8
<PAGE> 45
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 P.O. Box 4497, Houston, Texas 77210-4497. 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
9
<PAGE> 46
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 (a) 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 (b) 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
5:00 p.m. Eastern time will earn the dividend declared on the date of purchase.
Any request for correction to a transaction of Portfolio shares must be
submitted in writing to the Transfer Agent. The Transfer Agent reserves the
right to reject any such request. When a correction results in a dividend
adjustment, the institution must agree in writing to reimburse the Portfolio for
any loss resulting from the correction. Failure to deliver purchase proceeds on
the requested settlement date may result in a claim against the institution for
an amount equal to the overdraft charge incurred by 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 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 Government Agency 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 5:00 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
5:00 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 5:00 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.
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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. If a shareholder is unable to reach the Transfer Agent by
telephone, he may also request redemptions by telegraph or use overnight courier
services to expedite redemptions by mail, which will be effective on the
Business Day received by the Transfer Agent as long as such request is received
prior to 5:00 p.m. Eastern time.
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.
Any request for correction to a redemption transaction of Portfolio shares
must be submitted in writing to the Transfer Agent as described above in
"Purchase of Shares."
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
5:00 p.m. Eastern time on the day of declaration. Net income for dividend
purposes is determined daily as of 5:00 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 of the Class at the net
asset value as of 5:00 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 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 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.
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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 gains against the
losses of the other portfolios 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.
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 paid to any shareholder (a) who has provided either an incorrect tax
identification number or no number at all, (b) who is subject to backup
withholding by the Internal Revenue Service for failure to report the receipt of
interest or dividend income properly, or (c) 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."
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
5:00 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.
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 6:00 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 will furnish 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 will be 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.
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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.
For a discussion of AIM Management and its subsidiaries' Year 2000
Compliance Project, see "General Information -- Year 2000 Compliance Project."
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, as amended,
(the "Advisory Agreement"). AIM was organized in 1976 and, together with its
subsidiaries, manages or advises over 90 investment company portfolios
encompassing a broad range of investment objectives. 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. For such services, AIM is entitled to receive a fee from the
Portfolio calculated at the maximum annual rate of 0.10% on all net assets.
ADMINISTRATIVE SERVICES
The Trust has entered into a Master Administrative Services Agreement
effective February 28, 1997, as amended, 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.
EXPENSES
In addition to fees paid to AIM pursuant to the Advisory Agreement and the
expenses reimbursed to AIM under the Administrative Services Agreement, the
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
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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.
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.
DISTRIBUTOR
The Trust has entered into a Master Distribution Agreement dated as of
February 28, 1997, as amended, (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 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.
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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 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
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. In the event the Portfolio purchases securities
traded over-the-counter, the Portfolio deals directly with dealers who make
markets in the securities involved, except when better prices are available
elsewhere. Portfolio transactions placed through dealers who are primary market
makers are effected at net prices without commissions, but which include
compensation in the form of a mark up or mark down. The Portfolio may also
purchase securities from underwriters at prices which include a concession paid
by the issuer to the underwriter.
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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. Shares of beneficial interest of the
Trust are divided into eleven classes. Four classes, including the Class,
represent interests in the Portfolio, five classes represent interests in the
Treasury 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.
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 Fund Services, Inc., P.O. Box 4497, Houston, Texas 77210-4497, acts as
transfer agent for the shares of the Class.
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LEGAL COUNSEL
The law firm of Ballard Spahr Andrews & Ingersoll, LLP, 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.
YEAR 2000 COMPLIANCE PROJECT
In providing services to the AIM Funds, AIM Management and its subsidiaries
rely on both internal software systems as well as external software systems
provided by third parties. Many software systems in use today are unable to
distinguish between the year 2000 and the year 1900. This defect if not cured
will likely adversely affect the services that AIM Management, its subsidiaries
and other service providers provide the AIM Funds and their shareholders.
To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm Year 2000 compliance
upon installation.
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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SHORT-TERM INVESTMENTS TRUST
11 Greenway Plaza, Suite 100 PROSPECTUS
Houston, Texas 77046-1173
(800) 877-7748 September 1, 1998
INVESTMENT ADVISOR SHORT-TERM
A I M ADVISORS, INC. INVESTMENTS TRUST
11 Greenway Plaza, Suite 100 ---------------------
Houston, Texas 77046-1173 GOVERNMENT AGENCY
(713) 626-1919 PORTFOLIO
---------------------
DISTRIBUTOR PRIVATE
FUND MANAGEMENT COMPANY INVESTMENT CLASS
11 Greenway Plaza, Suite 100 TABLE OF CONTENTS
Houston, Texas 77046-1173
(800) 877-7748
PAGE
AUDITORS Summary...................... 2
KPMG PEAT MARWICK LLP Table of Fees and Expenses... 4
700 Louisiana Suitability for Investors.... 6
Houston, Texas 77002 Investment Program........... 6
Purchase of Shares........... 8
CUSTODIAN Redemption of Shares......... 10
THE BANK OF NEW YORK Dividends.................... 11
90 Washington Street Taxes........................ 12
11th Floor Net Asset Value.............. 13
New York, New York 10286 Yield Information............ 13
Reports to Shareholders...... 13
TRANSFER AGENT Management of the Trust...... 14
A I M FUND SERVICES, INC. General Information.......... 17
P.O. Box 4497
Houston, Texas 77210-4497
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 LAWFULLY
BE MADE.
=================================== =================================
</TABLE>
<PAGE> 57
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
SUBJECT TO COMPLETION DATED JUNE 22, 1998
SHORT-TERM
INVESTMENTS TRUST
Prospectus
- --------------------------------------------------------------------------------
GOVERNMENT The Government Agency Portfolio is a money market
AGENCY fund whose investment objective is the maximization of
PORTFOLIO current income to the extent consistent with the
preservation of capital and the maintenance of
liquidity. The Government Agency Portfolio seeks to
achieve its objective by investing in direct
obligations of the U.S. Treasury and other securities
issued or guaranteed as to principal and interest by
the U.S. Government or by its agencies or
instrumentalities, as well as repurchase agreements
RESOURCE secured by such obligations. The instruments purchased
CLASS by the Government Agency Portfolio will have maturities
of 397 days or less.
The Government Agency Portfolio is a series
SEPTEMBER 1, 1998 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 GOVERNMENT AGENCY
PORTFOLIO AND SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE. A STATEMENT OF ADDITIONAL INFORMATION, DATED
SEPTEMBER 1, 1998, 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 GOVERNMENT
AGENCY 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> 58
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 Government
Agency Portfolio (the "Portfolio"). The Portfolio is a money market fund which
invests in direct obligations of the U.S. Treasury and other securities issued
or guaranteed as to principal and interest by the U.S. Government or by its
agencies or instrumentalities, as well as 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, 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 the Treasury TaxAdvantage Portfolio and
shares of five classes of the Treasury 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 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
5:00 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 5:00 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 6:00 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. 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
2
<PAGE> 59
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 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. 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 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, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
3
<PAGE> 60
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***........................................ 0.00%
12b-1 fees (after fee waivers)***......................... 0.16%
Other expenses*** (estimated):
Custodian fees......................................... 0.01%
Other.................................................. 0.09%
-------
Total other expenses.............................. 0.10%
-------
Total portfolio operating expenses -- Resource Class***... 0.26%
=======
</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.
** The expenses set forth in the table are based on estimated average net
assets of $200,000,000 during the Portfolios' current fiscal period.
*** If no fees were being waived or reimbursed, Management fees would be 0.10%,
12b-1 fees would be 0.20%, Total other expenses would be 0.11% and Total
portfolio operating expenses would be 0.41%.
EXAMPLE
An investor in the Class would pay the following expenses on a $1,000
investment, assuming (1) a 5% annual return and (2) redemption at the end of
each time period.
<TABLE>
<S> <C>
1 year...................................................... $3
3 years..................................................... $8
</TABLE>
The Table of Fees and Expenses is designed to assist an investor in
understanding the various costs and expenses that an investor in the Class will
bear directly or indirectly. (For more complete descriptions of the various
costs and expenses, see "Management of the Trust" below.) The "Total portfolio
operating expenses -- Resource Class" figure is based upon cost and the
estimated size of the Class and fees to be changed for the current fiscal
period. 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. The Table of Fees and Expenses reflects a voluntary
waiver of management fees and 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' overall
expense ratio and increasing its yield to investors.
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> 61
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. 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 other securities issued
or guaranteed as to principal and interest by the U.S. Government or by its
agencies or instrumentalities, as well as 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 in direct obligations of the U.S. Treasury, which
include Treasury bills, notes and bonds, and repurchase agreements relating to
such securities. In addition, the Portfolio invests in securities issued or
guaranteed as to principal and interest by the U.S. Government or by its
agencies or instrumentalities and repurchase agreements relating to such
securities. Such obligations are collectively referred to as "Money Market
Obligations". 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.
Money Market Obligations
GOVERNMENT OBLIGATIONS. The Portfolio may invest in securities issued or
guaranteed as to principal and interest by the U.S. Government or by its
agencies or instrumentalities. Such obligations may be supported (a) by the full
faith and credit of the U.S. Treasury (as in the case of Government National
Mortgage Association Certificates), (b) by the right of the issuer to borrow
from the U.S. Treasury (as in the case of obligations of the Federal Home Loan
Bank), (c) by discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality (as in the case of the Federal
National Mortgage Association), or (d) only by the credit of the agency or
instrumentality itself (as in the case of obligations of the Federal Farm Credit
Bank). No assurance can be given that the U.S. Government will provide financial
support to such U.S. Government sponsored agencies or instrumentalities in the
future and it is not obligated by law to review, grant or extend future
financial support.
REPURCHASE AGREEMENTS. The Portfolio intends to invest in repurchase
agreements with banks and broker-dealers pertaining to the securities described
above and which at the date of purchase are "First Tier" securities as defined
in Rule 2a-7 under the Investment Company Act of 1940, as amended, (the "1940
Act"), as such Rule may be amended from time to time. 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
5
<PAGE> 62
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.
Investment Practices
BORROWING MONEY. The Portfolio may borrow money with respect to its portfolio
securities in amounts up to 10% of the value of its total assets at the time of
borrowing. The Portfolio will borrow money 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.
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 Portfolio is permitted to invest
in other investment companies to the extent permitted by the 1940 Act, the 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 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 the securities of any issuer if, as a result, the
Portfolio would fail to be a diversified company within the meaning of the
1940 Act, the rules and regulations promulgated thereunder, as such
statute, rules and regulations are amended from time to time; provided,
however, that the Portfolio may purchase securities of other investment
companies to the extent permitted by the 1940 Act and the rules and
regulations promulgated thereunder (as such statute, rules and regulations
are amended from time to time) or to the extent permitted by exemptive
order or other similar relief; or
(2) concentrate 25% or more of its total assets in the securities of
issuers in a particular industry; provided, however, that securities issued
or guaranteed by banks or subject to financial guaranty insurance are not
subject to this limitation; and provided further, that securities issued or
guaranteed by the U.S. Government, its agencies and instrumentalities
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<PAGE> 63
and tax-exempt securities issued by state and local governments and their
political subdivisions, are not included within this restriction.
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 5:00 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.
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 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 P.O. Box 4497, Houston, Texas 77210-4497. 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.
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<PAGE> 64
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 (a) 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 (b) 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
5:00 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
"Resource Class of the Government Agency 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.
Any request for correction to a transaction of Portfolio shares must be
submitted in writing to the Transfer Agent. The Transfer Agent reserves the
right to reject any such request. When a correction results in a dividend
adjustment, the institution must agree in writing to reimburse the Portfolio for
any loss resulting from the correction. Failure to deliver purchase proceeds on
the requested settlement date may result in a claim against the institution for
an amount equal to the overdraft charge incurred by the Portfolio.
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 5:00 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 5:00
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 5:00 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. If a shareholder is unable to reach
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the Transfer Agent by telephone, he may also request redemptions by telegraph or
use overnight courier services to expedite redemptions by mail, which will be
effective on the Business Day received by the Transfer Agent as long as such
request is received prior to 5:00 p.m. Eastern time.
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.
Any request for correction to a redemption transaction of Portfolio shares
must be submitted in writing to the Transfer Agent as described above in
"Purchase of Shares."
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
5:00 p.m. Eastern time on the day of declaration. Net income for dividend
purposes is determined daily as of 5:00 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 5:00 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 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 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
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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 portfolios 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.
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
paid to any shareholder (a) who has provided either an incorrect tax
identification number or no number at all, (b) who is subject to backup
withholding by the Internal Revenue Service for failure to report the receipt of
interest or dividend income properly, or (c) 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."
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 5:00
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)
825-6858. Yields will fluctuate from time to time and are not necessarily
indicative of future results. Accordingly, the yield information may not provide
a basis for comparison with investments which pay a fixed rate of interest for a
stated period of time. Yield is a function of the type and quality of the
Portfolio's investments, the Portfolio's maturity and the operating expense
ratio of the Class. A SHAREHOLDER'S INVESTMENT IN THE PORTFOLIO IS NOT INSURED
OR GUARANTEED BY THE U.S. GOVERNMENT OR BY ANY INSTITUTION. These factors should
be carefully considered by an investor before making an investment in the
Portfolio.
To assist banks and other institutions performing their own subaccounting,
same day information as to the daily dividend per share for the Portfolio to
eight decimal places and current yield normally will be available by 6:00 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 will furnish 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 will be audited by the Trust's independent auditors.
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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.
For a discussion of AIM Management and its subsidiaries' Year 2000 Compliance
Project, see "General Information -- Year 2000 Compliance Project."
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, as amended, (the "Advisory
Agreement"). AIM was organized in 1976 and, together with its subsidiaries,
manages or advises over 90 investment company portfolios encompassing a broad
range of investment objectives. 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. For such services, AIM is entitled to receive a fee from the
Portfolio calculated at the maximum annual rate of 0.10% of all net assets.
ADMINISTRATIVE SERVICES
The Trust has entered into a Master Administrative Services Agreement dated as
of February 28, 1997, as amended, 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.
EXPENSES
In addition to fees paid to AIM pursuant to the Advisory Agreement and the
expenses reimbursed to AIM under the Administrative Services Agreement, the
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,
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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.
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.
DISTRIBUTOR
The Trust has entered into a Master Distribution Agreement dated as of
February 28, 1997, as amended, (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.
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
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. 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.
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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 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
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. In the event the Portfolio purchases securities traded
over-the-counter, the Portfolio deals directly with dealers who make markets in
the securities involved, except when better prices are available elsewhere.
Portfolio transactions placed through dealers who are primary market makers are
effected at net prices without commissions, but which include compensation in
the form of a mark up or mark down. 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. Shares of beneficial interest of the Trust are divided
into eleven classes. Four classes, including the Class, represent interests in
the Portfolio, five classes represent interest in the Treasury 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.
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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 Fund Services, Inc., P.O. Box 4497, Houston, Texas 77210-4497, acts as
transfer agent for the shares of the Class.
LEGAL COUNSEL
The law firm of Ballard Spahr Andrews & Ingersoll, LLP, 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.
YEAR 2000 COMPLIANCE PROJECT
In providing services to the AIM Funds, AIM Management and its subsidiaries
rely on both internal software systems as well as external software systems
provided by third parties. Many software systems in use today are unable to
distinguish between the year 2000 and the year 1900. This defect if not cured
will likely adversely affect the services that AIM Management, its subsidiaries
and other service providers provide the AIM Funds and their shareholders.
To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm Year 2000 compliance
upon installation.
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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SHORT-TERM INVESTMENTS TRUST PROSPECTUS
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173 September 1, 1998
(800) 825-6858
SHORT-TERM
INVESTMENT ADVISOR INVESTMENTS TRUST
A I M ADVISORS, INC.
11 Greenway Plaza, Suite 100 ---------------------
Houston, Texas 77046-1173
(713) 626-1919 GOVERNMENT AGENCY PORTFOLIO
DISTRIBUTOR ---------------------
FUND MANAGEMENT COMPANY
11 Greenway Plaza, Suite 100 RESOURCE CLASS
Houston, Texas 77046-1173
(800) 877-7745 TABLE OF CONTENTS
AUDITORS
KPMG PEAT MARWICK LLP PAGE
700 Louisiana
Houston, Texas 77002 Summary.............................. 2
Table of Fees and Expenses........... 4
CUSTODIAN Suitability for Investors............ 5
THE BANK OF NEW YORK Investment Program................... 5
90 Washington Street Purchase of Shares................... 7
11th Floor Redemption of Shares................. 8
New York, New York 10286 Dividends............................ 9
Taxes................................ 9
Net Asset Value...................... 10
TRANSFER AGENT Yield Information.................... 10
A I M FUND SERVICES, INC. Reports to Shareholders.............. 10
P.O. Box 4497 Management of the Trust.............. 11
Houston, Texas 77210-4497 General Information.................. 13
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
LAWFULLY BE MADE.
=================================== ========================================
</TABLE>
<PAGE> 73
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
ANY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS STATEMENT OF ADDITIONAL INFORMATION DOES NOT
CONSTITUTE A PROSPECTUS.
SUBJECT TO COMPLETION DATED JUNE 22, 1998
STATEMENT OF
ADDITIONAL INFORMATION
SHORT-TERM INVESTMENTS TRUST
GOVERNMENT AGENCY PORTFOLIO
(CASH MANAGEMENT CLASS)
(INSTITUTIONAL 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 SEPTEMBER 1, 1998
RELATING TO THE PROSPECTUS OF EACH OF THE FOLLOWING CLASSES OF THE GOVERNMENT
AGENCY PORTFOLIO:
CASH MANAGEMENT CLASS PROSPECTUS DATED SEPTEMBER 1, 1998
INSTITUTIONAL CLASS PROSPECTUS DATED SEPTEMBER 1, 1998
RESOURCE CLASS PROSPECTUS DATED SEPTEMBER 1, 1998
AND PRIVATE INVESTMENT CLASS PROSPECTUS DATED SEPTEMBER 1, 1998
1
<PAGE> 74
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............................... 7
Investment Advisor..................................... 9
Administrative Services................................ 10
Expenses............................................... 10
Banking Regulations.................................... 11
Transfer Agent and Custodian........................... 11
Reports................................................ 11
Fee Waivers............................................ 11
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 and Brokerage........................ 18
General Brokerage Policy............................... 18
Allocation of Portfolio Transactions................... 19
Section 28(e) Standards................................ 19
Tax Matters................................................. 20
Qualification as a Regulated Investment Company........ 20
Excise Tax on Regulated Investment Companies........... 20
Portfolio Distributions................................ 21
Sale or Redemption of Shares........................... 21
Foreign Shareholders................................... 21
Effect of Future Legislation; Local Tax
Considerations........................................ 21
Financial Statements........................................ None
</TABLE>
2
<PAGE> 75
INTRODUCTION
The Government Agency 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 September
1, 1998, the Institutional Class Prospectus dated September 1, 1998, the Private
Investment Class Prospectus dated September 1, 1998 and the Resource Class
Prospectus dated September 1, 1998 (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. 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 three portfolios: the Portfolio, the Treasury Portfolio and the Treasury
TaxAdvantage Portfolio (together, the "Portfolios"). The Portfolio consists of
the following four classes of shares: Cash Management Class, Institutional
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 Portfolio and 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 (a) 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 (b) 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, each of its Portfolios 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, each of its Portfolios and
any class thereof with respect to which there are fewer than 100 holders of
record.
3
<PAGE> 76
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> 77
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. Unless otherwise indicated,
the address of each trustee and officer is 11 Greenway Plaza, Suite 100,
Houston, Texas 77046.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
POSITIONS HELD
NAME, ADDRESS AND AGE WITH REGISTRANT PRINCIPAL OCCUPATION DURING AT LEAST THE PAST 5 YEARS
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
*CHARLES T. BAUER (79) Trustee and Chairman of the Board of Directors, A I M Management
Chairman Group Inc., A I M Advisors, Inc., A I M Capital
Management, Inc., A I M Distributors, Inc., A I M
Fund Services, Inc. and Fund Management Company; and
Vice Chairman and Director, AMVESCAP PLC.
- -----------------------------------------------------------------------------------------------------------------------
BRUCE L. CROCKETT (54) Trustee Director, ACE Limited (insurance company). Formerly,
906 Frome Lane Director, President and Chief Executive Officer,
McLean, VA 22102 COMSAT Corporation; and Chairman, Board of Governors
of INTELSAT (international communications company).
- -----------------------------------------------------------------------------------------------------------------------
OWEN DALY II (74) Trustee Director, Cortland Trust Inc. (investment company).
Six Blythewood Road Formerly, Director, CF & I Steel Corp., Monumental
Baltimore, MD 21210 Life Insurance Company and Monumental General
Insurance Company; and Chairman of the Board of
Equitable Bancorporation.
- -----------------------------------------------------------------------------------------------------------------------
EDWARD K. DUNN, JR. (63) Trustee Chairman of the Board of Directors, Mercantile
2 Hopkins Plaza, 20th Floor Mortgage Corp. Formerly, Vice Chairman of the Board
Baltimore, MD 21201 of Directors and President, Mercantile-Safe Deposit
Trust Co.; and President, Mercantile Bankshares.
- -----------------------------------------------------------------------------------------------------------------------
JACK M. FIELDS (46) Trustee Chief Executive Officer, Texana Global, Inc. (foreign
8810 Will Clayton Parkway trading company) and Twenty First Century Group, Inc.
Jetero Plaza, Suite E (a governmental affairs company). Formerly, Member of
Humble, TX 77338 the U.S. House of Representatives.
- -----------------------------------------------------------------------------------------------------------------------
**CARL FRISCHLING (61) Trustee Partner, Kramer, Levin, Naftalis & Frankel (law
919 Third Avenue firm). Formerly, Partner, Reid & Priest (law firm).
New York, NY 10022
- -----------------------------------------------------------------------------------------------------------------------
</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> 78
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
POSITIONS HELD
NAME, ADDRESS AND AGE WITH REGISTRANT PRINCIPAL OCCUPATION DURING AT LEAST THE PAST 5 YEARS
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
*ROBERT H. GRAHAM (51) Trustee and Director, President and Chief Executive Officer,
President A I M Management Group Inc.; Director and President,
A I M Advisors, Inc.; Director and Senior Vice
President, A I M Capital Management, Inc., A I M
Distributors, Inc., A I M Fund Services, Inc. and
Fund Management Company; and Director, AMVESCAP PLC.
- -----------------------------------------------------------------------------------------------------------------------
LEWIS F. PENNOCK (55) Trustee Attorney in private practice in Houston, Texas.
6363 Woodway, Suite 825
Houston, TX 77057
- -----------------------------------------------------------------------------------------------------------------------
IAN W. ROBINSON (75) Trustee Formerly, Executive Vice President and Chief
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 (59) Trustee Executive Vice President, Development and Operations,
Transco Tower, 50th Floor Hines Interests Limited Partnership (real estate
2800 Post Oak Blvd. development).
Houston, TX 77056
- -----------------------------------------------------------------------------------------------------------------------
***JOHN J. ARTHUR (53) Senior Vice Director, Senior Vice President and Treasurer, A I M
President and Advisors, Inc.; and Vice President and Treasurer,
Treasurer A I M Management Group Inc., A I M Capital
Management, Inc., A I M Distributors, Inc., A I M
Fund Services, Inc. and Fund Management Company.
- -----------------------------------------------------------------------------------------------------------------------
GARY T. CRUM (51) Senior Vice Director and President, A I M Capital Management,
President Inc.; Director and Senior Vice President, A I M
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
President and Secretary, A I M Advisors, Inc.; Vice President,
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 Vice
President, A I M Capital Management, Inc. and A I M
Distributors, Inc.
- -----------------------------------------------------------------------------------------------------------------------
DANA R. SUTTON (39) Vice President Vice President and Fund Controller, A I M Advisors,
and Assistant Inc.; and Assistant Vice President and Assistant
Treasurer Treasurer, Fund Management Company.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
* A trustee who is an "interested person" of the Trust and AIM as defined in
the 1940 Act.
*** Mr. Arthur and Ms. Relihan are married to each other.
6
<PAGE> 79
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
POSITIONS HELD
NAME, ADDRESS AND AGE WITH REGISTRANT PRINCIPAL OCCUPATION DURING AT LEAST THE PAST 5 YEARS
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
MELVILLE B. COX (54) Vice President Vice President and Chief Compliance Officer, A I M
Advisors, Inc., A I M Capital Management, Inc., A I M
Distributors, Inc., A I M Fund Services, Inc. and
Fund Management Company.
- -----------------------------------------------------------------------------------------------------------------------
KAREN DUNN KELLEY (38) Vice President Senior Vice President, A I M Capital Management,
Inc.; and Vice President, A I M Advisors, Inc.
- -----------------------------------------------------------------------------------------------------------------------
J. ABBOTT SPRAGUE (43) Vice President Director and President, Fund Management Company;
Director; A I M Fund Services, Inc.; and Senior Vice
President, A I M Management Group Inc. and A I M
Advisors, 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, Dunn, Fields,
Frischling, Pennock, Robinson (Chairman) 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,
Dunn, Fields, Frischling, Pennock, Robinson and Sklar (Chairman). 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
(Chairman), Daly, Dunn, Fields, Pennock, 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"). All 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.
7
<PAGE> 80
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 67,774 84,000
Owen Daly II...................................... 4,879 103,542 84,000
Edward K. Dunn, Jr.(4)............................ 0 0 0
Jack Fields....................................... 2,466 0 71,000
Carl Frischling................................... 4,880 96,520 84,000(5)
Robert H. Graham.................................. 0 0 0
John F. Kroeger................................... 4,879 94,132 82,500
Lewis F. Pennock.................................. 4,879 55,777 84,000
Ian W. Robinson................................... 4,880 85,912 84,000
Louis S. Sklar.................................... 4,815 84,370 83,500
</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, 1997.
(3) Each serves as a Director or Trustee of a total of twelve registered
investment companies advised by AIM (comprised of over 45 portfolios). Data
reflects total compensation for the calendar year ended December 31, 1997.
(4) Mr. Dunn did not serve as a Trustee during the calendar year ending December
31, 1997.
(5) The Trust paid the law firm of Kramer, Levin, Naftalis & Frankel $13,565 in
legal fees for services provided to the Trust during the fiscal year ended
August 31, 1997. Mr. Frischling, a trustee of the Trust, is a partner in
such 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 regulated investment companies
managed, administered or distributed by AIM or its affiliates (the "Applicable
AIM Funds"). Each eligible trustee is entitled to receive an annual benefit from
the Applicable AIM Funds commencing on the first day of the calendar quarter
coincident with or following his date of retirement equal to 75% of the retainer
paid or accrued by the Applicable AIM Funds for such trustee during the
twelve-month period immediately preceding the trustee's retirement (including
amounts deferred under a separate agreement between the Applicable AIM Funds and
the trustee) for the number of such trustee's years of service (not in excess of
10 years of service) completed with respect to any of the Applicable AIM Funds.
Such benefit is payable to each eligible trustee in quarterly installments. If
an eligible trustee dies after attaining the normal retirement date but before
receipt of any benefits under the Plan commences, the trustee's surviving spouse
(if any) shall receive a quarterly survivor's benefit equal to 50% of the amount
payable to the deceased trustee, for no more than ten years beginning the first
day of the calendar quarter following the date of the trustee's death. Payments
under the Plan are not secured or funded by any Applicable AIM Fund.
8
<PAGE> 81
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, Dunn, Fields, Frischling, Pennock, Robinson and
Sklar are 10, 10, 0, 0, 20, 16, 10 and 8 years, respectively.
ESTIMATED ANNUAL BENEFITS UPON RETIREMENT
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
NUMBER OF
YEARS OF
SERVICE WITH
APPLICABLE ANNUAL RETAINER PAID BY ALL AIM FUNDS
AIM FUNDS $80,000
<S> <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, 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.
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
over 90 investment company portfolios encompassing a broad range of investment
objectives.
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.
As compensation for its services with respect to the Portfolio, AIM receives a
monthly fee which is calculated by applying a maximum annual rate of 0.10% to
the average daily net assets of the Portfolio.
9
<PAGE> 82
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."
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"), a holding company that has been engaged in the financial service
businesses since 1976. The address of AIM is 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 terms of a Transfer Agency and Service Agreement, dated December 29,
1997, between the Trust and A I M Fund Services, Inc. ("AFS"), a registered
transfer agent and wholly owned subsidiary of AIM, AFS receives a fee for the
provision of certain shareholder services for the Portfolio.
EXPENSES
In addition to fees paid to AIM pursuant to the Advisory Agreement and the
expenses reimbursed to AIM under the Administrative Services Agreement, the
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;
member-
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<PAGE> 83
ship 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 Fund Services, Inc., P.O. Box 4497, Houston, Texas 77210-4497, acts as
transfer agent for the shares of each class of the Portfolio and will receive an
estimated annual fee from the Trust for its services in such capacity in the
amount of 0.015% of average daily net assets of the Trust, payable monthly. Such
compensation may be changed from time to time as is agreed to by AFS and the
Trust.
REPORTS
The Trust will furnish 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 will be 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.
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<PAGE> 84
PRINCIPAL HOLDERS OF SECURITIES
GOVERNMENT AGENCY PORTFOLIO
AIM provided the initial capitalization of the Cash Management Class,
Institutional Class, Private Investment Class and Resource Class ("Class(es)")
of the Government Agency Portfolio and, accordingly, as of the date of this
Statement of Additional Information, owned all the outstanding shares of
beneficial interest of each Class of the Portfolio. Each Class of the Portfolio
expects that the sale of its shares to the public pursuant to the Prospectus
will promptly reduce the percentage of such shares owned by AIM to less than 1%
of the total shares outstanding of each Class.
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 June 1, 1998, 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>
Oppenheimer & Co., Inc.................................... 38.7%
World Financial Center
Oppenheimer Tower
New York, NY 10281
The Bank of New York...................................... 19.3%
One Wall Street
New York, NY 10286
The Bank of New York...................................... 7.5%
One Wall Street
New York, NY 10286
Rural Cellular Corporation................................ 7.4%
3905 Dakota St. SW
Alexandria, MN 56308
</TABLE>
INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
---------------- --------------
<S> <C>
Obie & Co................................................. 9.3%
P.O. Box 2558
Houston, TX 77252-2558
Trust Company Bank........................................ 7.8%
Center 3131
P.O. Box 105504
Atlanta, GA 30348
First Trust/VAR & Co...................................... 7.4%
Funds Control Suite 0404
180 E. 5th Street
St. Paul, MN 55101
Weststar Bank Trust Dept.................................. 7.2%
P.O. Box 1156
Bartlesville, OK 74005-1156
City of New York Deferred Compensation Plan............... 6.9%
40 Rector Street, 3rd Floor
New York, NY 10006
</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.
12
<PAGE> 85
PRIVATE INVESTMENT CLASS
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
---------------- --------------
<S> <C>
The Bank of New York...................................... 33.0%
One Wall Street
New York, NY 10286
First Trust/VAR & Co...................................... 8.9%
Funds Control Suite 0404
180 E. 5th Street
St. Paul, MN 55101
New Haven Savings Bank Trust Department................... 6.7%
P.O. Box 302
New Haven, CT 06502
Bank of the West.......................................... 5.5%
P.O. Box 1121
San Jose, CA
</TABLE>
RESOURCE CLASS
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OWNED OF
OF RECORD OWNER RECORD ONLY(a)
---------------- --------------
<S> <C>
First Union Capital Markets............................... 70.6%
8739 Research Drive
Charlotte,NC 28262-0675
Mellon Bank............................................... 22.9%
P.O. Box 710
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.
13
<PAGE> 86
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 June 1, 1998, 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>
First Trust/VAR & Co...................................................... 26.2%
Funds Control Suite 0404
180 East 5th Street
St. Paul, MN 55101
Peoples Two Ten Company................................................. 17.3%
c/o Summit Bank
Trust Operations, 7th Floor
P.O. Box 821
Hackensack, NJ 07602
Frost National Bank TX.................................................. 6.0%
c/o Frost
P.O. Box 2479
San Antonio, TX 78298-2479
</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..................................................... 33.7%
One Wall Street
New York, NY 10286
Ohio Dept. of Commerce Div............................................. 22.8%
775 High St., 20th Floor
Columbus, OH 43266
First National Bank of Chicago......................................... 22.7%
Mail Suite 0126
Chicago, IL 60670-0126
First Union Capital Markets............................................ 18.6%
8739 Research Drive
Charlotte, NC 28262-0675
</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.
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 June 1, 1998, the trustees
and officers of the Trust beneficially owned less than 1% of each class of the
Trust's outstanding shares with respect to the Treasury and Treasury
TaxAdvantage Portfolio.
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 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
14
<PAGE> 87
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, which require the Trust to adhere to certain conditions. The Portfolio
will invest only in "Eligible Securities" as defined in Rule 2a-7 of the 1940
Act, which the Board of Trustees has determined present minimal credit risks.
Rule 2a-7 also requires, among other things, that the Portfolio maintain a
dollar-weighted average portfolio maturity of 90 days or less and purchase only
U.S. dollar-denominated instruments having remaining maturities of 397 calendar
days or less.
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, as amended, (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 June 30, 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. 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, as amended, (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, Private Investment
Class and Resource Class of the Portfolio. These services may include among
other things: (a) answering customer inquiries regarding the shares of the class
and the Portfolio; (b) assisting customers in changing dividend options, account
designations and addresses; (c) performing sub-accounting; (d) establishing and
maintaining shareholder accounts and records; (e) processing purchase and
redemption transactions; (f) automatic investment in the shares of the class of
customer cash account balances; (g) 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; (h) arranging for bank wires; and (i) 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.
15
<PAGE> 88
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 and income other than investment income)
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.
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'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.
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<PAGE> 89
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 in direct obligations of the U.S. Treasury, which include
Treasury bills, notes and bonds and repurchase agreements relating to such
securities. In addition, the Portfolio invests in securities issued or
guaranteed as to principal and interest by the U.S. Government or by its
agencies or instrumentalities, and repurchase agreements relating to such
securities. The Portfolio may also borrow money 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 for temporary or emergency purposes to facilitate the orderly sale
of portfolio securities to accommodate abnormally heavy redemption requests
should they occur.
As set forth in the Prospectus, the Portfolio will limit its purchases of
securities to U.S. dollar-denominated securities which are "First Tier"
securities, as such term is defined from time to time in Rule 2a-7 under the
1940 Act. A First Tier Security is generally a security that: (i) has received a
short-term rating, or is subject to a guarantee that has received a short-term
rating, or, in either case, is issued by an issuer with a short-term rating from
the Requisite NRSROs in the highest short-term rating category for debt
obligations; (ii) is an unrated security that the Portfolio's investment adviser
has determined is of comparable quality to a rated security described in (i);
(iii) is a security issued by a registered investment company that is a money
market fund; or (iv) is a Government security. The term "Requisite NRSROs" means
(a) any two nationally recognized statistical rating organizations that have
issued a rating with respect to a security or class of debt obligations of an
issuer, or (b) if only one NRSRO has issued a rating with respect to such
security or issuer at the time the Portfolio acquires the security, the NRSRO.
At present, the NRSROs are; Standard & Poor's Corp.; Moody's Investors Services,
Inc.; Thomson Bankwatch, One; Duff and Phelps, Inc.; Fitch Investors Services,
Inc. and; with regard to certain types of securities, IBCA Ltd and its
subsidiary; IBCA, Inc. Subcategories or gradations in ratings (such as "+" or
"-") do not count as rating categories.
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) purchase the securities of any issuer if, as a result, the
Portfolio would fail to be a diversified company within the meaning of the
1940 Act, the rules and regulations promulgated thereunder, as such
statute, rules and regulations are amended from time to time; provided,
however, that the Portfolio may purchase securities of other investment
companies to the extent permitted by the 1940 Act and the rules and
regulations promulgated thereunder (as such statute, rules and regulations
are amended from time to time) or to the extent permitted by exemptive
order or other similar relief; or
(2) concentrate 25% or more of its total assets in the securities of
issuers in a particular industry; provided, however, that securities issued
or guaranteed by banks or subject to financial guaranty insurance are not
subject to this limitation; and provided further, that securities issued or
guaranteed by the U.S. Government, its agencies and instrumentalities [and
tax-exempt securities issued by state and local governments and their
political subdivisions,] are not included within this restriction.
(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, 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 then only in an amount up to 33 1/3% of the value
of its total assets at the time of borrowing;
(5) make loans of money or securities other than (a) through the
purchase of debt securities in accordance with the Portfolio's investment
program, and (b) by entering into repurchase agreements;
(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;
(8) purchase or sell commodities or commodity futures contracts,
purchase securities on margin, make short sales or invest in puts or calls;
or
17
<PAGE> 90
(9) invest in any obligation not payable as to principal and interest
in United States currency.
As a non-fundamental investment policy 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.
PORTFOLIO TRANSACTIONS
GENERAL BROKERAGE POLICY
AIM makes decisions to buy and sell securities for the Portfolio, selects
broker-dealers, effects the Portfolio's investment portfolio transactions,
allocates brokerage fees in such transactions, and where applicable, negotiates
commissions and spreads on transactions. Since purchases and sales of portfolio
securities by the Portfolio are usually principal transactions, the Portfolio
incurs little or no brokerage commissions. AIM's primary consideration in
effecting a security transaction is to obtain the most favorable execution of
the order, which includes the best price on the security and a low commission
rate (as applicable). While AIM seeks reasonable competitive commission rates,
the Portfolio may not pay the lowest commission or spread available. See
"Section 28(e) Standards" below.
In the event the Portfolio purchases securities traded in over-the-counter
markets, the Portfolio deals directly with dealers who make markets in the
securities involved, except when better prices are available elsewhere.
Portfolio transactions placed through dealers who are primary market makers are
effected at net prices without commissions, but which include compensation in
the form of a mark up or mark down.
AIM may determine target levels of commission business with various brokers on
behalf of its clients (including the Portfolio) over a certain time period. The
target levels will be based upon the following factors, among others: (1) the
execution services provided by the broker; (2) the research services provided by
the broker; and (3) the broker's interest in mutual funds in general and in the
Portfolio and other mutual funds advised by AIM or A I M Capital Management,
Inc. (collectively, the "AIM Funds") in particular, including sales of the
Portfolio and of the other AIM Funds. In connection with (3) above, the
Portfolio's trades may be executed directly by dealers which sell shares of the
AIM Funds or by other broker-dealers with which such dealers have clearing
arrangements. AIM will not use a specific formula in connection with any of
these considerations to determine the target levels.
AIM will seek, whenever possible, to recapture for the benefit of a Portfolio
any commissions, fees, brokerage or similar payments paid by the Portfolio on
portfolio transactions. Normally, the only fees which AIM can recapture are the
soliciting dealer fees on the tender of the Portfolio's securities in a tender
or exchange offer.
The Portfolio may engage in certain principal and agency transactions with
banks and their affiliates that own 5% or more of the outstanding voting
securities of the Portfolio provided the conditions of an exemptive order
received by the Portfolio from the SEC are met. In addition, the Portfolio may
purchase or sell a security from or to another AIM Fund provided the Portfolio
follows procedures adopted by the Board of Directors/Trustees of the various AIM
Funds, including the Trust. These inter-fund transactions do not generate
brokerage commissions but may result in custodial fees or taxes or other related
expenses.
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. 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.
ALLOCATION OF PORTFOLIO TRANSACTIONS
AIM and its affiliates manage several other investment accounts. Some of these
accounts may have investment objectives similar to the Portfolio. Occasionally,
identical securities will be appropriate for investment by the Portfolio and by
another fund or one or more of these investment accounts. However, the position
of each account in the same securities and the length of time that each account
may hold its investment in the same securities may vary. The timing and amount
of purchase by each account will also be determined by its cash position. If the
purchase or sale of securities is consistent with the investment policies of the
Portfolio and one or more of these accounts, and is considered at or about the
same time, AIM will fairly allocate
18
<PAGE> 91
transactions in such securities among the Portfolio and these accounts. AIM may
combine such transactions, in accordance with applicable laws and regulations,
to obtain the most favorable execution. Simultaneous transactions could,
however, adversely affect the Portfolio's ability to obtain or dispose of the
full amount of a security which it seeks to purchase or sell.
Sometimes the procedure for allocating portfolio transactions among the
various investment accounts advised by AIM could have an adverse effect on the
price or amount of securities available to the Portfolio. In making such
allocations, AIM considers the investment objectives and policies of its
advisory clients, the relative size of portfolio holdings of the same or
comparable securities, the availability of cash for investment, the size of
investment commitments generally held, and the judgments of the persons
responsible for recommending the investment.
SECTION 28(e) STANDARDS
Section 28(e) of the Securities Exchange Act of 1934 provides that AIM, under
certain circumstances, lawfully may cause an account to pay a higher commission
than the lowest available. Under Section 28(e), AIM must make a good faith
determination that the commissions paid are "reasonable in relation to the value
of the brokerage and research services provided . . . viewed in terms of either
that particular transaction or [AIM's] overall responsibilities with respect to
the accounts as to which it exercises investment discretion." The services
provided by the broker also must lawfully and appropriately assist AIM in the
performance of its investment decision-making responsibilities. Accordingly, in
recognition of research services provided to it, a Fund may pay a broker higher
commissions than those available from another broker.
Research services received from broker-dealers supplement AIM's own research
(and the research of its affiliates), and may include the following types of
information: statistical and background information on the U.S. and foreign
economies, industry groups and individual companies; forecasts and
interpretations with respect to the U.S. and foreign economies, securities,
markets, specific industry groups and individual companies; information on
federal, state, local and foreign political developments; portfolio management
strategies; performance information on securities, indexes and investment
accounts; information concerning prices of securities; and information supplied
by specialized services to AIM and to the Trust's trustees with respect to the
performance, investment activities, and fees and expenses of other mutual funds.
Broker-dealers may communicate such information electronically, orally or in
written form. Research services may also include the providing of custody
services, as well as the providing of equipment used to communicate research
information, the providing of specialized consultations with AIM personnel with
respect to computerized systems and data furnished to AIM as a component of
other research services, the arranging of meetings with management of companies,
and the providing of access to consultants who supply research information.
The outside research assistance is useful to AIM since the broker-dealers used
by AIM tend to follow a broader universe of securities and other matters than
AIM's staff can follow. In addition, the research provides AIM with a diverse
perspective on financial markets. Research services provided to AIM by
broker-dealers are available for the benefit of all accounts managed or advised
by AIM or by its affiliates. Some broker-dealers may indicate that the provision
of research services is dependent upon the generation of certain specified
levels of commissions and underwriting concessions by AIM's clients, including
the Portfolio. However, the Portfolio is not under any obligation to deal with
any broker-dealer in the execution of transactions in portfolio securities.
In some cases, the research services are available only from the broker-dealer
providing them. In other cases, the research services may be obtainable from
alternative sources in return for cash payments. AIM believes that the research
services are beneficial in supplementing AIM's research and analysis and that
they improve the quality of AIM's investment advice. The advisory fee paid by
the Portfolio is not reduced because AIM receives such services. However, to the
extent that AIM would have purchased research services had they not been
provided by broker-dealers, the expenses to AIM could be considered to have been
reduced accordingly.
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.
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<PAGE> 92
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 (a) 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 (b) 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. Government securities, securities of other regulated investment companies,
and securities of other issuers (as to which a fund has not invested more than
5% of the value of a fund's total assets in securities of such issuer and as to
which a fund does not hold more than 10% of the outstanding voting securities of
such issuer), and no more than 25% of the value of its total assets may be
invested in the securities of any other issuer (other than U.S. Government
securities and securities of other regulated investment companies), or in two or
more issuers which a fund controls and which are engaged in the same or similar
trades or businesses.
If, for any taxable year the Portfolio does not qualify as a regulated
investment company, all of its taxable income (including its net capital gain)
will be subject to tax at regular corporate rates without any deduction for
distributions to shareholders, and such distributions will be taxable as
ordinary dividends to the extent of the Portfolio's current and accumulated
earnings and profits. Such distributions generally will be eligible for the
dividends received deduction in the case of corporate shareholders.
EXCISE TAX ON REGULATED INVESTMENT COMPANIES
A 4% non-deductible excise tax is imposed on a regulated investment company
that fails to distribute in each calendar year an amount equal to 98% of
ordinary taxable income for the calendar year and 98% of capital gain net income
for the one-year period ended on October 31 of such calendar year (or, at the
election of a regulated investment company having a taxable year ending November
30 or December 31, for its taxable year (a "taxable year election")). The
balance of such income must be distributed during the next calendar year. For
the foregoing purposes, a regulated investment company is treated as having
distributed any amount on which it is subject to income tax for any taxable year
ending in such calendar year.
The Portfolio intends to make sufficient distributions or deemed distributions
of its ordinary taxable income and capital gain net income prior to the end of
each calendar year to avoid liability for the excise tax. However, investors
should note that the Portfolio may in certain circumstances be required to
liquidate portfolio investments to make sufficient distributions to avoid excise
tax liability.
PORTFOLIO DISTRIBUTIONS
The Portfolio anticipates distributing substantially all of its investment
company taxable income for each taxable year. Such distributions will be taxable
to shareholders as ordinary income and treated as dividends for federal income
tax purposes, but they will not qualify for the 70% dividends received deduction
for corporations.
Distributions by the Portfolio will be treated in the manner described above
regardless of whether such distributions are paid in cash or reinvested in
additional shares of the Portfolio. Shareholders receiving a distribution in the
form of additional shares will be treated as receiving a distribution in an
amount equal to the fair market value of the shares received, determined as of
the reinvestment date.
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<PAGE> 93
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.
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. Under the Taxpayer Relief Act of 1997, the Internal Revenue Service is
authorized to issue appropriate regulations that will enable shareholders to
determine the tax rates applicable to such recognized long-term capital gain.
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.
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 June 2,
1998. 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.
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<PAGE> 94
PART C
OTHER INFORMATION
Item 24.
(a) Financial Statements
1. Government Agency Portfolio - Cash Management Class
In Part A: None
In Part B: None
In Part C: None
2. Government Agency Portfolio - Institutional Class
In Part A: None
In Part B: None
In Part C: None
3. Government Agency Portfolio - Private Investment
Class
In Part A: None
In Part B: None
In Part C: None
4. Government Agency Portfolio - Resource Class
In Part A: None
In Part B: None
In Part C: None
5. Treasury Portfolio - Cash Management Class
In Part A: None
In Part B: None
In Part C: None
6. Treasury Portfolio - Institutional Class
In Part A: None
In Part B: None
In Part C: None
7. Treasury Portfolio - Personal Investment Class
In Part A: None
In Part B: None
In Part C: None
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<PAGE> 95
8. Treasury Portfolio - Private Investment Class
In Part A: None
In Part B: None
In Part C: None
9. Treasury Portfolio - Resource Class
In Part A: None
In Part B: None
In Part C: None
10. Treasury TaxAdvantage Portfolio - Institutional
Class
In Part A: None
In Part B: None
In Part C: None
11. Treasury TaxAdvantage Portfolio - Private Investment
Class
In Part A: None
In Part B: None
In Part C: None
(b) Exhibits
Exhibit
Number Description
(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 was filed
electronically as an Exhibit to Registrant's
Post-Effective Amendment No. 30 on December 17, 1997,
and is hereby incorporated by reference.
(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.
2
<PAGE> 96
Exhibit
Number Description
(f) Fourth Amendment, dated June 12, 1997, to the
Registrant's Agreement and Declaration of Trust, was
filed electronically as an Exhibit to Registrant's
Post-Effective Amendment No. 30 on December 17,
1997, and is hereby incorporated by reference.
(g) Fifth Amendment to the Registrant's Agreement and
Declaration of Trust is filed herewith
electronically.
(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, was filed electronically as an
Exhibit to Registrant's Post-Effective Amendment No.
30 on December 17, 1997, and is hereby incorporated
by reference.
(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.
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<PAGE> 97
Exhibit
Number Description
(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.
(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 was filed
electronically as an Exhibit to Registrant's Post-
Effective Amendment No. 30 on December 17, 1997, and
is hereby incorporated by reference.
(c) Form of Amendment No. 1 to the Master Investment
Advisory Agreement, dated February 28, 1997 between
A I M Advisors, Inc. and Registrant with respect to
the Government Agency 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 was filed electronically as an
Exhibit to Registrant's Post-Effective Amendment No.
30 on December 17, 1997, and is hereby incorporated
by reference.
(e) Form of Amendment No. 1 to the Master Distribution
Agreement, dated February 28, 1997 between Registrant
and Fund Management Company with respect to the
Government Agency 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.
4
<PAGE> 98
Exhibit
Number Description
(b) Form of Deferred Compensation Agreement was filed
electronically as an Exhibit to Registrant's
Post-Effective Amendment No. 30 on December 17, 1997,
and is hereby incorporated by reference.
(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.
(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.
(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, was filed electronically as an
Exhibit to Registrant's Post-Effective Amendment No.
30 on December 17, 1997.
(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, was filed electronically as an
Exhibit to Registrant's Post-Effective Amendment No.
30 on December 17, 1997.
(e) Transfer Agency and Service Agreement, dated December
29, 1997, between AIM Fund Services, Inc. and
Registrant was filed electronically as an Exhibit to
Registrant's Post-Effective Amendment No. 30 on
December 17, 1997, and is hereby incorporated by
reference.
(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 was filed electronically as an Exhibit to
Registrant's Post-Effective Amendment No. 30 on
December 17, 1997, and is hereby incorporated by
reference.
5
<PAGE> 99
Exhibit
Number Description
(i) Form of Amendment No. 1 to the Master Administrative
Services Agreement, dated February 28, 1997, between
Registrant and A I M Advisors, Inc. with respect to
Government Agency Portfolio, is filed herewith
electronically.
(10) - Opinion and Consent of Ballard Spahr Andrews & Ingersoll, LLP
is filed herewith electronically.
(11) - None.
(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.
(b) Amended and Restated Master Distribution Plan
pursuant to Rule 12b-1, effective as of June 30, 1997
and form of related agreement with respect to the
Treasury and Treasury TaxAdvantage Portfolios was
filed electronically as an Exhibit to Registrant's
Post-Effective Amendment No. 30 on December 17, 1997,
and is hereby incorporated by reference.
(c) Form of Amendment No. 1 to the Amended and Restated
Master Distribution Plan pursuant to Rule 12b-1,
effective as of June 30, 1997 and form of related
agreement 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
was filed electronically as an Exhibit to
Post-Effective Amendment No. 30 on December 17, 1997.
(c) Second Amended and Restated Multiple Class (Rule
18f-3) Plan was filed electronically as an Exhibit to
Registrant's Post-Effective Amendment No. 30 on
December 17, 1997, and is hereby incorporated by
reference.
(27) - Financial Data Schedule - None.
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<PAGE> 100
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 June 1, 1998
----------- ------------
<S> <C>
Treasury Portfolio
Cash Management Class 192
Institutional Class 159
Personal Investment Class 1,106
Private Investment Class 436
Resource Class 249
Treasury TaxAdvantage Portfolio
Institutional Class 16
Private Investment Class 9
Government Agency Portfolio
Cash Management Class 0
Institutional Class 0
Private Investment Class 0
Resource Class 0
</TABLE>
Item 27. Indemnification
State the general effect of any contract, arrangements or
statute under which any director, officer, underwriter or affiliated person of
the Registrant is insured or indemnified in any manner against any liability
which may be incurred in such capacity, other than insurance provided by any
director, officer, affiliated person or underwriter for their own protection.
Under the terms of the Registrant's Agreement and Declaration of Trust,
the Registrant may indemnify any person who was or is a trustee,
officer or employee of the Registrant to the maximum extent permitted
by law; provided, however, that any such indemnification (unless
ordered by a court) shall be made by the Registrant only as authorized
in the specific case upon a determination that indemnification of such
persons is proper in the circumstances. Such determination shall be
made (i) by the Board of Trustees, by a majority vote of a quorum which
consists of trustees who are neither "interested persons" of the
Registrant, as defined in Section 2(a)(19) of the Investment Company
Act of 1940, nor parties to the proceeding, or (ii) if the required
quorum is not obtainable or, if a quorum of such trustees so directs,
by independent legal counsel in a written opinion. No indemnification
will be provided by the Registrant to any trustee or officer of the
Registrant for any liability to the Registrant or shareholders to which
he would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of duty.
7
<PAGE> 101
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)
AIM Investment Securities Funds (AIM Limited Maturity
Treasury Fund - Institutional Class)
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:
8
<PAGE> 102
<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
William J. Wendel Senior Vice President None
John J. Arthur Vice President & Treasurer Senior Vice President
& Treasurer
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
James R. Anderson Vice President None
Nancy A. Beck Vice President None
Jesse H. Cole Vice President None
David E. Hessel Assistant Vice President, None
Assistant Treasurer &
Controller
Jeffrey L. Horne Assistant Vice President None
Robert W. Morris, Jr. Assistant Vice President None
Ann M. Srubar Assistant Vice President None
Dana R. Sutton Assistant Vice President & Vice President & Assistant
Assistant Treasurer Treasurer
Nicholas D. White Assistant Vice President None
Nancy L. Martin Assistant General Counsel & Assistant Secretary
Assistant Secretary
</TABLE>
- --------
* 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173
9
<PAGE> 103
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Principal Underwriter with Registrant
- ------------------ -------------------------- --------------------
<S> <C> <C>
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 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
(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.
- --------------------------
* 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173
10
<PAGE> 104
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment
to its Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the city of Houston, Texas on the 22nd day of
June, 1998.
REGISTRANT: TAX-FREE INVESTMENTS CO.
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 & Director June 22, 1998
-------------------------------------
(Charles T. Bauer)
/s/ ROBERT H. GRAHAM Director & President June 22, 1998
-------------------------------------- (Principal Executive Officer)
(Robert H. Graham)
/s/ BRUCE L. CROCKETT Director June 22, 1998
-------------------------------------
(Bruce L. Crockett)
/s/ OWEN DALY II Director June 22, 1998
-------------------------------------
(Owen Daly II)
/s/ EDWARD K. DUNN, JR. Director June 22, 1998
--------------------------------------
(Edward K. Dunn, Jr.)
/s/ JACK FIELDS Director June 22, 1998
--------------------------------------
(Jack Fields)
/s/ CARL FRISCHLING Director June 22, 1998
-------------------------------------
(Carl Frischling)
/s/ LEWIS F. PENNOCK Director June 22, 1998
-------------------------------------
(Lewis F. Pennock)
Director
-------------------------------------
(Ian W. Robinson)
/s/ LOUIS S. SKLAR Director June 22, 1998
-------------------------------------
(Louis S. Sklar)
/s/ JOHN J. ARTHUR Senior Vice President & June 22, 1998
------------------------------------- Treasurer (Principal Financial
(John J. Arthur) and Accounting Officer)
</TABLE>
<PAGE> 105
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number
- -------
<S> <C>
1(g) Fifth Amendment to Agreement and Declaration of Trust
5(c) Form of Amendment No. 1 to the Master Investment Advisory Agreement,
dated February 28, 1997, between Registrant and A I M Advisors, Inc.
6(e) Form of Amendment No. 1 to the Master Distribution Agreement, dated
February 28, 1997, between Registrant and Fund Management Company
9(i) Form of Amendment No. 1 to the Master Administrative Service Agreement,
dated February 28, 1997, between Registrant and A I M Advisors, Inc.
10 Opinion and Consent of Ballard Spahr Andrews & Ingersoll, LLP
15(c) Form of Amendment No. 1 to the Amended and Restated Master
Distribution Plan pursuant to Rule 12b-1, effective as of June 30, 1997
and form of related agreement
</TABLE>
<PAGE> 1
EXHIBIT 1(g)
FIFTH AMENDMENT
TO
AGREEMENT AND DECLARATION OF TRUST
OF
SHORT-TERM INVESTMENTS TRUST
THIS FIFTH AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST OF
SHORT-TERM INVESTMENTS TRUST (the "Amendment") is entered into the 18th day of
June, 1998, among Charles T. Bauer, Bruce L. Crockett, Owen Daly II,
Edward K. Dunn, Jr., 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
Short-Term Investments Trust entered into as of May 5, 1993, as amended (the
"Agreement").
WHEREAS, the Trustees of Short-Term Investments Trust (the "Trust")
desire to establish a new Portfolio of the Trust and four Classes thereof,
namely, the Government Agency Portfolio and its Cash Management Class,
Institutional Class, Private Investment Class and Resource Class; and
WHEREAS, Section 2.3.1 of the Agreement permits the Trustees to
establish such Portfolio and such Classes thereof and Section 9.7 of the
Agreement authorizes the Trustees to amend or otherwise supplement the Agreement
by making an amendment, all without prior Shareholder authorization or vote; and
WHEREAS, at a meeting duly called and held on the 11th day of March,
1998, the Trustees have resolved to amend the Agreement as hereinafter set
forth.
NOW, THEREFORE, the Trustees hereby amend the Agreement as herein set
forth below:
1. Capitalized terms not specifically defined in this Amendment
shall have the meanings ascribed to them in the Agreement.
2. Section 2.3 of the Agreement shall be deleted in its entirety
and the following new Section shall be substituted in lieu thereof:
"Section 2.3. Establishment of Portfolios and Classes. The Trust
shall be divided into three Portfolios: the Treasury Portfolio, the Treasury
TaxAdvantage Portfolio and the Government Agency Portfolio. The Treasury
Portfolio shall contain five Classes: the Institutional Class, the Private
Investment Class, the Personal Investment Class, the Cash Management Class and
the Resource Class. The Treasury TaxAdvantage Portfolio shall contain two
Classes: the Institutional Class and the Private Investment Class. The
Government Agency Portfolio shall contain four Classes: the Institutional
Class, the Private Investment Class, the Cash Management Class and the Resource
Class. The Treasury Portfolio, the Treasury TaxAdvantage Portfolio and the
Government Agency Portfolio and their respective Classes as set forth in this
Section 2.3 are collectively referred to as the "Portfolios". The
establishment and designation of any other Portfolio or Class thereof, or,
subject to Section 6.1 hereof, any change to the Portfolios, shall be effective
upon the adoption by a majority of the then Trustees of a resolution which sets
forth such establishment, designation or change."
The foregoing shall not be construed to amend or replace Sections
2.3.1 and 2.3.2 of the Agreement.
<PAGE> 2
3. With the exception of the amendment to Section 2.3 of the
Agreement as set forth in paragraph 2 of this Amendment, the Agreement, as
amended, shall in all other respects remain in full force and effect.
4. This Amendment may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same Amendment.
2
<PAGE> 3
IN WITNESS WHEREOF, the undersigned, being all of the Trustees
of the Trust, have executed this Fifth 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 /S/ EDWARD K. DUNN
- ------------------------------ ---------------------------------
Owen Daly II, Trustee Edward K. Dunn, Jr.
/S/ JACK FIELDS /S/ CARL FRISCHLING
- ------------------------------ ---------------------------------
Jack Fields, Trustee Carl Frischling, Trustee
/S/ ROBERT H. GRAHAM /S/ LEWIS F. PENNOCK
- ------------------------------ ---------------------------------
Robert H. Graham, 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 FIFTH AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST
OF SHORT-TERM INVESTMENTS TRUST]
3
<PAGE> 1
EXHIBIT 5(c)
AMENDMENT NO. 1
TO
MASTER INVESTMENT ADVISORY AGREEMENT
This Amendment dated as of __________, 1998, amends the Master
Investment Advisory Agreement (the "Agreement"), dated February 28, 1997,
between Short-Term Investments Trust, a Delaware business trust, and A I M
Advisors, Inc., a Delaware corporation. Terms not otherwise defined herein
shall have the meanings ascribed them in the Agreement.
W I T N E S S E T H:
WHEREAS, the parties desire to amend the Agreement to add a new
portfolio, namely the Government Agency Portfolio;
NOW, THEREFORE, the parties agree as follows:
1) Appendix A to the Agreement is hereby deleted in its entirety and
replaced with the following:
"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>
<PAGE> 2
GOVERNMENT AGENCY PORTFOLIO
<TABLE>
<CAPTION>
NET ASSETS ANNUAL RATE
- ---------- -----------
<S> <C>
All net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10%"
</TABLE>
2) Notwithstanding anything in the Agreement to the contrary, the terms
and conditions described in Paragraph 10 of the Agreement shall not apply to
the Government Agency Portfolio of the Company.
All other terms and provisions of the Agreement not amended herein
shall remain in full force and effect.
Dated: , 1998
--------------------
SHORT-TERM INVESTMENTS TRUST
Attest: By:
--------------------------- ---------------------------------
Assistant Secretary President
(SEAL)
A I M ADVISORS, INC.
Attest: By:
--------------------------- ---------------------------------
Assistant Secretary President
(SEAL)
2
<PAGE> 1
EXHIBIT 6(e)
AMENDMENT NO. 1
MASTER DISTRIBUTION AGREEMENT
The Master Distribution Agreement (the "Agreement"), dated February
28, 1997, by and between Short-Term Investments Trust, a Delaware business
trust, and Fund Management Company, a Texas corporation, is hereby amended as
follows:
Appendix A of the Agreement is hereby deleted in its entirety and
replaced with the following:
"APPENDIX A
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
Government Agency Portfolio
Institutional Class
Private Investment Class
Cash Management Class
Resource Class"
<PAGE> 2
All other terms and provisions of the Agreement not amended herein
shall remain in full force and effect.
Dated: , 1998
-------------------
SHORT-TERM INVESTMENTS TRUST
Attest: By:
---------------------------- ----------------------------------
Assistant Secretary President
(SEAL)
FUND MANAGEMENT COMPANY
Attest: By:
---------------------------- ----------------------------------
Assistant Secretary President
(SEAL)
<PAGE> 1
EXHIBIT 9(i)
AMENDMENT NO. 1
MASTER ADMINISTRATIVE SERVICES AGREEMENT
The Master Administrative Services Agreement (the "Agreement"), dated
February 28, 1997, by and between Short-Term Investments Trust, a Delaware
business trust, and A I M Advisors, Inc., a Delaware corporation, is hereby
amended as follows:
Appendix A of the Agreement is hereby deleted in its
entirety and replaced with the following:
"SHORT-TERM INVESTMENTS TRUST
APPENDIX A TO MASTER ADMINISTRATIVE SERVICES AGREEMENT
Treasury Portfolio
Treasury TaxAdvantage Portfolio
Government Agency Portfolio"
All other terms and provisions of the Agreement not amended herein
shall remain in full force and effect.
Dated: , 1998
--------------------
SHORT-TERM INVESTMENTS TRUST
Attest: By:
--------------------------- ---------------------------------
Assistant Secretary President
(SEAL)
A I M ADVISORS, INC.
Attest: By:
--------------------------- ---------------------------------
Assistant Secretary President
(SEAL)
<PAGE> 1
EXHIBIT 10
[BALLARD SPAHR ANDREWS & INGERSOLL, LLP LETTERHEAD]
June 22, 1998
Short-Term Investments Trust
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
Re: Short-Term Investments Trust
Registration Statement on Form N1-A
Gentlemen:
We have acted as counsel to Short-Term Investments Trust (the
"Trust"), a business trust organized under the laws of the State of Delaware
registered under the Investment Company Act of 1940 (the "1940 Act") as an
open-end series management investment company.
This opinion is given in connection with the filing by the
Trust of Post-Effective Amendment No. 31 to the Registration Statement on Form
N-1A under the Securities Act of 1933 and Post-Effective Amendment No. 32 to
such Registration Statement under the 1940 Act (the "Registration Statement")
relating to the registration of an indefinite number of Cash Management Class,
Institutional Class, Private Investment Class and Resource Class shares of
beneficial interest, par value $.01 per share (the "Shares"), representing
interests in the Government Agency Portfolio (the "Fund"), one of three series
portfolios of the Trust.
In connection with our giving this opinion, we have examined a
copy of the Trust's Agreement and Declaration of Trust, as amended, resolutions
of the Board of Trustees dated March 11, 1998 and June 15, 1998 and originals
or copies, certified or otherwise identified to our satisfaction, of such other
documents, records and other instruments as we have deemed necessary or
advisable for purposes of this opinion. We have also examined the prospectuses
included in the Registration Statement substantially in the forms in which they
are to become effective (the "Prospectuses"). As to various questions of fact
material to our opinion, we have relied upon information provided by officers
of the Trust.
<PAGE> 2
Short-Term Investment Trust
June 22, 1998
Page 2
Based on the foregoing, we are of the opinion that the Shares
to be offered for sale pursuant to the Prospectuses are duly authorized and,
when sold, issued and paid for as described in the Prospectuses, will be
legally issued, fully paid and non-assessable.
We express no opinion concerning the laws of any jurisdiction
other than the federal law of the United States of America and the Delaware
Business Trust Act of the State of Delaware.
Both the Delaware Business Trust Act and the Trust's Agreement
and Declaration of Trust, as amended (the "Trust Agreement"), provide that
shareholders of the Trust shall be entitled to the same limitation on personal
liability as is extended under the Delaware General Corporation Law to
stockholders of private corporations for profit. There is a remote
possibility, however, that, under certain circumstances, shareholders of a
Delaware business trust may be held personally liable for that trust's
obligations to the extent that 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. The Trust Agreement also provides for
indemnification out of property of the Fund for all loss and expense of any
shareholder held personally liable for the obligations of the Fund. Therefore,
the risk of any shareholder incurring financial loss beyond his investment due
to shareholder liability is limited to circumstances in which the Fund is
unable to meet its obligations and the express disclaimer of shareholder
liabilities is determined not to be effective.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name and to the references to our
firm under the caption "General Information - Legal Counsel" in the
Prospectuses included in the Registration Statement.
Very truly yours,
/s/ Ballard Spahr Andrews & Ingersoll,LLP
----------------------------------------
Ballard Spahr Andrews & Ingersoll, LLP
<PAGE> 1
EXHIBIT 15(c)
AMENDMENT NO. 1
AMENDED AND RESTATED
MASTER DISTRIBUTION PLAN PURSUANT TO RULE 12b-1
The Amended and Restated Master Distribution Plan (the "Plan"),
pursuant to Rule 12b-1 of Short-Term Investments Trust, a Delaware business
Trust, is hereby amended as follows:
Appendix A of the Plan is hereby deleted in its entirety and replaced
with the following:
"APPENDIX A TO
AMENDED AND RESTATED MASTER DISTRIBUTION PLAN
OF
SHORT-TERM INVESTMENTS TRUST
The Trust shall pay the Distributor as full compensation for all
services rendered and all facilities furnished under the Distribution Plan for
each class as designed below, a Distribution Fee* determined by applying the
annual rate set forth below as to each class to the average daily net asset
value of the class for the plan year, computed in a manner used for the
determination of the offering price of shares of the class.
<TABLE>
<CAPTION>
TREASURY PORTFOLIO ANNUAL RATE
- ------------------ -----------
<S> <C>
Personal Investment Class 0.75%
Private Investment Class 0.50%
Resource Class 0.20%
Cash Management Class 0.10%
</TABLE>
<TABLE>
<CAPTION>
TREASURY TAXADVANTAGE PORTFOLIO ANNUAL RATE
- ------------------------------- -----------
<S> <C>
Private Investment Class 0.50%
</TABLE>
<TABLE>
<CAPTION>
GOVERNMENT AGENCY PORTFOLIO ANNUAL RATE
- --------------------------- -----------
<S> <C>
Private Investment Class 0.50%
Resource Class 0.20%
Cash Management Class 0.10%
</TABLE>
- ----------------------------
* The Distribution Fee is payable apart from the sales charge, if any,
as stated in the current prospectus for the applicable class. The amount of
the Distribution Fee is subject to any applicable limitations imposed from time
to time by applicable Rules of the National Association of Securities Dealers,
Inc."
<PAGE> 2
All other terms and provisions of the Plan not amended herein shall
remain in full force and effect.
Dated , 1998
-------------------
SHORT-TERM INVESTMENTS TRUST
Attest: By:
------------------------ ------------------------------
Assistant Secretary President
(SEAL)
-2-
<PAGE> 3
[FUND MANAGEMENT LOGO] FUND MANAGEMENT COMPANY
SHAREHOLDER SERVICE AGREEMENT
(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
<PAGE> 4
Shareholder Service Agreement Page 2
all out-of-pocket expenses actually incurred by us in connection with
the transfer by us of such proxy statements and reports to our clients
as required under applicable law or regulation.
3. We agree to transfer to the Funds' custodian, in a timely manner as set
forth in the applicable prospectus, federal funds in an amount equal to
the amount of all purchase orders placed by us on behalf of our clients
and accepted by FMC. In the event that FMC fails to receive such
federal funds on such date (other than through the fault of FMC or the
Fund's custodian), we 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 Fund
Services, Inc.'s ("AFS") subaccounting customers through AIM LINK(TM),
and that neither FMC, AFS nor any Fund is responsible for the accuracy of
such information; and we will indemnify and hold harmless FMC, AFS 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.
<PAGE> 5
Shareholder Service Agreement Page 3
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 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> 6
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> 7
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%
Government Agency Portfolio - Private Investment Class .25%
Government Agency Portfolio - Resource Class .16%
Government Agency Portfolio - Cash Management Class .08%
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> 8
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, AFS or the Funds, including the ______ basis points of monthly
average net assets related to subaccounting and administration services
provided to us by AFS.
