<PAGE> 1
As filed with the Securities and Exchange Commission on August 27, 1998
1933 Act Registration No. 2-74549
1940 Act Registration No. 811-03297
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Pre-Effective Amendment No. __
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Post-Effective Amendment No. 27 X
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No. 23 X
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(Check appropriate box or boxes.)
AIM INVESTMENT PORTFOLIOS, INC
--------------------------------------------------
(Exact name of Registrant as Specified in Charter)
11 Greenway Plaza, Suite 100, Houston, TX 77046
---------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (713) 626-1919
---------------
Copy to:
<TABLE>
<S> <C> <C>
Michael A. Silver, Esq. Samuel D. Sirko, Esq. Arthur J. Brown, Esq.
INVESCO (NY), Inc. A I M Advisors, Inc. R. Darrell Mounts, Esq.
50 California Street, 27th Floor 11 Greenway Plaza, Suite 100 Kirkpatrick & Lockhart LLP
San Francisco, CA 94111 Houston, Texas 77046 1800 Massachusetts Avenue, N.W.,
(Name and Address of Agent for 2nd Floor
Service) Washington, D.C. 20036
Approximate Date of Proposed Public Offering: As soon as practicable after the effective date of
this Amendment
</TABLE>
It is proposed that this filing will become effective (check appropriate box):
immediately upon filing pursuant to paragraph (b)
---
X on September 8, 1998 pursuant to paragraph (b)
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60 days after filing pursuant to paragraph (a)(1)
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on (date) pursuant to paragraph (a)(1)
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75 days after filing pursuant to paragraph (a)(2)
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on (date) pursuant to paragraph (a)(2)
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If appropriate, check the following box:
This post-effective amendment designates a new effective date for a
--- previously filed post-effective amendment.
Title of Securities Being Registered: Shares of Common Stock
Pursuant to Rule 414 under the Securities Act of 1933 (the "Securities Act")
by this amendment to the registration statement on Form N-1A of AIM Investment
Portfolios, Inc., a Maryland corporation, the Registrant adopts, effective
September 8, 1998, the Registration Statement of such corporation under the
Securities Act and Notification of Registration and Registration Statement of
such corporation under the Investment Company Act of 1940.
<PAGE> 2
AIM INVESTMENT PORTFOLIOS, INC.
CONTENTS OF POST-EFFECTIVE AMENDMENT
THIS POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT OF AIM
INVESTMENT PORTFOLIOS, INC. CONTAINS THE FOLLOWING DOCUMENTS:
Facing Sheet
Contents of Post-Effective Amendment
Cross-Reference Sheet
Part A - Prospectus - Class A and Class B
- AIM Dollar Fund
- Prospectus - Advisor Class
- AIM Dollar Fund
Part B - Statement of Additional Information - Class A and Class B
- AIM Dollar Fund
- Statement of Additional Information - Advisor Class
- AIM Dollar Fund
Part C - Other Information
Signature Page
- AIM Investment Portfolios (a Delaware business
trust)
- AIM Investment Portfolios, Inc. (a Maryland
corporation)
Exhibits
<PAGE> 3
AIM INVESTMENT PORTFOLIOS, INC.
CROSS-REFERENCE SHEET
(as required by Rule 495)
<TABLE>
<CAPTION>
N-1A ITEM NO. PROSPECTUS LOCATION
- ------------- -------------------
<S> <C> <C>
I. CLASS A AND CLASS B
PART A
Item 1 Cover Page ................................................................................. Cover Page
Item 2. Synopsis .......................................................... Summary; Table of Fees and Expenses
Item 3. Condensed Financial Information .................................................. Financial Highlights
Item 4. General Description of Registrant .............. Cover Page; Summary; Investment Program; Risk Factors;
Management; Organization of the Trust; General Information
Item 5. Management of the Fund ................................................ Management; General Information
Item 5A. Management's Discussion of Fund Performance ......................................... See Annual Report
Item 6. Capital Stock and Other Securities ........ Summary; Organization of the Trust; How to Purchase Shares;
Dividends, Distributions and Tax Matters; General Information
Item 7. Purchase of Securities Being Offered .................... Management; How to Purchase Shares; Terms and
Conditions of Purchase of the AIM Funds; Special Plans;
Exchange Privilege; Determination of Net Asset Value
Item 8. Redemption or Repurchase ......................................... Special Plans; How to Redeem Shares;
Determination of Net Asset Value
Item 9. Pending Legal Proceedings .............................................................. Not applicable
II. ADVISOR CLASS PROSPECTUS LOCATION
-------------------
PART A
Item 1. Cover Page ................................................................................. Cover Page
Item 2. Synopsis .......................................................... Summary; Table of Fees and Expenses
Item 3. Condensed Financial Information .................................................. Financial Highlights
Item 4. General Description of Registrant .............. Cover Page; Summary; Investment Program; Risk Factors;
Management; Organization of the Trust; General Information
Item 5. Management of the Fund ................................................ Management; General Information
Item 5A. Management's Discussion of Fund Performance ......................................... See Annual Report
Item 6. Capital Stock and Other Securities ........ Summary; Organization of the Trust; How to Purchase Shares;
Dividends, Distributions and Tax Matters; General Information
Item 7. Purchase of Securities Being Offered .................... Management; How to Purchase Shares; Terms and
Conditions of Purchase of the AIM Funds; Special Plans;
Exchange Privilege; Determination of Net Asset Value
Item 8. Redemption or Repurchase ......................................... Special Plans; How to Redeem Shares;
Determination of Net Asset Value
Item 9. Pending Legal Proceedings .............................................................. Not applicable
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
III. CLASS A AND B STATEMENT OF ADDITIONAL INFORMATION LOCATION
--------------------------------------------
<S> <C> <C>
PART B
Item 10. Cover Page ................................................................................. Cover Page
Item 11. Table of Contents ................................................................... Table of Contents
Item 12. General Information and History ......................... Cover Page; Introduction; General Information
About the Funds; Miscellaneous Information
Item 13. Investment Objectives and Policies ..................... Investment Objectives and Policies; Investment
Limitations; Options and Futures; Risk Factors;
Execution of Portfolio Transactions
Item 14. Management of the Funds .................................................................... Management
Item 15. Control Persons and Principal Holders of Securities ......................... Miscellaneous Information
Item 16. Investment Advisory and Other Services .......................... Management; Miscellaneous Information
Item 17. Brokerage Allocation and Other Practices .......................... Execution of Portfolio Transactions
Item 18. Capital Stock and Other Securities ................................ General Information About the Funds
Item 19. Purchase, Redemption and Pricing of
Securities Being Offered ........................... Net Asset Value Determination; How to Purchase and
Redeem Shares; Programs and Services For Shareholders
Item 20. Tax Status ...................................................................................... Taxes
Item 21. Underwriters ............................................................................... Management
Item 22. Calculation of Performance Data .................................................... Investment Results
Item 23. Financial Statements ............................................................. Financial Statements
IV. ADVISOR CLASS STATEMENT OF ADDITIONAL INFORMATION LOCATION
--------------------------------------------
PART B
Item 10. Cover Page ................................................................................. Cover Page
Item 11. Table of Contents ................................................................... Table of Contents
Item 12. General Information and History ......................... Cover Page; Introduction; General Information
About the Funds; Miscellaneous Information
Item 13. Investment Objectives and Policies ..................... Investment Objectives and Policies; Investment
Limitations; Options and Futures; Risk Factors;
Execution of Portfolio Transactions
Item 14. Management of the Funds .................................................................... Management
Item 15. Control Persons and Principal Holders of Securities ......................... Miscellaneous Information
Item 16. Investment Advisory and Other Services .......................... Management; Miscellaneous Information
Item 17. Brokerage Allocation and Other Practices .......................... Execution of Portfolio Transactions
Item 18. Capital Stock and Other Securities ................................ General Information About the Funds
Item 19. Purchase, Redemption and Pricing of
Securities Being Offered ........................... Net Asset Value Determination; How to Purchase and
Redeem Shares; Programs and Services For Shareholders
Item 20. Tax Status ...................................................................................... Taxes
Item 21. Underwriters ............................................................................... Management
Item 22. Calculation of Performance Data .................................................... Investment Results
Item 23. Financial Statements ............................................................. Financial Statements
</TABLE>
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.
<PAGE> 5
[APPLICATION
INSIDE]
[AIM LOGO APPEARS HERE] THE AIM FAMILY OF FUNDS--Registered Trademark--
CLASS A AND CLASS B SHARES OF
AIM DOLLAR FUND
(A SERIES PORTFOLIO OF AIM INVESTMENT PORTFOLIOS)
PROSPECTUS
SEPTEMBER 8, 1998
This Prospectus contains information about AIM DOLLAR FUND (the "Fund"), which
is a diversified series of AIM Investment Portfolios (the "Trust"), an open-end,
series management investment company. The Fund seeks maximum current income
consistent with liquidity and conservation of capital. The Fund may invest in a
wide variety of high quality, U.S. dollar-denominated money market instruments,
including obligations issued or guaranteed by the U.S. and foreign governments,
their agencies and instrumentalities; U.S. and non-U.S. corporate obligations;
and instruments of U.S. and foreign banks.
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Fund at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or by calling
1-800-347-4246. 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 Fund. Additional information about the Fund may
also be obtained on the Web at http://www.aimfunds.com.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A STABLE NET
ASSET VALUE OF $1.00 PER SHARE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE> 6
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SUMMARY................................ 2
THE FUND............................... 4
Table of Fees and Expenses........... 4
Financial Highlights................. 5
Performance.......................... 6
Investment Program................... 6
Management........................... 8
Organization of the Trust............ 10
INVESTOR'S GUIDE TO THE AIM FAMILY OF
FUNDS--Registered Trademark--........ A-1
Introduction to The AIM Family of
Funds............................. A-1
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
How to Purchase Shares............... A-1
Terms and Conditions of Purchase of
the AIM Funds..................... A-2
Special Plans........................ A-9
Exchange Privilege................... A-12
How to Redeem Shares................. A-14
Determination of Net Asset Value..... A-19
Dividends, Distributions and Tax
Matters........................... A-19
General Information.................. A-23
APPLICATION INSTRUCTIONS............... B-1
</TABLE>
SUMMARY
- --------------------------------------------------------------------------------
THE FUND
The Fund is a diversified series of the Trust.
INVESTMENT OBJECTIVE. The Fund seeks maximum current income consistent with
liquidity and conservation of capital.
PRINCIPAL INVESTMENTS. The Fund invests in a wide variety of high quality U.S.
dollar-denominated money market instruments of U.S. and non-U.S. issuers.
INVESTMENT MANAGERS. The Fund is managed by A I M Advisors, Inc. ("AIM") and
is sub-advised by INVESCO (NY), Inc. (the "Sub-Advisor"). AIM and the
Sub-advisor and their worldwide asset management affiliates provide investment
management and/or administrative services to institutional, corporate and
individual clients around the world. AIM and the Sub-advisor are both indirect
wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are
an independent investment management group that has a significant presence in
the institutional and retail segment of the investment management industry in
North America and Europe, and a growing presence in Asia. AIM was organized in
1976 and, together with its subsidiaries, currently advises approximately 90
investment company portfolios.
PURCHASING SHARES. Investors may select Class A or Class B shares of the Fund
which are offered by this Prospectus at an offering price that reflects
differing sales charges and expense levels. See "Terms and Conditions of
Purchase of the AIM Funds -- Sales Charges and Dealer Concessions." Pursuant to
a separate prospectus, the Fund also offers Advisor Class shares, which
represent interests in the Fund. The Advisor Class has different distribution
arrangements.
CLASS A SHARES -- Shares are offered at net asset value without an initial
sales charge and without contingent deferred sales charges.
CLASS B SHARES -- Shares are offered at net asset value without an initial
sales charge and are subject to a maximum contingent deferred sales charge of 5%
on certain redemptions made within six years from the date such shares were
purchased. Class B shares automatically convert to Class A shares of the Fund
eight years following the end of the calendar month in which a purchase was
made. Class B shares are subject to higher annual expenses than Class A shares.
Initial investments in any class of shares must be at least $500 and
additional investments must be at least $50. The minimum initial investment is
modified for investments through tax-qualified retirement plans and accounts
initially established with an Automatic Investment Plan. The distributor of the
Fund's shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares" and "Special Plans."
SUITABILITY FOR INVESTORS. An investor in Class A or Class B shares of the
Fund should consider the method of purchasing shares that is most beneficial
given the amount of the purchase, the length of time the shares are expected to
be held, and other circumstances. Investors should consider whether, during the
anticipated life of their investment in the Fund, the accumulated distribution
fees and any applicable contingent deferred sales charges on Class B shares
prior to conversion would be less than the initial sales charge and accumulated
distribution fees on Class A shares purchased at the same time, and to what
extent such differential would be offset by the higher return on Class A shares.
To assist investors in making this determination, the table under the caption
"Table of Fees and Expenses" sets forth examples of the charges applicable to
each class of shares. Class A shares will normally be more beneficial than Class
B shares to the investor who qualifies for reduced initial sales charges, as
described below. Therefore, AIM Distributors will reject any order for purchase
of more than $250,000 for Class B shares.
2
<PAGE> 7
EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds"). Class
A and Class B shares of the Fund may be exchanged for shares of other funds in
The AIM Family of Funds in the manner and subject to the policies and charges
set forth herein. See "Exchange Privilege."
REDEEMING SHARES. Class A shareholders of the Fund may redeem all or a portion
of their shares at net asset value on any business day, generally without
charge. A contingent deferred sales charge of 1% may apply to certain
redemptions where a purchase of more than $1 million is made at net asset value.
See "How to Redeem Shares -- Contingent Deferred Sales Charge Program for Large
Purchases."
Class B shareholders of the Fund may redeem all or a portion of their shares
at net asset value on any business day, less a contingent deferred sales charge
for redemptions made within six years from the date such shares were purchased.
Class B shares redeemed after six years from the date such shares were purchased
will not be subject to any contingent deferred sales charge. See "How to Redeem
Shares -- Multiple Distribution System."
DISTRIBUTIONS. Dividends are declared daily and paid monthly from available
net investment income and any realized net short-term capital gain. Dividends
may be reinvested automatically in Fund shares of the distributing class without
a sales charge.
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> 8
THE FUND
- --------------------------------------------------------------------------------
TABLE OF FEES AND EXPENSES
The expenses and maximum transaction costs associated with investing in the
Class A and Class B shares of the Fund are reflected in the following table(1):
<TABLE>
<CAPTION>
CLASS A CLASS B
------- -------
<S> <C> <C>
Shareholder Transaction Costs(2):
Sales charge on purchases of shares....................... None None
Sales charges on reinvested distributions to
shareholders........................................... None None
Maximum contingent deferred sales charge (as a % of net
asset value at time of purchase or sale, whichever is
less).................................................. None 5.00%
Redemption charges........................................ None None
Exchange fees............................................. None None
Annual Fund Operating Expenses(3): (as a % of average net
assets)
Investment management and administration fees............. 0.50% 0.50%
12b-1 distribution and service fees (after waivers)....... 0.00% 0.75%
Other expenses (after reimbursements and waivers)......... 0.50% 0.50%
---- ----
Total Fund Operating Expenses (after
reimbursements and waivers)..................... 1.00% 1.75%
==== ====
</TABLE>
(1)This table is intended to assist investors in understanding the various costs
and expenses associated with investing in the Fund. Long-term shareholders
may pay more than the economic equivalent of the maximum front-end sales
charges permitted by the National Association of Securities Dealers, Inc.
rules regarding investment companies.
(2)The maximum 5% contingent deferred sales charge on Class B shares applies to
redemptions during the first year after purchase. The charge generally
declines by 1% annually thereafter, reaching zero after six years. See "Terms
and Conditions of Purchase of the AIM Funds -- Reductions in Initial Sales
Charges."
(3)Expenses are based on the Fund's fiscal year ended December 31, 1997. "Other
expenses" include custody, transfer agent, legal, audit and other expenses.
AIM has undertaken to limit the Fund's expenses (exclusive of brokerage
commissions, taxes, interest and extraordinary expenses) to the annual rate
of 1.00% and 1.75% of the average daily net assets of the Fund's Class A and
Class B shares, respectively. AIM has voluntarily agreed to continue this
limitation through May 31, 2000. See "Management" herein and the Statement of
Additional Information for more information.
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would directly or
indirectly pay the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS(2)
------ ------- ------- -----------
<S> <C> <C> <C> <C>
Class A shares...................................... $10 $32 $ 55 $123
Class B shares
Assuming complete redemption at end of
period(1)...................................... 70 89 119 188
Assuming no redemption............................ 18 56 96 188
</TABLE>
(1)Assumes deduction of the applicable contingent deferred sales charge.
(2)For Class B shares, this number reflects the conversion to Class A shares
eight years following the end of the calendar month in which a purchase was
made.
THE "HYPOTHETICAL EXAMPLE" SET FORTH ABOVE IS NOT A REPRESENTATION OF PAST OR
FUTURE EXPENSES. THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND
INDIRECT EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. THE ABOVE TABLE AND THE
ASSUMPTION IN THE HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY
REGULATION OF THE SEC APPLICABLE TO ALL MUTUAL FUNDS. THE 5% ANNUAL RETURN IS
NOT A PREDICTION OF AND DOES NOT REPRESENT THE FUND'S PROJECTED OR ACTUAL
PERFORMANCE.
4
<PAGE> 9
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The table below provides condensed financial information concerning income and
capital changes for one Class A and Class B share of the Fund. This information
is supplemented by the financial statements and notes thereto included in the
Statement of Additional Information. The financial statements and notes for the
fiscal year ended December 31, 1997, have been audited by PricewaterhouseCoopers
LLP, independent accountants, whose report thereon also appears in the Statement
of Additional Information. Information presented below for the fiscal years
ended December 31, 1988 to 1991 was audited by other auditors that served as the
Fund's independent accountants for those periods. The unaudited financial
statements and notes, for the semi-annual period ended June 30, 1998, are also
included in the Statement of Additional Information.
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
1998 -----------------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993 1992 1991
----------- -------- -------- -------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A+
Net investment income........... $ 0.023 $ 0.045 $ 0.044 $ 0.050 $ 0.032 $ 0.022 $ 0.028 $ 0.051
Distributions from net
investment income.............. (0.023) (0.045) (0.044) (0.050) (0.032) (0.022) (0.028) (0.051)
Net asset value (unchanged
during the period)............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total Investment
Return(b).............. 2.30% 4.62% 4.50% 5.08% 3.3% 2.2% 2.8% 5.1%
Ratios and supplemental data:
Net assets at end of the period
(in 000's)..................... $291,301 $186,611 $392,623 $183,761 $320,858 $87,822 $81,674 $70,295
Ratio of net investment income
to average net assets:
With expense waivers,
reductions and/or
reimbursement(a)............. 4.61% 4.50% 4.39% 4.94% 3.40% 2.17% 2.78% 5.10%
Without expense waivers,
reductions and/or
reimbursement(a)............. 4.36% 4.20% 4.08% 4.66% 3.15% 1.46% 2.47% 4.90%
Ratio of operating expenses to
average net assets:
With expense waivers,
reductions and/or
reimbursement(a)............. 0.94% 0.98% 0.99% 0.97% 0.92% 1.00% 1.25% 1.25%
Without expense waivers,
reductions and/or
reimbursement(a)............. 1.19% 1.28% 1.30% 1.25% 1.17% 1.72% 1.56% 1.45%
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1990 1989 1988
-------- ------- -------
<S> <C> <C> <C>
CLASS A+
Net investment income........... $ 0.069 $ 0.075 $ 0.058
Distributions from net
investment income.............. (0.069) (0.075) (0.058)
Net asset value (unchanged
during the period)............. $ 1.00 $ 1.00 $ 1.00
Total Investment
Return(b).............. 6.9% 7.6% 5.9%
Ratios and supplemental data:
Net assets at end of the period
(in 000's)..................... $123,218 $13,143 $11,628
Ratio of net investment income
to average net assets:
With expense waivers,
reductions and/or
reimbursement(a)............. 6.95% 7.60% 5.72%
Without expense waivers,
reductions and/or
reimbursement(a)............. 6.64% 7.17% --%
Ratio of operating expenses to
average net assets:
With expense waivers,
reductions and/or
reimbursement(a)............. 1.25% 1.19% 1.03%
Without expense waivers,
reductions and/or
reimbursement(a)............. 1.56% 1.62% --%
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31, APRIL 1, 1993
1998 --------------------------------------- TO DEC. 31,
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ------- -------- ------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
CLASS B++
Net investment income.................................... $ 0.019 $ 0.038 $ 0.037 $ 0.040 $ 0.025 $0.010
Distributions from net investment income................. (0.019) (0.038) (0.037) (0.040) (0.025) (0.010)
Net asset value (unchanged during the period)............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total Investment Return(b)....................... 1.99% 3.84% 3.73% 4.29% 2.53% 1.4%
Ratios and supplemental data:
Net assets at end of the period (in 000's)............... $101,012 $83,498 $128,308 $99,151 $109,936 $3,478
Ratio of net investment income to average net assets:
With expense waivers, reductions and/or
reimbursement(a)..................................... 3.86% 3.75% 3.64% 4.19% 2.65% 1.42%
Without expense waivers, reductions and/or
reimbursement(a)..................................... 3.61% 3.45% 3.33% 3.91% 2.40% 0.86%
Ratio of operating expenses to average net assets:
With expense waivers, reductions and/or
reimbursement(a)..................................... 1.69% 1.73% 1.74% 1.72% 1.67% 1.75%
Without expense waivers, reductions and/or
reimbursement(a)..................................... 1.94% 2.03% 2.05% 2.00% 1.92% 2.31%
</TABLE>
- ---------------
+ All capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
(a)Annualized for periods of less than one year.
(b)Not annualized.
5
<PAGE> 10
- --------------------------------------------------------------------------------
PERFORMANCE
All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return. Standardized total return
for Class B shares reflects the deduction of the maximum applicable contingent
deferred sales charge on a redemption of shares held for the period.
The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
Yield is computed in accordance with standardized formulas described in the
Statement of Additional Information and can be expected to fluctuate from time
to time and is not necessarily indicative of future results. Accordingly, yield
information may not provide a basis for comparison with investments which pay a
fixed rate of interest for a stated period of time. Yield reflects investment
income net of expenses over the relevant period attributable to a Fund share,
expressed as an annualized percentage of the maximum offering price per share
for Class A shares and net asset value per share for Class B shares.
Yield is a function of the type and quality of the Fund's investments, the
maturity of the securities held in the Fund's portfolio and the operating
expense ratio of the Fund. A shareholder's investment in the Fund is not insured
or guaranteed. These factors should be carefully considered by the investor
before making an investment in the Fund.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's yield and total return. The performance
of the Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
- --------------------------------------------------------------------------------
INVESTMENT PROGRAM
INVESTMENT OBJECTIVE. The Fund's investment objective is to seek maximum
current income consistent with liquidity and conservation of capital. The Fund
seeks this objective by investing in high quality, U.S. dollar-denominated money
market instruments, i.e., debt obligations with remaining maturities of 13
months or less. There can be no assurance that the Fund will achieve its
investment objective.
INVESTMENT POLICIES. The Fund seeks to maintain a net asset value of $1.00 per
share. To do so, the Fund uses the amortized cost method of valuing its
securities pursuant to Rule 2a-7 under the Investment Company Act of 1940, as
amended (the "1940 Act"), certain requirements of which are summarized below.
In accordance with Rule 2a-7, the Fund will (i) maintain a dollar-weighted
average portfolio maturity of 90 days or less and (ii) purchase only instruments
having remaining maturities of 13 months or less.
The Fund will invest only in high quality, U.S. dollar-denominated money
market instruments determined by the Sub-advisor to present minimal credit risks
in accordance with procedures established by the Trust's Board of Trustees (the
"Board"). To be considered high quality, a security must be rated in accordance
with applicable rules in one of the two highest rating categories for short-
term securities by at least two nationally recognized statistical rating
organizations ("NRSROs") (or one, if only one such NRSRO has rated the security)
or, if the issuer has no applicable short-term rating, determined by the
Sub-advisor to be of equivalent credit quality.
High quality securities are divided into "first tier" and "second tier"
securities. The Fund will limit its purchases of Municipal Securities to those
which are "First Tier" securities as defined in Rule 2a-7 under the 1940 Act.
Generally, "First Tier" securities are securities that are rated in the highest
rating category for short-term debt obligations by two NRSROs, or, if only rated
by one NRSRO, are rated in the highest rating category by that NRSRO, or, if
unrated, are determined by the Fund's Sub-advisor (under the supervision of and
pursuant to guidelines established by the Board of Trustees) to be of comparable
quality to a rated security that meets the forego-
6
<PAGE> 11
ing quality standards, as well as securities issued by a registered investment
company that is a money market fund and U.S. government securities.
The rating criteria of Standard & Poor's Corporation ("S&P") and Moody's
Investment Service, Inc. ("Moody's"), two NRSROs currently rating instruments of
the type the Fund may purchase, are more fully described in "Description of Debt
Ratings" in the Statement of Additional Information.
CERTAIN INVESTMENT STRATEGIES AND POLICIES. In pursuit of its objectives and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
PERMITTED INVESTMENTS. The Fund may invest in the following types of money
market instruments:
- Obligations issued or guaranteed by the U.S. and foreign governments, their
agencies and instrumentalities. These include: direct obligations of the U.S.
Treasury, such as Treasury bills and notes; obligations backed by the full faith
and credit of the U.S. government, such as those issued by the Government
National Mortgage Association; obligations supported primarily or solely by the
creditworthiness of the issuer, such as securities of Fannie Mae (also known as
the Federal National Mortgage Association), Freddie Mac (also known as the
Federal Home Loan Mortgage Corporation) and the Tennessee Valley Authority; and
similar U.S.-dollar denominated instruments of foreign governments, their
agencies, authorities and instrumentalities.
- Obligations of U.S. and non-U.S. banks, including certificates of deposit,
bankers' acceptances and similar instruments, when such banks have total assets
at the time of purchase equal to at least $1 billion.
- Interest-bearing deposits in U.S. commercial and savings banks having total
assets of $1 billion or less, in principal amounts at each such bank not greater
than are insured by an agency of the U.S. government, provided that the
aggregate amount of such deposits (including interest earned) does not exceed 5%
of the Fund's assets.
- Commercial paper and other short-term debt obligations of U.S. and foreign
companies, rated at least A-1 by S&P or Prime-1 by Moody's or, if not rated,
determined by the Sub-advisor to be of equivalent quality, provided that any
outstanding intermediate- or long-term debt of the issuer is rated at least AA
by S&P or Aa by Moody's. These instruments may include corporate bonds and notes
(corporate obligations that mature, or that may be redeemed, in one year or
less). These corporate obligations include variable rate master notes, which are
redeemable upon notice and permit investment of fluctuating amounts at varying
rates of interest pursuant to direct arrangements with the issuer of the
instrument.
- Repurchase agreements secured by any of the foregoing. A repurchase
agreement is a transaction in which the Fund purchases a security from a bank or
recognized securities dealer and simultaneously commits to resell that security
to the bank or dealer at an agreed-upon price, date and market rate of interest
unrelated to the coupon rate or maturity of the purchased security. Although
repurchase agreements carry certain risks not associated with direct investments
in securities, including possible decline in the market value of the underlying
securities and delays and costs to the Fund if the other party to the repurchase
agreement becomes bankrupt, the Fund will enter into repurchase agreements only
with banks and dealers believed by the Sub-advisor to present minimal credit
risks in accordance with guidelines approved by the Board. The Sub-advisor will
review and monitor the creditworthiness of such institutions under the Board's
general supervision. The Fund will not enter into repurchase agreements with
maturities of more than seven days if, as a result, more than 10% of the value
of its net assets would be invested in such repurchase agreements and other
illiquid securities.
INVESTMENT TECHNIQUES. In managing the Fund, the Sub-advisor may employ a
number of professional money management techniques, including varying the
composition of the Fund's investments and the average weighted maturity of the
Fund's portfolio within the limitations described above. Determinations to use
such techniques will be based on the Sub-advisor's identification and assessment
of the relative values of various money market instruments and the future of
interest rate patterns, economic conditions and shifts in fiscal and monetary
policy. The Sub-advisor also may seek to improve the Fund's yield by purchasing
or selling securities in order to take advantage of yield disparities that
regularly occur in the market. For example, frequently there are yield
disparities between different types of money market instruments, and market
conditions from time to time result in similar securities trading at different
prices.
RISKS AND OTHER CONSIDERATIONS. Investors should recognize that in periods of
declining interest rates, the Fund's yield will tend to be somewhat higher than
prevailing market rates; conversely, in periods of rising interest rates, the
Fund's yield will tend to be somewhat lower than those rates. Also, when
interest rates are falling, the net new money flowing into the Fund from the net
sale of its shares likely will be invested in instruments producing lower yields
than the balance of the Fund's portfolio, thereby reducing its yield. The
opposite generally will be true in periods of rising interest rates. The Fund is
designed to provide maximum current income consistent with the liquidity and
safety of principal afforded by investment in a portfolio of high quality money
market instruments; the Fund's yield may be lower than that produced by funds
investing in lower quality and/or longer-term securities.
Although the Fund may invest in instruments of non-U.S. issuers, all such
instruments will be denominated in U.S. dollars and will be first tier
securities. Obligations of non-U.S. issuers are subject to the same risks that
pertain to domestic issues, notably credit risk, market risk and liquidity risk.
Nonetheless, these instruments present risks that are different from those
presented by investment in instruments of U.S. issuers. Obligations of foreign
entities may be subject to certain sovereign risks, including adverse political
and economic developments in a foreign country, the extent and quality of
government regulation of financial markets and institutions,
7
<PAGE> 12
interest limitations, currency controls, foreign withholding taxes, and
expropriation or nationalization of foreign issuers and their assets. There may
be less publicly available information about foreign issuers than about domestic
issuers, and foreign issuers may not be subject to the same accounting, auditing
and financial recordkeeping standards and requirements as are domestic issuers.
Accordingly, while the Fund's ability to invest in these instruments may provide
it with the potential to produce a higher yield than money market funds
investing solely in instruments of domestic issuers, the Fund presents greater
risk than such other funds.
VARIABLE AND FLOATING RATE SECURITIES. The Fund may purchase variable and
floating rate securities with remaining maturities in excess of 13 months. Such
securities must comply with conditions established by the SEC under which they
may be considered to have remaining maturities of 13 months or less. The yield
of these securities varies in relation to changes in specific money market rates
such as the prime rate. These changes are reflected in adjustments to the yields
of the variable and floating rate securities, and different securities may have
different adjustment rates. To the extent that the Fund invests in such variable
and floating rate securities, it is the Sub-advisor's view that the Fund may be
able to take advantage of the higher yield that is usually paid on longer-term
securities. The Sub-advisor further believes that the variable and floating
rates paid on such securities may substantially reduce the wide fluctuations in
market value caused by interest rate changes and other factors which are typical
of longer-term debt securities.
OTHER INFORMATION. The Fund may acquire participation interests in securities
in which it is permitted to invest. Participation interests are pro rata
interests in securities held by others. Pending investment of proceeds from new
sales of Fund shares or for temporary defensive purposes, the Fund may hold any
portion of its assets in cash. The Fund may borrow money from banks as a
temporary measure (a) for extraordinary or emergency purposes in amounts up to
5% of its net assets (taken at market value) or (b) in amounts up to 33 1/3% of
its net assets in order to meet redemption requests. The Fund will not purchase
securities while borrowings remain outstanding. The Fund may invest no more than
5% of its total assets in the securities of a single issuer (other than
securities issued or guaranteed by the U.S. government, its agencies, or
instrumentalities).
The Fund's investment objective and policies with respect to borrowing as
stated above are fundamental and may not be changed without the approval of a
majority of its outstanding voting securities. A "majority of the Fund's
outstanding voting securities" means the lesser of (i) 67% of its shares
represented at a meeting at which more than 50% of the outstanding shares are
represented, and (ii) more than 50% of its outstanding shares. In addition, the
Fund has adopted certain investment limitations that also may not be changed
without shareholder approval. A description of these limitations is included in
the Statement of Additional Information. The Fund's other investment policies
described herein are not fundamental and may be changed by vote of the Board
without shareholder approval.
If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
- --------------------------------------------------------------------------------
MANAGEMENT
The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Trust's Board of Trustees has approved all significant agreements
between the Trust on the one side and persons or companies furnishing services
to the Fund on the other, including the investment management and administrative
services agreement with AIM, the investment sub-advisory and sub-administration
agreement between AIM and the Sub-advisor, the agreements with AIM Distributors
regarding distribution of the Fund's shares, the custody agreement and the
transfer agency agreement. The day-to-day operations of the Fund are delegated
to the officers of the Trust, subject always to the investment objective and
policies of the Fund and to the general supervision of the Trust's Board of
Trustees. See "Trustees and Executive Officers" in the Statement of Additional
Information for information on the Trustees.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the Fund's investment managers and administrators include
determining the composition of the Fund's portfolio and placing orders to buy,
sell or hold particular securities; furnishing corporate officers and clerical
staff; providing office space, services and equipment; and supervising all
matters relating to the Fund's operation. For these services, the Fund pays AIM
management and administration fees, computed daily and paid monthly, at the
annualized rate of 0.50% of the Fund's average daily net assets. Out of the
aggregate fees payable by the Fund, AIM pays the Sub-advisor sub-advisory and
sub-administration fees equal to 40% of the aggregate fees AIM receives from the
Fund. The Fund pays all expenses not assumed by AIM, the Sub-advisor, AIM
Distributors or other agents. AIM has undertaken to limit the Fund's expenses
(exclusive of brokerage commissions, interest, taxes and extraordinary expenses)
to the annual rate of 1.00% and 1.75% of the average daily net assets of the
Fund's Class A and Class B shares, respectively.
The Sub-advisor also serves as the Fund's pricing and accounting agent. For
these services the Sub-advisor receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-advisor (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administration agreement (the "Advisory Agreement"). AIM was organized in 1976
and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
8
<PAGE> 13
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Fund pursuant to an investment sub-advisory and
sub-administration agreement. Prior to May 29, 1998, the Sub-advisor was known
as Chancellor LGT Asset Management, Inc. On May 29, 1998, Liechtenstein Global
Trust AG ("LGT"), the former indirect parent organization of the Sub-advisor,
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included the Sub-advisor and
certain other affiliates. As a result of this transaction, the Sub-advisor is
now an indirect wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the
Sub-advisor and its worldwide asset management affiliates provided investment
management and/or administrative services to institutional, corporate and
individual clients around the world since 1969.
AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices in Atlanta, Boston, Dallas, Denver,
Louisville, Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore,
Sydney, Tokyo and Toronto. In managing the Fund, the Sub-advisor employs a team
approach, taking advantage of its investment resources around the world.
In placing orders for the Fund's portfolio securities transactions, the
Sub-advisor seeks to obtain the best net results. Consistent with its obligation
to obtain the best net results, the Sub-advisor may consider a broker/dealer's
sale of shares of the AIM Funds as a factor in considering through whom
portfolio transactions will be effected.
DISTRIBUTOR. The Trust has entered into master distribution agreements
relating to the Fund (the "Distribution Agreements.") with AIM Distributors, a
registered broker-dealer and a wholly owned subsidiary of AIM, pursuant to which
AIM Distributors acts as the distributor of Class A and Class B shares of the
Fund. Certain Trustees and officers of the Trust are affiliated with AIM
Distributors.
The Distribution Agreements provide AIM Distributors with the exclusive right
to distribute shares of the Fund directly and through institutions with whom AIM
Distributors has entered into selected dealer agreements. Under the Distribution
Agreement for the Class B shares, AIM Distributors sells Class B shares at net
asset value subject to a contingent deferred sales charge established by AIM
Distributors. AIM Distributors is authorized to advance to institutions through
whom Class B shares are sold a sales commission under schedules established by
AIM Distributors. The Distribution Agreement for the Class B shares provides
that AIM Distributors (or its assignee or transferee) will receive 0.75% (of the
total 1.00% payable under the distribution plan applicable to Class B shares) of
the Fund's average daily net assets attributable to Class B shares attributable
to the sales efforts of AIM Distributors and its predecessor. In the event the
Class B shares Distribution Agreement is terminated, AIM Distributors would
continue to receive payments of asset-based sales charges in respect of the
outstanding Class B shares attributable to the distribution efforts of AIM
Distributors and its predecessor; provided, however, that a complete termination
of the Class B shares master distribution plan (as defined in the plan) would
terminate all payments by the Fund of asset based sales charges and service fees
to AIM Distributors. Termination of the Class B shares distribution plan or
Distribution Agreement does not affect the obligation of Class B shareholders to
pay contingent deferred sales charges.
DISTRIBUTION PLANS. Class A Plan. The Trust has adopted a Master Distribution
Plan applicable to Class A shares of the Fund (the "Class A Plan") pursuant to
Rule 12b-1 under the 1940 Act, to compensate AIM Distributors for the purpose of
financing any activity that is intended to result in the sale of Class A shares
of the Fund.
Under the Class A Plan, the Trust may compensate AIM Distributors an aggregate
amount of 0.25% of the average daily net assets of Class A shares of the Fund
[on an annualized basis].
The Class A Plan is designed to compensate AIM Distributors, on a quarterly
basis, for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class A shares of the Fund. Payments can also be directed
by AIM Distributors to selected institutions who have entered into service
agreements with respect to Class A shares of the Fund and who provide continuing
personal shareholder services to their customers who own Class A shares of the
Fund. The service fees payable to selected institutions are calculated at the
annual rate of 0.25% of the average daily net asset value of those Fund shares
that are held in such institution's customers' accounts which were purchased on
or after a prescribed date set forth in the Plan.
Of the aggregate amount payable under the Class A Plan, payments to dealers
and other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund, in amounts
of up to 0.25% of the average net assets of such Fund attributable to the
customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset-based sales charge pursuant to the Class A Plan. The Class A Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Trust with respect to the Fund. The Class A
Plan does not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Class A Plan on behalf of the Fund. Thus, under the Class A Plan, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Dis-
9
<PAGE> 14
tributors thereunder at any given time, the Fund will not be obligated to pay
more than that fee. If AIM Distributors' expenses are less than the fee it
receives, AIM Distributors will retain the full amount of the fee.
Class B Plan. The Trust has also adopted a Master Distribution Plan applicable
to Class B shares of the Fund (the "Class B Plan"). Under the Class B Plan, the
Fund pays distribution expenses at an annual rate of 1.00% of the average daily
net assets attributable to the Fund's Class B shares. Of such amount, the Fund
pays a service fee of 0.25% of the average daily net assets attributable to the
Fund's Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee would
constitute an asset-based sales charge. Amounts paid in accordance with the
Class B Plan with respect to the Fund may be used to finance any activity
primarily intended to result in the sale of Class B shares of the Fund.
Both Plans. Activities that may be financed under the Class A Plan and the
Class B Plan (collectively, the "Plans") include, but are not limited to:
printing of prospectuses and statements of additional information and reports
for other than existing shareholders, overhead, preparation and distribution of
advertising material and sales literature, supplemental payments to dealers and
other institutions such as asset-based sales charges or as payments of service
fees under shareholder service arrangements, and the cost of administering the
Plans. These amounts payable by the Fund under the Plans need not be directly
related to the expenses actually incurred by AIM Distributors on behalf of the
Fund. Thus, even if AIM Distributors' actual expenses exceed the fee payable to
AIM Distributors thereunder at any given time, the Trust will not be obligated
to pay more than that fee, and if AIM Distributors' expenses are less than the
fee it receives, AIM Distributors will retain the full amount of the fee.
Payments pursuant to the Plans are subject to any applicable limitations imposed
by rules of the National Association of Securities Dealers, Inc.
Each of the Plans may be terminated at any time by a vote of the majority of
those trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding shares of the applicable class.
Under the Plans, certain financial institutions which have entered into
service agreements and which sell shares of the Fund on an agency basis, may
receive payments from the Fund pursuant to the respective Plans. AIM
Distributors does not act as principal, but rather as agent for the Fund, in
making such payments.
For additional information concerning the operation of the Plans see the
Statement of Additional Information.
- --------------------------------------------------------------------------------
ORGANIZATION OF THE TRUST
The Trust was organized as a Delaware business trust on May 7, 1998. On
September 8, 1998, the Trust acquired the assets of and assumed the liabilities
of AIM Investment Portfolios, Inc., a Maryland Corporation.
From time to time the Trust may establish additional funds, each corresponding
to a distinct investment portfolio and a distinct series of the Trust's shares
of beneficial interest. Shares of each fund are entitled to one vote per share
(with proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares for the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal as to earnings, assets
and voting privileges to each other share in the Fund, except that each normally
has exclusive voting rights with respect to its distribution plan and bears the
expenses, if any, related to the distribution of its shares. Shares of the Fund,
when issued, are fully paid and nonassessable.
LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust and the
Fund.
10
<PAGE> 15
THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
SHAREHOLDER ASSISTANCE IS
(800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
INVESTOR'S GUIDE
TO THE AIM FAMILY OF FUNDS--Registered Trademark--
- --------------------------------------------------------------------------------
INTRODUCTION TO THE AIM FAMILY OF FUNDS
THE AIM FAMILY OF FUNDS consists of the following mutual funds:
<TABLE>
<S> <C>
AIM ADVISOR FLEX FUND AIM GLOBAL INFRASTRUCTURE FUND
AIM ADVISOR INTERNATIONAL VALUE FUND AIM GLOBAL RESOURCES FUND
AIM ADVISOR LARGE CAP VALUE FUND AIM GLOBAL TELECOMMUNICATIONS FUND
AIM ADVISOR MULTIFLEX FUND AIM GLOBAL TRENDS FUND
AIM ADVISOR REAL ESTATE FUND AIM GLOBAL UTILITIES FUND
AIM AGGRESSIVE GROWTH FUND AIM HIGH INCOME MUNICIPAL FUND
AIM ASIAN GROWTH FUND AIM HIGH YIELD FUND
AIM BALANCED FUND AIM INCOME FUND
AIM BASIC VALUE FUND AIM INTERMEDIATE GOVERNMENT FUND
AIM BLUE CHIP FUND AIM INTERNATIONAL EQUITY FUND
AIM CAPITAL DEVELOPMENT FUND AIM INTERNATIONAL GROWTH FUND
AIM CHARTER FUND AIM JAPAN GROWTH FUND
AIM CONSTELLATION FUND AIM LATIN AMERICAN GROWTH FUND
AIM DEVELOPING MARKETS FUND AIM LIMITED MATURITY TREASURY FUND
AIM DOLLAR FUND(*) AIM MID CAP GROWTH FUND
AIM EMERGING MARKETS FUND AIM MONEY MARKET FUND(*)
AIM EMERGING MARKET DEBT FUND AIM MUNICIPAL BOND FUND
AIM EUROPEAN DEVELOPMENT FUND AIM NEW PACIFIC GROWTH FUND
AIM EUROPE GROWTH FUND AIM SELECT GROWTH FUND
AIM GLOBAL AGGRESSIVE GROWTH FUND AIM SMALL CAP EQUITY FUND
AIM GLOBAL CONSUMER PRODUCTS AND AIM SMALL CAP OPPORTUNITIES FUND
SERVICES FUND AIM STRATEGIC INCOME FUND
AIM GLOBAL FINANCIAL SERVICES FUND AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
AIM GLOBAL GOVERNMENT INCOME FUND AIM TAX-EXEMPT CASH FUND(*)
AIM GLOBAL GROWTH FUND AIM TAX-FREE INTERMEDIATE FUND
AIM GLOBAL GROWTH & INCOME FUND AIM VALUE FUND
AIM GLOBAL HEALTH CARE FUND AIM WEINGARTEN FUND
AIM GLOBAL INCOME FUND AIM WORLDWIDE GROWTH FUND
</TABLE>
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND are offered to investors at net
asset value, without payment of a sales charge, as described below. Other
funds, including the Class A, Class B and Class C shares of AIM MONEY MARKET
FUND, are sold with an initial sales charge or subject to a contingent
deferred sales charge upon redemption, as described below.
IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
HOW TO PURCHASE SHARES
HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM Family
of Funds ("AIM Funds"), an investor must submit a fully completed new Account
Application form directly to A I M Fund Services, Inc. ("AFS" or the "Transfer
Agent") or through any dealer authorized by A I M Distributors, Inc. ("AIM
Distributors") to sell shares of the AIM Funds.
Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment is
$500, except for accounts initially established through an Automatic Investment
Plan, which requires a special authorization form (see "Special Plans") and for
certain retirement accounts. The minimum initial investment for accounts
established with an Automatic Investment Plan is $50. The minimum initial
investment for an Individual Retirement Arrangement ("IRA") or Roth IRA is $250.
There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Savings Incentive Match Plans for Employee IRA ("SIMPLE IRA")
accounts, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such plans is $25 per
fund investment), or for investment of dividends and distributions of any of the
AIM Funds into any existing AIM
A-1
<PAGE> 16
Funds account. Notwithstanding the foregoing, the minimum initial investment
applicable to AIM Small Cap Opportunities Fund is $10,000.
AFS' mailing address is:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
For additional information or assistance, investors should call the Client
Services Department of AFS at:
(800) 959-4246
Shares of any AIM Funds not named on the cover of this Prospectus, as well as
Advisor Class shares of certain AIM Funds, are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
<TABLE>
<S> <C>
Beneficiary Bank ABA/Routing #: 113000609
Beneficiary Account Number: 00100366807
Beneficiary Account Name: A I M Fund Services, Inc.
RFB: Fund name, Reference Number (16 character limit)
OBI: Shareholder Name, Shareholder Account Number
(70 character limit)
</TABLE>
HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased directly
through AIM Distributors or through any dealer who has entered into an agreement
with AIM Distributors. The minimum investment for subsequent purchases is $50.
The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. Notwithstanding the foregoing, the minimum subsequent purchases of shares
of AIM Small Cap Opportunities Fund is $1,000. There are no such minimum
investment requirements for investment of dividends and distributions of any of
the AIM Funds into any other existing AIM Funds account.
BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
BY AIM BANK CONNECTION(SM): To purchase additional shares by electronic funds
transfer, please contact the Client Services Department of AFS for details.
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BASIC
VALUE FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM
EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT
FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL
INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS
FUND, AIM GLOBAL TRENDS FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH INCOME
MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM INTERNATIONAL GROWTH FUND,
AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM MID CAP EQUITY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL
BOND FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP
GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM STRATEGIC INCOME FUND,AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE
INTERMEDIATE FUND, AIM VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH
FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND
and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may be
purchased at their respective net asset value plus a sales charge as indicated
below, except that Class A shares of AIM DOLLAR FUND and AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without a
sales charge and Class B shares (the "Class B shares") and Class C shares (the
"Class C shares") of the Multiple Class Funds which offer such classes are sold
at net asset value subject to a contingent deferred sales charge payable upon
certain redemptions. Class B shares of AIM DOLLAR FUND, however, may be acquired
only by an exchange of shares of another AIM Fund. These contingent deferred
sales charges are described under the caption "How to Redeem Shares -- Multiple
Distribution System." Securities dealers and other persons entitled to receive
compensation for selling or servicing shares of a Multiple Class Fund may
receive different compensation for selling or servicing one particular class of
shares over
A-2
<PAGE> 17
another class in the same Multiple Class Fund. Factors an investor should
consider prior to purchasing Class A, Class B or Class C shares (or, if
applicable, AIM Cash Reserve Shares) of a Multiple Class Fund are described
below under "Special Information Relating to Multiple Class Funds." For
information on purchasing any of the AIM Funds and to receive a prospectus,
please call (800) 347-4246. As described below, the sales charge otherwise
applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
The following Multiple Class Funds sometimes are referred to herein as the
"AIM/GT Funds": AIM AMERICA VALUE FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR
FUND, AIM EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPE
GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL
FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM
GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS
FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN
GROWTH FUND, AIM MID CAP GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM SMALL CAP
EQUITY FUND, AIM STRATEGIC INCOME FUND and AIM WORLDWIDE GROWTH FUND.
The following tables show the sales charge and dealer concession at various
investment levels for the AIM Funds.
SALES CHARGES AND DEALER CONCESSIONS
GROUP I. Certain AIM Funds are currently sold with a sales charge ranging from
5.50% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM BASIC VALUE FUND, AIM ASIAN
GROWTH FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL UTILITIES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM MID CAP
EQUITY FUND, AIM MONEY MARKET FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT
GROWTH FUND, AIM SMALL CAP GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM
VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH FUND.
<TABLE>
<CAPTION>
DEALER
CONCESSION
INVESTOR'S SALES CHARGE ----------
-------------------------- AS A
AS A AS A PERCENTAGE
PERCENTAGE PERCENTAGE OF THE
OF THE PUBLIC OF THE NET PUBLIC
AMOUNT OF INVESTMENT IN OFFERING AMOUNT OFFERING
SINGLE TRANSACTION(1) PRICE INVESTED PRICE
----------------------- ------------- ---------- ----------
<S> <C> <C> <C> <C>
Less than $ 25,000 5.50% 5.82% 4.75%
$ 25,000 but less than $ 50,000 5.25 5.54 4.50
$ 50,000 but less than $ 100,000 4.75 4.99 4.00
$100,000 but less than $ 250,000 3.75 3.90 3.00
$250,000 but less than $ 500,000 3.00 3.09 2.50
$500,000 but less than $1,000,000 2.00 2.04 1.60
</TABLE>
- ---------------
(1) AIM Small Cap Opportunities Fund will not accept any single purchase in
excess of $250,000.
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
A-3
<PAGE> 18
GROUP II. Certain AIM Funds are currently sold with a sales charge ranging from
4.75% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND, AIM
BALANCED FUND, AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL
RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM
HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM LATIN AMERICAN GROWTH FUND, AIM MUNICIPAL BOND
FUND, AIM STRATEGIC INCOME FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.
<TABLE>
<CAPTION>
DEALER
CONCESSION
INVESTOR'S SALES CHARGE ----------
-------------------------- AS A
AS A AS A PERCENTAGE
PERCENTAGE PERCENTAGE OF THE
OF THE PUBLIC OF THE NET PUBLIC
AMOUNT OF INVESTMENT IN OFFERING AMOUNT OFFERING
SINGLE TRANSACTION PRICE INVESTED PRICE
----------------------- ------------- ---------- ----------
<S> <C> <C> <C> <C>
Less than $ 50,000 4.75% 4.99% 4.00%
$ 50,000 but less than $ 100,000 4.00 4.17 3.25
$100,000 but less than $ 250,000 3.75 3.90 3.00
$250,000 but less than $ 500,000 2.50 2.56 2.00
$500,000 but less than $1,000,000 2.00 2.04 1.60
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
<TABLE>
<CAPTION>
DEALER
CONCESSION
INVESTOR'S SALES CHARGE ----------
-------------------------- AS A
AS A AS A PERCENTAGE
PERCENTAGE PERCENTAGE OF THE
OF THE PUBLIC OF THE NET PUBLIC
AMOUNT OF INVESTMENT IN OFFERING AMOUNT OFFERING
SINGLE TRANSACTION PRICE INVESTED PRICE
----------------------- ------------- ---------- ----------
<S> <C> <C> <C> <C>
Less than $ 100,000 1.00% 1.01% 0.75%
$100,000 but less than $ 250,000 0.75 0.76 0.50
$250,000 but less than $1,000,000 0.50 0.50 0.40
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.
AIM Distributors may make payments to dealers and institutions who are dealers
of record for purchases of $1 million of more of Class A shares (or shares which
normally involve payment of initial sales charges), which are sold at net asset
value and are subject to
A-4
<PAGE> 19
a contingent deferred sales charge, for all AIM Funds other than Class A shares
of each of AIM LIMITED MATURITY TREASURY FUND and AIM TAX-FREE INTERMEDIATE FUND
as follows: 1% of the first $2 million of such purchases, plus 0.80% of the next
$1 million of such purchases, plus 0.50% of the next $17 million of such
purchases, plus 0.25% of amounts in excess of $20 million of such purchases. See
"Contingent Deferred Sales Charge Program for Large Purchases." AIM Distributors
may make payments to dealers and institutions who are dealers of record for
purchases of $1 million or more of Class A shares (or shares which normally
involve payment of initial sales charges), and which are sold at net asset value
and are not subject to a contingent deferred sales charge, in an amount up to
0.10% of such purchases of Class A shares of AIM LIMITED MATURITY TREASURY FUND,
and in an amount up to 0.25% of such purchases of Class A shares of AIM TAX-FREE
INTERMEDIATE FUND.
AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.
AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
on Class C shares are not paid on sales to investors exempt from the CDSC,
including Class C shareholders of record on April 30, 1995 who purchase
additional shares in any of the Funds on or after May 1, 1995, and in
circumstances where AIM Distributors grants an exemption on particular
transactions.
TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of regular trading on the New York Stock Exchange ("NYSE"), which is
generally 4:00 p.m. Eastern Time (and which is hereinafter referred to as "NYSE
Close"), on any business day of an AIM Fund will be confirmed at the price next
determined. Orders received after NYSE Close will be confirmed at the price
determined on the next business day of the AIM Fund. Certain financial
institutions (or their designees) may be authorized to accept purchase orders on
behalf of the AIM Funds. Orders received by authorized institutions (or their
designees) before NYSE Close will be deemed to have been received by an AIM Fund
on such day and will be effected that day, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. It is the responsibility of the dealer/financial institution to ensure
that all orders are transmitted on a timely basis to the Transfer Agent. Any
loss resulting from the dealer/financial institution's failure to submit an
order within the prescribed time frame will be borne by that dealer/financial
institution. Please see "How to Purchase Shares -- Purchases by Wire" for
information on obtaining a reference number for wire orders, which will
facilitate the handling of such orders and ensure prompt credit to an investor's
account. A "business day" of an AIM Fund is any day on which the NYSE is open
for business. It is expected that the NYSE will be closed during the next twelve
months on Saturdays and Sundays and on the days on which New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day are observed by the NYSE.
An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class Funds
currently offer two or more classes of shares through separate distribution
systems (the "Multiple Distribution System"). Although each class of shares of a
particular Multiple Class Fund represents an interest in the same portfolio of
investments, each class is subject to a different distribution structure and, as
a result, differing expenses. This Multiple Distribution System allows investors
to select the class that is best suited to the investor's needs and objectives.
In considering the options afforded by the Multiple Distribution System,
investors should consider both the applicable initial sales charge or contingent
deferred sales charge, as well as the ongoing expenses borne by each class of
shares and other relevant factors, such as whether his or her investment goals
are long-term or short-term.
CLASS A SHARES generally are sold subject to the initial sales charges
described above and are subject to the other fees and expenses described
herein. Class A shares of AIM MONEY MARKET FUND are designed to meet the
needs of an investor who wishes to establish a dollar cost averaging
program, pursuant to which Class A shares an investor owns may be exchanged
at net asset value for Class A shares of another Multiple Class Fund or
shares of another AIM Fund which is not a Multiple Class Fund, subject to
the terms and conditions described under the caption "Exchange
Privilege -- Terms and Conditions of Exchanges."
A-5
<PAGE> 20
CLASS B SHARES are sold without an initial sales charge. Thus, the entire
purchase price of Class B shares is immediately invested in Class B shares.
Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
per annum on the average daily net assets of a Multiple Class Fund
attributable to Class B shares. See the discussion under the caption
"Management -- Distribution Plans." In addition, Class B shares redeemed
within six years from the date such shares were purchased are subject to a
contingent deferred sales charge ranging from 5% for redemptions made
within the first year to 1% for redemptions made within the sixth year. No
contingent deferred sales charge will be imposed if Class B shares are
redeemed after six years from the date such shares were purchased.
Redemptions of Class B shares and associated charges are further described
under the caption "How to Redeem Shares -- Multiple Distribution System."
Class B shares will automatically convert into Class A shares of the same
Multiple Class Fund (together with a pro rata portion of all Class B shares
acquired through the reinvestment of dividends and other distributions)
eight years from the end of the calendar month in which the purchase of
Class B shares was made. Class B shares of AIM GLOBAL TRENDS FUND that were
outstanding on May 29, 1998 and which are continuously held by the
shareholder, automatically convert to Class A shares of AIM GLOBAL TRENDS
FUND seven years from the end of the calendar month in which the purchase
of such Class B shares was made. If a shareholder exchanges Class B shares
of AIM GLOBAL TRENDS FUND that were outstanding on, and continuously held
since, May 29, 1998 for Class B shares of any other AIM Fund, such Class B
shares will be subject to the eight year conversion feature applicable to
Class B shares of all other AIM Funds. Following such conversion of their
Class B shares, investors will be relieved of the higher Rule 12b-1 Plan
payments associated with Class B shares. See "Management -- Distribution
Plans."
AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an
initial sales charge and are not subject to a contingent deferred sales
charge; however, they are subject to the other fees and expenses described
in the prospectus for AIM MONEY MARKET FUND.
TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon Eastern Time or NYSE Close on any
business day of the Fund will be confirmed at the price next determined. Net
asset value is normally determined at 12:00 noon Eastern Time and NYSE Close on
each business day of AIM MONEY MARKET FUND.
SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND, AIM TAX-EXEMPT CASH
FUND and AIM DOLLAR FUND (THE "MONEY MARKET FUNDS"). Because each Money Market
Fund uses the amortized cost method of valuing the securities it holds and
rounds its per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of such funds will remain
constant at $1.00 per share. However, there is no assurance that each Money
Market Fund can maintain a $1.00 net asset value per share. In order to earn
dividends with respect to AIM MONEY MARKET FUND on the same day that a purchase
is made, purchase payments in the form of federal funds must be received by the
Transfer Agent before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds received
after such time but prior to NYSE Close, will begin to earn dividends on the
next business day following the date of purchase. The Money Market Funds
generally will not issue share certificates but will record investor holdings in
noncertificate form and regularly advise the shareholder of his ownership
position.
SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
REDUCTIONS IN INITIAL SALES CHARGES
Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of Class A shares of the AIM Funds that
are otherwise subject to an initial sales charge, provided that such purchases
are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class B and Class C shares of the Multiple Class Funds
will not be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges.
A-6
<PAGE> 21
The term "purchaser" means:
- an individual and his or her spouse and children, including any trust
established exclusively for the benefit of any such person; or a pension,
profit-sharing, or other benefit plan established exclusively for the
benefit of any such person, such as an IRA, Roth IRA, a single-participant
money-purchase/profit-sharing plan or an individual participant in a 403(b)
plan (unless such 403(b) plan qualifies as the purchaser as defined below);
- a 403(b) plan, the employer/sponsor of which is an organization described
under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended
(the "Code"), provided that:
a. the employer/sponsor must submit contributions for all participating
employees in a single contribution transmittal (i.e., the funds will
not accept contributions submitted with respect to individual
participants);
b. each transmittal must be accompanied by a single check or wire
transfer; and
c. all new participants must be added to the 403(b) plan by submitting
an application on behalf of each new participant with the
contribution transmittal;
- a trustee or fiduciary purchasing for a single trust, estate or single
fiduciary account (including a pension, profit-sharing or other employee
benefit trust created pursuant to a plan qualified under Section 401 of the
Code) and 457 plans, although more than one beneficiary or participant is
involved;
- a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
Simplified Employee Pension account ("SARSEP"), or Savings Incentive Match
Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
Distributors in writing that all of its related employee SEP, SARSEP or
SIMPLE IRA accounts should be linked;
- any other organized group of persons, whether incorporated or not, provided
the organization has been in existence for at least six months and has some
purpose other than the purchase at a discount of redeemable securities of a
registered investment company; or
- the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
Capital Management, Inc. ("AIM Capital").
Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by virtue of the foregoing definition, to the reduced
sales charge. No person or entity may distribute shares of the AIM Funds without
payment of the applicable sales charge other than to persons or entities who
qualify for a reduction in the sales charge provided herein.
(1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for (i) Class A
shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares
of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple
Class Funds) within the following 13 consecutive months. By marking the LOI
section on the account application and by signing the account application, the
purchaser indicates that he understands and agrees to the terms of the LOI and
is bound by the provisions described below.
Each purchase of fund shares normally subject to an initial sales charge made
during the 13-month period will be made at the public offering price applicable
to a single transaction of the total dollar amount indicated by the LOI, as
described under "Sales Charges and Dealer Concessions." It is the purchaser's
responsibility at the time of purchase to specify the account numbers that
should be considered in determining the appropriate sales charge. The offering
price may be further reduced as described under "Rights of Accumulation" if the
Transfer Agent is advised of all other accounts at the time of the investment.
Shares acquired through reinvestment of dividends and capital gain distributions
will not be applied to the LOI. At any time during the 13-month period after
meeting the original obligation, a purchaser may revise his intended investment
amount upward by submitting a written and signed request. Such a revision will
not change the original expiration date. By signing an LOI, a purchaser is not
making a binding commitment to purchase additional shares, but if purchases made
within the 13-month period do not total the amount specified, the investor will
pay the increased amount of sales charge as described below. Purchases made
within 90 days before signing an LOI will be applied toward completion of the
LOI. The LOI effective date will be the date of the first purchase with the
90-day period. The Transfer Agent will process necessary adjustments upon the
expiration or completion date of the LOI. Purchases made more than 90 days
before signing an LOI will be applied toward completion of the LOI based on the
value of the shares purchased calculated at the public offering price on the
effective date of the LOI.
To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
A-7
<PAGE> 22
If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
Any investor who purchased shares of the AIM/GT Funds pursuant to a LOI
entered into prior to June 1, 1998 may continue to make such purchases under the
terms of such LOI. See "How to Purchase and Redeem Shares" in the Statement of
Additional Information.
(2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) at the time of the proposed purchase. Rights of accumulation are also
available to holders of the Connecticut General Guaranteed Account, established
for tax-qualified group annuities, for contracts purchased on or before June 30,
1992. To determine whether or not a reduced initial sales charge applies to a
proposed purchase, AIM Distributors takes into account not only the money which
is invested upon such proposed purchase, but also the value of all shares of the
AIM Funds (except for (i) Class A shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND and (ii) Class B and
Class C shares of the Multiple Class Funds) owned by such purchaser, calculated
at their then current public offering price. If a purchaser so qualifies for a
reduced sales charge, the reduced sales charge applies to the total amount of
money then being invested by such purchaser and not just to the portion that
exceeds the breakpoint above which a reduced sales charge applies. For example,
if a purchaser already owns qualifying shares of any AIM Fund with a value of
$20,000 and wishes to invest an additional $20,000 in a fund with a maximum
initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will
apply to the full $20,000 purchase and not just to the $15,000 in excess of the
$25,000 breakpoint. To qualify for obtaining the discount applicable to a
particular purchase, the purchaser or his dealer must furnish AFS with a list of
the account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds at
net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and other distributions from
a fund (see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares
of certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
The following persons may purchase Class A shares of the AIM Funds through AIM
Distributors without payment of an initial sales charge: (a) A I M Management
Group Inc. ("AIM Management") and its affiliated companies; (b) any current or
retired officer, director, trustee or employee, or any member of the immediate
family (including spouse, children, parents and parents of spouse) of any such
person, of AIM Management or its affiliates or of certain mutual funds which are
advised or managed by AIM; or any trust established exclusively for the benefit
of such persons; (c) any employee benefit plan established for employees of AIM
Management or its affiliates; (d) any current or retired officer, director,
trustee or employee, or any member of the immediate family (including spouse,
children, parents and parents of spouse) of any such person, or of CIGNA
Corporation or of any of its affiliated companies, or of First Data Investor
Services Group (formerly The Shareholder Services Group, Inc.); (e) any
investment company sponsored by CIGNA Investments, Inc. or any of its affiliated
companies for the benefit of its directors' deferred compensation plans; (f)
discretionary advised clients of AIM or AIM Capital; (g) registered
representatives and employees of dealers who have entered into agreements with
AIM Distributors (or financial institutions that have arrangements with such
dealers with respect to the sale of shares of the AIM Funds) and any member of
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, provided that purchases at net asset value are permitted by
the policies of such person's employer; (h) certain broker-dealers, investment
advisers or bank trust departments that provide asset allocation, similar
specialized investment services or investment company transaction services for
their customers, that charge a minimum annual fee for such services, and that
have entered into an agreement with AIM Distributors with respect to their use
of the AIM Funds in connection with such services; (i) any employee or any
member of the immediate family (including spouse, children, parents and parents
of spouse) of any employee, of Triformis Inc.; (j) shareholders of the AIM/GT
Funds as of April 30, 1987 who since that date continually have owned shares of
one or more of the AIM/GT Funds; and (k) certain former AMA Investment Advisers'
shareholders who became shareholders of the AIM Global Health Care Fund in
October 1989, and who have continuously held shares in the AIM/GT Funds since
that time.
In addition, shares of any AIM Fund (except AIM Small Cap Opportunities Fund)
may be purchased at net asset value, without payment of a sales charge, by
pension, profit-sharing or other employee benefit plans created pursuant to a
plan qualified under Section 401 of the Code or plans under Section 457 of the
Code, or employee benefit plans created pursuant to Section 403(b) of the
A-8
<PAGE> 23
Code and sponsored by nonprofit organizations defined under Section 501(c)(3) of
the Code. Such plans will qualify for purchases at net asset value provided that
(1) the total amount invested in the plan is at least $1,000,000, (2) the
sponsor signs a $1,000,000 LOI, (3) such shares are purchased by an
employer-sponsored plan with at least 100 eligible employees, or (4) all of the
plan's transactions are executed through a single financial institution or
service organization who has entered into an agreement with AIM Distributors
with respect to their use of the AIM Funds in connection with such accounts.
Section 403(b) plans sponsored by public educational institutions will not be
eligible for net asset value purchases based on the aggregate investment made by
the plan or the number of eligible employees. Participants in such plans will be
eligible for reduced sales charges based solely on the aggregate value of their
individual investments in the applicable AIM Fund. PLEASE NOTE THAT TAX-EXEMPT
FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR SUCH PLANS. AIM Distributors may pay
investment dealers or other financial service firms for share purchases of the
Load Funds (as defined under the caption "Exchange Privilege") sold at net asset
value to an employee benefit plan in accordance with this paragraph as follows:
1% of the first $2 million of such purchases, plus 0.80% of the next $1 million
of such purchases, plus 0.50% of the next $17 million of such purchases, plus
0.25% of amounts in excess of $20 million of such purchases and up to 0.10% of
the net asset value of any Class A shares of AIM LIMITED MATURITY TREASURY FUND
sold at net asset value to an employee benefit plan in accordance with this
paragraph.
Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sales of Class A shares of
AIM WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such
trusts; and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone number of the dealer who sold to the unit holder the units to be
redeemed or repurchased; and (ii) states that the investment in Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by
the proceeds from the redemption or repurchase of units of such trusts.
FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
- --------------------------------------------------------------------------------
SPECIAL PLANS
Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a shareholder
who owns shares which are not subject to a contingent deferred sales charge, can
arrange for monthly, quarterly or annual amounts (but not less than $50) to be
drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that
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<PAGE> 24
exceed on an annual basis 12% of such account will be subject to a contingent
deferred sales charge on the amounts exceeding 12% of the account value at the
time the shareholder elects to participate in the Systematic Withdrawal Plan.
Under a Systematic Withdrawal Plan, all shares are to be held by the Transfer
Agent and all dividends and distributions are reinvested to shares of the
applicable AIM Fund by the Transfer Agent. To provide funds for payments made
under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient full
and fractional shares at their net asset value in effect at the time of each
such redemption.
Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C shares of the Multiple Class Funds, and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in the amount specified by
the shareholder (minimum $50 per investment, per account) and on a day or
date(s) specified by the shareholder. The proceeds are invested in shares of the
designated AIM Fund at the applicable offering price determined on the date of
the withdrawal. An Automatic Investment Plan may be discontinued upon 10 days'
prior notice to the Transfer Agent or AIM Distributors.
AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into another AIM Fund.
An authorization may be given on the account application or on an authorization
form available from AIM Distributors. An AIM Fund will waive the $5,000 minimum
account value requirement if the shareholder has an account in the fund selected
to receive the dividends and distributions with a value of at least $500.
DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sale charges may apply, as described under the caption
"Exchange Privilege."
PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination
money-purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans;
SARSEP plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement
accounts"). Information concerning these plans, including the custodian's fees
and the forms necessary to adopt such plans, can be obtained by calling or
writing the AIM Funds or AIM Distributors. Shares of the AIM Funds are also
available for investment through existing 401(k) plans (for both individuals and
employers) adopted under the Code. The plan custodian currently imposes an
annual $10 maintenance fee with respect to each retirement account for which it
serves as the custodian. This fee is generally charged in December. Each AIM
Fund and/or the custodian reserve the right to change this maintenance fee and
to initiate an establishment fee (not to exceed its cost).
PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance of $5,000 to
establish and maintain an allocation across a range of AIM Funds. The Program
automatically rebalances holdings of AIM Funds to the established allocation on
a periodic basis. Under the Program, a shareholder may predesig-
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<PAGE> 25
nate, on a percentage basis, how the total value of his or her holdings in a
minimum of two, and a maximum of ten, AIM Funds ("Personal Portfolio") is to be
rebalanced on a quarterly, semiannual, or annual basis.
Rebalancing under the Program will be effected through the exchange of shares
of one or more AIM Funds in the shareholder's Personal Portfolio for shares of
the same class(es) of one or more other AIM Funds in the shareholder's Personal
Portfolio. See "Exchange Privilege." If shares of the AIM Fund(s) in a
shareholder's Personal Portfolio have appreciated during a rebalancing period,
the Program will result in shares of AIM Fund(s) that have appreciated most
during the period being exchanged for shares of AIM Fund(s) that have
appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions." Participation in the Program does not assure that a shareholder
will profit from purchases under the Program nor does it prevent or lessen
losses in a declining market.
The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular AIM Fund would be 2% or less.
In predesignating percentages, shareholders must use whole percentages and
totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an AIM Fund's shares. The
AIM Funds and AIM Distributors reserve the right to modify, suspend, or
terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which AIM Funds
or what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, LOI, and
Automatic Investment Plan. Certain dealers/financial institutions may charge a
fee for establishing accounts relating to the Program. Investors should contact
their dealers/financial institutions or AIM Distributors for more information.
A-11
<PAGE> 26
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EXCHANGE PRIVILEGE
TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions," shares of certain of the AIM
Funds, including the Class A shares of the Multiple Class Funds, listed below
and referred to herein as the "Load Funds," are sold at a public offering price
that includes a maximum sales charge of 5.50% or 4.75% of the public offering
price of such shares; Class A shares (or shares which normally involve the
payment of initial sales charges) of certain of the AIM Funds, listed below and
referred to herein as the "Lower Load Funds," are sold at a public offering
price that includes a maximum sales charge of 1.00% of the public offering price
of such shares; and Class A shares or shares of certain other funds, listed
below and referred to herein as the "No Load Funds," are sold at net asset
value, without payment of a sales charge.
<TABLE>
<S> <C> <C>
LOAD FUNDS: LOWER LOAD FUNDS:
AIM ADVISOR FLEX FUND -- AIM GLOBAL INCOME AIM LIMITED MATURITY TREASURY FUND
CLASS A FUND -- CLASS A -- CLASS A
AIM ADVISOR INTERNATIONAL AIM GLOBAL INFRASTRUCTURE AIM TAX-FREE INTERMEDIATE FUND
VALUE FUND -- CLASS A FUND -- CLASS A -- CLASS A
AIM ADVISOR LARGE CAP AIM GLOBAL RESOURCES NO LOAD FUNDS:
VALUE FUND -- CLASS A FUND -- CLASS A
AIM ADVISOR MULTIFLEX AIM GLOBAL TELECOMMUNICATIONS AIM MONEY MARKET FUND
FUND -- CLASS A FUND -- CLASS A -- AIM CASH RESERVE SHARES
AIM ADVISOR REAL ESTATE AIM GLOBAL TRENDS AIM TAX-EXEMPT CASH FUND -- CLASS A
FUND -- CLASS A FUND -- CLASS A AIM DOLLAR FUND -- CLASS A
AIM AGGRESSIVE GROWTH AIM GLOBAL UTILITIES
FUND -- CLASS A FUND -- CLASS A
AIM ASIAN GROWTH AIM HIGH INCOME MUNICIPAL
FUND -- CLASS A FUND -- CLASS A
AIM BALANCED FUND -- CLASS A AIM HIGH YIELD FUND -- CLASS A
AIM BASIC VALUE AIM INCOME FUND -- CLASS A
FUND -- CLASS A AIM INTERMEDIATE GOVERNMENT
AIM BLUE CHIP FUND -- CLASS A FUND -- CLASS A
AIM CAPITAL DEVELOPMENT AIM INTERNATIONAL EQUITY
FUND -- CLASS A FUND -- CLASS A
AIM CHARTER FUND -- CLASS A AIM INTERNATIONAL GROWTH
AIM CONSTELLATION FUND -- CLASS A
FUND -- CLASS A AIM JAPAN GROWTH FUND -- CLASS A
AIM DEVELOPING MARKETS AIM LATIN AMERICAN GROWTH
FUND -- CLASS A FUND -- CLASS A
AIM EMERGING MARKETS AIM MID CAP EQUITY
FUND -- CLASS A FUND -- CLASS A
AIM EMERGING MARKETS DEBT AIM MONEY MARKET
FUND -- CLASS A FUND -- CLASS A
AIM EUROPE GROWTH AIM MUNICIPAL BOND
FUND -- CLASS A FUND -- CLASS A
AIM EUROPEAN DEVELOPMENT AIM NEW PACIFIC GROWTH
FUND -- CLASS A FUND -- CLASS A
AIM GLOBAL AGGRESSIVE GROWTH AIM SELECT GROWTH FUND -- CLASS A
FUND -- CLASS A AIM SMALL CAP GROWTH
AIM GLOBAL CONSUMER PRODUCTS FUND -- CLASS A
AND SERVICES FUND -- CLASS A AIM SMALL CAP OPPORTUNITIES
AIM GLOBAL FINANCIAL SERVICES FUND -- CLASS A
FUND -- CLASS A AIM STRATEGIC INCOME
AIM GLOBAL GOVERNMENT INCOME FUND -- CLASS A
FUND -- CLASS A AIM TAX-EXEMPT BOND FUND
AIM GLOBAL GROWTH OF CONNECTICUT -- CLASS A
FUND -- CLASS A AIM VALUE FUND -- CLASS A
AIM GLOBAL GROWTH & AIM WEINGARTEN FUND -- CLASS A
INCOME FUND -- CLASS A AIM WORLDWIDE GROWTH
AIM GLOBAL HEALTH CARE FUND -- CLASS A
FUND -- CLASS A
</TABLE>
A-12
<PAGE> 27
Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH FUND
(AND CLASS A SHARES OF AIM DOLLAR FUND); (II) LOWER LOAD FUND SHARE PURCHASES OF
$1,000,000 OR MORE AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND, AIM
TAX-EXEMPT CASH FUND AND AIM DOLLAR FUND PURCHASES MAY BE EXCHANGED FOR LOAD
FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH WILL THEN BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR PURPOSES OF CALCULATING THE
CONTINGENT DEFERRED SALES CHARGES ON THE LOAD FUND SHARES ACQUIRED, THE 18-MONTH
PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH EXCHANGE; (iii) Class A shares
may be exchanged for Class A shares; (iv) Class B shares may be exchanged only
for Class B shares; (v) Class C shares may only be exchanged for Class C shares;
and (vi) AIM Cash Reserve Shares of AIM MONEY MARKET FUND may not be exchanged
for Class A, Class B or Class C shares of AIM MONEY MARKET FUND. Class C shares
of AIM Small Cap Opportunities Fund are currently not available.
DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
<TABLE>
<CAPTION>
MULTIPLE CLASS FUNDS:
LOWER LOAD NO LOAD ------------------------------
FROM: TO: LOAD FUNDS FUNDS FUNDS CLASS B CLASS C
----- -------------- ---------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Load Funds....... Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
Lower Load Funds.. Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
No Load Funds.... Offering Price if No Load shares Net Asset Value if No Net Asset Value Not Applicable Not Applicable
were directly purchased. Net Load shares were
Asset Value if No Load shares acquired upon exchange
were acquired upon exchange of of shares of any Load
shares of any Load Fund or any Fund or any Lower Load
Lower Load Fund. Fund; otherwise,
Offering Price.
Multiple Class
Funds:
Class B........ Not Applicable Not Applicable Not Applicable Net Asset Value Not Applicable
FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE IS REVISED AS FOLLOWS:
Load Funds....... Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
Lower Load Funds.. Net Asset Value if shares were Net Asset Value Net Asset Value Not Applicable Not Applicable
acquired upon exchange of any
Load Fund. Otherwise, difference
in sales charge will apply.
No Load Funds.... Offering Price if No Load shares Net Asset Value if No Net Asset Value Not Applicable Not Applicable
were directly purchased. Net Load shares were
Asset Value if No Load shares acquired upon exchange
were acquired upon exchange of of shares of any Load
shares of any Load Fund. Fund or any Lower Load
Difference in sales charge will Fund; otherwise,
apply if No Load shares were Offering Price.
acquired upon exchange of Lower
Load Fund shares.
Multiple Class
Funds:
Class B........ Not Applicable Not Applicable Not Applicable Net Asset Value Not Applicable
Class C........ Not Applicable Not Applicable Not Applicable Not Applicable Net Asset Value
</TABLE>
An exchange is permitted only in the following circumstances: (a) if the funds
offer more than one class of shares, the exchange must be between the same class
of shares (e.g., Class A, Class B and Class C shares of a Multiple Class Fund
cannot be exchanged for each other) except that AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may be exchanged for Class A shares of another Multiple Class
Fund; (b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired through such
exchange; (c) the shares of the fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides; (d) the exchange must be
made between accounts having identical registrations and addresses; (e) the full
amount of the purchase price for the shares being exchanged must have already
been received by the fund; (f) the account from which shares have been exchanged
must be coded as having a certified taxpayer identification number on file or,
in the alternative, an appropriate IRS Form W-8 (certificate of foreign status)
or Form W-9 (certifying exempt status) must have been received by the fund; (g)
newly acquired shares (through either an initial or subsequent investment) are
held in an account for at least ten busi-
A-13
<PAGE> 28
ness days, and all other shares are held in an account for at least one day,
prior to the exchange; and (h) certificates representing shares must be returned
before shares can be exchanged. There is no fee for exchanges among the AIM
Funds.
THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged are
redeemed at their net asset value as determined at NYSE Close on the day that an
exchange request in proper form (described below) is received. Exchange requests
received after NYSE Close will result in the redemption of shares at their net
asset value at NYSE Close on the next business day. See "Terms and Conditions of
Purchase of the AIM Funds -- Timing of Purchase, Exchange and Redemption Orders
(AIM MONEY MARKET FUND only)" for information regarding the timing of exchange
orders for AIM MONEY MARKET FUND. Normally, shares of an AIM Fund to be acquired
by exchange are purchased at their net asset value or applicable offering price,
as the case may be, determined on the date that such request is received, but
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that a fund would be materially disadvantaged
by an immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into a fund paying daily dividends (See "Dividends, Distributions and
Tax Matters -- Dividends and Distributions," below), and the release of the
exchange proceeds is delayed for the foregoing five-day period, such shareholder
will not begin to accrue dividends until the sixth business day after the
exchange. Shares purchased by check may not be exchanged until it is determined
that the check has cleared, which may take up to ten business days from the date
that the check is received. See "Terms and Conditions of Purchase of the AIM
Funds -- Timing of Purchase Orders."
In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the AIM Funds. AIM Distributors reserves the right to impose conditions on
dealers or investment advisors who make telephone exchanges of shares of the
funds, including the condition that any such dealer or investment advisor enter
into an agreement (which contains additional conditions with respect to
exchanges of shares) with AIM Distributors. To exchange shares by telephone, a
shareholder, dealer or investment advisor who has satisfied the foregoing
conditions must call AFS at (800) 959-4246. If a shareholder is unable to reach
AFS by telephone, he may also request exchanges by telegraph or use overnight
courier services to expedite exchanges by mail, which will be effective on the
business day received by the Transfer Agent as long as such request is received
prior to NYSE Close. The Transfer Agent and AIM Distributors will not be liable
for any loss, expense or cost arising out of any telephone exchange request that
they reasonably believe 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 may include recordings of telephone transactions
(maintained for six months), requests for confirmation of the shareholder's
Social Security Number and current address, and mailings of confirmations
promptly after the transaction.
EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B or Class C
shares. For purposes of determining a shareholder's holding period of Class B or
Class C shares in the calculation of the applicable contingent deferred sales
charge, the period of time during which Class B or Class C shares were held
prior to an exchange will be added to the holding period of the applicable Class
B or Class C shares acquired in an exchange.
- --------------------------------------------------------------------------------
HOW TO REDEEM SHARES
Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. Although
a contingent deferred sales charge may be applicable to certain redemptions as
described below, there is no redemption fee imposed when shares are redeemed or
repurchased; however, dealers may charge service fees for handling repurchase
transactions.
A-14
<PAGE> 29
MULTIPLE DISTRIBUTION SYSTEM. Class B Shares. Class B shares purchased under
the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attributable to Class B shares or (iii) on amounts that
represent capital appreciation in the shareholder's account above the purchase
price of the Class B shares.
<TABLE>
<CAPTION>
YEARS CONTINGENT DEFERRED
SINCE SALES CHARGE AS
PURCHASE % OF DOLLAR AMOUNT
MADE SUBJECT TO CHARGE
- -------- -------------------
<S> <C>
First...................................................... 5%
Second..................................................... 4%
Third...................................................... 3%
Fourth..................................................... 3%
Fifth...................................................... 2%
Sixth...................................................... 1%
Seventh and Following...................................... None
</TABLE>
In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and other distributions; third, of shares
held for more than six years from the date such shares were purchased; and
fourth, of shares held less than six years from the date such shares were
purchased. The applicable sales charge will be applied against the lesser of the
current market value of shares redeemed or their original cost.
Class B shares that are acquired during a tender offer by AIM Floating Rate
Fund ("Floating Rate Fund") pursuant to an exchange will be subject, in lieu of
the contingent deferred sales charge described above, to a contingent deferred
sales charge equivalent to the early withdrawal charge on the shares of the
Floating Rate Fund. For purposes of computing such early withdrawal charge, the
holding period of Class B shares being redeemed will include the holding period
of the Floating Rate Fund shares prior to exchange.
Class C Shares. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
Waivers. Contingent deferred sales charges on Class B and Class C shares will
be waived on redemptions (1) following the death or post-purchase disability, as
defined in Section 72(m)(7) of the Code, of a shareholder or a settlor of a
living trust (provided AIM Distributors is notified of such death or
post-purchase disability at the time of the redemption request and is provided
with satisfactory evidence of such death or post-purchase disability), (2) in
connection with certain distributions from IRAs, custodial accounts maintained
pursuant to Code Section 403(b), deferred compensation plans qualified under
Code Section 457 and plans qualified under Code Section 401 (collectively,
"Retirement Plans"), (3) pursuant to a Systematic Withdrawal Plan, provided that
amounts withdrawn under such plan do not exceed on an annual basis 12% of the
value of the shareholder's investment in Class B or Class C shares at the time
the shareholder elects to participate in the Systematic Withdrawal Plan, (4)
effected pursuant to the right of a Multiple Class Fund to liquidate a
shareholder's account if the aggregate net asset value of shares held in the
account is less than the designated minimum account size described in the
prospectus of such Multiple Class Fund, (5) effected by AIM of its investment in
Class B or Class C shares and (6) of Class C shares where such investor's dealer
of record, due to the nature of the investor's account, notifies AIM
Distributors prior to the time of investment that the dealer waives the payment
otherwise payable to the dealer described in the last paragraph under the
caption "Terms and Conditions of Purchase of the AIM Funds -- All Groups of AIM
Funds."
Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.
Waiver category (2) above applies only to redemptions resulting from:
(i) required minimum distributions to plan participants or
beneficiaries who are age 70 1/2 or older, and only with respect to that
portion of such distributions which does not exceed 12% annually of the
participant's or beneficiary's account value in a particular AIM Fund;
A-15
<PAGE> 30
(ii) in-kind transfers of assets where the participant or beneficiary
notifies AIM Distributors of such transfer no later than the time such
transfer occurs;
(iii) tax-free rollovers or transfers of assets to another Retirement
Plan invested in Class B or Class C shares of one or more Multiple Class
Funds;
(iv) tax-free returns of excess contributions or returns of excess
deferral amounts; and
(v) distributions upon the death or disability (as defined in the
Code) of the participant or beneficiary.
CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in the program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gains distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD, (i) shares of any
Load Fund or AIM Cash Reserve shares of AIM MONEY MARKET FUND or Class A shares
of AIM DOLLAR FUND which were acquired through an exchange of shares which
previously were subject to the 1% contingent deferred sales charge will be
credited with the period of time such exchanged shares were held, and (ii)
shares of any Load Fund which are subject to the 1% contingent deferred sales
charge and which were acquired through an exchange of shares of a Lower Load or
a No Load Fund which previously were not subject to the 1% contingent deferred
sales charge will not be credited with the period of time such exchanged shares
were held. The charge will be waived in the following circumstances: (l)
redemptions of shares by employee benefit plans ("Plans") qualified under
Sections 401 or 457 of the Code, or Plans created under Section 403(b) of the
Code and sponsored by nonprofit organizations as defined under Section 501(c)(3)
of the Code, where shares are being redeemed in connection with employee
terminations or withdrawals, and (a) the total amount invested in a Plan is at
least $1,000,000, (b) the sponsor of a Plan signs a letter of intent to invest
at least $1,000,000 in one or more of the AIM Funds, or (c) the shares being
redeemed were purchased by an employer-sponsored Plan with at least 100 eligible
employees; provided, however, that Plans created under Section 403(b) of the
Code which are sponsored by public educational institutions shall qualify under
(a), (b) or (c) above on the basis of the value of each Plan participant's
aggregate investment in the AIM Funds, and not on the aggregate investment made
by the Plan or on the number of eligible employees; (2) redemptions of shares
following the death or post-purchase disability, as defined in Section 72(m)(7)
of the Code, of a shareholder or a settlor of a living trust; (3) redemptions of
shares purchased at net asset value by private foundations or endowment funds
where the initial amount invested was at least $1,000,000; (4) redemptions of
shares purchased by an investor in amounts of $1,000,000 or more where such
investor's dealer of record, due to the nature of the investor's account,
notifies AIM Distributors prior to the time of investment that the dealer waives
the payments otherwise payable to the dealer as described in the third paragraph
under the caption "Terms and Conditions of Purchase of the AIM Funds -- All
Groups of AIM Funds;" and (5) pursuant to a Systematic Withdrawal Plan, provided
that amounts withdrawn under such plan do not exceed on an annual basis 12% of
the value of the shareholder's investment in Class A shares at the time the
shareholder elects to participate in the Systematic Withdrawal Plan.
Shareholders who purchased $500,000 or more of Class A shares of the AIM/GT
Funds prior to June 1, 1998 are entitled to certain waivers of the contingent
deferred sales charge on those shares as described in the Statement of
Additional Information under "How to Purchase and Redeem Shares."
REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
In addition to these requirements, shareholders who have invested in a fund to
establish as IRA, should include the following information along with a written
request for either partial or full liquidation of fund shares; (a) a statement
as to whether or not the shareholder has attained age 59 1/2, and (b) a
statement as to whether or not the shareholder elects to have federal income tax
withheld from the proceeds of the liquidation.
A-16
<PAGE> 31
REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
this account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. Accounts in AIM Distributors' prototype
retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not eligible for
the telephone redemption option. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not 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 appropriate form 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 may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
EXPEDITED REDEMPTIONS (AIM Cash Reserve shares of AIM MONEY MARKET FUND
ONLY). If a redemption order is received prior to 11:30 a.m. Eastern Time, the
redemption will be effective on that day and AIM MONEY MARKET FUND will endeavor
to transmit payment on that same business day. If the redemption order is
received after 11:30 a.m. and prior to NYSE Close, the redemption will be made
at the next determined net asset value and payment will generally be transmitted
on the next business day.
REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class A shares of AIM DOLLAR FUND). After completing the
appropriate authorization form, shareholders may use checks to effect
redemptions from AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY
MARKET FUND and Class A shares of AIM DOLLAR FUND. This privilege does not apply
to retirement accounts or qualified plans. Checks may be drawn in any amount of
$250 or more. Checks drawn against insufficient shares in the account, against
shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented on the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent or certain financial institutions (or their designees) who
are authorized to accept redemption orders on behalf of the AIM Funds, provided
that such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer/financial institution to
ensure that all orders are transmitted on a timely basis. Any resulting loss
from the dealer/financial institution's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer/financial institution. Telephone redemption requests must be made by NYSE
Close on any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept requests which
specify a particular date for redemption or which specify any special
conditions.
Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone
A-17
<PAGE> 32
exchange and telephone redemption authorization forms; (7) changes in previously
designated wiring or electronic funds transfer instructions, and (8) written
redemptions or exchanges of shares previously reported as lost, whether or not
the redemption amount is under $50,000 or the proceeds are to be sent to the
address of record. These requirements may be waived or modified upon notice to
shareholders.
Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within ninety (90) days of a
redemption, a shareholder may invest all or part of the redemption proceeds in
Class A shares of any AIM Fund at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested; provided, however,
if the redemption was made from Class A shares of either AIM LIMITED MATURITY
TREASURY FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be
subject to the difference in sales charge between the shares redeemed and the
shares the proceeds are reinvested in. The shareholder must ask the Transfer
Agent for such privilege at the time of reinvestment. A realized gain on the
redemption is taxable, and reinvestment will not alter the taxes due on any
capital gains, except under the circumstances described below. If there has been
a loss on the redemption and shares of the same fund are repurchased, all of the
loss may not be tax deductible, depending on the timing and amount reinvested.
Under the Code, if the redemption proceeds of fund shares on which a sales
charge was paid are reinvested in shares of the same fund, or exchanged for
shares of another AIM Fund, at a reduced sales charge within 90 days of the
payment of the sales charge, the shareholder's basis in the fund shares redeemed
may not include the amount of the sales charge paid, thereby reducing the loss
or increasing the gain recognized from the redemption; however, the
shareholder's basis in the fund shares purchased will include the sales charge.
Each AIM Fund may amend, suspend or cease offering the privilege at any time as
to shares redeemed after the date of such amendment, suspension or cessation.
This privilege may only be exercised once each year by a shareholder with
respect to each AIM Fund.
Shareholders who are assessed a contingent deferred sales charge in connection
with the redemption of Class A shares and who subsequently reinvest a portion or
all of the value of the redeemed shares in Class A shares of any AIM Fund within
ninety (90) days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
A-18
<PAGE> 33
- --------------------------------------------------------------------------------
DETERMINATION OF NET ASSET VALUE
The net asset value per share (or share price) of each AIM Fund is determined
as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close with
respect to AIM MONEY MARKET FUND) on each "business day" of a fund as previously
defined. In the event the NYSE closes early (i.e. before 4:00 p.m. Eastern Time)
on a particular day, the net asset value of an AIM Fund's share will be
determined as of the close of the NYSE on such day. For purposes of defining net
asset value per share, futures and options contracts generally will be valued 15
minutes after the close of trading of the NYSE. The net asset value per share is
calculated by subtracting a class' liabilities from its assets and dividing the
result by the total number of class shares outstanding. The determination of net
asset value per share is made in accordance with generally accepted accounting
principles. Among other items, liabilities include accrued expenses and
dividends payable, and total assets include portfolio securities valued at their
market value, as well as income accrued but not yet received. Securities for
which market quotations are not readily available are valued at fair value as
determined in good faith by or under the supervision of the fund's officers and
in accordance with methods which are specifically authorized by its governing
Board of Directors or Trustees. Short-term obligations with maturities of 60
days or less, and the securities held by the Money Market Funds, are valued at
amortized cost as reflecting fair value. AIM HIGH INCOME MUNICIPAL FUND, AIM
MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM TAX-FREE
INTERMEDIATE FUND value variable rate securities that have an unconditional
demand or put feature exercisable within seven days or less at par, which
reflects the market value of such securities.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM Fund's net asset value. If events
materially affecting the value of such securities occur during such period, then
these securities will be valued at their fair value as determined in good faith
by or under the supervision of the Board of Directors or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
- --------------------------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
Each AIM Fund generally pays dividends and distributions as
set forth below:
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
OF NET OF NET
DIVIDENDS FROM REALIZED REALIZED
NET INVESTMENT SHORT-TERM LONG-TERM
FUND INCOME CAPITAL GAINS CAPITAL GAINS
---- -------------- ------------- -------------
<S> <C> <C> <C>
AIM ADVISOR FLEX FUND..................... declared and paid quarterly quarterly annually
AIM ADVISOR INTERNATIONAL VALUE FUND...... declared and paid annually annually annually
AIM ADVISOR LARGE CAP VALUE FUND.......... declared and paid quarterly quarterly annually
AIM ADVISOR MULTIFLEX FUND................ declared and paid quarterly quarterly annually
AIM ADVISOR REAL ESTATE FUND.............. declared and paid quarterly quarterly annually
AIM AGGRESSIVE GROWTH FUND................ declared and paid annually annually annually
AIM ASIAN GROWTH FUND..................... declared and paid annually annually annually
AIM BALANCED FUND......................... declared and paid quarterly annually annually
AIM BASIC VALUE FUND...................... declared and paid annually annually annually
AIM BLUE CHIP FUND........................ declared and paid annually annually annually
AIM CAPITAL DEVELOPMENT FUND.............. declared and paid annually annually annually
AIM CHARTER FUND.......................... declared and paid quarterly annually annually
AIM CONSTELLATION FUND.................... declared and paid annually annually annually
AIM DEVELOPING MARKETS FUND............... declared and paid annually annually annually
AIM DOLLAR FUND........................... declared daily; paid monthly annually annually
AIM EMERGING MARKETS FUND................. declared and paid annually annually annually
AIM EMERGING MARKETS DEBT FUND............ declared and paid monthsly annually annually
AIM EUROPE GROWTH FUND.................... declared and paid annually annually annually
AIM EUROPEAN DEVELOPMENT FUND............. declared and paid annually annually annually
AIM GLOBAL AGGRESSIVE GROWTH FUND......... declared and paid annually annually annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
FUND.................................... declared and paid annually annually annually
AIM GLOBAL FINANCIAL SERVICES FUND........ declared and paid annually annually annually
</TABLE>
A-19
<PAGE> 34
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
OF NET OF NET
DIVIDENDS FROM REALIZED REALIZED
NET INVESTMENT SHORT-TERM LONG-TERM
FUND INCOME CAPITAL GAINS CAPITAL GAINS
- ---- -------------- ------------- -------------
<S> <C> <C> <C>
AIM GLOBAL GOVERNMENT INCOME FUND......... declared and paid monthly annually annually
AIM GLOBAL GROWTH FUND.................... declared and paid annually annually annually
AIM GLOBAL GROWTH & INCOME FUND........... declared and paid quarterly annually annually
AIM GLOBAL HEALTH CARE FUND............... declared and paid annually annually annually
AIM GLOBAL INCOME FUND.................... declared daily; paid monthly annually annually
AIM GLOBAL INFRASTRUCTURE FUND............ declared and paid annually annually annually
AIM GLOBAL RESOURCES FUND................. declared and paid annually annually annually
AIM GLOBAL TELECOMMUNICATIONS FUND........ declared and paid annually annually annually
AIM GLOBAL TRENDS FUND.................... declared and paid annually annually annually
AIM GLOBAL UTILITIES FUND................. declared daily; paid monthly annually annually
AIM HIGH INCOME MUNICIPAL FUND............ declared daily; paid monthly annually annually
AIM HIGH YIELD FUND....................... declared daily; paid monthly annually annually
AIM INCOME FUND........................... declared daily; paid monthly annually annually
AIM INTERMEDIATE GOVERNMENT FUND.......... declared daily; paid monthly annually annually
AIM INTERNATIONAL EQUITY FUND............. declared and paid annually annually annually
AIM INTERNATIONAL GROWTH FUND............. declared and paid annually annually annually
AIM JAPAN GROWTH FUND..................... declared and paid annually annually annually
AIM LATIN AMERICAN GROWTH FUND............ declared and paid annually annually annually
AIM LIMITED MATURITY TREASURY FUND........ declared daily; paid monthly annually annually
AIM MID CAP EQUITY FUND................... declared and paid annually annually annually
AIM MONEY MARKET FUND..................... declared daily; paid monthly at least annually annually
AIM MUNICIPAL BOND FUND................... declared daily; paid monthly annually annually
AIM NEW PACIFIC GROWTH FUND............... declared and paid annually annually annually
AIM SELECT GROWTH FUND.................... declared and paid annually annually annually
AIM SMALL CAP GROWTH FUND................. declared and paid annually annually annually
AIM SMALL CAP OPPORTUNITIES FUND.......... declared and paid annually annually annually
AIM STRATEGIC INCOME FUND................. declared and paid monthly annually annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT... declared daily; paid monthly annually annually
AIM TAX-EXEMPT CASH FUND.................. declared daily; paid monthly at least annually annually
AIM TAX-FREE INTERMEDIATE FUND............ declared daily; paid monthly annually annually
AIM VALUE FUND............................ declared and paid annually annually annually
AIM WEINGARTEN FUND....................... declared and paid annually annually annually
AIM WORLDWIDE GROWTH FUND................. declared and paid annually annually annually
</TABLE>
In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each AIM Fund may make
additional distributions, if necessary, to avoid a non-deductible 4% federal
excise tax on certain undistributed income and capital gain (the "Excise Tax").
All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in like shares of another
Multiple Class Fund, to the extent permitted. For funds that do not declare a
dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the ex-dividend date. For funds that declare
a dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or the
dividend portion thereof, in cash, or to invest such dividends and distributions
in shares of another fund in the AIM Funds; provided that (i) dividends and
distributions attributable to Class B shares may only be reinvested in Class B
shares, (ii) dividends and distributions attributable to Class C shares may only
be reinvested in Class C shares, (iii) dividends and distributions attributable
to Class A shares may not be reinvested in Class B or Class C shares, and (iv)
dividends and distributions attributable to the AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may not be reinvested in the Class A shares of that Fund or in
any Class B or Class C shares. Investors who have not previously selected such a
reinvestment option on the account application form may contact the Transfer
Agent at any time to obtain a form to authorize such reinvestments in another
AIM Fund. Such reinvestments into the AIM Funds are not subject to sales
charges, and shares so purchased are automatically credited to the account of
the shareholder.
Dividends on Class B and Class C shares of an AIM Fund are expected to be
lower than dividends for Class A shares of that fund or AIM Cash Reserve Shares
because of higher distribution fees paid by Class B and Class C shares.
Dividends on all shares may also be affected by other class-specific expenses.
A-20
<PAGE> 35
Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
TAX MATTERS
Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares, except for "exempt-interest dividends" paid by
AIM HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND
FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND
(the "Tax-Exempt Funds"), which are exempt from federal income tax. With respect
to tax-exempt shareholders, dividends and distributions from the AIM Funds are
not subject to federal income taxation to the extent permitted under the
applicable tax exemption.
Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE FUND, AIM ASIAN GROWTH FUND,
AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL TRENDS FUND, AIM HIGH
YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MONEY MARKET FUND,
AIM NEW PACIFIC GROWTH FUND, AIM STRATEGIC INCOME FUND or any of the Tax-Exempt
Funds will qualify for this dividends received deduction.
Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year. No gain or loss will be recognized by shareholders upon
the automatic conversion of Class B shares of a Multiple Class Fund into Class A
shares of such fund.
For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
A-21
<PAGE> 36
TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be required
to include the "exempt-interest" portion of dividends paid by the Tax-Exempt
Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may affect the amount of social security and railroad retirement
benefits subject to federal income tax, may affect the deductibility of interest
on certain indebtedness of a shareholder, and may have other collateral federal
income tax consequences. In addition, the Tax-Exempt Funds may invest in
Municipal Securities the interest on which will constitute an item of tax
preference and which therefore could give rise to a federal alternative minimum
tax liability for certain shareholders; each Tax-Exempt Fund may invest up to
20% of its net assets in such securities and other taxable securities. For
additional information concerning the alternative minimum tax and certain
collateral tax consequences of the receipt of exempt-interest dividends, see the
Statements of Additional Information applicable to the Tax-Exempt Funds.
The Tax-Exempt Funds may pay dividends to shareholders that are taxable, but
will endeavor to avoid investments that would result in taxable dividends. The
percentage of dividends that constitutes exempt-interest dividends, and the
percentage thereof (if any) that constitutes items of tax preference, will be
determined annually. These percentages may differ from the actual percentages
for any particular day.
To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional fund shares.
Distributions of net capital gain will be taxable as long-term capital gains,
whether received in cash or additional fund shares and regardless of the length
of time a shareholder may have held his shares.
From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MID CAP EQUITY FUND,
AIM SMALL CAP GROWTH FUND, AIM STRATEGIC INCOME FUND -- SPECIAL TAX INFORMATION.
Certain states exempt from income taxes dividends paid by mutual funds
attributable to interest on U.S. Treasury and certain other U.S. government
obligations. Investors should consult with their own tax advisors concerning the
availability of such exemption.
AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM DEVELOPING
MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND,
AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM WORLDWIDE GROWTH
FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do
so, each of these funds may elect to pass through to its shareholders credits
for foreign taxes paid. If a fund makes such an election, a shareholder who
receives a distribution (1) will be required to include in gross income his
proportionate share of foreign taxes allocable to the distribution and (2) may
claim a credit or deduction for such share for his taxable year in which the
distribution is received, subject to the general limitations imposed on the
allowance of foreign tax credits and deductions. Shareholders should also note
that certain gains or losses attributable to fluctuations in exchange rates or
foreign currency forward contracts may increase or decrease the amount of income
of the fund available for distribution to shareholders and should note that if,
for any fund, such losses exceed other income during a taxable year, the fund
would not be able to pay ordinary income dividends for that year.
A-22
<PAGE> 37
- --------------------------------------------------------------------------------
GENERAL INFORMATION
CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each AIM Fund's transfer agent and dividend
payment agent.
SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
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 the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
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 second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be viewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. 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 Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
A-23
<PAGE> 38
APPLICATION INSTRUCTIONS
SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
GIVE SOCIAL SECURITY GIVE TAXPAYER I.D.
ACCOUNT TYPE NUMBER OF: ACCOUNT TYPE NUMBER OF:
------------ -------------------- ------------ ------------------
<S> <C> <C> <C>
Individual Individual Trust, Estate, Pension Trust, Estate, Pension
Plan Trust Plan Trust and not
personal TIN of fiduciary
Joint Individual First individual listed in the
"Account Registration" portion
of the Application
Unif. Gifts to Minor Corporation, Partnership, Corporation, Partnership,
Minors/Unif. Other Organization Other Organization
Transfers to Minors
Legal Guardian Ward, Minor or
Incompetent
Sole Proprietor Owner of Business Broker/Nominee Broker/Nominee
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
An investor is subject to backup withholding if:
(1) the investor fails to furnish a correct TIN to the Fund, or
(2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
(3) the investor is notified by the IRS that the investor is subject to backup
withholding because the investor failed to report all of the interest and
dividends on such investor's tax return (for reportable interest and
dividends only), or
(4) the investor fails to certify to the Fund that the investor is not subject
to backup withholding under (3) above (for reportable interest and
dividend accounts opened after 1983 only), or
(5) the investor does not certify his TIN. This applies only to reportable
interest, dividend, broker or barter exchange accounts opened after 1983,
or broker accounts considered inactive during 1983.
Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
most recent publication of the American Society of Corporate Secretaries,
Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
MCF-07/98
B-1
<PAGE> 39
NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
MCF-07/98
B-2
<PAGE> 40
[AIM LOGO APPEARS HERE] THE AIM FAMILY OF FUNDS--Registered Trademark--
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
Sub-Advisor
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Independent Accountants
PricewaterhouseCoopers LLP
One Post Office Square
Boston, MA 02109
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
DOL-PRO-1
<PAGE> 41
[APPLICATION
INSIDE]
[AIM LOGO APPEARS HERE] THE AIM FAMILY OF FUNDS--Registered Trademark--
ADVISOR CLASS OF
AIM DOLLAR FUND
(A SERIES PORTFOLIO OF AIM INVESTMENT PORTFOLIOS)
PROSPECTUS
SEPTEMBER 8, 1998
This Prospectus contains information about AIM DOLLAR FUND (the "Fund"), which
is a diversified series of AIM Investment Portfolios (the "Trust"), an open-end,
series, management investment company. The Fund is a diversified portfolio which
seeks maximum current income consistent with liquidity and conservation of
capital. The Fund may invest in a wide variety of high quality, U.S.
dollar-denominated money market instruments, including obligations issued or
guaranteed by the U.S. and foreign governments, their agencies and
instrumentalities; U.S. and non-U.S. corporate obligations; and instruments of
U.S. and foreign banks.
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or calling (800) 347-4246.
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 Fund. Additional information about the Fund may also
be obtained from http://www.aimfunds.com.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A STABLE NET
ASSET VALUE OF $1.00 PER SHARE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE> 42
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SUMMARY................................ 2
THE FUND............................... 3
Table of Fees and Expenses........... 3
Financial Highlights................. 4
Performance.......................... 5
Investment Program................... 5
Management........................... 7
Organization of the Trust............ 8
INVESTOR'S GUIDE TO THE AIM FAMILY OF
FUNDS--Registered Trademark--........ A-1
Introduction to The AIM Family of
Funds............................. A-1
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
How to Purchase Shares............... A-1
Terms and Conditions of Purchase of
the AIM Funds..................... A-2
Special Plans........................ A-4
Exchange Privilege................... A-4
How to Redeem Shares................. A-5
Determination of Net Asset Value..... A-7
Dividends, Distributions and Tax
Matters........................... A-8
General Information.................. A-10
APPLICATION INSTRUCTIONS............... B-1
</TABLE>
SUMMARY
- --------------------------------------------------------------------------------
THE FUND
The Fund is a diversified series of the Trust.
INVESTMENT OBJECTIVE. The Fund seeks maximum current income consistent with
liquidity and conservation of capital.
PRINCIPAL INVESTMENTS. The Fund invests in a wide variety of high quality U.S.
dollar-denominated money market instruments of U.S. and non-U.S. issuers.
INVESTMENT MANAGERS:. The Fund is managed by A I M Advisors, Inc. ("AIM") and
is sub-advised by INVESCO (NY), Inc. (the "Sub-advisor"). AIM and the
Sub-advisor and their worldwide asset management affiliates provide investment
management and/or administrative services to institutional, corporate and
individual clients around the world. AIM and the Sub-advisor are both indirect
wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are
an independent investment management group that has a significant presence in
the institutional and retail segment of the investment management industry in
North America and Europe, and a growing presence in Asia. AIM was organized in
1976 and, together with its subsidiaries, currently advises approximately 90
investment company portfolios.
PURCHASING SHARES. Advisor Class shares are offered through this Prospectus to
(a) trustees or other fiduciaries purchasing shares for employee benefit plans
which are sponsored by organizations which have at least 1,000 employees; (b)
any account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment advisor has investment
discretion over such account, and (ii) the account holder pays such person as
compensation for its advice and other services an annual fee of at least 0.50%
on the assets in the account; (c) any account with assets of a least $10,000 if
(i) such account is established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least 0.50% on the
assets in the account; (d) accounts advised by the Sub-advisor or one of the
companies formerly affiliated with the Asset Management Division of
Liechtenstein Global Trust AG, provided such accounts were invested in Advisor
Class shares of any of the funds in The AIM Family of Funds on May 29, 1998; and
(e) any of the companies composing or affiliated with AMVESCAP PLC. Pursuant to
a separate prospectus the Fund also offers Class A and Class B shares, which
represent interests in the Fund. The Class A and Class B shares have different
distribution arrangements. Initial investments in Advisor Class shares must be
at least $500 and additional investments must be at least $50. The distributor
of the Advisor Class shares is A I M Distributors, Inc. ("AIM Distributors"),
P.O. Box 4739, Houston, TX 77210-4739. See "How to Purchase Shares."
EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds").
Advisor Class shares of the Fund may be exchanged for Advisor Class shares of
certain funds in the AIM Family of Funds in the manner and subject to the
policies and charges set forth herein. See "Exchange Privilege."
REDEEMING SHARES. Advisor Class shareholders of the Fund may redeem all or a
portion of their shares at net asset value on any business day. See "How to
Redeem Shares."
DISTRIBUTIONS. Dividends are declared daily and paid monthly from available
net investment income and any realized net short-term capital gain. Dividends
and distributions may be reinvested automatically in Advisor Class shares or in
Advisor Class shares of certain funds in the AIM Family of Funds without a sales
charge.
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.
2
<PAGE> 43
THE FUND
- --------------------------------------------------------------------------------
TABLE OF FEES AND EXPENSES
The expenses and maximum transaction costs associated with investing in the
Advisor Class shares of the Fund are reflected in the following table(1):
<TABLE>
<S> <C>
Shareholder Transaction Costs:
Sales charge on purchases of shares....................... None
Sales charges on reinvested distributions to
shareholders........................................... None
Maximum contingent deferred sales charge (as a % of net
asset value at time of purchase or sale, whichever is
less).................................................. None
Redemption charges........................................ None
Exchange fees............................................. None
Annual Fund Operating Expenses(2): (as a % of average net
assets)
Investment management and administration fees............. 0.50%
12b-1 distribution and service fees....................... None
Other expenses (after waivers)............................ 0.50%
----
Total Fund Operating Expenses..................... 1.00%
====
</TABLE>
(1)This table is intended to assist investors in understanding the various costs
and expenses associated with investing in the Fund.
(2)Expenses are based on the Fund's fiscal year ended December 31, 1997. "Other
Expenses" include custody, transfer agency, legal, audit and other operating
expenses. Effective January 1, 1998, AIM has undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest and
extraordinary expenses) to the annual rate of 1.00% of the average daily net
assets of the Fund's Advisor Class shares. AIM has voluntarily agreed to
continue this limitation through May 31, 2000. See "Management" herein and
the Statement of Additional Information for more information. Investors
purchasing Advisor Class shares through financial planners, trust companies,
bank trust departments or registered investment advisors, or under a "wrap
fee" program, will be subject to additional fees charged by such entities or
by the sponsors of such programs. Where any account advised by one of the
companies affiliated with AMVESCAP PLC invests in Advisor Class shares of the
Fund, such account shall not be subject to duplicative advisory fees.
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would directly or
indirectly pay the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
---- ----- ----- -----
<S> <C> <C> <C> <C>
Advisor Class shares........................................ $10 $32 $55 $123
</TABLE>
THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND INDIRECT EXPENSES, MAY
BE MORE OR LESS THAN THOSE SHOWN. THE ABOVE TABLE AND THE ASSUMPTION IN THE
HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY REGULATION OF THE SEC
APPLICABLE TO ALL MUTUAL FUNDS. THE 5% ANNUAL RETURN IS NOT A PREDICTION OF AND
DOES NOT REPRESENT THE FUND'S PROJECTED OR ACTUAL PERFORMANCE.
3
<PAGE> 44
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The table below provides condensed financial information concerning income and
capital changes for one Advisor Class share of the Fund for the periods shown.
This information is supplemented by the financial statements and notes thereto
included in the Statement of Additional Information. The financial statements
and notes for the fiscal year ended December 31, 1997, have been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report thereon also
appears in the Statement of Additional Information. Information presented below
for the fiscal years ended December 31, 1988 to 1991 was audited by other
auditors that served as the Fund's independent accountants for those periods.
The unaudited financial statements and notes, for the semi-annual period ended
June 30, 1998, are also included in the Statement of Additional Information.
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
<TABLE>
<CAPTION>
ADVISOR CLASS++
SIX MONTHS ------------------------------
ENDED YEAR ENDED JUNE 1,
JUNE 30, DECEMBER 31, 1995 TO
1998 ------------------ DEC. 31,
(UNAUDITED) 1997 1996 1995
----------- ------- ------- --------
<S> <C> <C> <C> <C>
Net investment income................................... $ 0.023 $ 0.045 $ 0.044 $ 0.030
Distributions from net investment income................ (0.023) (0.045) (0.044) (0.030)
Net asset value (unchanged during the period)........... $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= =======
Total Investment Return(b)......................... 2.25% 4.61% 4.50% 2.92%
Ratios and supplemental data:
Net assets at end of the period (in 000's).............. $ 7,631 $ 6,780 $14,978 $ 2,096
Ratio of net investment income to average net assets:
With expense waivers, reductions and/or
reimbursements(a).................................. 4.61% 4.50% 4.39% 4.94%
Without expense waivers, reductions and/or
reimbursements(a).................................. 4.61% 4.45% 4.33% 4.91%
Ratio of expenses to average net assets:
With expense waivers, reductions and/or
reimbursements(a).................................. 0.93% 0.98% 0.99% 0.97%
Without expense waivers, reductions and/or
reimbursements(a).................................. 0.93% 1.03% 1.05% 1.00%
</TABLE>
- ---------------
++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
(a) Annualized for periods of less than one year.
(b) Not annualized.
4
<PAGE> 45
- --------------------------------------------------------------------------------
PERFORMANCE
All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return.
The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
Yield is computed in accordance with standardized formulas described in the
Statement of Additional Information and can be expected to fluctuate from time
to time and is not necessarily indicative of future results. Accordingly, yield
information may not provide a basis for comparison with investments which pay a
fixed rate of interest for a stated period of time. Yield reflects investment
income net of expenses over the relevant period attributable to a Fund share,
expressed as an annualized percentage of the maximum offering price per share.
Yield is a function of the type and quality of the Fund's investments, the
maturity of the securities held in the Fund's portfolio and the operating
expense ratio of the Fund. A shareholder's investment in the Fund is not insured
or guaranteed. These factors should be carefully considered by the investor
before making an investment in the Fund.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
- --------------------------------------------------------------------------------
INVESTMENT PROGRAM
INVESTMENT OBJECTIVE. The Fund's investment objective is to seek maximum
current income consistent with liquidity and conservation of capital. The Fund
seeks this objective by investing in high quality, U.S. dollar-denominated money
market instruments, i.e., debt obligations with remaining maturities of 13
months or less. There can be no assurance that the Fund will achieve its
investment objective.
INVESTMENT POLICIES. The Fund seeks to maintain a net asset value of $1.00 per
share. To do so, the Fund uses the amortized cost method of valuing its
securities pursuant to Rule 2a-7 under the Investment Company Act of 1940, as
amended (the "1940 Act"), certain requirements of which are summarized below.
In accordance with Rule 2a-7, the Fund will (i) maintain a dollar-weighted
average portfolio maturity of 90 days or less and (ii) purchase only instruments
having remaining maturities of 13 months or less.
The Fund will invest only in high quality, U.S. dollar-denominated money
market instruments determined by the Sub-advisor to present minimal credit risks
in accordance with procedures established by the Trust's Board of Trustees (the
"Board"). To be considered high quality, a security must be rated in accordance
with applicable rules in one of the two highest rating categories for short-
term securities by at least two nationally recognized statistical rating
organizations ("NRSROs") (or one, if only one such NRSRO has rated the security)
or, if the issuer has no applicable short-term rating, determined by the
Sub-advisor to be of equivalent credit quality.
High quality securities are divided into "first tier" and "second tier"
securities. The Fund will limit its purchases of Municipal Securities to those
which are "First Tier" securities as defined in Rule 2a-7 under the 1940 Act.
Generally, "First Tier" securities are securities that are rated in the highest
rating category for short-term debt obligations by two NRSROs, or, if only rated
by one NRSRO, are rated in the highest rating category by that NRSRO, or, if
unrated, are determined by the Fund's sub-advisor (under the supervision of and
pursuant to guidelines established by the Board of Trustees) to be of comparable
quality to a rated security that meets the foregoing quality standards, as well
as securities issued by a registered investment company that is a money market
fund and U.S. government securities.
5
<PAGE> 46
The rating criteria of Standard & Poor's Corporation ("S&P") and Moody's
Investors Service, Inc. ("Moody's"), two NRSROs currently rating instruments of
the type the Fund may purchase, are more fully described in "Description of Debt
Ratings" in the Statement of Additional Information.
CERTAIN INVESTMENT STRATEGIES AND POLICIES. In pursuit of its objectives and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
PERMITTED INVESTMENTS. The Fund may invest in the following types of money
market instruments:
- Obligations issued or guaranteed by the U.S. and foreign governments, their
agencies and instrumentalities. These include: direct obligations of the U.S.
Treasury, such as Treasury bills and notes; obligations backed by the full faith
and credit of the U.S. government, such as those issued by the Government
National Mortgage Association; obligations supported primarily or solely by the
creditworthiness of the issuer, such as securities of Fannie Mae (also known as
the Federal National Mortgage Association), Freddie Mac (also known as the
Federal Home Loan Mortgage Corporation) and the Tennessee Valley Authority; and
similar U.S.-dollar denominated instruments of foreign governments, their
agencies, authorities and instrumentalities.
- Obligations of U.S. and non-U.S. banks, including certificates of deposit,
bankers' acceptances and similar instruments, when such banks have total assets
at the time of purchase equal to at least $1 billion.
- Interest-bearing deposits in U.S. commercial and savings banks having total
assets of $1 billion or less, in principal amounts at each such bank not greater
than are insured by an agency of the U.S. government, provided that the
aggregate amount of such deposits (including interest earned) does not exceed 5%
of the Fund's assets.
- Commercial paper and other short-term debt obligations of U.S. and foreign
companies, rated at least A-1 by S&P or Prime-1 by Moody's or, if not rated,
determined by the Sub-advisor to be of equivalent quality, provided that any
outstanding intermediate- or long-term debt of the issuer is rated at least AA
by S&P or Aa by Moody's. These instruments may include corporate bonds and notes
(corporate obligations that mature, or that may be redeemed, in one year or
less). These corporate obligations include variable rate master notes, which are
redeemable upon notice and permit investment of fluctuating amounts at varying
rates of interest pursuant to direct arrangements with the issuer of the
instrument.
- Repurchase agreements secured by any of the foregoing. A repurchase
agreement is a transaction in which the Fund purchases a security from a bank or
recognized securities dealer and simultaneously commits to resell that security
to the bank or dealer at an agreed-upon price, date and market rate of interest
unrelated to the coupon rate or maturity of the purchased security. Although
repurchase agreements carry certain risks not associated with direct investments
in securities, including possible decline in the market value of the underlying
securities and delays and costs to the Fund if the other party to the repurchase
agreement becomes bankrupt, the Fund will enter into repurchase agreements only
with banks and dealers believed by the Sub-advisor to present minimal credit
risks in accordance with guidelines approved by the Board. The Sub-advisor will
review and monitor the creditworthiness of such institutions under the Board's
general supervision. The Fund will not enter into repurchase agreements with
maturities of more than seven days if, as a result, more than 10% of the value
of its net assets would be invested in such repurchase agreements and other
illiquid securities.
INVESTMENT TECHNIQUES. In managing the Fund, the Sub-advisor may employ a
number of professional money management techniques, including varying the
composition of the Fund's investments and the average weighted maturity of the
Fund's portfolio within the limitations described above. Determinations to use
such techniques will be based on the Sub-advisor's identification and assessment
of the relative values of various money market instruments and the future of
interest rate patterns, economic conditions and shifts in fiscal and monetary
policy. The Sub-advisor also may seek to improve the Fund's yield by purchasing
or selling securities in order to take advantage of yield disparities that
regularly occur in the market. For example, frequently there are yield
disparities between different types of money market instruments, and market
conditions from time to time result in similar securities trading at different
prices.
RISKS AND OTHER CONSIDERATIONS. Investors should recognize that in periods of
declining interest rates, the Fund's yield will tend to be somewhat higher than
prevailing market rates; conversely, in periods of rising interest rates, the
Fund's yield will tend to be somewhat lower than those rates. Also, when
interest rates are falling, the net new money flowing into the Fund from the net
sale of its shares likely will be invested in instruments producing lower yields
than the balance of the Fund's portfolio, thereby reducing its yield. The
opposite generally will be true in periods of rising interest rates. The Fund is
designed to provide maximum current income consistent with the liquidity and
safety of principal afforded by investment in a portfolio of high quality money
market instruments; the Fund's yield may be lower than that produced by funds
investing in lower quality and/or longer-term securities.
Although the Fund may invest in instruments of non-U.S. issuers, all such
instruments will be denominated in U.S. dollars and will be first tier
securities. Obligations of non-U.S. issuers are subject to the same risks that
pertain to domestic issues, notably credit risk, market risk and liquidity risk.
Nonetheless, these instruments present risks that are different from those
presented by investment in instruments of U.S. issuers. Obligations of foreign
entities may be subject to certain sovereign risks, including adverse political
and economic developments in a foreign country, the extent and quality of
government regulation of financial markets and institutions, interest
limitations, currency controls, foreign withholding taxes, and expropriation or
nationalization of foreign issuers and their assets. There may be less publicly
available information about foreign issuers than about domestic issuers, and
foreign issuers may not
6
<PAGE> 47
be subject to the same accounting, auditing and financial recordkeeping
standards and requirements as are domestic issuers. Accordingly, while the
Fund's ability to invest in these instruments may provide it with the potential
to produce a higher yield than money market funds investing solely in
instruments of domestic issuers, the Fund presents greater risk than such other
funds.
VARIABLE AND FLOATING RATE SECURITIES. The Fund may purchase variable and
floating rate securities with remaining maturities in excess of 13 months. Such
securities must comply with conditions established by the SEC under which they
may be considered to have remaining maturities of 13 months or less. The yield
of these securities varies in relation to changes in specific money market rates
such as the prime rate. These changes are reflected in adjustments to the yields
of the variable and floating rate securities, and different securities may have
different adjustment rates. To the extent that the Fund invests in such variable
and floating rate securities, it is the Sub-advisor's view that the Fund may be
able to take advantage of the higher yield that is usually paid on longer-term
securities. The Sub-advisor further believes that the variable and floating
rates paid on such securities may substantially reduce the wide fluctuations in
market value caused by interest rate changes and other factors which are typical
of longer-term debt securities.
OTHER INFORMATION. The Fund may acquire participation interests in securities
in which it is permitted to invest. Participation interests are pro rata
interests in securities held by others. Pending investment of proceeds from new
sales of Fund shares or for temporary defensive purposes, the Fund may hold any
portion of its assets in cash. The Fund may borrow money from banks as a
temporary measure (a) for extraordinary or emergency purposes in amounts up to
5% of its net assets (taken at market value) or (b) in amounts up to 33 1/3% of
its net assets in order to meet redemption requests. The Fund will not purchase
securities while borrowings remain outstanding. The Fund may invest no more than
5% of its total assets in the securities of a single issuer (other than
securities issued or guaranteed by the U.S. government, its agencies, or
instrumentalities).
The Fund's investment objective and policies with respect to borrowing as
stated above are fundamental and may not be changed without the approval of a
majority of its outstanding voting securities. A "majority of the Fund's
outstanding voting securities" means the lesser of (i) 67% of its shares
represented at a meeting at which more than 50% of the outstanding shares are
represented, and (ii) more than 50% of its outstanding shares. In addition, the
Fund has adopted certain investment limitations that also may not be changed
without shareholder approval. A description of these limitations is included in
the Statement of Additional Information. The Fund's other investment policies
described herein are not fundamental and may be changed by vote of the Board
without shareholder approval.
If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
- --------------------------------------------------------------------------------
MANAGEMENT
The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Trust's Board of Trustees has approved all significant agreements
between the Trust on the one side and persons or companies furnishing services
to the Fund on the other, including the investment management and administrative
services agreement with AIM, the investment sub-advisory and sub-administration
agreement between AIM and the Sub-advisor, the agreements with AIM Distributors
regarding distribution of the Fund's shares, the custody agreement and the
transfer agency agreement. The day-to-day operations of the Fund are delegated
to the officers of the Trust, subject always to the investment objective and
policies of the Fund and to the general supervision of the Trust's Board of
Trustees. See "Trustees and Executive Officers" in the Statement of Additional
Information for information on the Trustees.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the Fund's investment managers and administrators include
determining the composition of the Fund's portfolio and placing orders to buy,
sell or hold particular securities; furnishing corporate officers and clerical
staff; providing office space, services and equipment; and supervising all
matters relating to the Fund's operation. For these services, the Fund pays AIM
management and administration fees, computed daily and paid monthly, at the
annualized rate of 0.50% of the Fund's average daily net assets. Out of the
aggregate fees payable by the Fund, AIM pays the Sub-advisor sub-advisory and
sub-administration fees equal to 40% of the aggregate fees AIM receives from the
Fund. The Fund pays all expenses not assumed by AIM, the Sub-advisor, AIM
Distributors or other agents. AIM has undertaken to limit the Fund's expenses
(exclusive of brokerage commissions, interest, taxes and extraordinary expenses)
to the annual rate of 1.00% of the average daily net assets of the Fund's
Advisor Class shares.
The Sub-advisor also serves as the Fund's pricing and accounting agent. For
these services the Sub-advisor receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-advisor (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administration agreement (the "Advisory Agreement"). AIM was organized in 1976
and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Fund pursuant to an investment sub-advisory and
sub-administrative agreement. Prior to May 29, 1998, the Sub-advisor was known
as Chancellor LGT Asset Management, Inc. On May 29, 1998, Liechtenstein
7
<PAGE> 48
Global Trust AG ("LGT"), the former indirect parent organization of the
Sub-advisor, consummated a purchase agreement with AMVESCAP PLC pursuant to
which AMVESCAP PLC acquired LGT's Asset Management Division, which included the
Sub-advisor and certain other affiliates. As a result of this transaction, the
Sub-advisor is now an indirect wholly owned subsidiary of AMVESCAP PLC. Prior to
the sale, the Sub-advisor and its worldwide asset management affiliates provided
investment management and/or administrative services to institutional, corporate
and individual clients around the world since 1969.
AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices in Atlanta, Boston, Dallas, Denver,
Louisville, Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore,
Sydney, Tokyo and Toronto. In managing the Fund, the Sub-advisor employs a team
approach, taking advantage of its investment resources around the world.
In placing orders for the Fund's portfolio securities transactions, the
Sub-advisor seeks to obtain the best net results. Consistent with its obligation
to obtain the best net results, the Sub-advisor may consider a broker/dealer's
sale of shares of the AIM Funds as a factor in considering through whom
portfolio transactions will be effected.
DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement (the
"Distribution Agreement"), with AIM Distributors, a registered broker-dealer and
a wholly owned subsidiary of AIM, to act as the distributor of Advisor Class
shares of the Fund. Certain Trustees and officers of the Trust are affiliated
with AIM Distributors.
The Distribution Agreement provides AIM Distributors with the exclusive right
to distribute Advisor Class shares of the Fund directly and through institutions
with whom AIM Distributors has entered into selected dealer agreements.
- --------------------------------------------------------------------------------
ORGANIZATION OF THE TRUST
The Trust was organized as a Delaware business trust on May 7, 1998. On
September 8, 1998, the Trust acquired the assets of and assumed the liabilities
of AIM Investment Portfolios, Inc., a Maryland corporation.
From time to time the Trust may establish additional funds, each corresponding
to a distinct investment portfolio and a distinct series of the Trust's shares
of beneficial interest. Shares of each fund are entitled to one vote per share
(with proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares for the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal as to earnings, assets
and voting privileges to each other share in the Fund, except that each normally
has exclusive voting rights with respect to its distribution plan and bears the
expenses, if any, related to the distribution of its shares. Shares of the Fund,
when issued, are fully paid and nonassessable.
LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust and the
Fund.
8
<PAGE> 49
THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
SHAREHOLDER ASSISTANCE IS
(800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
INVESTOR'S GUIDE
TO THE AIM FAMILY OF FUNDS--Register Mark--
FOR ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
INTRODUCTION TO THE AIM FAMILY OF FUNDS
THE AIM FAMILY OF FUNDS consists of approximately 50 mutual funds, several of
which offer Advisor Class shares. Only Advisor Class shares are offered through
this Prospectus. Advisor Class shares are available from the following funds
(collectively, the "Advisor Class Funds"):
<TABLE>
<S> <C>
AIM BASIC VALUE FUND AIM GLOBAL INFRASTRUCTURE FUND
AIM DEVELOPING MARKETS FUND AIM GLOBAL RESOURCES FUND
AIM DOLLAR FUND AIM GLOBAL TELECOMMUNICATIONS FUND
AIM EMERGING MARKETS FUND AIM GLOBAL TRENDS FUND
AIM EMERGING MARKETS DEBT FUND AIM INTERNATIONAL GROWTH FUND
AIM EUROPE GROWTH FUND AIM JAPAN GROWTH FUND
AIM GLOBAL CONSUMER PRODUCTS AIM LATIN AMERICAN GROWTH FUND
AND SERVICES FUND AIM MID CAP EQUITY FUND
AIM GLOBAL FINANCIAL SERVICES FUND AIM NEW PACIFIC GROWTH FUND
AIM GLOBAL GOVERNMENT INCOME FUND AIM SMALL CAP GROWTH FUND
AIM GLOBAL GROWTH & INCOME FUND AIM STRATEGIC INCOME FUND
AIM GLOBAL HEALTH CARE FUND AIM WORLDWIDE GROWTH FUND
</TABLE>
IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. ADVISOR
CLASS SHARES OF A FUND MAY BE EXCHANGED ONLY FOR ADVISOR CLASS SHARES OF ANOTHER
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND
OTHER THAN THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
HOW TO PURCHASE SHARES
Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge or Rule 12b-1 fees.
HOW TO OPEN AN ACCOUNT. Advisor Class shares are available through Financial
Advisers (as defined herein) who have entered into agreements with A I M
Distributors, Inc. ("AIM Distributors"). In order to purchase Advisor Class
shares of any Advisor Class Fund, the Financial Adviser, on behalf of the
investor, must submit a fully completed new Account Application form directly to
A I M Fund Services, Inc. ("AFS" or the "Transfer Agent"). The Transfer Agent
will not accept new Account Application forms submitted directly by investors.
Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment for
Advisor Class shares is $500.
AFS' mailing address is:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
A-1
<PAGE> 50
For additional information or assistance, investors should call the Client
Services Department of AFS at:
(800) 959-4246
Advisor Class shares of any Advisor Class Funds not named on the cover of this
Prospectus, as well as Class A, Class B and Class C shares of other funds
distributed by AIM Distributors ("AIM Funds"), are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his Financial Adviser should call AFS' Client Services
Department at (800) 959-4246 prior to sending a wire to receive a reference
number for the wire. The following wire instructions should be used:
<TABLE>
<S> <C>
Beneficiary Bank ABA/Routing #: 113000609
Beneficiary Account Number: 00100366807
Beneficiary Account Name: A I M Fund Services, Inc.
RFB: Fund name, Reference Number (16 character limit)
Shareholder Name, Shareholder Account Number
OBI: (70 character limit)
</TABLE>
It is recommended that investors in wrap fee accounts and advisory accounts
place orders through their Financial Advisers.
HOW TO PURCHASE ADDITIONAL SHARES. Additional Advisor Class shares may be
purchased directly through AIM Distributors or through any Financial Adviser who
has entered into an agreement with AIM Distributors. The minimum investment for
additional purchases of Advisor Class shares is $50.
BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
BY AIM BANK CONNECTION(SM): To purchase additional Advisor Class shares by
electronic funds transfer, please contact the Client Services Department of AFS
for details.
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
In addition to the Advisor Class Funds, the AIM Funds consist of the following
funds: AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR
LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND,
AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BLUE
CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM CONSTELLATION
FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED MATURITY TREASURY
FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM SELECT GROWTH FUND,
AIM SMALL CAP OPPORTUNITIES FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM VALUE FUND and AIM
WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM
LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND), with the Advisor Class
Funds, the "Multiple Class Funds." For information on purchasing any of the AIM
Funds and to receive a prospectus, please call (800) 347-4246. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
Advisor Class shares are offered through this Prospectus to (a) trustees or
other fiduciaries purchasing shares for employee benefit plans that are
sponsored by organizations that have at least 1,000 employees; (b) any account
with assets of at least $10,000 if (i) a financial planner, trust company, bank
trust department or registered investment adviser has investment discretion over
the account and (ii) the account holder pays such person as compensation for its
advice and other services an annual fee of at least .50% of the assets in the
account; (c) any account with assets of at least $10,000 if (i) the account is
established under a "wrap fee" program and (ii) the account holder pays the
sponsor of such program an annual fee of at least .50% of the assets in the
account; (d) accounts advised by INVESCO (NY), Inc. or one of the companies
formerly affiliated with Liechtenstein Global Trust AG, provided such accounts
were invested in Advisor Class shares on May 29, 1998; (e) any of the companies
affiliated with AMVESCAP PLC; and (f) AIM GLOBAL TRENDS FUND (certain Advisor
Class Funds only).
Financial planners, trust companies, bank trust departments and registered
investment advisers referenced in clause (b) above, and sponsors of "wrap fee'
programs referenced in clause (c) above are collectively referred to as
"Financial Advisers." Financial Advisers and other fiduciaries may be required
to provide information satisfactory to AIM Distributors concerning their
eligibility to purchase Advisor Class shares. Investors in wrap fee programs and
advisory accounts may only purchase Advisor Class shares through Financial
Advisers who have entered into agreements with AIM Distributors. Investors may
be charged a fee by their agents or brokers for effecting transactions in
Advisor Class shares.
AIM Distributors may, from time to time, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives
A-2
<PAGE> 51
and their families to places within or outside the United States. The total
amount of such additional bonus payments or other consideration shall not exceed
0.25% of the public offering price of the shares sold. Any such bonus or
incentive programs will not change the price paid by investors for the purchase
of the applicable AIM Fund's shares or the amount that any particular AIM Fund
will receive as proceeds from such sales. Dealers may not use sales of the AIM
Funds' shares to qualify for any incentives to the extent that such incentives
may be prohibited by the laws of any state.
TIMING OF PURCHASE ORDERS. Orders for the purchase of Advisor Class shares
received prior to the close of regular trading on the New York Stock Exchange
("NYSE"), which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close"), on any business day of an AIM Fund will be
confirmed at the price next determined. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of the AIM Fund.
Certain financial institutions (or their designees) may be authorized to accept
purchase orders on behalf of the AIM Funds. Orders received by authorized
institutions (or their designees) before NYSE Close will be deemed to have been
received by an AIM Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders. It is the responsibility of the dealer/financial
institution to ensure that all orders are transmitted on a timely basis to the
Transfer Agent. Any loss resulting from the dealer/financial institution's
failure to submit an order within the prescribed time frame will be borne by
that dealer/financial institution. Please see "How to Purchase Shares -- Initial
and Subsequent Purchases by Wire" for information on obtaining a reference
number for wire orders, which will facilitate the handling of such orders and
ensure prompt credit to an investor's account. A "business day" of an AIM Fund
is any day on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays and on the
days on which New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE.
An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
SPECIAL INFORMATION RELATING TO AIM DOLLAR FUND. Because AIM DOLLAR FUND uses
the amortized cost method of valuing the securities it holds and rounds its per
share net asset value to the nearest whole cent, it is anticipated that the net
asset value of the shares of that fund will remain constant at $1.00 per share.
However, there is no assurance that AIM DOLLAR FUND can maintain a $1.00 net
asset value per share. AIM DOLLAR FUND generally will not issue share
certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form.
MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
A-3
<PAGE> 52
- --------------------------------------------------------------------------------
SPECIAL PLANS
Except as noted below, each Advisor Class Fund provides the special plans
described below for the convenience of its Advisor Class shareholders. Once
established, there is no obligation to continue to invest through a plan, and a
shareholder may terminate a plan at any time.
Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
AUTOMATIC DIVIDEND INVESTMENT PLAN. Advisor Class shareholders may elect to
have all dividends and distributions declared by an Advisor Class Fund paid in
cash or invested at net asset value either in Advisor Class shares of the same
Advisor Class Fund or invested in shares of another Advisor Class Fund. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" for a
description of payment dates for these options. In order to qualify to have
dividends and distributions of one Advisor Class Fund invested in shares of
another Advisor Class Fund, the following conditions must be satisfied: (a) the
shareholder must have an account balance in the dividend paying fund of at least
$5,000; (b) the account must be held in the name of the shareholder (i.e., the
account may not be held in nominee name); and (c) the shareholder must have
requested and completed an authorization relating to the reinvestment of
dividends into another Advisor Class Fund. An authorization may be given on the
account application or on an authorization form available from AIM Distributors.
An Advisor Class Fund will waive the $5,000 minimum account value requirement if
the shareholder has an account in the fund selected to receive the dividends and
distributions with a value of at least $500.
PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance to $5,000 to
establish and maintain an allocation across a range of Advisor Class Funds. The
Program automatically rebalances holdings of Advisor Class Funds to the
established allocation on a periodic basis. Under the Program, a shareholder may
predesignate, on a percentage basis, how the total value of his or her holdings
in a minimum of two, and a maximum of ten, Advisor Class Funds ("Personal
Portfolio") is to be rebalanced on a quarterly, semiannual, or annual basis.
Rebalancing under the Program will be effected through the exchange of shares
of one or more Advisor Class Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other Advisor Class Funds in the
shareholder's Personal Portfolio. See "Exchange Privilege." If shares of the
Advisor Class Fund(s) in a shareholder's Personal Portfolio have appreciated
during a rebalancing period, the Program will result in shares of Advisor Class
Fund(s) that have appreciated most during the period being exchanged for shares
of Advisor Class Fund(s) that have appreciated least. SUCH EXCHANGES ARE NOT
TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE
MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends, Distributions and Tax
Matters -- Dividends and Distributions." Participation in the Program does not
assure that a shareholder will profit from purchases under the Program nor does
it prevent or lessen losses in a declining market.
The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular Advisor Class Fund would be 2%
or less. In predesignating percentages, shareholders must use whole percentages
and totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an Advisor Class Fund's
shares. The AIM Funds and AIM Distributors reserve the right to modify, suspend,
or terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which Advisor
Class Funds or what allocation percentages are assigned to the Program, unless
canceled or changed in writing and received by the Transfer Agent in good order
at least five business days prior to the rebalancing date. Certain
dealers/financial institutions may charge a fee for establishing accounts
relating to the Program. Investors should contact their dealers/financial
institutions or AIM Distributors for more information.
- --------------------------------------------------------------------------------
EXCHANGE PRIVILEGE
TERMS AND CONDITIONS OF EXCHANGES. Advisor Class shareholders of the Advisor
Class Funds may participate in an exchange privilege as described below. AIM
Distributors acts as distributor for the Advisor Class Funds which represent a
range of different investment objectives and policies.
Advisor Class shares of any Advisor Class Fund may be exchanged only for
Advisor Class shares of any other Advisor Class Fund.
Investors in wrap fee programs and advisory accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of an
Advisor Class Fund being considered. Other investors should contact AIM
Distributors for the appropriate prospectus.
An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the Advisor Class Fund acquired through such
exchange; (b) the shares of the Advisor
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<PAGE> 53
Class Fund acquired through exchange must be qualified for sale in the state in
which the shareholder resides; (c) the exchange must be made between accounts
having identical registrations and addresses; (d) the full amount of the
purchase price for the shares being exchanged must have already been received by
the fund; (e) the account from which shares have been exchanged must be coded as
having a certified taxpayer identification number on file or, in the
alternative, an appropriate IRS Form W-8 (certificate of foreign status) or Form
W-9 (certifying exempt status) must have been received by the fund; (f) newly
acquired shares (through either an initial or subsequent investment) are held in
an account for at least ten business days, and all other shares are held in an
account for at least one day, prior to the exchange; and (g) certificates
representing shares must be returned before shares can be exchanged. There is no
fee for exchanges among the Advisor Class Funds.
THE CURRENT PROSPECTUS OF EACH OF THE ADVISOR CLASS FUNDS AND CURRENT
INFORMATION CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE
THROUGH AIM DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE
AGREEMENT WITH AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD
REVIEW THE PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH
EXCHANGE. EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE
INCOME TAX PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
Shares of any Advisor Class Fund to be exchanged are redeemed at their net
asset value as determined at NYSE Close on the day that an exchange request in
proper form (described below) is received. Exchange requests received after NYSE
Close will result in the redemption of shares at their net asset value at NYSE
Close on the next business day. Normally, Advisor Class shares of an Advisor
Class Fund to be acquired by exchange are purchased at their net asset value
determined on the date that such request is received, but under unusual market
conditions such purchases may be delayed for up to five business days if it is
determined that an Advisor Class Fund would be materially disadvantaged by an
immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into an Advisor Class Fund that declares daily dividends ("Dividends,
Distributions and Tax Matters -- Dividends and Distributions," below), and the
release of the exchange proceeds is delayed for the foregoing five-day period,
such shareholder will not begin to accrue dividends until the sixth business day
after the exchange. Advisor Class shares purchased by check may not be exchanged
until it is determined that the check has cleared, which may take up to ten
business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
EXCHANGES BY MAIL. Investors exchanging their Advisor Class shares by mail
should send a written request to AFS. The request should contain the account
registration and account number, the dollar amount or number of Advisor Class
shares to be exchanged, and the names of the Advisor Class Funds from which and
into which the exchange is to be made. The request should comply with all of the
requirements for redemption by mail. See "How to Redeem Shares."
EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. A shareholder may give exchange information to his Financial
Adviser. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the Advisor Class Funds. AIM Distributors reserves the right to impose
conditions on dealers or investment advisors who make telephone exchanges of
shares of the Advisor Class Funds, including the condition that any such dealer
or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a Financial Adviser, shareholder or dealer who has
satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
Financial Adviser, shareholder or dealer is unable to reach AFS by telephone, he
may also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to NYSE Close.
The Transfer Agent and AIM Distributors will not be liable for any loss, expense
or cost arising out of any telephone exchange request that they reasonably
believe 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 may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's Social Security Number
and current address, and mailings of confirmations promptly after the
transaction.
- --------------------------------------------------------------------------------
HOW TO REDEEM SHARES
Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. No
redemption fee is imposed when Advisor Class shares are redeemed or repurchased;
however, dealers/financial institutions may charge service fees for handling
repurchase transactions.
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REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
his account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not 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 appropriate form 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 may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
TIMING AND PRICING OF REDEMPTION ORDERS. Advisor Class shares of the Advisor
Class Funds are redeemed at their net asset value next computed after a request
for redemption in proper form (including signature guarantees and other required
documentation for written redemptions) is received by the Transfer Agent or
certain financial institutions (or their designees) who are authorized to accept
redemption orders on behalf of the AIM Funds, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. Orders for the redemption of Advisor Class shares received on any
business day of an AIM Fund will be confirmed at the price determined as of the
close of that day. Orders received after NYSE Close will be confirmed at the
price determined on the next business day of an AIM Fund. It is the
responsibility of the dealer/financial institution to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer/financial
institution's failure to submit a request for redemption within the prescribed
time frame will be borne by that dealer/financial institution. Telephone
redemption requests must be made by NYSE Close on any business day of an AIM
Fund and will be confirmed at the price determined as of the close of that day.
No AIM Fund will accept requests which specify a particular date for redemption
or which specify any special conditions.
Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions, and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the proceeds are to be sent to
the address of record. These requirements may be waived or modified upon notice
to shareholders.
Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such
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<PAGE> 55
as certain domestic banks, credit unions, securities dealers, or securities
exchanges. The Transfer Agent will also accept signatures with either: (1) a
signature guaranteed with a medallion stamp of the STAMP Program, or (2) a
signature guaranteed with a medallion stamp of the NYSE Medallion Signature
Program, provided that in either event, the amount of the transaction involved
does not exceed the surety coverage amount indicated on the medallion. For
information regarding whether a particular institution or organization qualifies
as an "eligible guarantor institution," an investor should contact the Client
Services Department of AFS.
- --------------------------------------------------------------------------------
DETERMINATION OF NET ASSET VALUE
The net asset value per share (or share price) of each Advisor Class Fund is
determined as of 4:00 p.m. Eastern Time on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an Advisor Class
Fund's share will be determined as of the close of the NYSE on such day. For
purposes of defining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE. The
net asset value per share is calculated by subtracting a class' liabilities from
its assets and dividing the result by the total number of class shares
outstanding. The determination of net asset value per share is made in
accordance with generally accepted accounting principles. Among other items,
liabilities include accrued expenses and dividends payable, and total assets
include portfolio securities valued at their market value, as well as income
accrued but not yet received. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the supervision of the fund's officers and in accordance with methods
which are specifically authorized by its governing Board of Directors or
Trustees. Short-term obligations with maturities of 60 days or less, and the
securities held by the AIM DOLLAR FUND, are valued at amortized cost as
reflecting fair value.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM Fund's net asset value. If events
materially affecting the value of such securities occur during such period, then
these securities will be valued at their fair value as determined in good faith
by or under the supervision of the Board of Directors or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
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<PAGE> 56
- --------------------------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
Each AIM Fund generally pays dividends and distributions as set forth below:
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
OF NET OF NET
DIVIDENDS FROM REALIZED REALIZED
NET INVESTMENT SHORT-TERM LONG-TERM
FUND INCOME CAPITAL GAINS CAPITAL GAINS
- ---- -------------- ------------- -------------
<S> <C> <C> <C>
AIM BASIC VALUE FUND............... declared and paid annually annually annually
AIM DEVELOPING MARKETS FUND........ declared and paid annually annually annually
AIM DOLLAR FUND.................... declared daily; paid monthly annually annually
AIM EMERGING MARKETS FUND.......... declared and paid annually annually annually
AIM EMERGING MARKETS DEBT FUND..... declared and paid monthly annually annually
AIM EUROPE GROWTH FUND............. declared and paid annually annually annually
AIM GLOBAL CONSUMER PRODUCTS AND
SERVICES FUND.................... declared and paid annually annually annually
AIM GLOBAL FINANCIAL SERVICES
FUND............................. declared and paid annually annually annually
AIM GLOBAL GOVERNMENT INCOME
FUND............................. declared and paid monthly annually annually
AIM GLOBAL GROWTH & INCOME FUND.... declared and paid quarterly annually annually
AIM GLOBAL HEALTH CARE FUND........ declared and paid annually annually annually
AIM GLOBAL INFRASTRUCTURE FUND..... declared and paid annually annually annually
AIM GLOBAL RESOURCES FUND.......... declared and paid annually annually annually
AIM GLOBAL TELECOMMUNICATIONS
FUND............................. declared and paid annually annually annually
AIM GLOBAL TRENDS FUND............. declared and paid annually annually annually
AIM INTERNATIONAL GROWTH FUND...... declared and paid annually annually annually
AIM JAPAN GROWTH FUND.............. declared and paid annually annually annually
AIM LATIN AMERICAN GROWTH FUND..... declared and paid annually annually annually
AIM MID CAP EQUITY FUND............ declared and paid annually annually annually
AIM NEW PACIFIC GROWTH FUND........ declared and paid annually annually annually
AIM SMALL CAP GROWTH FUND.......... declared and paid annually annually annually
AIM STRATEGIC INCOME FUND.......... declared and paid monthly annually annually
AIM WORLDWIDE GROWTH FUND.......... declared and paid annually annually annually
</TABLE>
In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each Advisor Class Fund
may make additional distributions, if necessary, to avoid a non-deductible 4%
federal excise tax on certain undistributed income and capital gain (the "Excise
Tax").
All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to Advisor Class shares of an Advisor
Class Fund are reinvested in additional Advisor Class shares of that fund,
absent an election by a shareholder to receive cash or to have such dividends
and distributions reinvested in Advisor Class shares of another Advisor Class
Fund, to the extent permitted. For funds that do not declare a dividend daily,
such dividends and distributions will be reinvested at the net asset value per
share determined on the ex-dividend date. For funds that declare a dividend
daily, such dividends and distributions will be reinvested at the net asset
value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or only the
dividend portion thereof, in cash, or to invest such dividends and distributions
in Advisor Class shares of another Advisor Class Fund. Investors who have not
previously selected such a reinvestment option on the account application form
may contact the Transfer Agent at any time to obtain a form to authorize such
reinvestments in another Advisor Class Fund.
Dividends on Advisor Class shares of an Advisor Class Fund are expected to be
higher than dividends on shares of other classes of that fund because of the
service and distribution fees paid by those other classes of shares. Dividends
on all shares may also be affected by other class-specific expenses.
Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
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<PAGE> 57
TAX MATTERS
Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares. With respect to tax-exempt shareholders,
dividends and distributions from the AIM Funds are not subject to federal income
taxation to the extent permitted under the applicable tax exemption.
Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM Developing
Markets Fund, AIM Dollar Fund, AIM Emerging Markets Fund, AIM Europe Growth
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Trends Fund, AIM International Growth Fund, AIM Japan Growth Fund, AIM Latin
American Growth Fund, AIM New Pacific Growth Fund and AIM Strategic Income Fund
will qualify for this dividends received deduction.
Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year.
For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS DEBT FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM MID CAP
EQUITY FUND, AIM SMALL CAP GROWTH FUND AND AIM STRATEGIC INCOME FUND -- SPECIAL
TAX INFORMATION. Certain states exempt from income taxes dividends paid by
mutual funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
A-9
<PAGE> 58
AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL
SERVICES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL
TELECOMMUNICATIONS FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND,
AIM LATIN AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND AND AIM WORLDWIDE
GROWTH FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is
eligible to do so, each of these funds may elect to pass through to its
shareholders credits for foreign taxes paid. If a fund makes such an election, a
shareholder who receives a distribution (1) will be required to include in gross
income his proportionate share of foreign taxes allocable to the distribution
and (2) may claim a credit or deduction for such share for his taxable year in
which the distribution is received, subject to the general limitations imposed
on the allowance of foreign tax credits and deductions. Shareholders should also
note that certain gains or losses attributable to fluctuations in exchange rates
or foreign currency forward contracts may increase or decrease the amount of
income of the fund available for distribution to shareholders and should note
that if, for any fund, such losses exceed other income during a taxable year,
the fund would not be able to pay ordinary income dividends for that year.
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GENERAL INFORMATION
CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the Advisor Class Funds. Chase Bank of Texas,
N.A., P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for
retail purchases of the AIM Funds.
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each Advisor Class Fund's transfer agent and
dividend payment agent.
SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
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 the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
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 second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. 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 Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
A-10
<PAGE> 59
APPLICATION INSTRUCTIONS
SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GIVE SOCIAL SECURITY GIVE TAXPAYER I.D.
ACCOUNT TYPE NUMBER OF: ACCOUNT TYPE NUMBER OF:
<S> <C> <C> <C>
Individual Individual Trust, Estate, Pension Trust, Estate, Pension
Plan Trust Plan Trust and not
personal TIN of fiduciary
Joint Individual First individual listed in the
"Account Registration" portion
of the Application
Unif. Gifts to Minor Corporation, Partnership, Corporation, Partnership,
Minors/Unif. Other Organization Other Organization
Transfers to Minors
Legal Guardian Ward, Minor or
Incompetent
Sole Proprietor Owner of Business Broker/Nominee Broker/Nominee
</TABLE>
- --------------------------------------------------------------------------------
Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
An investor is subject to backup withholding if:
(1) the investor fails to furnish a correct TIN to the Fund, or
(2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
(3) the investor is notified by the IRS that the investor is subject to backup
withholding because the investor failed to report all of the interest and
dividends on such investor's tax return (for reportable interest and
dividends only), or
(4) the investor fails to certify to the Fund that the investor is not subject
to backup withholding under (3) above (for reportable interest and
dividend accounts opened after 1983 only), or
(5) the investor does not certify his TIN. This applies only to reportable
interest, dividend, broker or barter exchange accounts opened after 1983,
or broker accounts considered inactive during 1983.
Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
most recent publication of the American Society of Corporate Secretaries,
Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
MCF-07/98
B-1
<PAGE> 60
NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
MCF-07/98
B-2
<PAGE> 61
[AIM LOGO APPEARS HERE] THE AIM FAMILY OF FUNDS--Registered Trademark--
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
Sub-Advisor
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Independent Accountants
PricewaterhouseCoopers LLP
One Post Office Square
Boston, MA 02109
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
DOL-PRO-2
<PAGE> 62
STATEMENT OF
ADDITIONAL INFORMATION
CLASS A AND CLASS B SHARES OF
AIM DOLLAR FUND
(A SERIES PORTFOLIO OF
AIM INVESTMENT PORTFOLIOS)
11 GREENWAY PLAZA
SUITE 100
HOUSTON, TEXAS 77046-1173
(713) 626-1919
---------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND
IT SHOULD BE READ IN CONJUNCTION WITH A PROSPECTUS OF THE
ABOVE-NAMED FUND, A COPY OF WHICH MAY BE OBTAINED FREE
OF CHARGE FROM AUTHORIZED DEALERS OR BY WRITING
A I M DISTRIBUTORS, INC.,
P.O. BOX 4739, HOUSTON, TEXAS 77210-4739
OR BY CALLING (800) 347-4246
---------------------
STATEMENT OF ADDITIONAL INFORMATION DATED SEPTEMBER 8, 1998
RELATING TO THE AIM DOLLAR FUND PROSPECTUS DATED SEPTEMBER 8, 1998
<PAGE> 63
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTRODUCTION................................................ 3
GENERAL INFORMATION ABOUT THE FUNDS......................... 3
The Trust and Its Shares.................................. 3
INVESTMENT OBJECTIVE AND POLICIES........................... 4
Investment Objective...................................... 4
Changes in a Security's Rating............................ 4
Variable and Floating Rate Obligations.................... 4
Bankers' Acceptances...................................... 4
Certificates of Deposit................................... 4
Commercial Paper.......................................... 4
U.S. Government Obligations............................... 4
Repurchase Agreements..................................... 4
When-Issued and Delayed Delivery Transactions............. 5
Illiquid Securities....................................... 5
INVESTMENT LIMITATIONS...................................... 6
MANAGEMENT.................................................. 7
Trustees and Executive Officers........................... 7
Investment Management and Administration Services......... 10
Expenses of the Fund...................................... 10
THE DISTRIBUTION PLANS...................................... 10
The Class A Plan.......................................... 10
The Class B Plan.......................................... 10
Both Plans................................................ 10
THE DISTRIBUTOR............................................. 13
DIVIDENDS AND TAXES......................................... 14
Daily Income Dividends.................................... 14
Taxes -- General.......................................... 14
Non-U.S. Shareholders..................................... 14
HOW TO PURCHASE AND REDEEM SHARES........................... 15
PROGRAM AND SERVICES FOR SHAREHOLDERS....................... 16
DIVIDEND ORDER.............................................. 16
NET ASSET VALUE DETERMINATION............................... 16
EXECUTION OF PORTFOLIO TRANSACTIONS......................... 17
MISCELLANEOUS INFORMATION................................... 18
Custodian................................................. 18
Transfer Agency and Accounting Agency Services............ 18
Independent Accountants................................... 18
Shareholder Liability..................................... 18
Name...................................................... 18
Control Persons and Principal Holders of Securities....... 19
INVESTMENT RESULTS.......................................... 19
Total Return Quotations................................... 20
Performance Information................................... 23
APPENDIX.................................................... 25
Commercial Paper Ratings.................................. 25
Bond Ratings.............................................. 25
Note Ratings.............................................. 25
FINANCIAL STATEMENTS........................................ FS
</TABLE>
2
<PAGE> 64
INTRODUCTION
This Statement of Additional Information relates to the Class A and Class B
shares of AIM Dollar Fund (the "Fund"). The Fund is a diversified series of AIM
Investment Portfolios (the "Trust"), a registered open-end management investment
company organized as a Delaware business trust.
A I M Advisors, Inc. ("AIM") serves as the investment manager of and
administrator for, and INVESCO (NY), Inc. (the "Sub-advisor") serves as the
investment sub-advisor of and sub-administrator for the Fund.
The Trust is a series mutual fund. The rules and regulations of the Securities
and Exchange Commission (the "SEC") require all mutual funds to furnish
prospective investors certain information concerning the activities of the fund
being considered for investment. This information for the Fund is included in a
Prospectus dated September 8, 1998. Additional copies of the Prospectus and this
Statement of Additional Information may be obtained without charge by writing
the principal distributor of the Fund's shares, A I M Distributors, Inc. ("AIM
Distributors"), P.O. Box 4739, Houston, TX 77210-4739 or by calling (800)
347-4246. Investors must receive a Prospectus before they invest.
This Statement of Additional Information is intended to furnish prospective
investors with additional information concerning the Fund. Some of the
information required to be in this Statement of Additional Information is also
included in the Prospectus; and, in order to avoid repetition, reference will be
made to sections of the Prospectus. Additionally, the Prospectus and this
Statement of Additional Information omit certain information contained in the
Registration Statement filed with the SEC. Copies of the Registration Statement,
including items omitted from the Prospectus and this Statement of Additional
Information, may be obtained from the SEC by paying the charges prescribed under
its rules and regulations.
GENERAL INFORMATION ABOUT THE FUNDS
THE TRUST AND ITS SHARES
The Trust previously operated under the name AIM Investment Portfolios, Inc.,
which was organized as a Maryland corporation in 1981. The Trust was reorganized
on September 8, 1998 as a Delaware business trust, and is registered with the
SEC as a diversified open-end series management investment company. The Trust
currently consists of a single portfolio, the AIM Dollar Fund. The Fund has
three separate classes: Class A, Class B and Advisor Class shares. All
historical financial and other information contained in this Statement of
Additional Information for periods prior to September 8, 1998, is that of the
series of GT Global Dollar Fund (renamed AIM Dollar Fund).
This Statement of Additional Information relates solely to the Class A and B
shares of the Fund.
The term "majority of the outstanding shares" of the Trust, of the Fund or of
a particular class of the Fund means, respectively, the vote of the lesser of
(a) 67% or more of the shares of the Trust, the Fund 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, the Fund or such class are present or
represented by proxy, or (b) more than 50% of the outstanding shares of the
Trust, the Fund or such class.
Class A, Class B and Advisor Class shares of the Fund have equal rights and
privileges. Each share of a particular class is entitled to one vote, to
participate equally in dividends and distributions declared by the Trust's Board
of Trustees with respect to the class of the Fund and, upon liquidation of the
Fund, to participate proportionately in the net assets of the Fund allocable to
such class remaining after satisfaction of outstanding liabilities of the Fund
allocable to such class. Fund shares are fully paid, non-assessable and fully
transferable when issued and have no preemptive rights and have such conversion
and exchange rights as set forth in the Prospectus and this Statement of
Additional Information. Fractional shares have proportionately the same rights,
including voting rights, as are provided for a full share.
Shareholders of the Fund do not have cumulative voting rights, and therefore
the holders of more than 50% of the outstanding shares of the Fund voting
together for election of trustees may elect all of the members of the Board of
Trustees of the Trust. In such event, the remaining holders cannot elect any
trustees of the Trust.
3
<PAGE> 65
INVESTMENT OBJECTIVE AND POLICIES
INVESTMENT OBJECTIVE
The investment objective of the Fund is maximum current income consistent with
liquidity and conservation of capital. The Fund seeks its objective by investing
in high quality, U.S. dollar-denominated money market instruments.
CHANGES IN A SECURITY'S RATING
Subsequent to the purchase of a security by the Fund, the security may cease
to be rated or its rating may be reduced below the minimum rating required for
its purchase, as described in the Prospectus. In such event the Fund, the
Trust's Board of Trustees (the "Board") and the Sub-advisor will review the
situation and take appropriate action in accordance with procedures adopted by
the Board pursuant to Rule 2a-7 under the Investment Company Act of 1940, as
amended (the "1940 Act").
VARIABLE AND FLOATING RATE OBLIGATIONS
Floating and variable rate demand notes and bonds are obligations ordinarily
having stated maturities in excess of 13 months, but which permit the holder to
demand payment of principal at any time, or at specified intervals not exceeding
13 months, in each case upon not more than 30 days' notice. The issuer of such
obligations generally has a corresponding right, after a given period, to prepay
in its discretion the outstanding principal amount of the obligation plus
accrued interest upon a specified number of days' notice to the holders thereof.
The interest rates payable on certain securities in which the Fund may invest
are not fixed and may fluctuate based upon changes in market rates. Variable and
floating rate obligations have interest rates that are adjusted at designated
intervals or whenever there are changes in the market rates of interest on which
the interest rates are based. Variable and floating rate obligations permit the
Fund to "lock in" the current interest rate for only the period until the next
rate adjustment, but the rate adjustment feature tends to limit the extent to
which the market value of the obligation will fluctuate.
BANKERS' ACCEPTANCES
Bankers' acceptances are negotiable obligations of a bank to pay a draft which
has been drawn on it by a customer. These obligations are backed by large banks
and usually are backed by goods in international trade.
CERTIFICATES OF DEPOSIT
Certificates of deposit are negotiable certificates representing a commercial
bank's obligations to repay funds deposited with it, earning specified rates of
interest over a given period of time.
COMMERCIAL PAPER
Commercial paper consists of short-term promissory notes issued by large
corporations with a high quality rating to finance short-term credit needs.
U.S. GOVERNMENT OBLIGATIONS
U.S. government obligations are debt securities issued or guaranteed by the
U.S. Treasury or by an agency or instrumentality of the U.S. government.
However, not all U.S. government obligations are backed by the full faith and
credit of the United States. For example, securities issued by the Federal
National Mortgage Association, the Federal Home Loan Mortgage Corporation and
the Tennessee Valley Authority are supported only by the credit of the issuer.
There is no guarantee that the U.S. government will provide support to such U.S.
government sponsored agencies, as it is not so obligated by law. Therefore, the
purchase of such securities involves more risk than investment in other U.S.
government obligations.
REPURCHASE AGREEMENTS
A repurchase agreement is a transaction in which the Fund purchases a security
from a bank or recognized securities dealer and simultaneously commits to resell
that security to the bank or dealer at an agreed-upon price, date and market
rate of interest unrelated to the coupon rate or maturity of the purchased
security. Although repurchase agreements carry certain risks not associated with
direct investments in securities, including possible decline in the market value
of the underlying securities and delays and costs to the Fund if the other party
to the repurchase agreement becomes bankrupt,
4
<PAGE> 66
the Fund intends to enter into repurchase agreements only with banks and dealers
believed by the Sub-advisor to present minimal credit risks in accordance with
guidelines established by the Board. The Sub-advisor will review and monitor the
creditworthiness of such institutions under the Board's general supervision.
The Fund will invest only in repurchase agreements collateralized at all times
in an amount at least equal to the repurchase price plus accrued interest. To
the extent that the proceeds from any sale of such collateral upon a default in
the obligation to repurchase were less than the repurchase price, the Fund would
suffer a loss. If the financial institution which is party to the repurchase
agreement petitions for bankruptcy or otherwise becomes subject to bankruptcy or
other liquidation proceedings, there may be restrictions on the Fund's ability
to sell the collateral and the Fund could suffer a loss. However, with respect
to financial institutions whose bankruptcy or liquidation proceedings are
subject to the U.S. Bankruptcy Code, the Fund intends to comply with provisions
under that code that would allow the immediate resale of such collateral. There
is no limitation on the amount of the Fund's assets that may be subject to
repurchase agreements at any given time. The Fund will not enter into a
repurchase agreement with a maturity of more than seven days if, as a result,
more than 10% of the value of its net assets would be invested in such
repurchase agreements and other illiquid investments.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
The Fund may buy and sell securities on a when-issued or delayed delivery
basis, with payment and delivery taking place at a future date. The market value
of securities purchased in this way may change before the delivery date, which
could increase fluctuations in the Fund's yield. Ordinarily, the Fund will not
earn interest on securities purchased until they are delivered.
ILLIQUID SECURITIES
The Fund will not invest more than 10% of its net assets in illiquid
securities. The term "illiquid securities" for this purpose means securities
that cannot be disposed of within seven days in the ordinary course of business
at approximately the amount at which the Fund has valued the securities and
includes, among other things, repurchase agreements maturing in more than seven
days, and restricted securities other than those the Sub-advisor has determined
to be liquid pursuant to guidelines established by the Board. Commercial paper
issues in which the Fund may invest include securities issued by major
corporations without registration under the Securities Act of 1933, as amended
(the "1933 Act"), in reliance on the exemption from such registration afforded
by Section 3(a)(3) thereof and commercial paper issued in reliance on the
so-called "private placement" exemption from registration afforded by Section
4(2) of the 1933 Act ("Section 4(2) paper"). Section 4(2) paper is restricted as
to disposition under the federal securities laws in that any resale must
similarly be made in an exempt transaction. Section 4(2) paper is normally
resold to other institutional investors through or with the assistance of
investment dealers who make a market in Section 4(2) paper, thus providing
liquidity.
Not all restricted securities are illiquid. In recent years a large
institutional market has developed for certain securities that are not
registered under the 1933 Act, including private placements, repurchase
agreements, commercial paper, foreign securities and corporate bonds and notes.
These instruments are often restricted securities because the securities are
sold in transactions not requiring registration. Institutional investors
generally will not seek to sell these instruments to the general public, but
instead will often depend either on an efficient institutional market in which
such unregistered securities can be readily resold on or an issuer's ability to
honor a demand for repayment. Therefore, the fact that there are contractual or
legal restrictions on resale to the general public or certain institutions is
not dispositive of the liquidity of such investments.
Rule 144A under the 1933 Act establishes a "safe harbor" from the registration
requirements of the 1933 Act for resales of certain securities to qualified
institutional buyers. Institutional markets for restricted securities have
developed as a result of Rule 144A, providing both readily ascertainable values
for restricted securities and the ability to liquidate an investment to satisfy
share redemption orders. Such markets include automated systems for the trading,
clearance and settlement of unregistered securities, such as the PORTAL System
sponsored by the National Association of Securities Dealers, Inc. An
insufficient number of qualified institutional buyers interested in purchasing
Rule 144A-eligible restricted securities held by the Fund, however, could affect
adversely the marketability of such portfolio securities and the Fund might be
unable to dispose of such securities promptly or at favorable prices.
With respect to liquidity determinations generally, the Board has the ultimate
responsibility for determining whether specific securities, including restricted
securities pursuant to Rule 144A under the 1933 Act, are liquid or illiquid. The
Board has delegated the function of making day-to-day determinations of
liquidity to the Sub-advisor, in accordance with procedures approved by the
Board. The Sub-advisor takes into account a number of factors in reaching
liquidity decisions, including (1) the frequency of trading in the security; (2)
the number of dealers that make quotes for the security;
5
<PAGE> 67
(3) the number of dealers that have undertaken to make a market in the security;
(4) the number of other potential purchasers; and (5) the nature of the security
and how trading is effected (e.g., the time needed to sell the security, how
offers are solicited and the mechanics of transfer). The Sub-advisor monitors
the liquidity of securities held by the Fund and periodically reports such
determinations to the Board as applicable. If the liquidity percentage
restriction of the Fund is satisfied at the time of investment, a later increase
in the percentage of illiquid securities held by the Fund resulting from a
change in market value or assets will not constitute a violation of that
restriction. If as a result of a change in market value or assets, the
percentage of illiquid securities held by the Fund increases above the
applicable limit, the Sub-advisor will take appropriate steps to bring the
aggregate amount of illiquid assets back within the prescribed limitations as
soon as reasonably practicable, taking into account the effect of any
disposition on the Fund.
INVESTMENT LIMITATIONS
The Fund has adopted the following investment limitations as fundamental
policies that may not be changed without approval by the affirmative vote of a
majority of the outstanding shares of the Fund. The Fund may not:
(1) Purchase securities of any one issuer if, as a result, more than
5% of the Fund's total assets would be invested in securities of that
issuer or the Fund would own or hold more than 10% of the outstanding
voting securities of that issuer, except that up to 25% of the Fund's total
assets may be invested without regard to this limitation, and except that
this limitation does not apply to securities issued or guaranteed by the
U.S. government, its agencies or instrumentalities or to securities issued
by other investment companies;
(2) Issue senior securities or borrow money, except as permitted under
the 1940 Act and then not in excess of 33 1/3% of the Fund's total assets
(including the amount borrowed but reduced by any liabilities not
constituting borrowings) at the time of the borrowing, except that the Fund
may borrow up to an additional 5% of its total assets (not including the
amount borrowed) for temporary or emergency purposes;
(3) Engage in the business of underwriting securities of other
issuers, except to the extent that the Fund might be considered an
underwriter under the federal securities laws in connection with its
disposition of portfolio securities;
(4) Purchase or sell real estate, except that investments in
securities of issuers that invest in real estate and investments in
mortgage-backed securities, mortgage participations or other instruments
supported by interests in real estate are not subject to this limitation,
and except that the Fund may exercise rights under agreements relating to
such securities, including the right to enforce security interests and to
hold real estate acquired by reason of such enforcement until that real
estate can be liquidated in an orderly manner;
(5) Make loans, except through loans of portfolio securities or
through repurchase agreements, provided that for purposes of this
limitation, the acquisition of bonds, debentures, other debt securities or
instruments, or participations or other interests therein and investments
in government obligations, commercial paper, certificates of deposit,
bankers' acceptances or similar instruments will not be considered the
making of a loan;
(6) Purchase or sell physical commodities, but the Fund may purchase,
sell or enter into financial options and futures, forward and spot currency
contracts, swap transactions and other financial contracts or derivative
instruments; or
(7) Purchase any security if, as a result of that purchase, 25% or
more of the Fund's total assets would be invested in securities of issuers
having their principal business activities in the same industry, except
that this limitation does not apply to securities issued or guaranteed by
the U.S. government, its agencies or instrumentalities;
Notwithstanding any other investment policy of the Fund, the Fund may invest
all of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
For purposes of the concentration policy contained in limitation (7), above,
the Fund intends to comply with the SEC staff position that securities issued or
guaranteed as to principal and interest by any single foreign government are
considered to be securities of issuers in the same industry.
If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage resulting from a change in values or assets
will not constitute a violation of that restriction.
6
<PAGE> 68
Investors should refer to the Fund's prospectus for further information with
respect to the investment objective, which may not be changed without the
approval of its shareholders, and other investment policies, techniques and
limitations, which may be changed without shareholder approval.
The following investment policies of the Fund are not fundamental policies and
may be changed by vote of the Trust's Board of Trustees without shareholder
approval. The Fund may not:
(1) Invest more than 10% of its net assets in illiquid securities;
(2) Purchase securities on margin, provided that the Fund may obtain
short-term credits as may be necessary for the clearance of purchases and
sales of securities, and further provided that the Fund may make margin
deposits in connection with its use of financial options and futures,
forward and spot currency contracts, swap transactions and other financial
contracts or derivative instruments; or
(3) Mortgage, pledge, or hypothecate any of its assets, provided that
this shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activities.
MANAGEMENT
TRUSTEES AND EXECUTIVE OFFICERS
The Trust's Trustees and Executive Officers are listed below. Unless otherwise
indicated, the address of each Executive Officer is 11 Greenway Plaza, Suite
100, Houston, Texas 77046.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
NAME, ADDRESS AND AGE POSITION HELD WITH REGISTRANT PRINCIPAL OCCUPATION WITH REGISTRANT
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
ROBERT H. GRAHAM (51) Trustee, Chairman of the Board Director, President and Chief Executive
and President Officer, 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.
- -----------------------------------------------------------------------------------------------------
C. DEREK ANDERSON (57) Trustee President, Plantagenet Capital
220 Sansome Street Management, LLC (an investment
Suite 400 partnership); Chief Executive Officer,
San Francisco, CA 94104 Plantagenet Holdings, Ltd. (an
investment banking firm); Director,
Anderson Capital Management, Inc. since
1988; Director, PremiumWear, Inc.
(formerly Munsingwear, Inc.) (a casual
apparel company); Director, "R" Homes,
Inc. and various other companies; and
Trustee, each of the other investment
companies registered under the 1940 Act
that is sub-advised or sub-administered
by the Sub-advisor.
- -----------------------------------------------------------------------------------------------------
FRANK S. BAYLEY (59) Trustee Partner, law firm of Baker & McKenzie;
Two Embarcadero Center Director and Chairman, C.D. Stimson
Suite 2400 Company (a private investment company);
San Francisco, CA 94111 and Trustee, each of the other
investment companies registered under
the 1940 Act that is sub-advised or
sub-administered by the Sub-advisor.
- -----------------------------------------------------------------------------------------------------
ARTHUR C. PATTERSON (54) Trustee Managing Partner, Accel Partners (a
428 University Avenue venture capital firm); Director,
Palo Alto, CA 94301 Viasoft and PageMart, Inc. (both public
software companies) and several other
privately held software and
communications companies; and Trustee,
each of the other investment companies
registered under the 1940 Act that is
sub-advised or sub-administered by the
Sub-advisor.
- -----------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE> 69
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
NAME, ADDRESS AND AGE POSITION HELD WITH REGISTRANT PRINCIPAL OCCUPATION WITH REGISTRANT
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
RUTH H. QUIGLEY (63) Trustee Private investor; President, Quigley
1055 California Street Friedlander & Co., Inc. (a financial
San Francisco, CA 94108 advisory services firm) from 1984 to
1986; and Trustee, each of the other
investment companies registered under
the 1940 Act that is sub-advised or
sub-administered by the Sub-advisor.
- -----------------------------------------------------------------------------------------------------
+JOHN J. ARTHUR (53) Vice President Director, Senior Vice President and
Treasurer, A I M Advisors, Inc.; Vice
President and Treasurer, A I M
Management Group Inc., A I M Capital
Management, Inc., A I M Distributors,
Inc., A I M Fund Services, Inc. and
Fund Management Company.
- -----------------------------------------------------------------------------------------------------
KENNETH W. CHANCEY (53) Vice President and Principal Senior Vice President -- Mutual Fund
50 California Street Accounting Officer Accounting, the Sub-advisor since 1997;
San Francisco, CA 94111 Vice President -- Mutual Fund
Accounting, the Sub-advisor from 1992
to 1997.
- -----------------------------------------------------------------------------------------------------
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.
- -----------------------------------------------------------------------------------------------------
GARY T. CRUM (50) Vice President Director and President, A I M Capital
Management, Inc.; Director and Senior
Vice President, A I M Management Group
Inc. and A I M Advisors, Inc.; and
Director, A I M Distributors, Inc. and
AMVESCAP PLC.
- -----------------------------------------------------------------------------------------------------
HELGE K. LEE (52) Vice President and Secretary Chief Legal and Compliance
50 California Street Officer -- North America, the
San Francisco, CA 94111 Sub-advisor since October 1997;
Secretary and Chief Legal and
Compliance Officer, INVESCO (NY) Asset
Management, Inc., INVESCO (NY), Inc.,
GT Global Investor Services, Inc. and
G.T. Insurance since August 1997;
Secretary and Chief Legal and
Compliance Officer, GT Global from
August 1997 to April 1998; Executive
Vice President of the Asset Management
Division of Liechtenstein Global Trust
AG, from October 1996 to May 1998;
Senior Vice President, General Counsel
and Secretary of INVESCO (NY) Asset
Management, Inc., INVESCO (NY), Inc.,
GT Global, GT Global Investor Services,
Inc. and G.T. Insurance from May 1994
to October 1996; and Senior Vice
President, General Counsel and
Secretary of Strong/Corneliuson
Management, Inc. and Secretary of each
of the Strong Funds from October 1991
to May 1994.
- -----------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
<TABLE>
<S> <C> <C>
+ Mr. Arthur and Ms. Relihan are married to each other.
</TABLE>
8
<PAGE> 70
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
NAME, ADDRESS AND AGE POSITION HELD WITH REGISTRANT PRINCIPAL OCCUPATION WITH REGISTRANT
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
+CAROL F. RELIHAN (43) Vice President Director, Senior Vice President,
General Counsel and Secretary, A I M
Advisors, Inc.; Vice President, General
Counsel and Secretary, A I M Management
Group Inc.; Director, Vice President
and General Counsel, Fund Management
Company; Vice President and General
Counsel, A I M Fund Services, Inc.; and
Vice President, A I M Capital
Management, Inc. and A I M
Distributors, Inc.
- -----------------------------------------------------------------------------------------------------
DANA R. SUTTON (39) Vice President and Assistant Vice President and Fund Controller,
Treasurer A I M Advisors, Inc.; and Assistant
Vice President and Assistant Treasurer,
Fund Management Company.
- -----------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
+ Mr. Arthur and Ms. Relihan are married to each other.
The Board of Trustees has a Nominating and Audit Committee, comprised of Miss
Quigley and Messrs. Anderson, Bayley and Patterson, which is responsible for
nominating persons to serve as Trustees, reviewing audits of the Trust and
recommending firms to serve as independent auditors of the Trust. All of the
Trust's Trustees also serve as directors or trustees of some or all of the other
investment companies managed, administered or advised by AIM. All of the Trust's
executive officers hold similar offices with some or all of the other investment
companies managed, administered or advised by AIM. Each Trustee who is not a
trustee, officer or employee of the Sub-advisor or any affiliated company is
paid aggregate fees of $5,000 a year, plus $300 per fund for each meeting of the
Board attended, and reimbursed travel and other expenses incurred in connection
with attendance at such meetings. Other Trustees and Officers receive no
compensation or expense reimbursement from the Trust. For the fiscal year ended
December 31, 1997, Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss Quigley, who
are not trustees, officers or employees of the Sub-advisor or any affiliated
company, received total compensation of $3,588, $3,716, $3,100 and $3,409,
respectively, from the Trust for their services as Trustees. For the fiscal year
ended December 31, 1997, Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss
Quigley, who are not trustees, officers or employees of the Sub-advisor or any
other affiliated company, received total compensation of $103,654, $106,556,
$89,700 and $98,038, respectively, from the investment companies managed or
administered by AIM and sub-advised or sub-administered by the Sub-advisor, for
which he or she serves as Trustee. Fees and expenses disbursed to the Trustees
contained no accrued or payable pension or retirement benefits. As of June 26,
1998, the Officers and Trustees and their families as a group owned in the
aggregate beneficially or of record less than 1% of the outstanding shares of
the Fund.
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES
AIM serves as the Fund's investment manager and administrator under an
investment management and administration contract between the Trust and AIM
("Management Contract"). The Sub-advisor serves as the sub-advisor and sub-
administrator to the Fund under a Sub-Advisory and Sub-Administration Contract
between AIM and the Sub-advisor ("Sub-Management Contract," and together with
the Management Contract, the "Management Contracts"). As investment managers and
administrators, AIM and the Sub-advisor make all investment decisions for the
Fund and administer the Fund's affairs. Among other things, AIM and the
Sub-advisor furnish the services and pay the compensation and travel expenses of
persons who perform the executive, administrative, clerical and bookkeeping
functions of the Trust and the Fund, and provide suitable office space,
necessary small office equipment and utilities.
The Management Contracts may be renewed for one-year terms with respect to the
Fund, provided that any such renewal has been specifically approved at least
annually by: (i) the Board, or by the vote of a majority of the Fund's
outstanding voting securities (as defined in the 1940 Act), and (ii) a majority
of Trustees who are not parties to the Management Contracts or "interested
persons" of any such party (as defined in the 1940 Act), cast in person at a
meeting called for the specific purpose of voting on such approval. Either the
Trust or each of AIM or the Sub-advisor may terminate the Management Contracts
without penalty upon sixty days' written notice to the other party. The
Management Contracts terminate automatically in the event of their assignment
(as defined in the 1940 Act).
For the fiscal years ended December 31, 1997, 1996 and 1995, the Fund paid
investment management and administration fees to the Sub-advisor in the amounts
of $1,384,735, $1,808,976 and $1,665,299, respectively. During the fiscal years
ended December 31, 1997 and 1996, the Sub-advisor reimbursed the Fund for a
portion of its investment
9
<PAGE> 71
management and administration fees in the amounts of $88,707 and $173,045,
respectively. No such reimbursements were made during the fiscal year ended
December 31, 1995.
EXPENSES OF THE FUND
The Fund pays all expenses not assumed by AIM, the Sub-advisor, AIM
Distributors and other agents. These expenses include, in addition to the
advisory, administration, distribution, transfer agency, pricing and accounting
agency and brokerage fees discussed above, legal and audit expenses, custodian
fees, trustee's fees, organizational fees, fidelity bond and other insurance
premiums, taxes, extraordinary expenses and the expenses of reports and
prospectuses sent to existing investors. The allocation of general Trust
expenses and expenses shared among the Fund and other funds organized as series
of the Trust are allocated on a basis deemed fair and equitable, which may be
based on the relative net assets of the Fund or the nature of the service
performed and relative applicability to the Fund. Expenditures, including costs
incurred in connection with the purchase or sale of portfolio securities, which
are capitalized in accordance with generally accepted accounting principles
applicable to investment companies, are accounted for as capital items and not
as expenses.
THE DISTRIBUTION PLANS
THE CLASS A PLAN
The Trust has adopted a Master Distribution Plan pursuant to Rule 12b-1 under
the 1940 Act relating to the Class A shares of the Fund (the "Class A Plan").
The Class A Plan provides that the Class A shares pay 0.25% per annum of their
average daily net assets as compensation to AIM Distributors for the purpose of
financing any activity which is primarily intended to result in the sale of
Class A shares. Of such amounts, the Fund pays a service fee of 0.25% of the
average daily net assets attributable to Class A shares to selected dealers and
other institutions which furnish continuing personal shareholder services to
their customers who purchase and own Class A shares. Activities appropriate for
financing under the Class A Plan include, but are not limited to, the following:
printing of prospectuses and statements of additional information and reports
for other than existing shareholders; overhead; preparation and distribution of
advertising material and sales literature; expenses of organizing and conducting
sales seminars; supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements; and costs of administering the Class A Plan.
THE CLASS B PLAN
The Trust has also adopted a Master Distribution Plan pursuant to Rule 12b-1
under the 1940 Act relating to Class B shares of the Fund (the "Class B Plan",
and collectively with the Class A Plan, the "Plans"). Under the Class B Plan,
the Fund pays compensation to AIM Distributors at an annual rate of 1.00% of the
average daily net assets attributable to Class B shares. Of such amount, the
Fund pays a service fee of 0.25% of the average daily net assets attributable to
Class B shares to selected dealers and other institutions which furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares. Amounts paid in accordance with the Class B Plan may be used to
finance any activity primarily intended to result in the sale of Class B shares,
including but not limited to printing of prospectuses and statements of
additional information and reports for other than existing shareholders;
overhead; preparation and distribution of advertising material and sales
literature; expenses of organizing and conducting sales seminars; supplemental
payments to dealers and other institutions such as asset-based sales charges or
as payments of service fees under shareholder service arrangements; and costs of
administering the Class B Plan. AIM Distributors may transfer and sell its
rights to payments under the Class B Plan in order to finance distribution
expenditures in respect of Class B shares.
BOTH PLANS
Pursuant to an incentive program, AIM Distributors may enter into agreements
("Shareholder Service Agreements") with investment dealers selected from time to
time by AIM Distributors for the provision of distribution assistance in
connection with the sale of the Funds' shares to such dealers' customers, and
for the provision of continuing personal shareholder services to customers who
may from time to time directly or beneficially own shares of the Funds. The
distribution assistance and continuing personal shareholder services to be
rendered by dealers under the Shareholder Service Agreements may include, but
shall not be limited to, the following: distributing sales literature; answering
routine customer inquiries concerning the Fund; assisting customers in changing
dividend options, account designations and addresses, and in enrolling in any of
the several special investment plans offered in connection with the purchase of
the Fund's shares; assisting in the establishment and maintenance of customer
accounts and records and in the processing of
10
<PAGE> 72
purchase and redemption transactions; investing dividends and any capital gains
distributions automatically in the Fund's shares; and providing such other
information and services as the Fund or the customer may reasonably request.
Under the Plans, in addition to the Shareholder Service Agreements authorizing
payments to selected dealers, banks may enter into Shareholder Service
Agreements authorizing payments under the Plans to be made to banks which
provide services to their customers who have purchased shares. Services provided
pursuant to Shareholder Service Agreements with banks may include some or all of
the following: answering shareholder inquiries regarding the Fund; performing
sub-accounting; establishing and maintaining shareholder accounts and records;
processing customer purchase and redemption transactions; providing periodic
statements showing a shareholder's account balance and the integration of such
statements with those of other transactions and balances in the shareholder's
other accounts serviced by the bank; forwarding applicable prospectuses, proxy
statements, reports and notices to bank clients who hold Fund shares; and such
other administrative services as the Fund reasonably may request, to the extent
permitted by applicable statute, rule or regulation. Similar agreements may be
permitted under the Plans for institutions which provide recordkeeping for and
administrative services to 401(k) plans.
Financial intermediaries and any other person entitled to receive compensation
for selling Fund shares may receive different compensation for selling shares of
one particular class over another.
Under a Shareholder Service Agreement, the Fund agrees to pay periodically
fees to selected dealers and other institutions who render the foregoing
services to their customers. The fees payable under a Shareholder Service
Agreement generally will be calculated at the end of each payment period for
each business day of the Fund during such period at the annual rate of 0.25% of
the average daily net asset value of the Fund's shares purchased or acquired
through exchange. Fees calculated in this manner shall be paid only to those
selected dealers or other institutions who are dealers or institutions of record
at the close of business on the last business day of the applicable payment
period for the account in which the Fund's shares are held.
Payments pursuant to the Plans are subject to any applicable limitations
imposed by rules of the National Association of Securities Dealers, Inc.
("NASD"). The Plans conform to rules of the NASD by limiting payments made to
dealers and other financial institutions who provide continuing personal
shareholder services to their customers who purchase and own shares of the Fund
to no more than 0.25% per annum of the average daily net assets of the funds
attributable to the customers of such dealers or financial institutions, and by
imposing a cap on the total sales charges, including asset based sales charges,
that may be paid by the Fund and its respective classes.
AIM Distributors does not act as principal, but rather as agent for the Fund,
in making dealer incentive and shareholder servicing payments under the Plans.
These payments are an obligation of the Fund and not of AIM Distributors.
Prior to June 1, 1998, the Trust had adopted a different Rule 12b-1 plan, that
operated as a "reimbursement-type" plan (the "Prior Plan"). The information
provided below relates to payments made under the Prior Plan, which provided for
payments to GT Global Inc., the distributor of the Fund at the time the Prior
Plan was in effect.
For the fiscal year ended December 31, 1997, the Fund paid, including waivers,
the following amounts under the Prior Plan:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS A CLASS B
-------- -------- ------- -------
% OF CLASS
AVERAGE DAILY
NET ASSETS
-------------
<S> <C> <C> <C> <C>
AIM Dollar Fund................................. $ 0 746,848 0% 0.75%
</TABLE>
Actual fees by category paid by the Fund with regard to the Class A shares
during the year ended December 31, 1997 follows:
<TABLE>
<S> <C>
CLASS A
Compensation to Underwriters to partially offset other
marketing expenses..................................... $ --
Compensation to Dealers including finder's fees........... $422,808
</TABLE>
11
<PAGE> 73
Actual fees by category paid by the Fund with regard to the Class B Shares
during the year ended December 31, 1997 as follows:
<TABLE>
<S> <C>
CLASS B
Compensation to Underwriters to partially offset upfront
dealer commissions and other marketing costs........... $746,848
Compensation to Dealers................................... $248,949
</TABLE>
The Plans require AIM Distributors to provide the Board of Trustees at least
quarterly with a written report of the amounts expended pursuant to the Plans
and the purposes for which such expenditures were made. The Board of Trustees
reviews these reports in connection with their decisions with respect to the
Plans.
As required by Rule 12b-1, the Plans and related forms of Shareholder Service
Agreements were approved by the Board of Trustees, including a majority of the
Trustees who are not "interested persons" (as defined in the 1940 Act) of the
Trust and who have no direct or indirect financial interest in the operation of
the Plans or in any agreements related to the Plans ("Qualified Trustees"). In
approving the Plans in accordance with the requirements of Rule 12b-1, the
Trustees considered various factors and determined that there is a reasonable
likelihood that the Plans would benefit each class of the Fund and their
respective shareholders.
The Plans do not obligate the Fund to reimburse AIM Distributors for the
actual expenses AIM Distributors may incur in fulfilling its obligations under
the Plans. Thus, even if AIM Distributors' actual expenses exceed the fee
payable to AIM Distributors thereunder at any given time, the Fund will not be
obligated to pay more than that fee. If AIM Distributors' expenses are less than
the fee it receives, AIM Distributors will retain the full amount of the fee.
Unless terminated earlier in accordance with their terms, the Plans continue
in effect until May 29, 1999 and each year thereafter, as long as such
continuance is specifically approved at least annually by the Board of Trustees,
including a majority of the Qualified Trustees.
The Plans may be terminated by the vote of a majority of the Qualified
Trustees, or, with respect to a particular class, by the vote of a majority of
the outstanding voting securities of that class.
Any change in the Plans that would increase materially the distribution
expenses paid by the applicable class requires shareholder approval; otherwise,
it may be amended by the Trustees, including a majority of the Qualified
Trustees, by votes cast in person at a meeting called for the purpose of voting
upon such amendment. As long as the Plans are in effect, the selection or
nomination of the Qualified Trustees is committed to the discretion of the
Qualified Trustees. In the event the Class A Plan is amended in a manner which
the Board of Trustees determines would materially increase the charges paid
under the Class A Plan, the Class B shares of the Fund will no longer convert
into Class A shares of the same Fund unless the Class B shares, voting
separately, approve such amendment. If the Class B shareholders do not approve
such amendment, the Board of Trustees will (i) create a new class of shares of
the Fund which is identical in all material respects to the Class A shares as
they existed prior to the implementation of the amendment and (ii) ensure that
the existing Class B shares of the Fund will be exchanged or converted into such
new class of shares no later than the date the Class B shares were scheduled to
convert into Class A shares.
The principal differences between the Class A Plan, on the one hand, and the
Class B Plan, on the other hand, are: (i) the Class A Plan allows payment to AIM
Distributors or to dealers or financial institutions of up to 0.25% of average
daily net assets of the Class A shares of the Fund, as compared to 1.00% of such
assets of the Fund's Class B shares; (ii) the Class B Plan obligates the Class B
shares to continue to make payments to AIM Distributors following termination of
the Class B shares Distribution Agreement with respect to Class B shares sold by
or attributable to the distribution efforts of AIM Distributors and its
predecessor GT Global, Inc. unless there has been a complete termination of the
Class B Plan (as defined in such Plan) and (iii) the Class B Plan expressly
authorizes AIM Distributors to assign, transfer or pledge its rights to payments
pursuant to the Class B Plan.
12
<PAGE> 74
THE DISTRIBUTOR
Information concerning AIM Distributors and the continuous offering of the
Fund's shares is set forth in the Prospectus under the headings "How to Purchase
Shares" and "Terms and Conditions of Purchase of the AIM Funds." Master
Distribution Agreements with AIM Distributors relating to the Class A and Class
B shares of the Funds were approved by the Board of Trustees on May 7, 1998.
Both such Master Distribution Agreements are hereinafter collectively referred
to as the "Distribution Agreements."
The Distribution Agreements provide that AIM Distributors will bear the
expenses of printing from the final proof and distributing the Fund's
prospectuses and statements of additional information relating to public
offerings made by AIM Distributors pursuant to the Distribution Agreements
(other than those prospectuses and statements of additional information
distributed to existing shareholders of the Fund), and any promotional or sales
literature used by AIM Distributors or furnished by AIM Distributors to dealers
in connection with the public offering of the Fund's shares, including expenses
of advertising in connection with such public offerings. AIM Distributors has
not undertaken to sell any specified number of shares of any classes of the
Fund.
AIM Distributors expects to pay sales commissions from its own resources to
dealers and institutions who sell Class B shares of the Funds at the time of
such sales. Payments with respect to Class B shares will equal 4.0% of the
purchase price of the Class B shares sold by the dealer or institution, and will
consist of a sales commission equal to 3.75% of the purchase price of the Class
B shares sold plus an advance of the first year service fee of 0.25% with
respect to such shares. The portion of the payments to AIM Distributors under
the Class B Plan which constitutes an asset-based sales charge (0.75%) is
intended in part to permit AIM Distributors to recoup a portion of such sales
commissions plus financing costs. AIM Distributors anticipates that it will
require a number of years to recoup from Class B Plan payments the sales
commissions paid to dealers and institutions in connection with sales of Class B
shares. In the future, if multiple distributors serve a Fund, each such
distributor (or its assignee or transferee) would receive a share of the
payments under the Class B Plan based on the portion of the Fund's Class B
shares sold by or attributable to the distribution efforts of that distributor.
The Trust (on behalf of any class of the Fund) or AIM Distributors may
terminate the Distribution Agreements on sixty (60) days' written notice without
penalty. The Distribution Agreements will terminate automatically in the event
of their assignment. In the event the Class B shares Distribution Agreement is
terminated, AIM Distributors would continue to receive payments of asset based
distribution fees in respect of the outstanding Class B shares attributable to
the distribution efforts of AIM Distributors and its predecessor; provided,
however, that a complete termination of the Class B Plan (as defined in such
Plan) would terminate all payments by the Fund of asset based distribution fees
and service fees to AIM Distributors. Termination of the Class B Plan or
Distribution Agreement does not affect the obligation of Class B shareholders to
pay contingent deferred sales charges.
The following chart reflects the contingent deferred sales charges paid by
Class A and Class B shareholders for the fiscal years ended December 31, 1997,
1996 and 1995 for Class A and Class B shares:
<TABLE>
<CAPTION>
1997 1996 1995
---------- -------- ----------
<S> <C> <C> <C>
AIM Dollar Fund.................................. $1,241,407 $968,357 $1,333,734
</TABLE>
13
<PAGE> 75
DIVIDENDS AND TAXES
DAILY INCOME DIVIDENDS
Net investment income and any realized net short-term capital gain are
determined and declared as a dividend each day. Each such dividend is payable to
shareholders as of the close of business on that day. Orders to purchase Fund
shares are executed on the business day on which Federal Funds, i.e., monies
held on deposit at a Federal Reserve Bank, become available. Shares begin
accruing dividends on the day following the date of purchase. Shares are
entitled to the dividend declared on the day a redemption request is received by
the Transfer Agent. Dividends are automatically reinvested in Fund shares of the
distributing class on the last Business Day of the month, at net asset value,
unless a shareholder otherwise instructs the Transfer Agent in writing. A
shareholder that does so will be mailed a check in the amount of each dividend.
For the purpose of calculating dividends, daily net investment income of the
Fund consists of (a) all interest income accrued on investments (including any
discount or premium ratably accrued or amortized, respectively, to the date of
maturity or determined in such other manner the Fund chooses in accordance with
generally accepted accounting principles), (b) minus all accrued liabilities,
including interest, taxes and other expense items, and reserves for contingent
or undetermined liabilities, all determined in accordance with those principles,
(c) plus or minus all realized gains or losses on investments, if any.
TAXES -- GENERAL
To continue to qualify for treatment as a regulated investment company under
the Internal Revenue Code of 1986, as amended (the "Code"), the Fund must
distribute to its shareholders for each taxable year at least 90% of its
investment company taxable income (consisting of net investment income and any
net short-term capital gain) and must meet several additional requirements.
These requirements include the following: (1) the Fund must derive at least 90%
of its gross income each taxable year from dividends, interest and gains from
the sale or other disposition of securities, or other income derived with
respect to its business of investing in securities; and (2) the Fund must
diversify its holdings so that, at the close of each quarter of its taxable
year, (i) at least 50% of the value of its total assets is represented by cash
and cash items, U.S. government securities and other securities limited, with
respect to any one issuer, to an amount that does not exceed 5% of the value of
the Fund's total assets and (ii) not more than 25% of the value of its total
assets is invested in the securities of any one issuer (other than U.S.
government securities).
The Fund will be subject to a nondeductible 4% excise tax to the extent it
fails to distribute by the end of any calendar year substantially all of its
ordinary income for that year and capital gain net income, if any, for the
one-year period ending on October 31 of that year, plus certain other amounts.
Dividends from the Fund's investment company taxable income are taxable to its
shareholders as ordinary income. The Fund does not expect to receive any
dividend income from U.S. corporations, which means that no part of the
dividends from the Fund will not be eligible for the dividends-received
deduction allowed to corporations. Dividends will be taxed for federal income
tax purposes in the same manner whether they are received in cash or reinvested
in additional Fund shares.
NON-U.S. SHAREHOLDERS
Dividends paid by the Fund to a shareholder who, as to the United States, is a
nonresident alien individual, nonresident alien fiduciary of a trust or estate,
foreign corporation or foreign partnership (a "foreign shareholder") will be
subject to U.S. withholding tax (at a rate of 30% or lower treaty rate).
Withholding will not apply if a dividend paid by the Fund to a foreign
shareholder is "effectively connected with the conduct of a U.S. trade or
business," in which case the reporting and withholding requirements applicable
to U.S. citizens or other domestic taxpayers will apply.
The foregoing is a general and abbreviated summary of certain federal tax
considerations affecting the Fund and its shareholders. Investors are urged to
consult their own tax advisors for more detailed information and for information
regarding any foreign, state and local taxes applicable to an investment in the
Fund.
14
<PAGE> 76
HOW TO PURCHASE AND REDEEM SHARES
A complete description of the manner in which shares of the Fund may be
purchased appears in the Fund's Prospectus under the headings "How to Purchase
Shares," "Terms and Conditions of Purchase of the AIM Funds" and "Special
Plans."
The sales charge normally deducted on purchases of Class A shares is used to
compensate AIM Distributors and participating dealers for their expenses
incurred in connection with the distribution of the Fund's Class A shares. Since
there is little expense associated with unsolicited orders placed directly with
AIM Distributors by persons who, because of their relationship with the Fund or
with AIM and its affiliates, are familiar with the Fund, or whose programs for
purchase involve little expense (e.g., because of the size of the transaction
and shareholder records required), AIM Distributors believes that it is
appropriate and in the Fund's best interests that such persons, and certain
other persons whose purchases result in relatively low expenses of distribution,
be permitted to purchase Class A shares of the Fund through AIM Distributors
without payment of a sales charge. The persons who may purchase Class A shares
of the Fund without a sales charge are set forth in the Fund's Prospectus. In
addition, the Fund offers programs such as Right of Accumulation and Letter of
Intent, which are described in the prospectus, and are designed to permit
investors to aggregate purchases of different funds, or separate purchases over
time, in order to qualify for a lower sales charge rate. See "Terms and
Conditions of Purchase of the AIM Funds -- Reductions in Initial Sales Charges"
in the Prospectus.
Class A shares that are subject to a contingent deferred sales charge and that
were purchased before June 1, 1998 are entitled to the following waivers from
the contingent deferred sales charge otherwise due upon redemption: (1) minimum
required distributions made in connection with an IRA, Keogh Plan or custodial
account under Section 403(b) of the Code or other retirement plan following
attainment of age 70 1/2; (2) total or partial redemptions resulting from a
distribution following retirement in the case of a tax-qualified
employer-sponsored retirement plan; (3) when a redemption results from a
tax-free return of an excess contribution pursuant to Section 408(d)(4) or (5)
of the Code or from the death or disability of the employee; (4) redemptions
pursuant to a Fund's right to liquidate a shareholder's account involuntarily;
(5) redemptions pursuant to distributions from a tax-qualified
employer-sponsored retirement plan, which is invested in AIM Funds, which are
permitted to be made without penalty pursuant to the Code, other than tax-free
rollovers or transfers of assets, and the proceeds of which are reinvested in
AIM Funds; (6) redemptions made in connection with participant-directed
exchanges between options in an employer-sponsored benefit plan; (7) redemptions
made for the purpose of providing cash to fund a loan to a participant in a
tax-qualified retirement plan; (8) redemptions made in connection with a
distribution from any retirement plan or account that is permitted in accordance
with the provisions of Section 72(t)(2) of the Code, and the regulations
promulgated thereunder; (9) redemptions made in connection with a distribution
from any retirement plan or account that involves the return of an excess
deferral amount pursuant to Section 401(k)(8) or Section 402(g)(2) of the Code;
(10) redemptions made in connection with a distribution from a qualified
profit-sharing or stock bonus plan described in Section 401(k) of the Code to a
participant or beneficiary under Section 401(k)(2)(B)(IV) of the Code upon
hardship of the covered employee (determined pursuant to Treasury Regulation
Section 1.401(k)-1(d)(2)); and (11) redemptions made by or for the benefit of
certain states, counties or cities, or any instrumentalities, departments or
authorities thereof where such entities are prohibited or limited by applicable
law from paying a sales charge or commission.
Class B shares purchased before June 1, 1998 are subject to the following
waivers from the contingent deferred sales charge otherwise due upon redemption,
in addition to the waivers provided for redemptions of currently issued Class B
shares as described in the Prospectus: (1) total or partial redemptions
resulting from a distribution following retirement in the case of a
tax-qualified employer-sponsored retirement; (2) minimum required distributions
made in connection with an IRA, Keogh Plan or custodial account under Section
403(b) of the Code or other retirement plan following attainment of age 70 1/2;
(3) redemptions pursuant to distributions from a tax-qualified
employer-sponsored retirement plan, which is invested in AIM Funds, which are
permitted to be made without penalty pursuant to the Code, other than tax-free
rollovers or transfers of assets, and the proceeds of which are reinvested in
AIM Funds; (4) redemptions made in connection with participant-directed
exchanges between options in an employer-sponsored benefit plan; (5) redemptions
made for the purpose of providing cash to fund a loan to a participant in a
tax-qualified retirement plan; (6) redemptions made in connection with a
distribution from any retirement plan or account that is permitted in accordance
with the provisions of Section 72(t)(2) of the Code and the regulations
promulgated thereunder; (7) redemptions made in connection with a distribution
from a qualified profit-sharing or stock bonus plan described in Section 401(k)
of the Code to a participant or beneficiary under Section 401(k)(2)(B)(IV) of
the Code upon hardship of the covered employee (determined pursuant to Treasury
Regulation Section 1.401(k)-1(d)(2)); and (8) redemptions made by or for the
benefit of certain states, counties or cities, or any instrumentalities,
departments or authorities thereof where such entities are prohibited or limited
by applicable law from paying a sales charge or commission.
15
<PAGE> 77
For purposes of a Letter of Intent entered into prior to June 1, 1998, any
registered investment advisor, trust company or bank trust department which
exercises investment discretion and which intends within thirteen months to
invest $500,000 or more can be treated as a single purchaser, provided further
that such entity places all purchases and redemption orders. Such entities
should be prepared to establish their qualifications for such treatment.
Complete information concerning the method of exchanging shares of the Fund
for shares of the other AIM Funds is set forth in the prospectus under the
heading "Exchange Privilege."
Information concerning redemption of the Fund's shares is set forth in the
Prospectus under the heading "How to Redeem Shares." In addition to the Fund's
obligation to redeem shares, AIM Distributors may also repurchase shares as an
accommodation to shareholders. To effect a repurchase, those dealers who have
executed Selected Dealer Agreements with AIM Distributors must phone orders to
the order desk of the Fund at (800) 959-4246 and guarantee delivery of all
required documents in good order. A repurchase is effected at the net asset
value per share of the Fund next determined after the repurchase order is
received. Such an arrangement is subject to timely receipt by A I M Fund
Services, Inc. ("AFS"), the Fund's transfer agent, of all required documents in
good order. If such documents are not received within a reasonable time after
the order is placed, the order is subject to cancellation. While there is no
charge imposed by a Fund or by AIM Distributors (other than any applicable
contingent deferred sales charge) when shares are redeemed or repurchased,
dealers may charge a fair service fee for handling the transaction.
The right of redemption may be suspended or the date of payment postponed when
(a) trading on the New York Stock Exchange ("NYSE") is restricted, as determined
by applicable rules and regulations of the SEC, (b) the NYSE is closed for other
than customary weekend and holiday closings, (c) the SEC has by order permitted
such suspension, or (d) an emergency as determined by the SEC exists making
disposition of portfolio securities or the valuation of the net assets of a Fund
not reasonably practicable.
The Fund's net asset value is calculated by dividing the number of outstanding
shares into the net assets of the Fund. Net assets are the excess of the Fund's
assets over its liabilities. A more detailed description of how the Fund's net
asset value is calculated appears in the Prospectus under the heading
"Determination of Net Asset Value."
PROGRAMS AND SERVICES FOR SHAREHOLDERS
The Fund provides certain services for shareholders and certain investment or
redemption programs. See "Exchange Privilege" and "How to Redeem Shares" in the
Prospectus. All inquiries concerning these programs should be made directly to
A I M Fund Services, Inc., P.O. Box 4739, Houston, TX 77210-4739, toll free at
(800) 959-4246.
DIVIDEND ORDER
Dividends may be paid to someone other than the registered owner, or sent to
an address other than the address of record. (Please note that signature
guarantees are required to effect this option.) An investor also may direct that
his or her dividends be invested in one of the other AIM Funds and there is no
sales charge for these investments; initial investment minimums apply. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" in the
Prospectus. To effect this option, please contact your authorized dealer. For
more information concerning AIM Funds other than the Fund, please obtain a
current prospectus by contacting your authorized dealer, by writing to A I M
Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, or by calling
toll free (800) 959-4246.
NET ASSET VALUE DETERMINATION
The net asset value per share of the Fund is determined daily as of 12:00 noon
and the close of trading on the NYSE (generally 4:00 p.m. Eastern time) on each
business day of the Fund. In the event the NYSE closes early (i.e., before 4:00
p.m. Eastern time) on a particular day, the net asset value of a Fund is
determined as of the close of the NYSE on such day. Net asset value per share is
determined by dividing the value of the Fund's securities, cash and other assets
(including interest accrued but not collected) attributable to a particular
class, less all its liabilities (including accrued expenses and dividends
payable) attributable to that class, by the number of shares outstanding of that
class and rounding the resulting per share net asset value to the nearest one
cent. Determination of the net asset value per share is made in accordance with
generally accepted accounting principles.
The securities of the Fund are valued on the basis of amortized cost. This
method values a security at its cost on the date of purchase and thereafter
assumes a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the market value of
the security. While this method provides certainty in valuation, it may result
in periods during which value, as determined by amortized cost, is higher or
lower than the price the Fund
16
<PAGE> 78
would receive if the security were sold. During such periods, the daily yield on
shares of the Fund computed as described under "Performance Information" may
differ somewhat from an identical computation made by another investment company
with identical investments utilizing available indications as to the market
value of its portfolio securities.
The valuation of portfolio instruments based upon their amortized cost and the
concomitant maintenance of the net asset value per share of $1.00 for the Fund
is permitted in accordance with applicable rules and regulations of the SEC
which require the Fund to adhere to certain conditions. These rules require,
among other things, that the Fund maintain a dollar-weighted average portfolio
maturity of 90 days or less, purchase only instruments having remaining
maturities of 397 calendar days or less and invest only in securities determined
by the Board of Trustees to be "Eligible Securities" (as defined in Rule 2a-7
under the 1940 Act) and to present minimal credit risk to the Fund.
The Board of Trustees is required to establish procedures designed to
stabilize, to the extent reasonably practicable, the Fund's price per share at
$1.00, as computed for the purpose of sales and redemptions. Such procedures
include review of the Fund's holdings by the Board of Trustees at such intervals
as they may deem appropriate, to determine whether the net asset value
calculated by using available market quotations or other reputable sources for
the Fund deviates from $1.00 per share and, if so, whether such deviation may
result in material dilution or is otherwise unfair to existing holders of the
Fund's shares. In the event the Board of Trustees determines that such a
deviation exists for the Fund, it will take such corrective action as the Board
of Trustees deems necessary and appropriate with respect to the Fund, including
the sale of portfolio instruments prior to maturity to realize capital gains or
losses or to shorten the average portfolio maturity; the withholding of
dividends; redemption of shares in kind; or the establishment of a net asset
value per share by using available market quotations.
The Fund intends to comply with any amendments made to Rule 2a-7 which may
require corresponding changes in the Fund's procedures which are designed to
stabilize the Fund's price per share at $1.00.
EXECUTION OF PORTFOLIO TRANSACTIONS
Subject to policies established by the Board, the Sub-advisor is responsible
for the execution of the Fund's portfolio transactions and the selection of
broker/dealers who execute such transactions on behalf of the Fund. Purchases
and sales of money market instruments by the Fund generally are made on a
principal basis, in which the dealer through whom the trade is executed retains
a "spread" as compensation. The spread is the difference in the price at which
the dealer buys or sells the instrument to the Fund and the price which the
dealer is able to resell or at which the dealer originally purchased,
respectively, the instrument. In executing transactions, the Sub-advisor seeks
the best net results for the Fund, taking into account such factors as the price
(including the applicable dealer spread), size of the order, difficulty of
execution and operational facilities of the firm involved. Although the
Sub-advisor generally seeks reasonably competitive spreads, payment of the
lowest spread is not necessarily consistent with the best net results. The Fund
has no obligation to deal with any broker/dealer or group of broker/dealers in
the execution of portfolio transactions.
Investment decisions for the Fund and for other investment accounts managed by
the Sub-advisor are made independently of each other in light of differing
conditions. However, the same investment decision occasionally may be made for
two or more of such accounts, including the Fund. In such cases, simultaneous
transactions may occur. Purchases or sales are then allocated as to price or
amount in a manner deemed fair and equitable to all accounts involved. While in
some cases this practice could have a detrimental effect upon the price or value
of the security as far as the Fund is concerned, in other cases the Sub-advisor
believes that coordination and the ability to participate in volume transactions
will be beneficial to the Fund.
Under a policy adopted by the Board, and subject to the policy of obtaining
the best net results, the Sub-advisor may consider a broker/dealer's sale of the
shares of the Fund and the other funds for which AIM or the Sub-advisor serves
as investment manager and/or administrator in selecting broker/dealers for the
execution of portfolio transactions. This policy does not imply a commitment to
execute portfolio transactions through all broker/dealers that sell shares of
the Fund and such other funds.
The Fund 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 Fund, provided the conditions of an exemptive order received by the Funds
from the SEC are met. In addition, the Fund may purchase or sell a security from
or to another AIM Fund provided the Fund follow procedures adopted by the Boards
of Directors/Trustees of the various AIM Funds, including the Trust. These
inter-fund transactions do not generate brokerage commissions but may result in
custodial fees or taxes or other related expenses.
17
<PAGE> 79
MISCELLANEOUS INFORMATION
AIM was organized in 1976, and along with its subsidiaries, manages or advises
approximately 90 investment company portfolios encompassing a broad range of
investment objectives. AIM is a direct, wholly owned subsidiary of A I M
Management Group Inc. ("AIM Management"), a holding company that has been
engaged in the financial services business since 1976. AIM is the sole
shareholder of the Fund's principal underwriter, AIM Distributors. AIM
Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire
Square, London, EC2M 4YR, England. AMVESCAP PLC and its subsidiaries are
independent investment management groups, that have a significant presence in
the institutional and retail segment of the investment management industry in
North America and Europe, and a growing presence in Asia.
CUSTODIAN
State Street Bank and Trust Company ("State Street"), 225 Franklin Street,
Boston, MA 02110, acts as custodian of the Fund's assets. State Street is
authorized to establish and has established separate accounts in foreign
currencies and to cause securities of the Fund to be held in separate accounts
outside the United States in the custody of non-U.S. banks.
TRANSFER AGENCY AND ACCOUNTING AGENCY SERVICES
The Transfer Agency and Service Agreement between the Trust and AFS, a
registered transfer agent and wholly-owned subsidiary of AIM, provides that AFS
will perform certain shareholder services for the Fund for a fee per account
serviced. The Transfer Agency and Service Agreement provides that AFS will
receive a per account fee plus out-of-pocket expenses to process orders for
purchases, redemptions and exchanges of shares; prepare and transmit payments
for dividends and distributions declared by the Fund; maintain shareholder
accounts and provide shareholders with information regarding the Fund and its
accounts. The Transfer Agency and Service Agreement became effective on
September 8, 1998. The Sub-advisor also serves as the Fund's pricing and
accounting agent. For the fiscal years ended December 31, 1997, 1996 and 1995,
the accounting services fees for the Fund were $69,517, $90,682 and $86,710,
respectively.
INDEPENDENT ACCOUNTANTS
The Fund's independent accountants are PricewaterhouseCoopers LLP.
PricewaterhouseCoopers LLP conducts annual audits of the Fund's financial
statements, assists in the preparation of the Fund's federal and state income
tax returns and consults with the Trust and the Fund as to matters of
accounting, regulatory filings, and federal and state income taxation.
The financial statements of the Trust included in this Statement of Additional
Information have been audited by PricewaterhouseCoopers LLP, as stated in their
opinion appearing herein, and are included in reliance upon such opinion given
upon the authority of that firm as experts in accounting and auditing.
SHAREHOLDER LIABILITY
Under Delaware law, the shareholders of the Trust enjoy the same limitations
extended to shareholders of private, for-profit corporations. There is a remote
possibility, however, that under certain circumstances shareholders of the Trust
may be held personally liable for the Trust's obligations. However, the Trust
Agreement disclaims shareholder liability for acts or obligations of the Trust
and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Trust or a trustee. If
a shareholder is held personally liable for the obligations of the Trust, the
Trust Agreement provides that the shareholder shall be entitled, out of the
assets belonging to the applicable Fund (or allocable to the applicable Class),
to be held harmless from and indemnified against all loss and expense arising
from such liability in accordance with the Trust's Bylaws and applicable law.
Thus, the risk of a shareholder incurring financial loss on account of such
liability is limited to circumstances in which the Trust itself would be unable
to meet its obligations and where the other party was held not to be bound by
the disclaimer.
NAME
Prior to May 29, 1998, the Fund operated under the name of GT Global Dollar
Fund.
18
<PAGE> 80
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
To the best knowledge of the Trust, the names and addresses of the holders of
5% or more of the outstanding shares of any class of the Fund's equity
securities as of August 10, 1998, and the percentage of the outstanding shares
held by such holders are set forth below:
<TABLE>
<CAPTION>
PERCENT
PERCENT OWNED OF
OWNED OF RECORD AND
AIM DOLLAR FUND NAME AND ADDRESS OF OWNER RECORD* BENEFICIALLY
- --------------- ------------------------- -------- ------------
<S> <C> <C> <C>
Class A.......................... Bear Stearns Securities Corp. 6.31% -0-
FBO 101-40029-25
One Metrotech Center
Brooklyn, New York 11201-3870
Merrill Lynch, Pierce, Fenner &
Smith 6.22% -0-
141 W. Jackson Boulevard
Suite 290
Chicago, Illinois 60604-2904
Advisor Class.................... Independent Trust Corp. 18.49% -0-
Custodian Funds 868
15255 S. 94th Ave. Ste. 303
Orland Park, IL 60462-3897
Independent Trust Corp. 27.82% -0-
Custodian Funds 88
15255 S. 94th Ave. Ste. 303
Orland Park, IL 60462-3897
Independent Trust Corp. 22.33% -0-
Custodian Funds 865
15255 S. 94th Ave. Ste. 303
Orland Park, IL 60462-3897
</TABLE>
- ---------------
* The Trust has no knowledge as to whether all or any portion of the shares
owned of record are also owned beneficially.
INVESTMENT RESULTS
The Fund may, from time to time, provide yield information or comparisons of
its yield to various averages including data from Lipper Analytical Services,
Inc., Bank Rate Monitor(TM), IBC/Donaghue's Money Fund Report, Money Magazine,
and other industry publications, in advertisements or in reports furnished to
current or prospective shareholders.
The Fund calculates its yield for its shares daily, based upon the seven days
ending on the day of the calculation, called the "base period." The yield is
computed by determining the net change in the value of a hypothetical account
with a balance of one share at the beginning of the base period, with the net
change, excluding capital changes, but including the value of any additional
shares purchased with dividends earned from the original one share and all
dividends declared on the original and any purchased shares; dividing the net
change in the account's value by the value of the account at the beginning of
the base period to determine the base period return; and multiplying the base
period return by ( 365/7). The Fund's effective yield is computed by compounding
the unannualized base period return by adding 1 to the base period return;
raising the sum to the 365/7th power; and subtracting 1 from the result.
For the seven-day period ended December 31, 1997, the Fund's Class A share
yield was 4.55% and effective yield was 4.66%. The seven-day and effective
yields are calculated as follows:
Assumptions:
<TABLE>
<S> <C>
Value of hypothetical pre-existing account with exactly one
share at the beginning of the period:..................... $1.000000000
Value of same account* (excluding capital changes) at the
end of the seven-day period ending Dec. 31, 1997:......... $1.000873532
</TABLE>
- ---------------
* Value includes additional shares acquired with dividends paid on the original
shares.
19
<PAGE> 81
Calculation:
<TABLE>
<S> <C>
Ending account value:....................................... $1.000873532
Less beginning account value:............................... $1.000000000
Net change in account value:................................ $ .000873532
</TABLE>
Seven-day yield = $.000873532 X 365/7 = 4.55%
Effective yield** = [1 + .000873532] 365/7 - 1 = 4.66%
- ---------------
** The effective yield assumes a year's compounding of the seven-day yield.
For the seven-day period ended December 31, 1997, the Fund's Class B share
yield was 3.82% and effective yield was 3.89%. The seven-day and effective
yields are calculated as follows:
Assumptions:
<TABLE>
<S> <C>
Value of hypothetical pre-existing account with exactly one
share at the beginning of the period:..................... $1.000000000
Value of same account* (excluding capital changes) at the
end of the seven-day period ending Dec. 31, 1997:......... $1.000731785
</TABLE>
- ---------------
* Value includes additional shares acquired with dividends paid on the original
shares.
Calculation:
<TABLE>
<S> <C>
Ending account value:....................................... $1.000731785
Less beginning account value:............................... $1.000000000
Net change in account value:................................ $ .000731785
</TABLE>
Seven-day yield = $.000731785 X 365/7 = 3.82%
Effective yield** = [1 + .000731785] 365/7 - 1 = 3.89%
- ---------------
** The effective yield assumes a year's compounding of the seven-day yield.
The Fund's investment results may also be calculated for longer periods in
accordance with the following method: by subtracting (a) the net asset value of
one share at the beginning of the period, from (b) the net asset value of all
shares an investor would own at the end of the period for the share held at the
beginning of the period (assuming reinvestment of all dividends and
distributions) and dividing by (c) the net asset value per share at the
beginning of the period. The resulting percentage indicates the positive or
negative rate of return that an investor would have earned from the reinvested
dividends and distributions and any changes in share price during the period.
TOTAL RETURN QUOTATIONS
The standard formula for calculating total return, as described in the
Prospectus, is as follows:
P(1+T)(n)=ERV
<TABLE>
<S> <C> <C> <C>
Where P = a hypothetical initial payment of $1,000.
T = average annual total return (assuming the applicable maximum
sales load is deducted at the beginning of the 1, 5, or 10
year periods).
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment at
the end of the 1, 5, or 10 year periods (or fractional
portion of such period).
</TABLE>
20
<PAGE> 82
The Fund's Standardized Returns for its Class A shares, stated as average
annualized total returns, at December 31, 1997, were as follows:
<TABLE>
<CAPTION>
STANDARDIZED AVERAGE
PERIOD ANNUALIZED TOTAL RETURN
- ------ -----------------------
<S> <C>
Year ended Dec. 31, 1997.................................... 4.60%
Five years ended Dec. 31, 1997.............................. 3.91%
Ten years ended Dec. 31, 1997............................... 4.84%
</TABLE>
The Fund's Standardized Returns for its Class B shares, which were first
offered on April 1, 1993, stated as average annualized total returns, were as
follows:
<TABLE>
<CAPTION>
STANDARDIZED AVERAGE
ANNUALIZED TOTAL
PERIOD RETURN
- ------ --------------------
<S> <C>
Year ended Dec. 31, 1997.................................... (1.16)%
April 1, 1993 (commencement of operations) through Dec. 31,
1997...................................................... 2.87%
</TABLE>
Standard total return quotes may be accompanied by total return figures
calculated by alternative methods. For example, average annual total return may
be calculated without assuming payment of the full sales load according to the
following formula:
P(1+U)(n)=ERV
<TABLE>
<S> <C> <C> <C>
Where P = a hypothetical initial payment of $1,000.
U = average annual total return assuming payment of only a
stated portion of, or none of, the applicable maximum sales
load at the beginning of the stated period.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment at
the end of the stated period.
</TABLE>
The Fund's non-standardized returns for its Class A shares, stated as average
annualized total returns, at December 31, 1997, were as follows:
<TABLE>
<CAPTION>
NON-STANDARDIZED AVERAGE
PERIOD ANNUALIZED TOTAL RETURN
- ------ ------------------------
<S> <C>
Year ended Dec. 31, 1997.................................... 4.60%
Five years ended Dec. 31, 1997.............................. 3.91%
Ten years ended Dec. 31, 1997............................... 4.84%
</TABLE>
The Fund's non-standardized return for its Class B shares, stated as average
annualized total returns, at December 31, 1997, were as follows:
<TABLE>
<CAPTION>
NON-STANDARDIZED AVERAGE
PERIOD ANNUALIZED TOTAL RETURN
- ------ ------------------------
<S> <C>
Year ended Dec. 31, 1997.................................... 3.84%
April 1, 1993 (commencement of operations) through Dec. 31,
1997...................................................... 3.24%
</TABLE>
Cumulative total return across a stated period may be calculated as follows:
P(1+V)(n)=ERV
<TABLE>
<S> <C> <C> <C>
Where P = a hypothetical initial payment of $1,000.
V = cumulative total return assuming payment of all of, a stated
portion of, or none of, the applicable maximum sales load at
the beginning of stated period.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment at
the end of the stated period.
</TABLE>
21
<PAGE> 83
The Fund's non-standardized return for its Class A shares, stated as aggregate
total return, at December 31, 1997, was as follows:
<TABLE>
<CAPTION>
NON-STANDARDIZED AGGREGATE
PERIOD TOTAL RETURN
- ------ --------------------------
<S> <C>
Sept. 16, 1985 (commencement of operations) through Dec. 31,
1997...................................................... 82.61%
</TABLE>
The Fund's non-standardized return for its Class B shares, stated as aggregate
total return (reflecting deduction of the applicable contingent deferred sales
charge), at December 31, 1997, was as follows:
<TABLE>
<CAPTION>
NON-STANDARDIZED AGGREGATE
PERIOD TOTAL RETURN
- ------ --------------------------
<S> <C>
April 1, 1993 (commencement of operations) through Dec. 31,
1997...................................................... 14.37%
</TABLE>
The Fund's non-standardized return for its Class B shares, stated as aggregate
total return (not reflecting deduction of the applicable contingent deferred
sales charge), at December 31, 1997, was as follows:
<TABLE>
<CAPTION>
NON-STANDARDIZED AGGREGATE
PERIOD TOTAL RETURN
- ------ --------------------------
<S> <C>
April 1, 1993 (commencement of operations) through Dec. 31,
1997...................................................... 16.37%
</TABLE>
The Fund's investment results will vary from time to time depending upon
market conditions, the composition of the Fund's portfolio and operating
expenses of the Fund, so that current or past yield or total return figures
should not be considered representative of what an investment in the Fund may
earn in any future period. These factors and possible differences in the methods
used in calculating investment results should be considered when comparing the
Fund's investment results with those published for other investment companies
and other investment vehicles. Investment results also should be considered
relative to the risks associated with the investment objective and policies. The
Fund's investment results will be calculated separately for Class A and Class B
shares. The Fund will include performance data for both Class A and Class B
shares of the Fund in any advertisement or information including performance
data for the Fund.
22
<PAGE> 84
PERFORMANCE INFORMATION
Total return and yield figures for the Fund are neither fixed nor guaranteed,
and the Fund's principal is not insured. Performance quotations reflect
historical information and should not be considered representative of the Fund's
performance for any period in the future. Performance is a function of a number
of factors which can be expected to fluctuate. The Fund may provide performance
information in reports, sales literature and advertisements. The Fund may also,
from time to time, quote information about the Fund published or aired by
publications or other media entities which contain articles or segments relating
to investment results or other data about the Fund. Such publications or media
entities may include the following, among others:
Advertising Age
Barron's
Best's Review
Broker World
Business Week
Changing Times
Christian Science Monitor
CNBC
CNN
Consumer Reports
Economist
EuroMoney
FACS of the Week
Financial Planning
Financial Product News
Financial Services Week
Financial World
Forbes
Fortune
Global Finance
Hartford Courant Inc.
Insurance Forum
Institutional Investor
Insurance Week
Investor's Daily
Journal of the American
Society of CLU & ChFC
Kiplinger Letter
Money
Mutual Fund Forecaster
Mutual Fund Magazine
Nation's Business
New York Times
PBS
Pension World
Pensions & Investments
Personal Investor
Philadelphia Inquirer
Smart Money
USA Today
U.S. News & World Report
Wall Street Journal
Washington Post
The Fund and AIM Distributors may from time to time, in advertisements, sales
literature and reports furnished to present or prospective shareholders, compare
the Fund with the following, or compare the Fund's performance to performance
data of similar mutual funds as published in the following, among others:
Bank Rate National Monitor Index
Bear Stearns Foreign Bond Index
Bond Buyer Index
CDA/Wiesenberger Investment Company Services
(data and mutual fund rankings and
comparisons)
CNBC/Financial News Composite Index
COFI
Consumer Price Index
Datastream
Donoghue's
Dow Jones Industrial Average
EAFE Index
First Boston High Yield Index
Fitch (publications)
Ibbotson Associates International Bond Index
International Bank for Reconstruction and
Development (publications)
International Finance Corporation Emerging
Markets Database
International Financial Statistics
Lehman Bond Indices
Lipper Analytical Data Services, Inc. (data and
mutual fund rankings and comparisons)
Micropal, Inc. (data and mutual fund rankings
and comparisons)
Moody's Investors Service (publications)
Morgan Stanley Capital International All
Country (AC) World Index
Morgan Stanley Capital International World
Indices
Morningstar, Inc. (data and mutual fund rankings
and comparisons)
NASDAQ
Organization for Economic Cooperation and
Development (publications)
Salomon Brothers Global Telecommunications
Index
Salomon Brothers World Government Bond
Index -- Non-U.S.
Salomon Brothers World Government Bond Index
Standard & Poor's (publications)
Standard & Poor's 500 Composite Stock Price
Index
Stangar
Wilshire Associates
World Bank (publications and reports)
The World Bank Publication of Trends in
Developing Countries
Worldscope
23
<PAGE> 85
The Fund may also compare its performance to rates on Certificates of Deposit
and other fixed rate investments such as the following:
10-year Treasuries
30-year Treasuries
30-day Treasury Bills
Information relating to foreign market performance, capitalization and
diversification is based on sources believed to be reliable but may be subject
to revision and has not been independently verified by the Fund or AIM
Distributors. Advertising for the Fund may from time to time include discussions
of general economic conditions and interest rates. Advertising for the Fund may
also include reference to the use of the Fund as part of an individual's overall
retirement investment program. From time to time, sales literature and/or
advertisements for the Fund may disclose (i) the largest holdings in the Fund's
portfolio, (ii) certain selling group members and/or (iii) certain institutional
shareholders.
From time to time, the Fund's sales literature and/or advertisements may
discuss generic topics pertaining to the mutual fund industry. This includes,
but is not limited to, literature addressing general information about mutual
funds, variable annuities, dollar-cost averaging, stocks, bonds, money markets,
certificates of deposit, retirement, retirement plans, asset allocation,
tax-free investing, college planning, and inflation.
Although performance data may be useful to prospective investors when
comparing a Fund's performance with other funds and other potential investments,
investors should note that the methods of computing performance of other
potential investments are not necessarily comparable to the methods employed by
a Fund.
24
<PAGE> 86
APPENDIX
COMMERCIAL PAPER RATINGS
Standard & Poor's, a division of the McGraw-Hill Companies, Inc. ("S&P").
"A-1" and "A-2" are the two highest commercial paper rating categories: A-1.
This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus sign (+) designation. A-2. Capacity for
timely payment on issues with this designation is satisfactory. However, the
relative degree of safety is not as high as for issues designated "A-1".
Moody's Investors Service, Inc. ("Moody's"). "Prime-1" and "Prime-2" are the
two highest commercial paper rating categories. Prime-1. Issuers (or supporting
institutions) assigned this highest rating have a superior ability for repayment
of senior short-term debt obligations. Prime-1 repayment ability will often be
evidenced by many of the following characteristics: leading market positions in
well-established industries; high rates of return on funds employed;
conservative capitalization structure with moderate reliance on debt and ample
asset protection; broad margins in earnings coverage of fixed financial charges
and high internal cash generation; and well-established access to a range of
financial markets and assured sources of alternate liquidity. Prime-2. Issuers
(or supporting institutions) assigned this rating have a strong ability for
repayment of senior short-term debt obligations. This will normally be evidenced
by many of the characteristics cited above but to a lesser degree. Earnings
trends and coverage ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.
BOND RATINGS
S&P: Its ratings for high quality bonds are as follows: An obligation rated
"AAA" has the highest rating assigned by S&P. The obligor's capacity to meet its
financial commitment on the obligation is extremely strong. An obligation rated
"AA" differs from the highest rated obligations only in a small degree. The
obligor's capacity to meet its financial commitment on the obligation is very
strong.
Moody's: Its ratings for high quality bonds are as follows: Bonds which are
rated Aaa are judged to be of the best quality. They carry the smallest degree
of investment risk and are generally referred to as "gilt edged." Interest
payments are protected by a large or by an exceptionally stable margin, and
principal is secure. While the various protective elements are likely to change,
such changes as can be visualized are most unlikely to impair the fundamentally
strong position of such issues. Bonds which are rated Aa are judged to be of
high quality by all standards. Together with the Aaa group they comprise what
are generally known as high grade bonds. They are rated lower than the best
bonds because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may be
other elements present which make the long-term risk appear somewhat larger than
the Aaa securities.
NOTE RATINGS
S&P: The SP-1 rating denotes a very strong or strong capacity to pay principal
and interest. Those issues determined to possess overwhelming safety
characteristics will be given a plus (+) designation.
The SP-2 rating denotes a satisfactory capacity to pay principal and interest.
Moody's: The MIG 1 designation denotes best quality. There is strong
protection by established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing.
The MIG 2 designation denotes high quality. Margins of protection are ample
although not as large as in the preceding group.
25
<PAGE> 87
FINANCIAL STATEMENTS
FS
<PAGE> 88
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
PORTFOLIO OF INVESTMENTS
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY PRINCIPAL VALUE % OF NET
SHORT-TERM INVESTMENTS YIELD DATE AMOUNT (NOTE 1) ASSETS
- ----------------------------------------------------------------- --------- --------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Commercial Paper - Discounted (42.9%)
Shell Oil Co. ................................................. 5.52% 27-Aug-98 15,000,000 $ 14,870,325 3.7
Associates Corp. .............................................. 5.58% 09-Nov-98 15,000,000 14,702,521 3.7
Kingdom of Sweden ............................................. 5.52% 06-Jul-98 12,000,000 11,990,950 3.0
Coca Cola Co. ................................................. 5.51% 14-Jul-98 12,000,000 11,976,470 3.0
International Lease Finance Corp. ............................. 5.53% 17-Jul-98 12,000,000 11,971,040 3.0
Household Finance Corp. ....................................... 5.54% 20-Jul-98 12,000,000 11,965,230 3.0
Walt Disney Co. ............................................... 5.58% 21-Oct-98 12,000,000 11,797,280 2.9
E.I. Dupont de Nemours & Co. .................................. 5.59% 21-Oct-98 12,000,000 11,796,906 2.9
American Express Credit Corp. ................................. 5.58% 23-Oct-98 12,000,000 11,792,900 2.9
Motorola Inc. ................................................. 5.52% 13-Jul-98 10,000,000 9,981,767 2.5
Ford Motor Credit Corp. ....................................... 5.51% 11-Aug-98 10,000,000 9,938,956 2.5
General Electric Co. .......................................... 5.56% 28-Aug-98 10,000,000 9,912,678 2.5
John Deere Capital Corp. ...................................... 5.57% 11-Sep-98 10,000,000 9,891,400 2.5
United States Automobile Association Capital Corp. ............ 5.58% 25-Sep-98 10,000,000 9,868,611 2.5
Minnesota Mining & Manufacturing Co. .......................... 5.61% 22-Sep-98 9,000,000 8,886,290 2.2
------------ -----
Total Commercial Paper - Discounted (amortized cost
$171,343,324) .................................................. 171,343,324 42.8
------------ -----
<CAPTION>
REPURCHASE AGREEMENTS
- -----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dated June 30, 1998, with State Street Bank & Trust Co., due
July 1, 1998, for an effective yield of 5.70%, collateralized
by $54,775,000 U.S. Treasury Notes, 5.375% due 1/31/00 (market
value of collateral is $55,815,232 including accrued interest)
............................................................. 54,720,000 13.7
Dated June 30, 1998, with BancAmerica Robertson Stephens, due
July 1, 1998, for an effective yield of 5.55%, collateralized
by $50,730,000 of U.S. Treasury Notes & Bills, 6.25% and 8.75%
due 6/30/02 & 11/15/08, respectively (market value of
collateral is $51,242,992 including accrued interest) ....... 51,000,000 12.8
------------ -----
TOTAL REPURCHASE AGREEMENTS (cost $105,720,000) ................. 105,720,000 26.5
------------ -----
TOTAL INVESTMENTS (cost $277,063,324) * ........................ 277,063,324 69.3
Other Assets and Liabilities .................................... 122,880,385 30.7
------------ -----
NET ASSETS ...................................................... $399,943,709 100.0
------------ -----
------------ -----
</TABLE>
- --------------
* For Federal income tax purposes, cost is $277,063,324
The accompanying notes are an integral part of the financial statements.
FS-1
<PAGE> 89
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
STATEMENT OF ASSETS
AND LIABILITIES
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (amortized cost $171,343,324) (Note 1)....................... $171,343,324
Repurchase agreements, at value and cost (Note 1)................................................ 105,720,000
U.S. currency.................................................................................... 20,244
Receivable for Fund shares sold.................................................................. 129,613,171
Interest receivable.............................................................................. 16,527
-----------
Total assets................................................................................... 406,713,266
-----------
Liabilities:
Payable for Fund shares repurchased.............................................................. 6,121,295
Distribution payable............................................................................. 219,677
Payable for investment management and administration fees (Note 2)............................... 150,888
Payable for transfer agent fees (Note 2)......................................................... 67,596
Payable for registration and filing fees......................................................... 64,830
Payable for service and distribution expenses (Note 2)........................................... 60,672
Payable for printing and postage expenses........................................................ 48,995
Payable for professional fees.................................................................... 13,679
Payable for custodian fees....................................................................... 9,830
Payable for fund accounting fees (Note 2)........................................................ 6,015
Payable for Directors' fees and expenses (Note 2)................................................ 3,059
Other accrued expenses........................................................................... 3,021
-----------
Total liabilities.............................................................................. 6,769,557
-----------
Net assets......................................................................................... $399,943,709
-----------
-----------
Class A:
Net asset value and redemption price per share ($291,300,510 DIVIDED BY 291,360,629 shares
outstanding)...................................................................................... $ 1.00
-----------
-----------
Class B:+
Net asset value and offering price per share ($101,012,198 DIVIDED BY 100,970,806 shares
outstanding)...................................................................................... $ 1.00
-----------
-----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($7,631,001 DIVIDED BY
7,630,975 shares outstanding)..................................................................... $ 1.00
-----------
-----------
Net assets: At June 30, 1998, net assets consisted of paid-in capital of $399,943,709.
<FN>
- --------------
+ Redemption price per share is equal to the net asset value per share less
any applicable contingent deferred sales charge.
</TABLE>
The accompanying notes are an integral part of the financial statements.
FS-2
<PAGE> 90
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
STATEMENT OF OPERATIONS
Six months ended June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Interest income............................................................................... $8,298,701
Expenses:
Service and distribution expenses:(Note 2)
Class A.......................................................................... $ 251,824
Class B.......................................................................... 456,424 708,248
---------
Investment management and administration fees (Note 2)........................................ 747,972
Transfer agent fees (Note 2).................................................................. 345,900
Registration and filing fees.................................................................. 139,200
Professional fees............................................................................. 52,074
Printing and postage expenses................................................................. 49,775
Fund accounting fees.......................................................................... 40,604
Custodian fees................................................................................ 10,000
Directors' fees and expenses (Note 2)......................................................... 8,465
Other expenses................................................................................ 4,196
---------
Total expenses before reductions............................................................ 2,106,434
---------
Expenses waived by A I M Advisors, Inc. (Note 2).......................................... (365,930)
---------
Total net expenses.......................................................................... 1,740,504
---------
Net investment income........................................................................... 6,558,197
---------
Net increase in net assets resulting from operations............................................ $6,558,197
---------
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
FS-3
<PAGE> 91
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
---------------- -----------------
<S> <C> <C>
Increase (Decrease) in net assets
Operations:
Net investment income............................................... $ 6,558,197 $ 11,700,779
---------------- -----------------
Net increase in net assets resulting from operations.............. 6,558,197 11,700,779
---------------- -----------------
Class A:
Distributions to shareholders: (Note 1)
From net investment income.......................................... (4,644,385) (7,587,680)
Class B:
Distributions to shareholders: (Note 1)
From net investment income.......................................... (1,765,418) (3,720,785)
Advisor Class:
Distributions to shareholders: (Note 1)
From net investment income.......................................... (148,394) (392,314)
---------------- -----------------
Total distributions............................................... (6,558,197) (11,700,779)
---------------- -----------------
Capital share transactions: (Note 3)
Increase from capital shares sold and reinvested.................... 5,510,183,410 8,215,928,197
Decrease from capital shares repurchased............................ (5,387,128,456) (8,474,948,990)
---------------- -----------------
Net increase (decrease) from capital share transactions........... 123,054,954 (259,020,793)
---------------- -----------------
Total increase (decrease) in net assets............................... 123,054,954 (259,020,793)
Net assets:
Beginning of period................................................. 276,888,755 535,909,548
---------------- -----------------
End of period *..................................................... $ 399,943,709 $ 276,888,755
---------------- -----------------
---------------- -----------------
<FN>
- --------------
* Includes undistributed net investment income of $0.
</TABLE>
The accompanying notes are an integral part of the financial statements.
FS-4
<PAGE> 92
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS A+
-----------------------------------------------------------------------
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
1998 ----------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income................... 0.023 0.045 0.044 0.050 0.032 0.022
Distributions from net investment
income................................. (0.023) (0.045) (0.044) (0.050) (0.032) (0.022)
----------- ---------- ---------- ---------- ---------- ----------
Net asset value (unchanged during the
period)................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ---------- ---------- ---------- ---------- ----------
----------- ---------- ---------- ---------- ---------- ----------
Total investment return (b)............. 2.30% 4.62% 4.50% 5.08% 3.3% 2.2%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 291,301 $ 186,611 $ 392,623 $ 183,761 $ 320,858 $ 87,822
Ratio of net investment income to
average net assets:
With expense reductions, waivers,
and/or reimbursement (a) (Note 2).... 4.61% 4.50% 4.39% 4.94% 3.40% 2.17%
Without expense reductions, waivers,
and/or reimbursement (a)............. 4.36% 4.20% 4.08% 4.66% 3.15% 1.46%
Ratio of operating expenses to average
net assets: (a)
With expense reductions, waivers,
and/or reimbursement (a) (Note 2).... 0.93% 0.98% 0.99% 0.97% 0.92% 1.00%
Without expense reductions, waivers,
and/or reimbursement (a)............. 1.18% 1.28% 1.30% 1.25% 1.17% 1.72%
</TABLE>
- ----------------
(a) Annualized for periods of less than one year.
(b) Not annualized for periods of less than one year.
+ All capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
The accompanying notes are an integral part of the financial statements.
FS-5
<PAGE> 93
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS B++
--------------------------------------------------------------------------
SIX MONTHS
ENDED APRIL 1, 1993
JUNE 30, YEAR ENDED DECEMBER 31, TO
1998 ---------------------------------------------- DECEMBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ---------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net investment income................... 0.019 0.038 0.037 0.040 0.025 0.010
Distributions from net investment
income................................. (0.019) (0.038) (0.037) (0.040) (0.025) (0.010)
----------- ---------- ---------- ---------- ---------- -------------
Net asset value (unchanged during the
period)................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ---------- ---------- ---------- ---------- -------------
----------- ---------- ---------- ---------- ---------- -------------
Total investment return (b)............. 1.99% 3.84% 3.73% 4.29% 2.53% 1.4%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 101,012 $ 83,498 $ 128,308 $ 99,151 $ 109,936 $ 3,478
Ratio of net investment income to
average net assets:
With expense reductions, waivers,
and/or reimbursement (a) (Note 2).... 3.86% 3.75% 3.64% 4.19% 2.65% 1.42%
Without expense reductions, waivers,
and/or reimbursement (a)............. 3.61% 3.45% 3.33% 3.91% 2.40% 0.86%
Ratio of operating expenses to average
net assets: (a)
With expense reductions, waivers,
and/or reimbursement (a) (Note 2).... 1.68% 1.73% 1.74% 1.72% 1.67% 1.75%
Without expense reductions, waivers,
and/or reimbursement (a)............. 1.93% 2.03% 2.05% 2.00% 1.92% 2.31%
</TABLE>
- ----------------
(a) Annualized for periods of less than one year.
(b) Not annualized for periods of less than one year.
+ All capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
The accompanying notes are an integral part of the financial statements.
FS-6
<PAGE> 94
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
ADVISOR CLASS+++
---------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER JUNE 1, 1995
JUNE 30, 31, TO
1998 ---------------------- DECEMBER 31,
(UNAUDITED) 1997 1996 1995
------------ ---------- ---------- -------------
<S> <C> <C> <C> <C>
Net investment income................... 0.023 0.045 0.044 0.030
Distributions from net investment
income................................. (0.023) (0.045) (0.044) (0.030)
------------ ---------- ---------- -------------
Net asset value (unchanged during the
period)................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ---------- ---------- -------------
------------ ---------- ---------- -------------
Total investment return (b)............. 2.25 % 4.61% 4.50% 2.92%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 7,631 $ 6,780 $ 14,978 $ 2,096
Ratio of net investment income to
average net assets:
With expense reductions, waivers,
and/or reimbursement (a) (Note 2).... 4.61 % 4.50% 4.39% 4.94%
Without expense reductions, waivers,
and/or reimbursement (a)............. 4.61 % 4.45% 4.33% 4.91%
Ratio of operating expenses to average
net assets: (a)
With expense reductions, waivers,
and/or reimbursement (a) (Note 2).... 0.93 % 0.98% 0.99% 0.97%
Without expense reductions, waivers,
and/or reimbursement (a)............. 0.93 % 1.03% 1.05% 1.00%
</TABLE>
- ----------------
(a) Annualized for periods of less than one year.
(b) Not annualized for periods of less than one year.
+ All capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
The accompanying notes are an integral part of the financial statements.
FS-7
<PAGE> 95
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
NOTES TO FINANCIAL STATEMENTS
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 2)
AIM Dollar Fund (the "Fund", formerly GT Global Dollar Fund) is a diversified
series of AIM Investment Portfolios, Inc. (the "Company"). The Company is
registered under the Investment Company Act of 1940, as amended ("1940 Act"), as
an open-end management investment company.
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Each class has exclusive voting
rights with respect to its distribution plan. Investment income, realized and
unrealized capital gains and losses, and the common expenses of the Fund are
allocated on a pro rata basis to each class based on the relative net assets of
each class to the total net assets of the Fund. Each class of shares differs in
its respective distribution expenses, and may differ in its transfer agent,
registration, and certain other class-specific fees and expenses.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Fund in the preparation of the financial
statements.
(A) PORTFOLIO VALUATION
Securities in the Fund are valued utilizing the amortized cost valuation method
permitted in accordance with Rule 2a-7 under the 1940 Act. This method involves
valuing a portfolio security initially at its cost and thereafter assuming a
constant amortization to maturity of any discount or premium.
(B) FEDERAL INCOME TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, and unrealized appreciation of securities held, or for excise tax on
income and capital gains. The Fund currently has a capital loss carryforward of
$3,382 which expires in 2005.
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, U.S. government securities or other
high quality debt securities of which the value, including accrued interest, is
at least equal to the amount to be repaid to the Fund under each agreement at
its maturity. A I M Advisors, Inc. is responsible for determining that the value
of these underlying securities remains at least equal to the resale price.
(D) OTHER
Security transactions are recorded on the trade date (date the order to buy or
sell is executed). Interest income is recorded on an accrual basis. Dividends to
shareholders from net investment income are declared daily and paid or
reinvested monthly.
2. RELATED PARTIES
A I M Advisors, Inc. ("AIM" or the "Manager") is the Fund's investment manager
and administrator, and INVESCO (NY), Inc., (formerly, Chancellor LGT Asset
Management, Inc.) is the Fund's investment sub-adviser and/or sub-administrator.
As of the close of business on May 29, 1998, Liechtenstein Global Trust AG
("LGT"), the former indirect parent organization of Chancellor LGT Asset
Management, Inc. ("Chancellor LGT"), consummated a purchase agreement with
AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset Management
Division, which included Chancellor LGT and certain other affiliates. As a
result of this transaction, Chancellor LGT was renamed INVESCO (NY), Inc., and
is now an indirect wholly-owned subsidiary of AMVESCAP PLC. In connection with
this transaction, AIM, an indirect wholly-owned subsidiary of AMVESCAP PLC,
became the investment manager and administrator of the Funds and INVESCO (NY),
Inc. became the sub-adviser and sub-administrator of the Funds. All of the
changes became effective as of the close of business on May 29, 1998.
The Fund pays the Manager investment management and administration fees at the
annualized rate of 0.50% of the Fund's average daily net assets. These fees are
computed daily and paid monthly, and are subject to reduction in any year to the
extent that the Fund's expenses (exclusive of brokerage commissions, taxes,
interest, distribution-related expenses and extraordinary expenses) exceed the
most stringent limits prescribed by the laws or regulations of any state in
which the Fund's shares are sold.
A I M Distributors, Inc. ("AIM Distributors"), an affiliate of the Manager,
serves as the Fund's distributor. For the period ended May 29, 1998, GT Global,
Inc. ("GT Global") served as the Fund's distributor. The Fund offers Class A,
Class B, and Advisor Class shares for purchase. Certain redemptions of Class A
shares made within two years of purchase are subject to contingent deferred
sales charges ("CDSCs"), in accordance with the Fund's current prospectus. Class
B shares of the Fund are available only through an exchange of Class B shares of
other AIM Mutual Funds. Certain redemptions of Class B shares made within six
years of purchase are also subject to CDSCs, in accordance with the Fund's
current prospectus. For the period ended June 30, 1998, AIM Distributors and GT
Global collected CDSCs in the amount of $53,658 and $384,193, respectively. In
addition, AIM Distributors may, from time to time, make ongoing payments to
brokerage firms, financial institutions (including banks)
FS-8
<PAGE> 96
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
and others that facilitate the administration and servicing of shareholder
accounts.
For the period ended May 29, 1998, pursuant to the then effective separate
distribution plans adopted under the 1940 Act Rule 12b-1 by the Company's Board
of Directors with respect to the Fund's Class A shares ("Class A Plan") and
Class B shares ("Class B Plan"), the Fund reimbursed GT Global for a portion of
its shareholder servicing and distribution expenses. Under the Class A Plan, the
Fund was permitted to pay GT Global a service fee at the annualized rate of up
to 0.25% of the average daily net assets of the Fund's Class A shares for GT
Global's expenditures incurred in servicing and maintaining shareholder
accounts, and was permitted to pay GT Global a distribution fee at the
annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares less any amounts paid by the Fund as the aforementioned service
fee for GT Global's expenditures incurred in providing services as distributor.
GT Global does not currently intend to seek reimbursement of any amounts under
the Class A Plan. All expenses for which GT Global is reimbursed under the Class
A Plan will have been incurred within one year of such reimbursement.
For the period ended May 29, 1998, pursuant to the Fund's Class B Plan, the Fund
was permitted to pay GT Global a service fee at the annualized rate of up to
0.25% of the average daily net assets of the Fund's Class B shares for GT
Global's expenditures incurred in servicing and maintaining shareholder
accounts, and was permitted to pay GT Global a distribution fee at the
annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in providing services as
distributor. GT Global does not currently intend to seek reimbursement of any
amounts in excess of 0.75% of average daily net assets under the Class B Plan.
Expenses incurred under the Class B Plan in excess of 1.00% annually were
permitted to be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect.
Effective as of the close of business May 29, 1998, pursuant to Rule 12b-1 under
the 1940 Act, the Company's Board of Directors adopted a Master Distribution
Plan applicable to the Fund's Class A shares ("Class A Plan") and Class B shares
("Class B Plan"), pursuant to which a Fund compensates AIM Distributors for the
purpose of financing any activity that is intended to result in the sale of
Class A or Class B shares of the Funds. Under the Class A Plan, the Fund
compensates AIM Distributors at the annualized rate of 0.25% of the average
daily net assets of the Fund's Class A shares.
Pursuant to the Fund's Class B Plan, the Fund compensates AIM Distributors at an
annualized rate of 1.00% of the average daily net assets of the Fund's Class B
shares.
The Manager and AIM Distributors have voluntarily undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
items) to the maximum annual level of 1.00%, 1.75%, and 1.00% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by AIM
Distributors of payments under the Class A Plan and/or Class B Plan and/or
reimbursements by the Manager or AIM Distributors of portions of the Fund's
other operating expenses.
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and AIM Distributors, is the transfer agent of the Fund. For performing
shareholder servicing, reporting, and general transfer agent services, GT
Services receives an annual maintenance fee of $17.50 per account, a new account
fee of $4.00 per account, a per transaction fee of $1.75 for all transactions
other than exchanges and a per exchange fee of $2.25. GT Services is also
reimbursed by the Funds for its out-of-pocket expenses for such items as
postage, forms, telephone charges, stationery and office supplies.
The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the result according to the Fund's average daily net assets.
The Company pays each of its Directors who is not an employee, officer or
director of the Manager, GT Global or GT Services $1,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Director.
FS-9
<PAGE> 97
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
3. CAPITAL SHARES
At June 30, 1998, there were 2,000,000,000 shares of the Company's common stock
authorized, at $0.001 per share. Of this number, 1,500,000,000 shares have been
classified as shares of the Fund; 500 million shares have been classified as
Class A shares, 500 million have been classified as Class B shares, and 500
million have been classified as Advisor Class shares. These amounts may be
increased from time to time at the discretion of the Board of Directors.
Transactions in capital shares of the Fund were as follows:
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
--------------------- ----------------------
CLASS A SHARES & AMOUNT SHARES & AMOUNT
- ---------------------------------------- --------------------- ----------------------
<S> <C> <C>
Shares sold............................. $ 4,604,406,284 $ 6,222,351,251
Shares issued in connection with
reinvestment of distributions......... 2,445,437 4,193,093
--------------------- ----------------------
4,606,851,721 6,226,544,344
Shares repurchased...................... (4,502,161,868) (6,432,557,179)
--------------------- ----------------------
Net increase (decrease)................. $ 104,689,853 $ (206,012,835)
--------------------- ----------------------
--------------------- ----------------------
<CAPTION>
CLASS B SHARES & AMOUNT SHARES & AMOUNT
- ---------------------------------------- --------------------- ----------------------
<S> <C> <C>
Shares sold............................. $ 747,831,959 $ 1,763,392,144
Shares issued in connection with
reinvestment of distributions......... 1,327,518 2,479,264
--------------------- ----------------------
749,159,477 1,765,871,408
Shares repurchased...................... (731,645,373) (1,810,681,116)
--------------------- ----------------------
Net increase (decrease)................. $ 17,514,104 $ (44,809,708)
--------------------- ----------------------
--------------------- ----------------------
<CAPTION>
ADVISOR CLASS SHARES & AMOUNT SHARES & AMOUNT
- ---------------------------------------- --------------------- ----------------------
<S> <C> <C>
Shares sold............................. $ 154,115,624 $ 223,289,952
Shares issued in connection with
reinvestment of distributions......... 56,588 222,493
--------------------- ----------------------
154,172,212 223,512,445
Shares repurchased...................... (153,321,215) (231,710,695)
--------------------- ----------------------
Net increase (decrease)................. $ 850,997 $ (8,198,250)
--------------------- ----------------------
--------------------- ----------------------
</TABLE>
FS-10
<PAGE> 98
GT GLOBAL DOLLAR FUND
Fifty California Street, 27th Floor
San Francisco, California 94111
General Telephone No. 415/392-6181
General Fund Information 800/824-1580
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPORT FROM THE FUND MANAGER
The Fund's total return for the 12 months ended December 31, 1997, was 4.62%
for Class A shares and 3.84% for Class B shares. As of December 31, the Fund's
SEC seven-day yield was 4.55% for Class A shares and 3.82% for Class B shares.
Because the Fund invests only in short-term debt obligations with remaining
maturities of 13 months or less, its performance generally reflects the level of
short-term interest rates. Please bear in mind that an investment in the Fund is
neither insured nor guaranteed by the U.S. government and that there can be no
assurance that the Fund will be able to maintain a stable net asset value of
$1.00 per share.
The U.S. bond market produced excellent returns in 1997. After a 25-basis
point increase in the Federal funds rate in March, the market began an upswing
in the second quarter that lasted throughout the last three quarters of the
year. In addition, interest rates fell after it became clear that the benign
economic environment in the U.S. would forestall additional interest rate
increases by the Fed in 1997.
In total, 1997 produced the lowest rates of U.S. inflation in decades, while
the economy enjoyed continued good growth. That combination, along with a stable
dollar, beckoned global investors in the fourth quarter. In addition, yields on
money market instruments have been fairly stable throughout the period and the
90-day Treasury bill yield ended the year about 18 basis points higher than it
began, at 5.35%.
We believe the overall environment for U.S. fixed income markets should
continue to be attractive in 1998. Short-term rates have remained in a narrow
range for some time, and we feel the economic environment augurs well for
continued stability. We concur with Federal Reserve (the Fed) Chairman
Greenspan's recent comments that effects of the Asian crisis have not yet fully
impacted U.S. markets. We expect weakness in Asia to moderate economic growth
somewhat, but believe its potential negative effect on U.S. profits and growth
in 1998 will be counterbalanced by its positive effect on inflation and interest
rates.
Additionally, we see reasonable potential for further declines in interest
rates. Inflation is at its lowest level in over 40 years, and productivity is
strong -- all positive cost factors we think will support U.S. profitability
even as product pricing remains under pressure. This environment (a new one for
investors) may necessitate a shift in policy stance by the Fed, whereby, instead
of constantly fighting inflation, they must also be concerned with deflation.
Our concerns about Fed tightening have been virtually erased, and we feel
the potential grows that the Fed may soon lower interest rates. In keeping with
our outlook, the average maturity of holdings in the Fund has been increased
moderately while still maintaining a high degree of liquidity for investors.
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of
GT Investment Portfolios, Inc.:
We have audited the accompanying statement of assets and liabilities of GT
Global Dollar Fund, a series of shares of common stock of GT Investment
Portfolios, Inc., including the schedule of portfolio investments, as of
December 31, 1997, the related statement of operations for the year then ended,
the statements of changes in net assets for each of the two years in the period
then ended and the financial highlights for each of the five years in the period
then ended. These financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and the financial highlights
referred to above present fairly, in all material respects, the financial
position of GT Global Dollar Fund as of December 31, 1997, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND, L.L.P.
BOSTON, MASSACHUSETTS
FEBRUARY 17, 1998
[GT GLOBAL LOGO]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FS-11
<PAGE> 99
GT GLOBAL DOLLAR FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY PRINCIPAL VALUE % OF NET
SHORT-TERM INVESTMENTS YIELD DATE AMOUNT (NOTE 1) ASSETS
- ----------------------------------------------------------------- --------- --------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Commercial Paper - Discounted (47.4%)
John Deere Capital Corp. ...................................... 5.73% 19-Mar-98 12,000,000 $ 11,854,982 4.3
Walt Disney Co. ............................................... 5.59% 14-Apr-98 12,000,000 11,812,884 4.3
American Express Credit Corp. ................................. 5.71% 21-May-98 12,000,000 11,740,067 4.2
Kingdom of Sweden ............................................. 5.62% 26-Jan-98 10,000,000 9,961,875 3.6
AIG Funding, Inc. ............................................. 5.73% 30-Jan-98 10,000,000 9,954,245 3.6
E.I. DuPont de Nemours & Co. .................................. 5.62% 09-Feb-98 10,000,000 9,940,742 3.6
Ford Motor Credit Corp. ....................................... 5.63% 13-Feb-98 10,000,000 9,934,544 3.6
Bellsouth Telecommunications, Inc. ............................ 5.78% 25-Feb-98 10,000,000 9,912,611 3.6
General Electric Capital Corp. ................................ 5.71% 11-Mar-98 10,000,000 9,893,625 3.6
3M Corp. ...................................................... 5.68% 24-Apr-98 10,000,000 9,824,850 3.5
AT&T Corp. .................................................... 5.58% 15-Jan-98 9,500,000 9,479,902 3.4
Motorola, Inc. ................................................ 5.59% 09-Feb-98 9,000,000 8,946,375 3.2
Emerson Electric Co. .......................................... 5.66% 05-Jan-98 8,000,000 7,995,111 2.9
------------ -----
Total Commercial Paper - Discounted (amortized cost
$131,251,813) .................................................. 131,251,813 47.4
------------ -----
Government & Government Agency Obligations (3.6%)
Federal Home Loan Bank ........................................ 5.59% 06-Mar-98 10,000,000 9,903,289 3.6
------------ -----
Total Government & Government Agency Obligations (amortized cost
$9,903,289) .................................................... 9,903,289 3.6
------------ -----
TOTAL SHORT-TERM INVESTMENTS (cost $141,155,102) ................ 141,155,102 51.0
------------ -----
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENTS (NOTE 1) ASSETS
- ----------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Dated December 31, 1997, with State Street Bank & Trust Co.,
due January 2, 1998, for an effective yield of 5.80%,
collateralized by $45,775,000 U.S. Treasury Bills, 6.25% due
6/30/98 (market value of collateral is $45,946,656 including
accrued interest) ........................................... 45,041,000 16.3
Dated December 31, 1997, with BancAmerica Robertson Stephens,
due January 2, 1998, for an effective yield of 6.10%,
collateralized by $40,190,000 U.S. Treasury Bills and Notes,
6.25% due 6/30/98 & 3/31/99, respectively (market value of
collateral is $40,808,921 including accrued interest) ....... 40,000,000 14.4
------------ -----
TOTAL REPURCHASE AGREEMENTS (cost $85,041,000) .................. 85,041,000 30.7
------------ -----
TOTAL INVESTMENTS (cost $226,196,102) * ........................ 226,196,102 81.7
Other Assets and Liabilities .................................... 50,692,653 18.3
------------ -----
NET ASSETS ...................................................... $276,888,755 100.0
------------ -----
------------ -----
</TABLE>
- --------------
* For Federal income tax purposes, cost is $226,196,102
The accompanying notes are an integral part of the financial statements.
FS-12
<PAGE> 100
GT GLOBAL DOLLAR FUND
STATEMENT OF ASSETS
AND LIABILITIES
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (amortized cost $141,155,102) (Note 1)....................... $141,155,102
Repurchase agreement, at value and cost (Note 1)................................................. 85,041,000
U.S. currency.................................................................................... 22,315
Receivable for Fund shares sold.................................................................. 72,954,035
Interest receivable.............................................................................. 14,034
-----------
Total assets................................................................................... 299,186,486
-----------
Liabilities:
Payable for Fund shares repurchased.............................................................. 21,805,756
Payable for investment management and administration fees (Note 2)............................... 134,841
Distribution payable............................................................................. 97,586
Payable for registration and filing fees......................................................... 91,486
Payable for service and distribution expenses (Note 2)........................................... 65,528
Payable for transfer agent fees (Note 2)......................................................... 35,773
Payable for printing and postage expenses........................................................ 26,318
Payable for professional fees.................................................................... 24,747
Payable for fund accounting fees (Note 2)........................................................ 4,326
Payable for Directors' fees and expenses (Note 2)................................................ 3,682
Payable for custodian fees....................................................................... 1,701
Other accrued expenses........................................................................... 5,987
-----------
Total liabilities.............................................................................. 22,297,731
-----------
Net assets......................................................................................... $276,888,755
-----------
-----------
Class A:
Net asset value and redemption price per share ($186,610,657 DIVIDED BY 186,670,776 shares
outstanding)...................................................................................... $ 1.00
-----------
-----------
Class B:+
Net asset value and offering price per share ($83,498,094 DIVIDED BY 83,456,702 shares
outstanding)...................................................................................... $ 1.00
-----------
-----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($6,780,004 DIVIDED BY
6,779,978 shares outstanding)..................................................................... $ 1.00
-----------
-----------
Net assets: At December 31, 1997, net assets consisted of paid-in capital of
$276,888,755.
<FN>
- --------------
+ Redemption price per share is equal to the net asset value per share less
any applicable contingent deferred sales charge.
</TABLE>
The accompanying notes are an integral part of the financial statements.
FS-13
<PAGE> 101
GT GLOBAL DOLLAR FUND
STATEMENT OF OPERATIONS
Year ended December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Interest income.............................................................................. $15,170,711
Expenses:
Service and distribution expenses: (Note 2)
Class A......................................................................... $ 422,808
Class B......................................................................... 995,797 1,418,605
---------
Investment management and administration fees (Note 2)....................................... 1,384,735
Transfer agent fees (Note 2)................................................................. 725,305
Registration and filing fees................................................................. 400,217
Professional fees............................................................................ 102,864
Printing and postage expenses................................................................ 101,842
Fund accounting fees (Note 2)................................................................ 69,517
Custodian fees (Note 4)...................................................................... 43,930
Directors' fees and expenses (Note 2)........................................................ 13,971
Other expenses............................................................................... 13,326
----------
Total expenses before reductions........................................................... 4,274,312
----------
Expenses waived by Chancellor LGT Asset Management, Inc. (Note 2)........................ (671,757)
Expenses reimbursed by Chancellor LGT Asset Management, Inc. (Note 2).................... (88,707)
Expense reductions (Note 2).............................................................. (43,916)
----------
Total net expenses......................................................................... 3,469,932
----------
Net investment income.......................................................................... 11,700,779
----------
Net increase in net assets resulting from operations........................................... $11,700,779
----------
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
FS-14
<PAGE> 102
GT GLOBAL DOLLAR FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1996
-------------- ---------------
Increase (Decrease) in net assets
Operations:
Net investment income................................................... $ 11,700,779 $ 15,135,332
-------------- ---------------
Net increase in net assets resulting from operations.................. 11,700,779 15,135,332
-------------- ---------------
Class A:
Distributions to shareholders: (Note 1)
From net investment income.............................................. (7,587,680) (11,055,154)
Class B:
Distributions to shareholders: (Note 1)
From net investment income.............................................. (3,720,785) (3,791,539)
Advisor Class:
Distributions to shareholders: (Note 1)
From net investment income.............................................. (392,314) (288,639)
-------------- ---------------
Total distributions................................................... (11,700,779) (15,135,332)
-------------- ---------------
Capital share transactions: (Note 3)
Increase from capital shares sold and reinvested........................ 8,215,928,197 16,871,270,679
Decrease from capital shares repurchased................................ (8,474,948,990) (16,620,368,622)
-------------- ---------------
Net increase (decrease) from capital share transactions............... (259,020,793) 250,902,057
-------------- ---------------
Total increase (decrease) in net assets................................... (259,020,793) 250,902,057
Net assets:
Beginning of year....................................................... 535,909,548 285,007,491
-------------- ---------------
End of year *........................................................... $ 276,888,755 $ 535,909,548
-------------- ---------------
-------------- ---------------
<FN>
- --------------
* Includes undistributed net investment income of $0.
</TABLE>
The accompanying notes are an integral part of the financial statements.
FS-15
<PAGE> 103
GT GLOBAL DOLLAR FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS A+
----------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net investment income................... 0.045 0.044 0.050 0.032 0.022
Distributions from net investment
income................................. (0.045) (0.044) (0.050) (0.032) (0.022)
---------- ---------- ---------- ---------- ----------
Net asset value (unchanged during the
period)................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total investment return (b)............. 4.62% 4.50% 5.08% 3.3% 2.2%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 186,611 $ 392,623 $ 183,761 $ 320,858 $ 87,822
Ratio of net investment income to
average net assets:
With expense reductions, waivers, and
reimbursement by Chancellor LGT Asset
Management, Inc. (a) (Notes 2 & 4)... 4.50% 4.39% 4.94% 3.40% 2.17%
Without expense reductions, waivers,
and reimbursement by Chancellor LGT
Asset Management, Inc. (a)........... 4.20% 4.08% 4.66% 3.15% 1.46%
Ratio of expenses to average net
assets: (a)
With expense reductions, waivers, and
reimbursement by Chancellor LGT Asset
Management, Inc. (a) (Notes 2 & 4)... 0.98% 0.99% 0.97% 0.92% 1.00%
Without expense reductions, waivers,
and reimbursement by Chancellor LGT
Asset Management, Inc. (a)........... 1.28% 1.30% 1.25% 1.17% 1.72%
</TABLE>
- ----------------
(a) Annualized for periods of less than one year.
(b) Not annualized for periods of less than one year.
+ All capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
The accompanying notes are an integral part of the financial statements.
FS-16
<PAGE> 104
GT GLOBAL DOLLAR FUND
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS B++
-------------------------------------------------------------
APRIL 1, 1993
YEAR ENDED DECEMBER 31, TO
---------------------------------------------- DECEMBER 31,
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Net investment income................... 0.038 0.037 0.040 0.025 0.010
Distributions from net investment
income................................. (0.038) (0.037) (0.040) (0.025) (0.010)
---------- ---------- ---------- ---------- -------------
Net asset value (unchanged during the
period)................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- -------------
---------- ---------- ---------- ---------- -------------
Total investment return (b)............. 3.84% 3.73% 4.29% 2.53% 1.4%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 83,498 $ 128,308 $ 99,151 $ 109,936 $ 3,478
Ratio of net investment income to
average net assets:
With expense reductions, waivers, and
reimbursement by Chancellor LGT Asset
Management, Inc. (a) (Notes 2 & 4)... 3.75% 3.64% 4.19% 2.65% 1.42%
Without expense reductions, waivers,
and reimbursement by Chancellor LGT
Asset Management, Inc. (a)........... 3.45% 3.33% 3.91% 2.40% 0.86%
Ratio of expenses to average net
assets: (a)
With expense reductions, waivers, and
reimbursement by Chancellor LGT Asset
Management, Inc. (a) (Notes 2 & 4)... 1.73% 1.74% 1.72% 1.67% 1.75%
Without expense reductions, waivers,
and reimbursement by Chancellor LGT
Asset Management, Inc. (a)........... 2.03% 2.05% 2.00% 1.92% 2.31%
</TABLE>
- ----------------
(a) Annualized for periods of less than one year.
(b) Not annualized for periods of less than one year.
+ All capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
The accompanying notes are an integral part of the financial statements.
FS-17
<PAGE> 105
GT GLOBAL DOLLAR FUND
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
ADVISOR CLASS+++
-------------------------------------
YEAR ENDED DECEMBER JUNE 1, 1995
31, TO
---------------------- DECEMBER 31,
1997 1996 1995
---------- ---------- -------------
<S> <C> <C> <C>
Net investment income................... 0.045 0.044 0.030
Distributions from net investment
income................................. (0.045) (0.044) (0.030)
---------- ---------- -------------
Net asset value (unchanged during the
period)................................ $ 1.00 $ 1.00 $ 1.00
---------- ---------- -------------
---------- ---------- -------------
Total investment return (b)............. 4.61% 4.50% 2.92%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 6,780 $ 14,978 $ 2,096
Ratio of net investment income to
average net assets:
With expense reductions, waivers, and
reimbursement by Chancellor LGT Asset
Management, Inc. (a) (Notes 2 & 4)... 4.50% 4.39% 4.94%
Without expense reductions, waivers,
and reimbursement by Chancellor LGT
Asset Management, Inc. (a)........... 4.45% 4.33% 4.91%
Ratio of expenses to average net
assets: (a)
With expense reductions, waivers, and
reimbursement by Chancellor LGT Asset
Management, Inc. (a) (Notes 2 & 4)... 0.98% 0.99% 0.97%
Without expense reductions, waivers,
and reimbursement by Chancellor LGT
Asset Management, Inc. (a)........... 1.03% 1.05% 1.0%
</TABLE>
- ----------------
(a) Annualized for periods of less than one year.
(b) Not annualized for periods of less than one year.
+ All capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
The accompanying notes are an integral part of the financial statements.
FS-18
<PAGE> 106
GT GLOBAL DOLLAR FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Dollar Fund ("Fund") is a diversified series of GT Investment
Portfolios, Inc. ("Company"). The Company is registered under the Investment
Company Act of 1940, as amended (1940 Act), as an open-end management investment
company.
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Each class has exclusive voting
rights with respect to its distribution plan. Investment income, realized and
unrealized capital gains and losses, and the common expenses of the Fund are
allocated on a pro rata basis to each class based on the relative net assets of
each class to the total net assets of the Fund. Each class of shares differs in
its respective distribution expenses, and may differ in its transfer agent,
registration, and certain other class-specific fees and expenses.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.
(A) PORTFOLIO VALUATION
Securities are valued at amortized cost, which approximates market value.
(B) FEDERAL INCOME TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, and unrealized appreciation of securities held, or for excise tax on
income and capital gains. The Fund currently has a capital loss carryforward of
$3,382 which expires in 2005.
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, U.S. government securities or other
high quality debt securities of which the value, including accrued interest, is
at least equal to the amount to be repaid to the Fund under each agreement at
its maturity. Chancellor LGT Asset Management, Inc. (the "Manager") is
responsible for determining that the value of these underlying securities
remains at least equal to the resale price.
(D) OTHER
Security transactions are recorded on the trade date (date the order to buy or
sell is executed). Interest income is recorded on an accrual basis. Dividends to
shareholders from net investment income are declared daily and paid or
reinvested monthly.
2. RELATED PARTIES
The Manager serves as the investment manager and administrator of the Fund. The
Fund pays the Manager investment management and administration fees at the
annualized rate of 0.50% of the Fund's average daily net assets. These fees are
computed daily and paid monthly, and are subject to reduction in any year to the
extent that the Fund's expenses (exclusive of brokerage commissions, taxes,
interest, distribution-related expenses and extraordinary expenses) exceed the
most stringent limits prescribed by the laws or regulations of any state in
which the Fund's shares are sold.
GT Global, Inc. ("GT Global"), an affiliate of the Manager, serves as the Fund's
distributor. The Fund offers Class A shares for purchase. Certain redemptions of
Class A shares made within two years of purchase are subject to contingent
deferred sales charges ("CDSCs"), in accordance with the Fund's current
prospectus. Class B shares of the Fund are available only through an exchange of
Class B shares of other GT Global Mutual Funds. Certain redemptions of Class B
shares made within six years of purchase are also subject to CDSCs, in
accordance with the Fund's current prospectus. For the year ended December 31,
1997, GT Global collected CDSCs in the amount of $1,241,407. In addition, GT
Global may, from time to time, make ongoing payments to brokerage firms,
financial institutions (including banks) and others that facilitate the
administration and servicing of shareholder accounts.
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Directors has
adopted separate distribution plans with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares less any amounts paid by the Fund as the aforementioned service
fee for GT Global's expenditures incurred in providing services as distributor.
GT Global does not currently intend to seek reimbursement of any amounts under
the Class A Plan. All expenses for which GT Global is reimbursed under the Class
A Plan will have been incurred within one year of such reimbursement.
Pursuant to the Fund's Class B Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in providing services as
distributor. GT Global does not currently intend to seek reimbursement of any
FS-19
<PAGE> 107
GT GLOBAL DOLLAR FUND
amounts in excess of 0.75% of average daily net assets under the Class B Plan.
Expenses incurred under the Class B Plan in excess of 1.00% annually may be
carried forward for reimbursement in subsequent years as long as that Plan
continues in effect.
The Manager and GT Global have voluntarily undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, interest, taxes and extraordinary
expenses) to the annual rate of 1.00%, 1.75%, and 1.00% of the average daily net
assets of the Fund's Class A, Class B, and Advisor Class shares, respectively.
If necessary, this limitation will be effected by waivers by the Manager of its
investment management and administration fees, waivers by GT Global of payments
under the Class A Plan and/or Class B Plan and/or reimbursements by the Manager
or GT Global of portions of the Fund's other operating expenses.
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent for the Fund. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. The Transfer Agent also is reimbursed
by the Fund for its out-of-pocket expenses for such items as postage, forms,
telephone charges, stationery and office supplies.
The Company pays each of its Directors who is not an employee, officer or
director of the Manager, GT Global or GT Services $1,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Director.
The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by LGT and 0.02% to the assets in excess of $5 billion and allocating
the result according to the Fund's average daily net assets.
3. CAPITAL SHARES
At December 31, 1997, there were 2,000,000,000 shares of the Company's common
stock authorized, at $0.001 per share. Of this number, 1,500,000,000 shares have
been classified as shares of the Fund; 500 million shares have been classified
as Class A shares, 500 million have been classified as Class B shares, and 500
million have been classified as Advisor Class shares. These amounts may be
increased from time to time at the discretion of the Board of Directors.
Transactions in capital shares of the Fund were as follows:
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
---------------------- ----------------------
CLASS A SHARES & AMOUNT SHARES & AMOUNT
- ---------------------------------------- ---------------------- ----------------------
<S> <C> <C>
Shares sold............................. 6,222,351,251 14,275,856,684
Shares issued in connection with
reinvestment of distributions......... 4,193,093 7,664,536
---------------------- ----------------------
6,226,544,344 14,283,521,220
Shares repurchased...................... (6,432,557,179) (14,074,631,817)
---------------------- ----------------------
Net increase (decrease)................. (206,012,835) 208,889,403
---------------------- ----------------------
---------------------- ----------------------
<CAPTION>
CLASS B SHARES & AMOUNT SHARES & AMOUNT
- ---------------------------------------- ---------------------- ----------------------
<S> <C> <C>
Shares sold............................. 1,763,392,144 2,348,173,773
Shares issued in connection with
reinvestment of distributions......... 2,479,264 2,261,688
---------------------- ----------------------
1,765,871,408 2,350,435,461
Shares repurchased...................... (1,810,681,116) (2,321,320,722)
---------------------- ----------------------
Net increase (decrease)................. (44,809,708) 29,114,739
---------------------- ----------------------
---------------------- ----------------------
<CAPTION>
ADVISOR CLASS SHARES & AMOUNT SHARES & AMOUNT
- ---------------------------------------- ---------------------- ----------------------
<S> <C> <C>
Shares sold............................. 223,289,952 237,098,781
Shares issued in connection with
reinvestment of distributions......... 222,493 215,804
---------------------- ----------------------
223,512,445 237,314,585
Shares repurchased...................... (231,710,695) (224,416,508)
---------------------- ----------------------
Net increase (decrease)................. (8,198,250) 12,898,077
---------------------- ----------------------
---------------------- ----------------------
</TABLE>
4. EXPENSE REDUCTIONS
For the year ended December 31, 1997, the Fund's custody fees were offset by
$43,916 of credits on cash held at the custodian.
5. SUBSEQUENT EVENT
On January 30, 1998, Liechtenstein Global Trust ("LGT") and AMVESCAP PLC
("AMVESCAP") entered into an agreement by which AMVESCAP will acquire LGT's
Asset Management Division, including Chancellor LGT Asset Management, Inc.
AMVESCAP is the holding company of the AIM and INVESCO asset management
businesses.
FS-20
<PAGE> 108
STATEMENT OF
ADDITIONAL INFORMATION
ADVISOR CLASS SHARES OF
AIM DOLLAR FUND
(A SERIES PORTFOLIO OF
AIM INVESTMENT PORTFOLIOS)
11 GREENWAY PLAZA
SUITE 100
HOUSTON, TEXAS 77046-1173
(713) 626-1919
---------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND
IT SHOULD BE READ IN CONJUNCTION WITH A PROSPECTUS OF THE
ABOVE-NAMED FUND, A COPY OF WHICH MAY BE OBTAINED FREE
OF CHARGE FROM AUTHORIZED DEALERS OR BY WRITING
A I M DISTRIBUTORS, INC.
P.O. BOX 4739, HOUSTON TEXAS 77210-4739
OR BY CALLING (800) 347-4246.
---------------------
STATEMENT OF ADDITIONAL INFORMATION DATED SEPTEMBER 8, 1998
RELATING TO THE AIM DOLLAR FUND PROSPECTUS DATED SEPTEMBER 8, 1998
<PAGE> 109
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTRODUCTION................................................ 4
GENERAL INFORMATION ABOUT THE FUNDS......................... 4
The Trust and Its Shares.................................. 4
INVESTMENT OBJECTIVE AND POLICIES........................... 4
Investment Objective...................................... 4
Changes in a Security's Rating............................ 5
Variable and Floating Rate Obligations.................... 5
Bankers' Acceptances...................................... 5
Certificates of Deposit................................... 5
Commercial Paper.......................................... 5
U.S. Government Obligations............................... 5
Repurchase Agreements..................................... 5
When-Issued and Delayed Delivery Transactions............. 6
Illiquid Securities....................................... 6
INVESTMENT LIMITATIONS...................................... 7
MANAGEMENT.................................................. 8
Trustees and Executive Officers........................... 8
Investment Management and Administration Services......... 10
Distribution Services..................................... 11
Expenses of the Fund...................................... 11
DIVIDENDS AND TAXES......................................... 11
Daily Income Dividends.................................... 11
Taxes -- General.......................................... 11
Non-U.S. Shareholders..................................... 12
HOW TO PURCHASE AND REDEEM SHARES........................... 12
Programs and Services for Shareholders.................... 13
Dividend Order............................................ 13
NET ASSET VALUE DETERMINATION............................... 13
EXECUTION OF PORTFOLIO TRANSACTIONS......................... 14
MISCELLANEOUS INFORMATION................................... 14
Custodian................................................. 14
Transfer Agency and Accounting Agency Services............ 14
Independent Accountants................................... 14
Shareholder Liability..................................... 15
Name...................................................... 15
Control Persons and Principal Holders of Securities....... 15
INVESTMENT RESULTS.......................................... 16
Total Return Quotations................................... 17
Performance Information................................... 18
</TABLE>
2
<PAGE> 110
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
APPENDIX.................................................... 21
Commercial Paper Ratings.................................. 21
Bond Ratings.............................................. 21
Note Ratings.............................................. 21
FINANCIAL STATEMENTS........................................ FS
</TABLE>
3
<PAGE> 111
INTRODUCTION
This Statement of Additional Information relates to the Advisor Class shares
of AIM Dollar Fund (the "Fund"). The Fund is a diversified series of AIM
Investment Portfolios (the "Trust"), a registered open-end management investment
company organized as a Delaware business trust.
A I M Advisors, Inc. ("AIM") serves as the investment manager of and
administrator for, and INVESCO (NY), Inc. (the "Sub-advisor") serves as the
investment sub-advisor of and sub-administrator for, the Fund.
The Trust is a series mutual fund. The rules and regulations of the Securities
and Exchange Commission (the "SEC") require all mutual funds to furnish
prospective investors certain information concerning the activities of the fund
being considered for investment. This information for the Fund is included in a
Prospectus dated September 8, 1998. Additional copies of the Prospectuses and
this Statement of Additional Information may be obtained without charge by
writing the principal distributor of the Fund's shares, A I M Distributors, Inc.
("AIM Distributors"), P.O. Box 4739, Houston, TX 77210-4739 or by calling (800)
347-4246. Investors must receive a Prospectus before they invest.
This Statement of Additional Information is intended to furnish prospective
investors with additional information concerning the Fund. Some of the
information required to be in this Statement of Additional Information is also
included in the Prospectus; and, in order to avoid repetition, reference will be
made to sections of the Prospectus. Additionally, the Prospectus and this
Statement of Additional Information omit certain information contained in the
Registration Statement filed with the SEC. Copies of the Registration Statement,
including items omitted from the Prospectus and this Statement of Additional
Information, may be obtained from the SEC by paying the charges prescribed under
its rules and regulations.
GENERAL INFORMATION ABOUT THE FUNDS
THE TRUST AND ITS SHARES
The Trust previously operated under the name AIM Investment Portfolios, Inc.,
which was organized as a Maryland corporation on July 13, 1981. The Trust was
reorganized on September 8, 1998 as a Delaware business trust, and is registered
with the SEC as a diversified open-end series management investment company. The
Trust currently consists of a single portfolio, the AIM Dollar Fund. The Fund
has three separate classes: Class A, Class B and Advisor Class shares. All
historical financial and other information contained in this Statement of
Additional Information for periods prior to September 8, 1998, is that of GT
Global Dollar Fund. (renamed AIM Dollar Fund).
This Statement of Additional Information relates solely to the Advisor Class
shares of the Fund.
The term "majority of the outstanding shares" of the Trust, of the Fund or of
a particular class of the Fund means, respectively, the vote of the lesser of
(a) 67% or more of the shares of the Trust, the Fund 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, the Fund or such class are present or
represented by proxy, or (b) more than 50% of the outstanding shares of the
Trust, the Fund or such class.
Class A, Class B and Advisor Class shares of the Fund have equal rights and
privileges. Each share of a particular class is entitled to one vote, to
participate equally in dividends and distributions declared by the Trust's Board
of Trustees with respect to the class of the Fund and, upon liquidation of the
Fund, to participate proportionately in the net assets of the Fund allocable to
such class remaining after satisfaction of outstanding liabilities of the Fund
allocable to such class. Fund shares are fully paid, non-assessable and fully
transferable when issued and have no preemptive rights and have such conversion
and exchange rights as set forth in the Prospectus and this Statement of
Additional Information. Fractional shares have proportionately the same rights,
including voting rights, as are provided for a full share.
Shareholders of the Fund do not have cumulative voting rights, and therefore
the holders of more than 50% of the outstanding shares of the Fund voting
together for election of trustees may elect all of the members of the Board of
Trustees of the Trust. In such event, the remaining holders cannot elect any
trustees of the Trust.
INVESTMENT OBJECTIVE AND POLICIES
INVESTMENT OBJECTIVE
The investment objective of the Fund is maximum current income consistent with
liquidity and conservation of capital. The Fund seeks its objective by investing
in high quality, U.S. dollar-denominated money market instruments.
4
<PAGE> 112
CHANGES IN A SECURITY'S RATING
Subsequent to the purchase of a security by the Fund, the security may cease
to be rated or its rating may be reduced below the minimum rating required for
its purchase, as described in the Prospectus. In such event the Fund, the
Trust's Board of Trustees (the "Board") and the Sub-advisor will review the
situation and take appropriate action in accordance with procedures adopted by
the Board pursuant to Rule 2a-7 under the Investment Company Act of 1940, as
amended (the "1940 Act").
VARIABLE AND FLOATING RATE OBLIGATIONS
Floating and variable rate demand notes and bonds are obligations ordinarily
having stated maturities in excess of 13 months, but which permit the holder to
demand payment of principal at any time, or at specified intervals not exceeding
13 months, in each case upon not more than 30 days' notice. The issuer of such
obligations generally has a corresponding right, after a given period, to prepay
in its discretion the outstanding principal amount of the obligation plus
accrued interest upon a specified number of days' notice to the holders thereof.
The interest rates payable on certain securities in which the Fund may invest
are not fixed and may fluctuate based upon changes in market rates. Variable and
floating rate obligations have interest rates that are adjusted at designated
intervals or whenever there are changes in the market rates of interest on which
the interest rates are based. Variable and floating rate obligations permit the
Fund to "lock in" the current interest rate for only the period until the next
rate adjustment, but the rate adjustment feature tends to limit the extent to
which the market value of the obligation will fluctuate.
BANKERS' ACCEPTANCES
Bankers' acceptances are negotiable obligations of a bank to pay a draft which
has been drawn on it by a customer. These obligations are backed by large banks
and usually are backed by goods in international trade.
CERTIFICATES OF DEPOSIT
Certificates of deposit are negotiable certificates representing a commercial
bank's obligations to repay funds deposited with it, earning specified rates of
interest over a given period of time.
COMMERCIAL PAPER
Commercial paper consists of short-term promissory notes issued by large
corporations with a high quality rating to finance short-term credit needs.
U.S. GOVERNMENT OBLIGATIONS
U.S. government obligations are debt securities issued or guaranteed by the
U.S. Treasury or by an agency or instrumentality of the U.S. government.
However, not all U.S. government obligations are backed by the full faith and
credit of the United States. For example, securities issued by the Federal
National Mortgage Association, the Federal Home Loan Mortgage Corporation and
the Tennessee Valley Authority are supported only by the credit of the issuer.
There is no guarantee that the U.S. government will provide support to such U.S.
government sponsored agencies, as it is not so obligated by law. Therefore, the
purchase of such securities involves more risk than investment in other U.S.
government obligations.
REPURCHASE AGREEMENTS
A repurchase agreement is a transaction in which the Fund purchases a security
from a bank or recognized securities dealer and simultaneously commits to resell
that security to the bank or dealer, an agreed-upon price, date and market rate
of interest unrelated to coupon rate or maturity of the purchased security.
Although repurchase agreements carry certain risks not associated with direct
investments in securities, including possible decline in the market value of the
underlying securities and delays and costs to the Fund if the other party to the
repurchase agreement becomes bankrupt, the Fund intends to enter into repurchase
agreements only with banks and dealers believed by the Sub-advisor to present
minimal credit risks in accordance with guidelines established by the Board. The
Sub-advisor will review and monitor the creditworthiness of such institutions
under the Board's general supervision.
The Fund will invest only in repurchase agreements collateralized at all times
in an amount at least equal to the repurchase price plus accrued interest. To
the extent that the proceeds from any sale of such collateral upon a default in
the obligation to repurchase were less than the repurchase price, the Fund would
suffer a loss. If the financial institution which is party to the repurchase
agreement petitions for bankruptcy or otherwise becomes subject to bankruptcy or
other
5
<PAGE> 113
liquidation proceedings, there may be restrictions on the Fund's ability to sell
the collateral and the Fund could suffer a loss. However, with respect to
financial institutions whose bankruptcy or liquidation proceedings are subject
to the U.S. Bankruptcy Code, the Fund intends to comply with provisions under
that code that would allow the immediate resale of such collateral. There is no
limitation on the amount of the Fund's assets that may be subject to repurchase
agreements at any given time. The Fund will not enter into a repurchase
agreement with a maturity of more than seven days if, as a result, more than 10%
of the value of its net assets would be invested in such repurchase agreements
and other illiquid investments.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
The Fund may buy and sell securities on a when-issued or delayed delivery
basis, with payment and delivery taking place at a future date. The market value
of securities purchased in this way may change before the delivery date, which
could increase fluctuations in the Fund's yield. Ordinarily, the Fund will not
earn interest on securities purchased until they are delivered.
ILLIQUID SECURITIES
The Fund will not invest more than 10% of its net assets in illiquid
securities. The term "illiquid securities" for this purpose means securities
that cannot be disposed of within seven days in the ordinary course of business
at approximately the amount at which the Fund has valued the securities and
includes, among other things, repurchase agreements maturing in more than seven
days, and restricted securities other than those the Sub-advisor has determined
to be liquid pursuant to guidelines established by the Board. Commercial paper
issues in which the Fund may invest include securities issued by major
corporations without registration under the Securities Act of 1933, as amended
(the "1933 Act"), in reliance on the exemption from such registration afforded
by Section 3(a)(3) thereof and commercial paper issued in reliance on the
so-called "private placement" exemption from registration afforded by Section
4(2) of the 1933 Act ("Section 4(2) paper"). Section 4(2) paper is restricted as
to disposition under the federal securities laws in that any resale must
similarly be made in an exempt transaction. Section 4(2) paper is normally
resold to other institutional investors through or with the assistance of
investment dealers who make a market in Section 4(2) paper, thus providing
liquidity.
Not all restricted securities are illiquid. In recent years a large
institutional market has developed for certain securities that are not
registered under the 1933 Act, including private placements, repurchase
agreements, commercial paper, foreign securities and corporate bonds and notes.
These instruments are often restricted securities because the securities are
sold in transactions not requiring registration. Institutional investors
generally will not seek to sell these instruments to the general public, but
instead will often depend either on an efficient institutional market in which
such unregistered securities can be readily resold on or an issuer's ability to
honor a demand for repayment. Therefore, the fact that there are contractual or
legal restrictions on resale to the general public or certain institutions is
not dispositive of the liquidity of such investments.
Rule 144A under the 1933 Act establishes a "safe harbor" from the registration
requirements of the 1933 Act for resales of certain securities to qualified
institutional buyers. Institutional markets for restricted securities have
developed as a result of Rule 144A, providing both readily ascertainable values
for restricted securities and the ability to liquidate an investment to satisfy
share redemption orders. Such markets include automated systems for the trading,
clearance and settlement of unregistered securities, such as the PORTAL System
sponsored by the National Association of Securities Dealers, Inc. An
insufficient number of qualified institutional buyers interested in purchasing
Rule 144A-eligible restricted securities held by the Fund, however, could affect
adversely the marketability of such portfolio securities and the Fund might be
unable to dispose of such securities promptly or at favorable prices.
With respect to liquidity determinations generally, the Board has the ultimate
responsibility for determining whether specific securities, including restricted
securities pursuant to Rule 144A under the 1933 Act, are liquid or illiquid. The
Board has delegated the function of making day-to-day determinations of
liquidity to the Sub-advisor, in accordance with procedures approved by the
Board. The Sub-advisor takes into account a number of factors in reaching
liquidity decisions, including (1) the frequency of trading in the security; (2)
the number of dealers that make quotes for the security; (3) the number of
dealers that have undertaken to make a market in the security; (4) the number of
other potential purchasers; and (5) the nature of the security and how trading
is effected (e.g., the time needed to sell the security, how offers are
solicited and the mechanics of transfer). The Sub-advisor monitors the liquidity
of securities held by the Fund and periodically reports such determinations to
the Board as applicable. If the liquidity percentage restriction of the Fund is
satisfied at the time of investment, a later increase in the percentage of
illiquid securities held by the Fund resulting from a change in market value or
assets will not constitute a violation of that restriction. If as a result of a
change in market value or assets, the percentage of illiquid securities held by
the Fund increases above the applicable limit, the
6
<PAGE> 114
Sub-advisor will take appropriate steps to bring the aggregate amount of
illiquid assets back within the prescribed limitations as soon as reasonably
practicable, taking into account the effect of any disposition on the Fund.
INVESTMENT LIMITATIONS
The Fund has adopted the following investment limitations as fundamental
policies that may not be changed without approval by the affirmative vote of a
majority of the outstanding shares of the Fund. The Fund may not:
(1) Purchase securities of any one issuer if, as a result, more than
5% of the Fund's total assets would be invested in securities of that
issuer or the Fund would own or hold more than 10% of the outstanding
voting securities of that issuer, except that up to 25% of the Fund's total
assets may be invested without regard to this limitation, and except that
this limitation does not apply to securities issued or guaranteed by the
U.S. government, its agencies or instrumentalities or to securities issued
by other investment companies;
(2) Issue senior securities or borrow money, except as permitted under
the 1940 Act and then not in excess of 33 1/3% of the Fund's total assets
(including the amount borrowed but reduced by any liabilities not
constituting borrowings) at the time of the borrowing, except that the Fund
may borrow up to an additional 5% of its total assets (not including the
amount borrowed) for temporary or emergency purposes;
(3) Engage in the business of underwriting securities of other
issuers, except to the extent that the Fund might be considered an
underwriter under the federal securities laws in connection with its
disposition of portfolio securities;
(4) Purchase or sell real estate, except that investments in
securities of issuers that invest in real estate and investments in
mortgage-backed securities, mortgage participations or other instruments
supported by interests in real estate are not subject to this limitation,
and except that the Fund may exercise rights under agreements relating to
such securities, including the right to enforce security interests and to
hold real estate acquired by reason of such enforcement until that real
estate can be liquidated in an orderly manner;
(5) Make loans, except through loans of portfolio securities or
through repurchase agreements, provided that for purposes of this
limitation, the acquisition of bonds, debentures, other debt securities or
instruments, or participations or other interests therein and investments
in government obligations, commercial paper, certificates of deposit,
bankers' acceptances or similar instruments will not be considered the
making of a loan;
(6) Purchase or sell physical commodities, but the Fund may purchase,
sell or enter into financial options and futures, forward and spot currency
contracts, swap transactions and other financial contracts or derivative
instruments; or
(7) Purchase any security if, as a result of that purchase, 25% or
more of the Fund's total assets would be invested in securities of issuers
having their principal business activities in the same industry, except
that this limitation does not apply to securities issued or guaranteed by
the U.S. government, its agencies or instrumentalities;
Notwithstanding any other investment policy of the Fund, the Fund may invest
all of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
For purposes of the concentration policy contained in limitation (7), above,
the Fund intends to comply with the SEC staff position that securities issued or
guaranteed as to principal and interest by any single foreign government are
considered to be securities of issuers in the same industry.
If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage resulting from a change in values or assets
will not constitute a violation of that restriction.
The following investment policies of the Fund are not fundamental policies and
may be changed by vote of the Trust's Board of Trustees without shareholder
approval. The Fund may not:
(1) Invest more than 10% of its net assets in illiquid securities;
(2) Purchase securities on margin, provided that the Fund may obtain
short-term credits as may be necessary for the clearance of purchases and
sales of securities, and further provided that the Fund may make margin
deposits in connection with its use of financial options and futures,
forward and spot currency contracts, swap transactions and other financial
contracts or derivative instruments; or
7
<PAGE> 115
(3) Mortgage, pledge, or hypothecate any of its assets, provided that
this shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activities.
Investors should refer to the Fund's prospectus for further information with
respect to the investment objective, which may not be changed without the
approval of its shareholders, and other investment policies, techniques and
limitations, which may be changed without shareholder approval.
MANAGEMENT
TRUSTEES AND EXECUTIVE OFFICERS
The Trust's Trustees and Executive Officers are listed below. Unless otherwise
indicated, the address of each Executive Officer is 11 Greenway Plaza, Suite
100, Houston, Texas 77046.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
NAME, ADDRESS AND AGE POSITIONS HELD WITH REGISTRANT PRINCIPAL OCCUPATION WITH REGISTRANT
--------------------- ------------------------------ ------------------------------------
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
ROBERT H. GRAHAM, (51) Trustee, Chairman of the Board Director, President and Chief
and President Executive Officer, 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.
- -----------------------------------------------------------------------------------------------------
C. DEREK ANDERSON, (57) Trustee President, Plantagenet Capital
220 Sansome Street Management, LLC (an investment
Suite 400 partnership); Chief Executive Officer,
San Francisco, CA 94104 Plantagenet Holdings, Ltd. (an
investment banking firm); Director,
Anderson Capital Management, Inc.
since 1988; Director, PremiumWear,
Inc. (formerly Munsingwear, Inc.) (a
casual apparel company); Director, "R"
Homes, Inc. and various other
companies; and Trustee, each of the
other investment companies registered
under the 1940 Act that is sub-advised
or sub-administered by the
Sub-advisor.
- -----------------------------------------------------------------------------------------------------
FRANK S. BAYLEY, (59) Trustee Partner, law firm of Baker & McKenzie;
Two Embarcadero Center Director and Chairman, C.D. Stimson
Suite 2400 Company (a private investment
San Francisco, CA 94111 company); and Trustee, each of the
other investment companies registered
under the 1940 Act that is sub-advised
or sub-administered by the
Sub-advisor.
- -----------------------------------------------------------------------------------------------------
ARTHUR C. PATTERSON, (54) Trustee Managing Partner, Accel Partners (a
428 University Avenue venture capital firm); Director,
Palo Alto, CA 94301 Viasoft and PageMart, Inc. (both
public software companies) and several
other privately held software and
communications companies; and Trustee,
each of the other investment companies
registered under the 1940 Act that is
sub-advised or sub-administered by the
Sub-advisor.
- -----------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 116
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
NAME, ADDRESS AND AGE POSITIONS HELD WITH REGISTRANT PRINCIPAL OCCUPATION WITH REGISTRANT
--------------------- ------------------------------ ------------------------------------
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
RUTH H. QUIGLEY, (63) Trustee Private investor; President from 1984
1055 California Street to 1986; and Quigley Friedlander &
San Francisco, CA 94108 Co., Inc. (a financial advisory
services firm) from 1984 to 1986; and
Trustee, each of the other investment
companies registered under the 1940
Act that is sub-advised or
sub-administered by the Sub-advisor.
- -----------------------------------------------------------------------------------------------------
+JOHN J. ARTHUR, (53) Vice President Director, Senior Vice President and
Treasurer, A I M Advisors, Inc.; Vice
President and Treasurer, A I M
Management Group Inc., A I M Capital
Management, Inc., A I M Distributors,
Inc., A I M Fund Services, Inc. and
Fund Management Company.
- -----------------------------------------------------------------------------------------------------
KENNETH W. CHANCEY, (53) Vice President and Principal Senior Vice President -- Mutual Fund
50 California Street Accounting Officer Accounting, the Sub-advisor since
San Francisco, CA 94111 1997; Vice President -- Mutual Fund
Accounting, the Sub-advisor from 1992
to 1997.
- -----------------------------------------------------------------------------------------------------
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.
- -----------------------------------------------------------------------------------------------------
GARY T. CRUM, (50) Vice President Director and President, A I M Capital
Management, Inc.; Director and Senior
Vice President, A I M Management Group
Inc. and A I M Advisors, Inc.; and
Director, A I M Distributors, Inc. and
AMVESCAP PLC.
- -----------------------------------------------------------------------------------------------------
HELGE K. LEE, (52) Vice President and Secretary Chief Legal and Compliance
50 California Street Officer -- North America, the
San Francisco, CA 94111 Sub-advisor since October 1997;
Secretary and Chief Legal and
Compliance Officer, INVESCO (NY) Asset
Management, Inc., INVESCO (NY), Inc.,
GT Global Investor Services, Inc. and
G.T. Insurance since August 1997;
Secretary and Chief Legal and
Compliance Officer, GT Global from
August 1997 to April 1998; Executive
Vice President of the Asset Management
Division of Liechtenstein Global Trust
AG, from October 1996 to May 1998;
Senior Vice President, General Counsel
and Secretary of INVESCO (NY) Asset
Management, Inc., INVESCO (NY), Inc.,
GT Global, GT Global Investor
Services, Inc. and G.T. Insurance from
May 1994 to October 1996; and Senior
Vice President, General Counsel and
Secretary of Strong/Corneliuson
Management, Inc. and Secretary of each
of the Strong Funds from October 1991
to May 1994.
- -----------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
<TABLE>
<S> <C> <C>
+ Mr. Arthur and Ms. Relihan are married to each other.
</TABLE>
9
<PAGE> 117
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
NAME, ADDRESS AND AGE POSITIONS HELD WITH REGISTRANT PRINCIPAL OCCUPATION WITH REGISTRANT
--------------------- ------------------------------ ------------------------------------
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
+CAROL F. RELIHAN, (43) Vice President Director, Senior Vice President,
General Counsel and Secretary, A I M
Advisors, Inc.; Vice President,
General Counsel and Secretary, A I M
Management Group Inc.; Director, Vice
President and General Counsel, Fund
Management Company; Vice President and
General Counsel, A I M Fund Services,
Inc.; and Vice President, A I M
Capital Management, Inc. and A I M
Distributors, Inc.
- -----------------------------------------------------------------------------------------------------
DANA R. SUTTON, (39) Vice President and Assistant Vice President and Fund Controller,
Treasurer A I M Advisors, Inc.; and Assistant
Vice President and Assistant
Treasurer, Fund Management Company.
- -----------------------------------------------------------------------------------------------------
</TABLE>
The Board of Trustees has a Nominating and Audit Committee, comprised of Miss
Quigley and Messrs. Anderson, Bayley and Patterson, which is responsible for
nominating persons to serve as Trustees, reviewing audits of the Trust and
recommending firms to serve as independent auditors of the Trust. All of the
Trust's Trustees also serve as directors or trustees of some or all of the other
investment companies managed, administered or advised by AIM. All of the Trust's
Executive Officers hold similar offices with some or all of the other investment
companies managed, administered or advised by AIM. Each Trustee who is not a
trustee, officer or employee of the Sub-advisor or any affiliated company is
paid aggregate fees of $5,000 a year, plus $300 per Fund for each meeting of the
Board attended, and reimbursed travel and other expenses incurred in connection
with attendance at such meetings. Other Trustees and Officers receive no
compensation or expense reimbursement from the Trust. For the fiscal year ended
December 31, 1997, Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss Quigley, who
are not trustees, officers or employees of the Sub-advisor or any affiliated
company, received total compensation of $3,588, $3,716, $3,100 and $3,409,
respectively, from the Trust for their services as Trustees. For the fiscal year
ended December 31, 1997, Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss
Quigley, who are not directors, officers or employees of the Sub-advisor or any
other affiliated company received total compensation of $103,654, $106,556,
$89,700 and $98,038, respectively, from the investment companies managed or
administered by AIM and sub-advised or sub-administered by the Sub-advisor for
which he or she serves as a Trustee. Fees and expenses disbursed to the Trustees
contained no accrued or payable pension or retirement benefits. As of June 26,
1998, the Officers and Trustees and their families as a group owned in the
aggregate beneficially or of record less than 1% of the outstanding shares of
the Fund.
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES
AIM serves as the Fund's investment manager and administrator under an
investment management and administration contract between the Trust and AIM
("Management Contract"). The Sub-advisor serves as the sub-advisor and sub-
administrator to the Fund under a sub-advisory and sub-administration contract
between AIM and the Sub-advisor ("Sub-Management Contract," and together with
the Management Contract, the "Management Contracts"). As investment managers and
administrators, AIM and the Sub-advisor make all investment decisions for the
Fund and administer the Fund's affairs. Among other things, AIM and the
Sub-advisor furnish the services and pay the compensation and travel expenses of
persons who perform the executive, administrative, clerical and bookkeeping
functions of the Trust and the Fund, and provide suitable office space,
necessary small office equipment and utilities.
The Management Contracts may be renewed for one-year terms with respect to the
Fund, provided that any such renewal has been specifically approved at least
annually by: (i) the Board, or by the vote of a majority of the Fund's
outstanding voting securities (as defined in the 1940 Act), and (ii) a majority
of Trustees who are not parties to the Management Contracts or "interested
persons" of any such party (as defined in the 1940 Act), cast in person at a
meeting called for the specific purpose of voting on such approval. Either the
Trust or each of AIM or the Sub-advisor may terminate the Management Contracts
without penalty upon sixty days' written notice to the other party. The
Management Contracts terminate automatically in the event of their assignment
(as defined in the 1940 Act).
The Funds may engage in certain principal and agency transactions with banks
and their affiliates that own 5% or more of the outstanding voting securities of
a Fund, provided the conditions of an exemptive order received by the Funds from
- ---------------
<TABLE>
<S> <C> <C>
+ Mr. Arthur and Ms. Relihan are married to each other.
</TABLE>
10
<PAGE> 118
the SEC are met. In addition, a Fund may purchase or sell a security from or to
another AIM Fund provided the Funds follow procedures adopted by the Boards of
Directors/Trustees of the various AIM Funds, including the Trust. These inter-
fund transactions do not generate brokerage commissions but may result in
custodial fees or taxes or other related expenses.
For the fiscal years ended December 31, 1997, 1996 and 1995, the Fund paid
investment management and administration fees to the Sub-advisor in the amounts
of $1,384,735, $1,808,976 and $1,665,299, respectively. During the fiscal years
ended December 31, 1997 and 1996, the Sub-advisor reimbursed the Fund for a
portion of its investment management and administration fees in the amounts of
$88,707 and $173,045, respectively. No such reimbursements were made during the
fiscal year ended December 31, 1995.
DISTRIBUTION SERVICES
The Fund's Advisor Class are offered continuously through the Fund's principal
underwriter and distributor, AIM Distributors, on a "best efforts" basis
pursuant to a distribution contract between the Trust and AIM Distributors
without a front-end sales charge or a contingent deferred sales charge.
EXPENSES OF THE FUND
The Fund pays all expenses not assumed by AIM, the Sub-advisor, AIM
Distributors and other agents. These expenses include, in addition to the
advisory, administration, distribution, transfer agency, pricing and accounting
agency and brokerage fees discussed above, legal and audit expenses, custodian
fees, trustees' fees, organizational fees, fidelity bond and other insurance
premiums, taxes, extraordinary expenses and the expenses of reports and
prospectuses sent to existing investors. The allocation of general Trust
expenses and expenses shared among the Fund and other funds organized as series
of the Trust are allocated on a basis deemed fair and equitable, which may be
based on the relative net assets of the Fund or the nature of the services
performed and relative applicability to the Fund. Expenditures, including costs
incurred in connection with the purchase or sale of portfolio securities, which
are capitalized in accordance with generally accepted accounting principles
applicable to investment companies, are accounted for as capital items and not
as expenses.
DIVIDENDS AND TAXES
DAILY INCOME DIVIDENDS
Net investment income and any realized net short-term capital gain are
determined and declared as a dividend each day. Each such dividend is payable to
shareholders as of the close of business on that day. Orders to purchase Fund
shares are executed on the business day on which Federal Funds, i.e., monies
held on deposit at a Federal Reserve Bank, become available. Shares begin
accruing dividends on the day following the date of purchase. Shares are
entitled to the dividend declared on the day a redemption request is received by
the Transfer Agent. Dividends are automatically reinvested in Advisor Class
shares of the Fund on the last Business Day of the month, at net asset value,
unless a shareholder otherwise instructs the Transfer Agent in writing. A
shareholder that does so will be mailed a check in the amount of each dividend.
For the purpose of calculating dividends, daily net investment income of the
Fund consists of (a) all interest income accrued on investments (including any
discount or premium ratably accrued or amortized, respectively, to the date of
maturity or determined in such other manner the Fund chooses in accordance with
generally accepted accounting principles), (b) minus all accrued liabilities,
including interest, taxes and other expense items, and reserves for contingent
or undetermined liabilities, all determined in accordance with those principles,
(c) plus or minus all realized gains or losses on investments, if any.
TAXES -- GENERAL
To continue to qualify for treatment as a regulated investment company under
the Internal Revenue Code of 1986, as amended (the "Code"), the Fund must
distribute to its shareholders for each taxable year at least 90% of its
investment company taxable income (consisting of net investment income and any
net short-term capital gain) and must meet several additional requirements.
These requirements include the following: (1) the Fund must derive at least 90%
of its gross income each taxable year from dividends, interest and gains from
the sale or other disposition of securities, or other income derived with
respect to its business of investing in securities; and (2) the Fund must
diversify its holdings so that, at the close of each quarter of its taxable
year, (i) at least 50% of the value of its total assets is represented by cash
and cash items, U.S. government securities and other securities limited, with
respect to any one issuer, to an amount that does
11
<PAGE> 119
not exceed 5% of the value of the Fund's total assets and (ii) not more than 25%
of the value of its total assets is invested in the securities of any one issuer
(other than U.S. government securities).
The Fund will be subject to a nondeductible 4% excise tax to the extent it
fails to distribute by the end of any calendar year substantially all of its
ordinary income for that year and capital gain net income, if any, for the
one-year period ending on October 31 of that year, plus certain other amounts.
Dividends from the Fund's investment company taxable income are taxable to its
shareholders as ordinary income. The Fund does not expect to receive any
dividend income from U.S. corporations, which means that no part of the
dividends from the Fund will be eligible for the dividends-received deduction
allowed to corporations. Dividends will be taxed for federal income tax purposes
in the same manner whether they are received in cash or reinvested in additional
Fund shares.
NON-U.S. SHAREHOLDERS
Dividends paid by the Fund to a shareholder who, as to the United States, is a
nonresident alien individual, nonresident alien fiduciary of a trust or estate,
foreign corporation or foreign partnership (a "foreign shareholder") will be
subject to U.S. withholding tax (at a rate of 30% or lower treaty rate).
Withholding will not apply if a dividend paid by the Fund to a foreign
shareholder is "effectively connected with the conduct of a U.S. trade or
business," in which case the reporting and withholding requirements applicable
to domestic shareholders will apply.
The foregoing is a general and abbreviated summary of certain federal tax
considerations affecting the Fund and its shareholders. Investors are urged to
consult their own tax advisors for more detailed information and for information
regarding any foreign, state and local taxes applicable to an investment in the
Fund.
HOW TO PURCHASE AND REDEEM SHARES
A complete description of the manner in which shares of the Fund may be
purchased appears in the Fund's Prospectus under the headings "How to Purchase
Shares," "Terms and Conditions of Purchase of the AIM Funds" and "Special
Plans."
For purposes of a Letter of Intent entered into prior to June 1, 1998, any
registered investment advisor, trust company or bank trust department which
exercises investment discretion and which intends within thirteen months to
invest $500,000 or more can be treated as a single purchaser, provided further
that such entity places all purchases and redemption orders. Such entities
should be prepared to establish their qualifications for such treatment.
Complete information concerning the method of exchanging shares of the Fund
for shares of the other AIM Funds is set forth in the Prospectus under the
heading "Exchange Privilege."
Information concerning redemption of the Fund's shares is set forth in the
Prospectus under the heading "How to Redeem Shares." In addition to the Fund's
obligation to redeem shares, AIM Distributors may also repurchase shares as an
accommodation to shareholders. To effect a repurchase, those dealers who have
executed Selected Dealer Agreements with AIM Distributors must phone orders to
the order desk of the Fund at (800) 959-4246 and guarantee delivery of all
required documents in good order. A repurchase is effected at the net asset
value per share of the Fund next determined after the repurchase order is
received. Such an arrangement is subject to timely receipt by A I M Fund
Services, Inc. ("AFS"), the Fund's transfer agent, of all required documents in
good order. If such documents are not received within a reasonable time after
the order is placed, the order is subject to cancellation. While there is no
charge imposed by a Fund or by AIM Distributors (other than any applicable
contingent deferred sales charge) when shares are redeemed or repurchased,
dealers may charge a fair service fee for handling the transaction.
The right of redemption may be suspended or the date of payment postponed when
(a) trading on the New York Stock Exchange ("NYSE") is restricted, as determined
by applicable rules and regulations of the SEC, (b) the NYSE is closed for other
than customary weekend and holiday closings, (c) the SEC has by order permitted
such suspension, or (d) an emergency as determined by the SEC exists making
disposition of portfolio securities or the valuation of the net assets of a Fund
not reasonably practicable.
The Fund's net asset value is calculated by dividing the number of outstanding
shares into the net assets of the Fund. Net assets are the excess of the Fund's
assets over its liabilities. A more detailed description of how the Fund's net
asset value is calculated appears in the Prospectus under the heading
"Determination of Net Asset Value."
12
<PAGE> 120
PROGRAMS AND SERVICES FOR SHAREHOLDERS
The Fund provides certain services for shareholders and certain investment or
redemption programs. See "Exchange Privilege" and "How to Redeem Shares" in the
Prospectus. All inquiries concerning these programs should be made directly to
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, toll free
at (800) 959-4246.
DIVIDEND ORDER
Dividends may be paid to someone other than the registered owner, or sent to
an address other than the address of record. (Please note that signature
guarantees are required to effect this option.) An investor also may direct that
his or her dividends be invested in one of the other AIM Funds and there is no
sales charge for these investments; initial investment minimums apply. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" in the
Prospectus. To effect this option, please contact your authorized dealer. For
more information concerning AIM Funds other than the Fund, please obtain a
current prospectus by contacting your authorized dealer, by writing to A I M
Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, or by calling
toll free (800) 959-4246.
NET ASSET VALUE DETERMINATION
The net asset value per share of the Fund is determined daily as of 12:00 noon
and the close of trading on the NYSE (generally 4:00 p.m. Eastern time) on each
business day of the Fund. In the event the NYSE closes early (i.e., before 4:00
p.m. Eastern time) on a particular day, the net asset value of a Fund is
determined as of the close of the NYSE on such day. Net asset value per share is
determined by dividing the value of the Fund's securities, cash and other assets
(including interest accrued but not collected) attributable to a particular
class, less all its liabilities (including accrued expenses and dividends
payable) attributable to that class, by the number of shares outstanding of that
class and rounding the resulting per share net asset value to the nearest one
cent. Determination of the net asset value per share is made in accordance with
generally accepted accounting principles.
The securities of the Fund are valued on the basis of amortized cost. This
method values a security at its cost on the date of purchase and thereafter
assumes a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the market value of
the security. While this method provides certainty in valuation, it may result
in periods during which value, as determined by amortized cost, is higher or
lower than the price the Fund would receive if the security were sold. During
such periods, the daily yield on shares of the Fund computed as described under
"Performance Information" may differ somewhat from an identical computation made
by another investment company with identical investments utilizing available
indications as to the market value of its portfolio securities.
The valuation of portfolio instruments based upon their amortized cost and the
concomitant maintenance of the net asset value per share of $1.00 for the Fund
is permitted in accordance with applicable rules and regulations of the SEC
which require the Fund to adhere to certain conditions. These rules require,
among other things, that the Fund maintain a dollar-weighted average portfolio
maturity of 90 days or less, purchase only instruments having remaining
maturities of 397 calendar days or less and invest only in securities determined
by the Board of Trustees to be "Eligible Securities" (as defined in Rule 2a-7
under the 1940 Act) and to present minimal credit risk to the Fund.
The Board of Trustees is required to establish procedures designed to
stabilize, to the extent reasonably practicable, the Fund's price per share at
$1.00, as computed for the purpose of sales and redemptions. Such procedures
include review of the Fund's holdings by the Board of Trustees at such intervals
as they may deem appropriate, to determine whether the net asset value
calculated by using available market quotations or other reputable sources for
the Fund deviates from $1.00 per share and, if so, whether such deviation may
result in material dilution or is otherwise unfair to existing holders of the
Fund's shares. In the event the Board of Trustees determines that such a
deviation exists for the Fund, it will take such corrective action as the Board
of Trustees deems necessary and appropriate with respect to the Fund, including
the sale of portfolio instruments prior to maturity to realize capital gains or
losses or to shorten the average portfolio maturity; the withholding of
dividends; redemption of shares in kind; or the establishment of a net asset
value per share by using available market quotations.
The Fund intends to comply with any amendments made to Rule 2a-7 which may
require corresponding changes in the Fund's procedures which are designed to
stabilize the Fund's price per share at $1.00.
13
<PAGE> 121
EXECUTION OF PORTFOLIO TRANSACTIONS
Subject to policies established by the Board, the Sub-advisor is responsible
for the execution of the Fund's portfolio transactions and the selection of
broker/dealers who execute such transactions on behalf of the Fund. Purchases
and sales of money market instruments by the Fund generally are made on a
principal basis, in which the dealer through whom the trade is executed retains
a "spread" as compensation. The spread is the difference in the price at which
the dealer buys or sells the instrument to the Fund and the price which the
dealer is able to resell or at which the dealer originally purchased,
respectively, the instrument. In executing transactions, the Sub-advisor seeks
the best net results for the Fund, taking into account such factors as the price
(including the applicable dealer spread), size of the order, difficulty of
execution and operational facilities of the firm involved. Although the
Sub-advisor generally seeks reasonably competitive spreads, payment of the
lowest spread is not necessarily consistent with the best net results. The Fund
has no obligation to deal with any broker/dealer or group of broker/dealers in
the execution of portfolio transactions.
Investment decisions for the Fund and for other investment accounts managed by
the Sub-advisor are made independently of each other in light of differing
conditions. However, the same investment decision occasionally may be made for
two or more of such accounts, including the Fund. In such cases, simultaneous
transactions may occur. Purchases or sales are then allocated as to price or
amount in a manner deemed fair and equitable to all accounts involved. While in
some cases this practice could have a detrimental effect upon the price or value
of the security as far as the Fund is concerned, in other cases the Sub-advisor
believes that coordination and the ability to participate in volume transactions
will be beneficial to the Fund.
Under a policy adopted by the Board and subject to the policy of obtaining the
best net results, the Sub-advisor may consider a broker/dealer's sale of the
shares of the Fund and the other funds for which AIM or the Sub-advisor serves
as investment manager and/or administrator in selecting broker/dealers for the
execution of portfolio transactions. This policy does not imply a commitment to
execute portfolio transactions through all broker/dealers that sell shares of
the Fund and such other funds.
MISCELLANEOUS INFORMATION
AIM was organized in 1976, and together with its subsidiaries, manages or
advises approximately 90 investment company portfolios encompassing a broad
range of investment objectives. AIM is a direct, wholly owned subsidiary of
A I M Management Group Inc. ("AIM Management"), a holding company that has been
engaged in the financial services business since 1976. AIM is the sole
shareholder of the Funds' principal underwriter, AIM Distributors. AIM
Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire
Square, London, EC2M 4YR, England. AMVESCAP PLC and its subsidiaries are
independent investment management groups that have a significant presence in the
institutional and retail segment of the investment management industry in North
America and Europe, and a growing presence in Asia.
CUSTODIAN
State Street Bank and Trust Company ("State Street"), 225 Franklin Street,
Boston, MA 02110, acts as custodian of the Fund's assets. State Street is
authorized to establish and has established separate accounts in foreign
currencies and to cause securities of the Fund to be held in separate accounts
outside the United States in the custody of non-U.S. banks.
TRANSFER AGENCY AND ACCOUNTING AGENCY SERVICES
The Transfer Agency and Service Agreement between the Trust and AFS, a
registered transfer agent and wholly owned subsidiary of AIM, provides that AFS
will perform certain shareholder services for the Fund for a fee per account
serviced. The Transfer Agency and Service Agreement provides that AFS will
receive a per account fee plus out-of-pocket expenses to process orders for
purchases, redemptions and exchanges of shares; prepare and transmit payments
for dividends and distributions declared by the Fund; maintain shareholder
accounts and provide shareholders with information regarding the Fund and its
accounts. The Transfer Agency and Service Agreement became effective on
September 8, 1998. The Sub-advisor also serves as the Fund's pricing and
accounting agent. For the fiscal years ended December 31, 1997, 1996 and 1995,
the accounting services fees for the Fund were $69,517, $90,682 and $86,710,
respectively.
INDEPENDENT ACCOUNTANTS
The Fund's independent accountants are PricewaterhouseCoopers LLP.
PricewaterhouseCoopers LLP conducts annual audits of the Fund's financial
statements, assists in the preparation of the Fund's federal and state income
tax returns and consults with the Trust and the Fund as to matters of
accounting, regulatory filings, and federal and state income taxation.
14
<PAGE> 122
The financial statements of the Trust included in this Statement of Additional
Information have been audited by PricewaterhouseCoopers LLP, as stated in their
opinion appearing herein, and are included in reliance upon such opinion given
upon the authority of that firm as experts in accounting and auditing.
SHAREHOLDER LIABILITY
Under Delaware law, the shareholders of the Trust enjoy the same limitations
extended to shareholders of private, for-profit corporations. There is a remote
possibility, however, that under certain circumstances shareholders of the Trust
may be held personally liable for the Trust's obligations. However, the Trust
Agreement disclaims shareholder liability for acts or obligations of the Trust
and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Trust or a trustee. If
a shareholder is held personally liable for the obligations of the Trust, the
Trust Agreement provides that the shareholder shall be entitled out of the
assets belonging to the applicable Fund (or allocable to the applicable Class),
to be held harmless from and indemnified against all loss and expense arising
from such liability in accordance with the Trust's Bylaws and applicable law.
Thus, the risk of a shareholder incurring financial loss on account of such
liability is limited to circumstances in which the Trust itself would be unable
to meet its obligations and where the other party was held not to be bound by
the disclaimer.
NAME
Prior to May 29, 1998, the Fund operated under the name of GT Global Dollar
Fund.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
To the best knowledge of the Trust, the names and addresses of the holders of
5% or more of the outstanding shares of any class of the Fund's equity
securities as of August 10, 1998, and the percentage of the outstanding shares
held by such holders are set forth below:
<TABLE>
<CAPTION>
PERCENT
PERCENT OWNED OF
OWNED OF RECORD AND
AIM DOLLAR FUND NAME AND ADDRESS OF OWNER RECORD* BENEFICIALLY
- --------------- ------------------------- -------- ------------
<S> <C> <C> <C>
Class A.......................... Bear Stearns Securities Corp. 6.31% -0-
FBO 101-40029-25Y
One Metrotech Center
Brooklyn, New York 11201-3870
Merrill Lynch, Pierce, Fenner &
Smith 6.22% -0-
141 W. Jackson Boulevard
Suite 290
Chicago, Illinois 60604-2904
Advisor Class.................... Independent Trust Corp. 18.49% -0-
Custodian Funds 868
15255 S. 94th Ave. Ste. 303
Orland Park, IL 60462-3897
Independent Trust Corp. 27.82% -0-
Custodian Funds 88
15255 S. 94th Ave. Ste. 303
Orland Park, IL 60462-3897
Independent Trust Corp. 22.33% -0-
Custodian Fund 865
15255 S. 94th Ave. Ste. 303
Orland Park, IL 60462-3897
</TABLE>
- ---------------
* The Trust has no knowledge as to whether all or any portion of the shares
owned of record are also owned beneficially.
15
<PAGE> 123
INVESTMENT RESULTS
The Fund may, from time to time, provide yield information or comparisons of
its yield to various averages including data from Lipper Analytical Services,
Inc., Bank Rate Monitor(TM), IBC/Donaghue's Money Fund Report, Money Magazine,
and other industry publications, in advertisements or in reports furnished to
current or prospective shareholders.
The Fund calculates its yield for its shares daily, based upon the seven days
ending on the day of the calculation, called the "base period." The yield is
computed by determining the net change in the value of a hypothetical account
with a balance of one share at the beginning of the base period, with the net
change, excluding capital changes, but including the value of any additional
shares purchased with dividends earned from the original one share and all
dividends declared on the original and any purchased shares; dividing the net
change in the account's value by the value of the account at the beginning of
the base period to determine the base period return; and multiplying the base
period return by (365/7). The Fund's effective yield is computed by compounding
the unannualized base period return by adding 1 to the base period return;
raising the sum to the 365/7th power; and subtracting 1 from the result.
For the seven-day period ended December 31, 1997, the Fund's Class A share
yield was 4.55% and effective yield was 4.66%. The seven-day and effective
yields are calculated as follows:
ASSUMPTIONS:
<TABLE>
<S> <C>
Value of hypothetical pre-existing account with exactly one
share at the beginning of the period:..................... $1.000000000
Value of same account* (excluding capital changes) at the
end of the seven-day period ending Dec. 31, 1997:......... $1.000873532
</TABLE>
- ---------------
* Value includes additional shares acquired with dividends paid on the original
shares.
CALCULATION:
<TABLE>
<S> <C>
Ending account value:....................................... $1.000873532
Less beginning account value:............................... $1.000000000
Net change in account value:................................ $ .000873532
</TABLE>
Seven-day yield = $.000873532 X (365)/(7) = 4.55%
Effective yield** = [1 + .000873532] (365)/(7) -1 = 4.66%
- ---------------
** The effective yield assumes a year's compounding of the seven-day yield.
For the seven-day period ended December 31, 1997, the Fund's Advisor Class
share yield was 4.55% and effective yield was 4.66%. The seven-day and effective
yields are calculated as follows:
ASSUMPTIONS:
<TABLE>
<S> <C>
Value of hypothetical pre-existing account with exactly one
share at the beginning of the period:..................... $1.000000000
Value of same account* (excluding capital changes) at the
end of the seven-day period ending Dec. 31, 1997:......... $1.000873375
</TABLE>
- ---------------
* Value includes additional shares acquired with dividends paid on the original
shares.
CALCULATION:
<TABLE>
<S> <C>
Ending account value:..................................... $1.000873375
Less beginning account value:............................. $1.000000000
Net change in account value:.............................. $ .000873375
</TABLE>
Seven-day yield = $.000873375 X (365)/(7) = 4.55%
Effective yield** = [1 + .000873375] (365)/(7) -1 = 4.66%
- ---------------
** The effective yield assumes a year's compounding of the seven-day yield.
16
<PAGE> 124
The Fund's investment results may also be calculated for longer periods in
accordance with the following method: by subtracting (a) the net asset value of
one share at the beginning of the period, from (b) the net asset value of all
shares an investor would own at the end of the period for the share held at the
beginning of the period (assuming reinvestment of all dividends and
distributions) and dividing by (c) the net asset value per share at the
beginning of the period. The resulting percentage indicates the positive or
negative rate of return that an investor would have earned from the reinvested
dividends and distributions and any changes in share price during the period.
TOTAL RETURN QUOTATIONS
The standard formula for calculating total return, as described in the
Prospectus, is as follows:
P(1+T)(n) = ERV
<TABLE>
<S> <C> <C> <C>
P = a hypothetical initial payment of $1,000.
Where
T = average annual total return (assuming the applicable maximum
sales load is deducted at the beginning of the 1, 5, or 10
year periods).
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment at
the end of the 1, 5, or 10 year periods (or fractional
portion of such period).
</TABLE>
The Fund's standardized returns for its Class A shares, stated as average
annualized total returns, at December 31, 1997, were as follows:
<TABLE>
<CAPTION>
STANDARDIZED AVERAGE
PERIOD ANNUALIZED TOTAL RETURN
- ------ -----------------------
<S> <C>
Year ended Dec. 31, 1997.................................. 4.60%
Five years ended Dec. 31, 1997............................ 3.91%
Ten years ended Dec. 31, 1997............................. 4.84%
</TABLE>
The Fund's standardized returns for its Advisor Class shares, stated as
average annualized total returns, were as follows:
<TABLE>
<CAPTION>
STANDARDIZED AVERAGE
PERIOD ANNUALIZED TOTAL RETURN
- ------ -----------------------
<S> <C>
Year ended Dec. 31, 1997.................................. 4.61%
June 1, 1995 (commencement of operations) through Dec. 31,
1997.................................................... 4.67%
</TABLE>
Standard total return quotes may be accompanied by total return figures
calculated by alternative methods. For example, average annual total return may
be calculated without assuming payment of the full sales load according to the
following formula:
P(1+U)(n) = ERV
<TABLE>
<S> <C> <C> <C>
P = a hypothetical initial payment of $1,000.
Where
U = average annual total return assuming payment of only a
stated portion of, or none of, the applicable maximum sales
load at the beginning of the stated period.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment at
the end of the stated period.
</TABLE>
The Fund's non-standardized returns for its Class A shares, stated as average
annualized total returns, at December 31, 1997, were as follows:
<TABLE>
<CAPTION>
NON-STANDARDIZED
AVERAGE
PERIOD ANNUALIZED TOTAL RETURN
- ------ -----------------------
<S> <C>
Year ended Dec. 31, 1997.................................. 4.60%
Five years ended Dec. 31, 1997............................ 3.91%
Ten years ended Dec. 31, 1997............................. 4.84%
</TABLE>
17
<PAGE> 125
The Fund's non-standardized return for its Advisor Class shares, stated as
average annualized total returns, at December 31, 1997, were as follows:
<TABLE>
<CAPTION>
NON-STANDARDIZED
AVERAGE
PERIOD ANNUALIZED TOTAL RETURN
- ------ -----------------------
<S> <C>
Year ended Dec. 31, 1997.................................. 4.61%
June 1, 1995 (commencement of operations) through Dec. 31,
1997.................................................... 4.67%
</TABLE>
Cumulative total return across a stated period may be calculated as follows:
P(1+V)(n) = ERV
<TABLE>
<S> <C> <C> <C>
P = a hypothetical initial payment of $1,000.
Where
V = cumulative total return assuming payment of all of, a stated
portion of, or none of, the applicable maximum sales load at
the beginning of the stated period.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment at
the end of the stated period.
</TABLE>
The Fund's non-standardized return for its Class A shares, stated as aggregate
total return, at December 31, 1997, was as follows:
<TABLE>
<CAPTION>
NON-STANDARDIZED
AGGREGATE
PERIOD TOTAL RETURN
- ------ ----------------
<S> <C>
Sept. 16, 1985 (commencement of operations) through Dec.
31, 1997................................................ 82.61%
</TABLE>
The Fund's non-standardized return for its Advisor Class shares, stated as
aggregate total return, at December 31, 1997, was as follows:
<TABLE>
<CAPTION>
NON-STANDARDIZED
AGGREGATE
PERIOD TOTAL RETURN
- ------ ----------------
<S> <C>
June 1, 1995 (commencement of operations) through Dec. 31,
1997.................................................... 12.52%
</TABLE>
The Fund's investment results will vary from time to time depending upon
market conditions, the composition of the Fund's portfolio and operating
expenses of the Fund, so that current or past yield or total return figures
should not be considered representative of what an investment in the Fund may
earn in any future period. These factors and possible differences in the methods
used in calculating investment results should be considered when comparing the
Fund's investment results with those published for other investment companies
and other investment vehicles. Investment results also should be considered
relative to the risks associated with the investment objective and policies. The
Fund's investment results will be calculated separately for Class A and Class B
shares. The Fund will include performance data for both Class A and Class B
shares of the Fund in any advertisement or information including performance
data for the Fund.
PERFORMANCE INFORMATION
Total return and yield figures for the Fund are neither fixed nor guaranteed,
and the Fund's principal is not insured. Performance quotations reflect
historical information and should not be considered representative of the Fund's
performance for any period in the future. Performance is a function of a number
of factors which can be expected to fluctuate. The Fund may provide performance
information in reports, sales literature and advertisements. The Fund may also,
from time to time, quote information about the Fund published or aired by
publications or other media entities which contain articles or segments relating
to investment results or other data about the Fund. Such publications or media
entities may include the following, among others:
Advertising Age
Barron's
Best's Review
Broker World
Business Week
Changing Times
Christian Science Monitor
CNBC
CNN
Consumer Reports
Economist
EuroMoney
FACS of the Week
Financial Planning
Financial Product News
Financial Services Week
Financial World
Forbes
18
<PAGE> 126
Fortune
Global Finance
Hartford Courant Inc.
Insurance Forum
Institutional Investor
Insurance Week
Investor's Daily
Journal of the American
Society of CLU & ChFC
Kiplinger Letter
Money
Mutual Fund Forecaster
Mutual Fund Magazine
Nation's Business
New York Times
PBS
Pension World
Pensions & Investments
Personal Investor
Philadelphia Inquirer
Smart Money
USA Today
U.S. News & World Report
Wall Street Journal
Washington Post
The Fund and AIM Distributors may from time to time, in advertisements, sales
literature and reports furnished to present or prospective shareholders, compare
the Fund with the following, or compare the Fund's performance to performance
data of similar mutual funds as published in the following, among others:
Bank Rate National Monitor Index
Bear Stearns Foreign Bond Index
Bond Buyer Index
CDA/Wiesenberger Investment Company Services
(data and mutual fund rankings and
comparisons)
CNBC/Financial News Composite Index
COFI
Consumer Price Index
Datastream
Donoghue's
Dow Jones Industrial Average
EAFE Index
First Boston High Yield Index
Fitch (publications)
Ibbotson Associates International Bond Index
International Bank for Reconstruction and
Development (publications)
International Finance Corporation Emerging
Markets Database
International Financial Statistics
Lehman Bond Indices
Lipper Analytical Data Services, Inc. (data and
mutual fund rankings and comparisons)
Micropal, Inc. (data and mutual fund rankings
and comparisons)
Moody's Investors Service (publications)
Morgan Stanley Capital International All
Country (AC) World Index
Morgan Stanley Capital International World
Indices
Morningstar, Inc. (data and mutual fund rankings
and comparisons)
NASDAQ
Organization for Economic Cooperation and
Development (publications)
Salomon Brothers Global Telecommunications
Index
Salomon Brothers World Government Bond
Index-Non-U.S.
Salomon Brothers World Government Bond Index
Standard & Poor's (publications)
Standard & Poor's 500 Composite Stock Price
Index
Stangar
Wilshire Associates
World Bank (publications and reports)
The World Bank Publication of Trends in
Developing Countries
Worldscope
The Fund may also compare its performance to rates on Certificates of Deposit
and other fixed rate investments such as the following:
10-year Treasuries
30-year Treasuries
30-day Treasury Bills
Information relating to foreign market performance, capitalization and
diversification is based on sources believed to be reliable but may be subject
to revision and has not been independently verified by the Fund or AIM
Distributors. Advertising for the Fund may from time to time include discussions
of general economic conditions and interest rates. Advertising for the Fund may
also include reference to the use of the Fund as part of an individual's overall
retirement investment program. From time to time, sales literature and/or
advertisements for the Fund may disclose (i) the largest holdings in the Fund's
portfolio, (ii) certain selling group members and/or (iii) certain institutional
shareholders.
From time to time, the Fund's sales literature and/or advertisements may
discuss generic topics pertaining to the mutual fund industry. This includes,
but is not limited to, literature addressing general information about mutual
funds, variable annuities, dollar-cost averaging, stocks, bonds, money markets,
certificates of deposit, retirement, retirement plans, asset allocation,
tax-free investing, college planning, and inflation.
19
<PAGE> 127
Although performance data may be useful to prospective investors when
comparing a Fund's performance with other funds and other potential investments,
investors should note that the methods of computing performance of other
potential investments are not necessarily comparable to the methods employed by
a Fund.
20
<PAGE> 128
APPENDIX
COMMERCIAL PAPER RATINGS
S&P. "A-1" and "A-2" are the two highest commercial paper rating categories:
A-1. This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus sign (+) designation. A-2. Capacity for
timely payment on issues with this designation is satisfactory. However, the
relative degree of safety is not as high as for issues designated "A-1".
Moody's. "Prime-1" and "Prime-2" are the two highest commercial paper rating
categories. Prime-1. Issuers (or supporting institutions) assigned this highest
rating have a superior ability for repayment of senior short-term debt
obligations. Prime-1 repayment ability will often be evidenced by many of the
following characteristics: leading market positions in well-established
industries; high rates of return on funds employed; conservative capitalization
structure with moderate reliance on debt and ample asset protection; broad
margins in earnings coverage of fixed financial charges and high internal cash
generation; and well-established access to a range of financial markets and
assured sources of alternate liquidity. Prime-2. Issuers (or supporting
institutions) assigned this rating have a strong ability for repayment of senior
short-term debt obligations. This will normally be evidenced by many of the
characteristics cited above but to a lesser degree. Earnings trends and coverage
ratios, while sound, may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
BOND RATINGS
S&P: Its ratings for high quality bonds are as follows: An obligation rated
"AAA" has the highest rating assigned by S&P. The obligor's capacity to meet its
financial commitment on the obligation is extremely strong. An obligation rated
"AA" differs from the highest rated obligations only in a small degree. The
obligor's capacity to meet its financial commitment on the obligation is very
strong.
Moody's: Its ratings for high quality bonds are as follows: Bonds which are
rated Aaa are judged to be of the best quality. They carry the smallest degree
of investment risk and are generally referred to as "gilt edged." Interest
payments are protected by a large or by an exceptionally stable margin, and
principal is secure. While the various protective elements are likely to change,
such changes as can be visualized are most unlikely to impair the fundamentally
strong position of such issues. Bonds which are rated Aa are judged to be of
high quality by all standards. Together with the Aaa group they comprise what
are generally known as high grade bonds. They are rated lower than the best
bonds because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may be
other elements present which make the long-term risk appear somewhat larger than
the Aaa securities.
NOTE RATINGS
S&P: The SP-1 rating denotes a very strong or strong capacity to pay principal
and interest. Those issues determined to possess overwhelming safety
characteristics will be given a plus (+) designation.
The SP-2 rating denotes a satisfactory capacity to pay principal and interest.
Moody's: The MIG 1 designation denotes best quality. There is strong
protection by established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing.
The MIG 2 designation denotes high quality. Margins of protection are ample
although not as large as in the preceding group.
21
<PAGE> 129
FINANCIAL STATEMENTS
FS
<PAGE> 130
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
PORTFOLIO OF INVESTMENTS
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY PRINCIPAL VALUE % OF NET
SHORT-TERM INVESTMENTS YIELD DATE AMOUNT (NOTE 1) ASSETS
- ----------------------------------------------------------------- --------- --------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Commercial Paper - Discounted (42.9%)
Shell Oil Co. ................................................. 5.52% 27-Aug-98 15,000,000 $ 14,870,325 3.7
Associates Corp. .............................................. 5.58% 09-Nov-98 15,000,000 14,702,521 3.7
Kingdom of Sweden ............................................. 5.52% 06-Jul-98 12,000,000 11,990,950 3.0
Coca Cola Co. ................................................. 5.51% 14-Jul-98 12,000,000 11,976,470 3.0
International Lease Finance Corp. ............................. 5.53% 17-Jul-98 12,000,000 11,971,040 3.0
Household Finance Corp. ....................................... 5.54% 20-Jul-98 12,000,000 11,965,230 3.0
Walt Disney Co. ............................................... 5.58% 21-Oct-98 12,000,000 11,797,280 2.9
E.I. Dupont de Nemours & Co. .................................. 5.59% 21-Oct-98 12,000,000 11,796,906 2.9
American Express Credit Corp. ................................. 5.58% 23-Oct-98 12,000,000 11,792,900 2.9
Motorola Inc. ................................................. 5.52% 13-Jul-98 10,000,000 9,981,767 2.5
Ford Motor Credit Corp. ....................................... 5.51% 11-Aug-98 10,000,000 9,938,956 2.5
General Electric Co. .......................................... 5.56% 28-Aug-98 10,000,000 9,912,678 2.5
John Deere Capital Corp. ...................................... 5.57% 11-Sep-98 10,000,000 9,891,400 2.5
United States Automobile Association Capital Corp. ............ 5.58% 25-Sep-98 10,000,000 9,868,611 2.5
Minnesota Mining & Manufacturing Co. .......................... 5.61% 22-Sep-98 9,000,000 8,886,290 2.2
------------ -----
Total Commercial Paper - Discounted (amortized cost
$171,343,324) .................................................. 171,343,324 42.8
------------ -----
<CAPTION>
REPURCHASE AGREEMENTS
- -----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dated June 30, 1998, with State Street Bank & Trust Co., due
July 1, 1998, for an effective yield of 5.70%, collateralized
by $54,775,000 U.S. Treasury Notes, 5.375% due 1/31/00 (market
value of collateral is $55,815,232 including accrued interest)
............................................................. 54,720,000 13.7
Dated June 30, 1998, with BancAmerica Robertson Stephens, due
July 1, 1998, for an effective yield of 5.55%, collateralized
by $50,730,000 of U.S. Treasury Notes & Bills, 6.25% and 8.75%
due 6/30/02 & 11/15/08, respectively (market value of
collateral is $51,242,992 including accrued interest) ....... 51,000,000 12.8
------------ -----
TOTAL REPURCHASE AGREEMENTS (cost $105,720,000) ................. 105,720,000 26.5
------------ -----
TOTAL INVESTMENTS (cost $277,063,324) * ........................ 277,063,324 69.3
Other Assets and Liabilities .................................... 122,880,385 30.7
------------ -----
NET ASSETS ...................................................... $399,943,709 100.0
------------ -----
------------ -----
</TABLE>
- --------------
* For Federal income tax purposes, cost is $277,063,324
The accompanying notes are an integral part of the financial statements.
FS-1
<PAGE> 131
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
STATEMENT OF ASSETS
AND LIABILITIES
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (amortized cost $171,343,324) (Note 1)....................... $171,343,324
Repurchase agreements, at value and cost (Note 1)................................................ 105,720,000
U.S. currency.................................................................................... 20,244
Receivable for Fund shares sold.................................................................. 129,613,171
Interest receivable.............................................................................. 16,527
-----------
Total assets................................................................................... 406,713,266
-----------
Liabilities:
Payable for Fund shares repurchased.............................................................. 6,121,295
Distribution payable............................................................................. 219,677
Payable for investment management and administration fees (Note 2)............................... 150,888
Payable for transfer agent fees (Note 2)......................................................... 67,596
Payable for registration and filing fees......................................................... 64,830
Payable for service and distribution expenses (Note 2)........................................... 60,672
Payable for printing and postage expenses........................................................ 48,995
Payable for professional fees.................................................................... 13,679
Payable for custodian fees....................................................................... 9,830
Payable for fund accounting fees (Note 2)........................................................ 6,015
Payable for Directors' fees and expenses (Note 2)................................................ 3,059
Other accrued expenses........................................................................... 3,021
-----------
Total liabilities.............................................................................. 6,769,557
-----------
Net assets......................................................................................... $399,943,709
-----------
-----------
Class A:
Net asset value and redemption price per share ($291,300,510 DIVIDED BY 291,360,629 shares
outstanding)...................................................................................... $ 1.00
-----------
-----------
Class B:+
Net asset value and offering price per share ($101,012,198 DIVIDED BY 100,970,806 shares
outstanding)...................................................................................... $ 1.00
-----------
-----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($7,631,001 DIVIDED BY
7,630,975 shares outstanding)..................................................................... $ 1.00
-----------
-----------
Net assets: At June 30, 1998, net assets consisted of paid-in capital of $399,943,709.
<FN>
- --------------
+ Redemption price per share is equal to the net asset value per share less
any applicable contingent deferred sales charge.
</TABLE>
The accompanying notes are an integral part of the financial statements.
FS-2
<PAGE> 132
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
STATEMENT OF OPERATIONS
Six months ended June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Interest income............................................................................... $8,298,701
Expenses:
Service and distribution expenses:(Note 2)
Class A.......................................................................... $ 251,824
Class B.......................................................................... 456,424 708,248
---------
Investment management and administration fees (Note 2)........................................ 747,972
Transfer agent fees (Note 2).................................................................. 345,900
Registration and filing fees.................................................................. 139,200
Professional fees............................................................................. 52,074
Printing and postage expenses................................................................. 49,775
Fund accounting fees.......................................................................... 40,604
Custodian fees................................................................................ 10,000
Directors' fees and expenses (Note 2)......................................................... 8,465
Other expenses................................................................................ 4,196
---------
Total expenses before reductions............................................................ 2,106,434
---------
Expenses waived by A I M Advisors, Inc. (Note 2).......................................... (365,930)
---------
Total net expenses.......................................................................... 1,740,504
---------
Net investment income........................................................................... 6,558,197
---------
Net increase in net assets resulting from operations............................................ $6,558,197
---------
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
FS-3
<PAGE> 133
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
---------------- -----------------
<S> <C> <C>
Increase (Decrease) in net assets
Operations:
Net investment income............................................... $ 6,558,197 $ 11,700,779
---------------- -----------------
Net increase in net assets resulting from operations.............. 6,558,197 11,700,779
---------------- -----------------
Class A:
Distributions to shareholders: (Note 1)
From net investment income.......................................... (4,644,385) (7,587,680)
Class B:
Distributions to shareholders: (Note 1)
From net investment income.......................................... (1,765,418) (3,720,785)
Advisor Class:
Distributions to shareholders: (Note 1)
From net investment income.......................................... (148,394) (392,314)
---------------- -----------------
Total distributions............................................... (6,558,197) (11,700,779)
---------------- -----------------
Capital share transactions: (Note 3)
Increase from capital shares sold and reinvested.................... 5,510,183,410 8,215,928,197
Decrease from capital shares repurchased............................ (5,387,128,456) (8,474,948,990)
---------------- -----------------
Net increase (decrease) from capital share transactions........... 123,054,954 (259,020,793)
---------------- -----------------
Total increase (decrease) in net assets............................... 123,054,954 (259,020,793)
Net assets:
Beginning of period................................................. 276,888,755 535,909,548
---------------- -----------------
End of period *..................................................... $ 399,943,709 $ 276,888,755
---------------- -----------------
---------------- -----------------
<FN>
- --------------
* Includes undistributed net investment income of $0.
</TABLE>
The accompanying notes are an integral part of the financial statements.
FS-4
<PAGE> 134
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS A+
-----------------------------------------------------------------------
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
1998 ----------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income................... 0.023 0.045 0.044 0.050 0.032 0.022
Distributions from net investment
income................................. (0.023) (0.045) (0.044) (0.050) (0.032) (0.022)
----------- ---------- ---------- ---------- ---------- ----------
Net asset value (unchanged during the
period)................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ---------- ---------- ---------- ---------- ----------
----------- ---------- ---------- ---------- ---------- ----------
Total investment return (b)............. 2.30% 4.62% 4.50% 5.08% 3.3% 2.2%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 291,301 $ 186,611 $ 392,623 $ 183,761 $ 320,858 $ 87,822
Ratio of net investment income to
average net assets:
With expense reductions, waivers,
and/or reimbursement (a) (Note 2).... 4.61% 4.50% 4.39% 4.94% 3.40% 2.17%
Without expense reductions, waivers,
and/or reimbursement (a)............. 4.36% 4.20% 4.08% 4.66% 3.15% 1.46%
Ratio of operating expenses to average
net assets: (a)
With expense reductions, waivers,
and/or reimbursement (a) (Note 2).... 0.93% 0.98% 0.99% 0.97% 0.92% 1.00%
Without expense reductions, waivers,
and/or reimbursement (a)............. 1.18% 1.28% 1.30% 1.25% 1.17% 1.72%
</TABLE>
- ----------------
(a) Annualized for periods of less than one year.
(b) Not annualized for periods of less than one year.
+ All capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
The accompanying notes are an integral part of the financial statements.
FS-5
<PAGE> 135
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS B++
--------------------------------------------------------------------------
SIX MONTHS
ENDED APRIL 1, 1993
JUNE 30, YEAR ENDED DECEMBER 31, TO
1998 ---------------------------------------------- DECEMBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ---------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net investment income................... 0.019 0.038 0.037 0.040 0.025 0.010
Distributions from net investment
income................................. (0.019) (0.038) (0.037) (0.040) (0.025) (0.010)
----------- ---------- ---------- ---------- ---------- -------------
Net asset value (unchanged during the
period)................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ---------- ---------- ---------- ---------- -------------
----------- ---------- ---------- ---------- ---------- -------------
Total investment return (b)............. 1.99% 3.84% 3.73% 4.29% 2.53% 1.4%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 101,012 $ 83,498 $ 128,308 $ 99,151 $ 109,936 $ 3,478
Ratio of net investment income to
average net assets:
With expense reductions, waivers,
and/or reimbursement (a) (Note 2).... 3.86% 3.75% 3.64% 4.19% 2.65% 1.42%
Without expense reductions, waivers,
and/or reimbursement (a)............. 3.61% 3.45% 3.33% 3.91% 2.40% 0.86%
Ratio of operating expenses to average
net assets: (a)
With expense reductions, waivers,
and/or reimbursement (a) (Note 2).... 1.68% 1.73% 1.74% 1.72% 1.67% 1.75%
Without expense reductions, waivers,
and/or reimbursement (a)............. 1.93% 2.03% 2.05% 2.00% 1.92% 2.31%
</TABLE>
- ----------------
(a) Annualized for periods of less than one year.
(b) Not annualized for periods of less than one year.
+ All capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
The accompanying notes are an integral part of the financial statements.
FS-6
<PAGE> 136
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
ADVISOR CLASS+++
---------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER JUNE 1, 1995
JUNE 30, 31, TO
1998 ---------------------- DECEMBER 31,
(UNAUDITED) 1997 1996 1995
------------ ---------- ---------- -------------
<S> <C> <C> <C> <C>
Net investment income................... 0.023 0.045 0.044 0.030
Distributions from net investment
income................................. (0.023) (0.045) (0.044) (0.030)
------------ ---------- ---------- -------------
Net asset value (unchanged during the
period)................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ---------- ---------- -------------
------------ ---------- ---------- -------------
Total investment return (b)............. 2.25 % 4.61% 4.50% 2.92%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 7,631 $ 6,780 $ 14,978 $ 2,096
Ratio of net investment income to
average net assets:
With expense reductions, waivers,
and/or reimbursement (a) (Note 2).... 4.61 % 4.50% 4.39% 4.94%
Without expense reductions, waivers,
and/or reimbursement (a)............. 4.61 % 4.45% 4.33% 4.91%
Ratio of operating expenses to average
net assets: (a)
With expense reductions, waivers,
and/or reimbursement (a) (Note 2).... 0.93 % 0.98% 0.99% 0.97%
Without expense reductions, waivers,
and/or reimbursement (a)............. 0.93 % 1.03% 1.05% 1.00%
</TABLE>
- ----------------
(a) Annualized for periods of less than one year.
(b) Not annualized for periods of less than one year.
+ All capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
The accompanying notes are an integral part of the financial statements.
FS-7
<PAGE> 137
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
NOTES TO FINANCIAL STATEMENTS
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 2)
AIM Dollar Fund (the "Fund", formerly GT Global Dollar Fund) is a diversified
series of AIM Investment Portfolios, Inc. (the "Company"). The Company is
registered under the Investment Company Act of 1940, as amended ("1940 Act"), as
an open-end management investment company.
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Each class has exclusive voting
rights with respect to its distribution plan. Investment income, realized and
unrealized capital gains and losses, and the common expenses of the Fund are
allocated on a pro rata basis to each class based on the relative net assets of
each class to the total net assets of the Fund. Each class of shares differs in
its respective distribution expenses, and may differ in its transfer agent,
registration, and certain other class-specific fees and expenses.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Fund in the preparation of the financial
statements.
(A) PORTFOLIO VALUATION
Securities in the Fund are valued utilizing the amortized cost valuation method
permitted in accordance with Rule 2a-7 under the 1940 Act. This method involves
valuing a portfolio security initially at its cost and thereafter assuming a
constant amortization to maturity of any discount or premium.
(B) FEDERAL INCOME TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, and unrealized appreciation of securities held, or for excise tax on
income and capital gains. The Fund currently has a capital loss carryforward of
$3,382 which expires in 2005.
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, U.S. government securities or other
high quality debt securities of which the value, including accrued interest, is
at least equal to the amount to be repaid to the Fund under each agreement at
its maturity. A I M Advisors, Inc. is responsible for determining that the value
of these underlying securities remains at least equal to the resale price.
(D) OTHER
Security transactions are recorded on the trade date (date the order to buy or
sell is executed). Interest income is recorded on an accrual basis. Dividends to
shareholders from net investment income are declared daily and paid or
reinvested monthly.
2. RELATED PARTIES
A I M Advisors, Inc. ("AIM" or the "Manager") is the Fund's investment manager
and administrator, and INVESCO (NY), Inc., (formerly, Chancellor LGT Asset
Management, Inc.) is the Fund's investment sub-adviser and/or sub-administrator.
As of the close of business on May 29, 1998, Liechtenstein Global Trust AG
("LGT"), the former indirect parent organization of Chancellor LGT Asset
Management, Inc. ("Chancellor LGT"), consummated a purchase agreement with
AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset Management
Division, which included Chancellor LGT and certain other affiliates. As a
result of this transaction, Chancellor LGT was renamed INVESCO (NY), Inc., and
is now an indirect wholly-owned subsidiary of AMVESCAP PLC. In connection with
this transaction, AIM, an indirect wholly-owned subsidiary of AMVESCAP PLC,
became the investment manager and administrator of the Funds and INVESCO (NY),
Inc. became the sub-adviser and sub-administrator of the Funds. All of the
changes became effective as of the close of business on May 29, 1998.
The Fund pays the Manager investment management and administration fees at the
annualized rate of 0.50% of the Fund's average daily net assets. These fees are
computed daily and paid monthly, and are subject to reduction in any year to the
extent that the Fund's expenses (exclusive of brokerage commissions, taxes,
interest, distribution-related expenses and extraordinary expenses) exceed the
most stringent limits prescribed by the laws or regulations of any state in
which the Fund's shares are sold.
A I M Distributors, Inc. ("AIM Distributors"), an affiliate of the Manager,
serves as the Fund's distributor. For the period ended May 29, 1998, GT Global,
Inc. ("GT Global") served as the Fund's distributor. The Fund offers Class A,
Class B, and Advisor Class shares for purchase. Certain redemptions of Class A
shares made within two years of purchase are subject to contingent deferred
sales charges ("CDSCs"), in accordance with the Fund's current prospectus. Class
B shares of the Fund are available only through an exchange of Class B shares of
other AIM Mutual Funds. Certain redemptions of Class B shares made within six
years of purchase are also subject to CDSCs, in accordance with the Fund's
current prospectus. For the period ended June 30, 1998, AIM Distributors and GT
Global collected CDSCs in the amount of $53,658 and $384,193, respectively. In
addition, AIM Distributors may, from time to time, make ongoing payments to
brokerage firms, financial institutions (including banks)
FS-8
<PAGE> 138
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
and others that facilitate the administration and servicing of shareholder
accounts.
For the period ended May 29, 1998, pursuant to the then effective separate
distribution plans adopted under the 1940 Act Rule 12b-1 by the Company's Board
of Directors with respect to the Fund's Class A shares ("Class A Plan") and
Class B shares ("Class B Plan"), the Fund reimbursed GT Global for a portion of
its shareholder servicing and distribution expenses. Under the Class A Plan, the
Fund was permitted to pay GT Global a service fee at the annualized rate of up
to 0.25% of the average daily net assets of the Fund's Class A shares for GT
Global's expenditures incurred in servicing and maintaining shareholder
accounts, and was permitted to pay GT Global a distribution fee at the
annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares less any amounts paid by the Fund as the aforementioned service
fee for GT Global's expenditures incurred in providing services as distributor.
GT Global does not currently intend to seek reimbursement of any amounts under
the Class A Plan. All expenses for which GT Global is reimbursed under the Class
A Plan will have been incurred within one year of such reimbursement.
For the period ended May 29, 1998, pursuant to the Fund's Class B Plan, the Fund
was permitted to pay GT Global a service fee at the annualized rate of up to
0.25% of the average daily net assets of the Fund's Class B shares for GT
Global's expenditures incurred in servicing and maintaining shareholder
accounts, and was permitted to pay GT Global a distribution fee at the
annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in providing services as
distributor. GT Global does not currently intend to seek reimbursement of any
amounts in excess of 0.75% of average daily net assets under the Class B Plan.
Expenses incurred under the Class B Plan in excess of 1.00% annually were
permitted to be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect.
Effective as of the close of business May 29, 1998, pursuant to Rule 12b-1 under
the 1940 Act, the Company's Board of Directors adopted a Master Distribution
Plan applicable to the Fund's Class A shares ("Class A Plan") and Class B shares
("Class B Plan"), pursuant to which a Fund compensates AIM Distributors for the
purpose of financing any activity that is intended to result in the sale of
Class A or Class B shares of the Funds. Under the Class A Plan, the Fund
compensates AIM Distributors at the annualized rate of 0.25% of the average
daily net assets of the Fund's Class A shares.
Pursuant to the Fund's Class B Plan, the Fund compensates AIM Distributors at an
annualized rate of 1.00% of the average daily net assets of the Fund's Class B
shares.
The Manager and AIM Distributors have voluntarily undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
items) to the maximum annual level of 1.00%, 1.75%, and 1.00% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by AIM
Distributors of payments under the Class A Plan and/or Class B Plan and/or
reimbursements by the Manager or AIM Distributors of portions of the Fund's
other operating expenses.
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and AIM Distributors, is the transfer agent of the Fund. For performing
shareholder servicing, reporting, and general transfer agent services, GT
Services receives an annual maintenance fee of $17.50 per account, a new account
fee of $4.00 per account, a per transaction fee of $1.75 for all transactions
other than exchanges and a per exchange fee of $2.25. GT Services is also
reimbursed by the Funds for its out-of-pocket expenses for such items as
postage, forms, telephone charges, stationery and office supplies.
The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the result according to the Fund's average daily net assets.
The Company pays each of its Directors who is not an employee, officer or
director of the Manager, GT Global or GT Services $1,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Director.
FS-9
<PAGE> 139
AIM DOLLAR FUND
(FORMERLY GT GLOBAL DOLLAR FUND)
3. CAPITAL SHARES
At June 30, 1998, there were 2,000,000,000 shares of the Company's common stock
authorized, at $0.001 per share. Of this number, 1,500,000,000 shares have been
classified as shares of the Fund; 500 million shares have been classified as
Class A shares, 500 million have been classified as Class B shares, and 500
million have been classified as Advisor Class shares. These amounts may be
increased from time to time at the discretion of the Board of Directors.
Transactions in capital shares of the Fund were as follows:
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
--------------------- ----------------------
CLASS A SHARES & AMOUNT SHARES & AMOUNT
- ---------------------------------------- --------------------- ----------------------
<S> <C> <C>
Shares sold............................. $ 4,604,406,284 $ 6,222,351,251
Shares issued in connection with
reinvestment of distributions......... 2,445,437 4,193,093
--------------------- ----------------------
4,606,851,721 6,226,544,344
Shares repurchased...................... (4,502,161,868) (6,432,557,179)
--------------------- ----------------------
Net increase (decrease)................. $ 104,689,853 $ (206,012,835)
--------------------- ----------------------
--------------------- ----------------------
<CAPTION>
CLASS B SHARES & AMOUNT SHARES & AMOUNT
- ---------------------------------------- --------------------- ----------------------
<S> <C> <C>
Shares sold............................. $ 747,831,959 $ 1,763,392,144
Shares issued in connection with
reinvestment of distributions......... 1,327,518 2,479,264
--------------------- ----------------------
749,159,477 1,765,871,408
Shares repurchased...................... (731,645,373) (1,810,681,116)
--------------------- ----------------------
Net increase (decrease)................. $ 17,514,104 $ (44,809,708)
--------------------- ----------------------
--------------------- ----------------------
<CAPTION>
ADVISOR CLASS SHARES & AMOUNT SHARES & AMOUNT
- ---------------------------------------- --------------------- ----------------------
<S> <C> <C>
Shares sold............................. $ 154,115,624 $ 223,289,952
Shares issued in connection with
reinvestment of distributions......... 56,588 222,493
--------------------- ----------------------
154,172,212 223,512,445
Shares repurchased...................... (153,321,215) (231,710,695)
--------------------- ----------------------
Net increase (decrease)................. $ 850,997 $ (8,198,250)
--------------------- ----------------------
--------------------- ----------------------
</TABLE>
FS-10
<PAGE> 140
GT GLOBAL DOLLAR FUND
Fifty California Street, 27th Floor
San Francisco, California 94111
General Telephone No. 415/392-6181
General Fund Information 800/824-1580
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPORT FROM THE FUND MANAGER
The Fund's total return for the 12 months ended December 31, 1997, was 4.62%
for Class A shares and 3.84% for Class B shares. As of December 31, the Fund's
SEC seven-day yield was 4.55% for Class A shares and 3.82% for Class B shares.
Because the Fund invests only in short-term debt obligations with remaining
maturities of 13 months or less, its performance generally reflects the level of
short-term interest rates. Please bear in mind that an investment in the Fund is
neither insured nor guaranteed by the U.S. government and that there can be no
assurance that the Fund will be able to maintain a stable net asset value of
$1.00 per share.
The U.S. bond market produced excellent returns in 1997. After a 25-basis
point increase in the Federal funds rate in March, the market began an upswing
in the second quarter that lasted throughout the last three quarters of the
year. In addition, interest rates fell after it became clear that the benign
economic environment in the U.S. would forestall additional interest rate
increases by the Fed in 1997.
In total, 1997 produced the lowest rates of U.S. inflation in decades, while
the economy enjoyed continued good growth. That combination, along with a stable
dollar, beckoned global investors in the fourth quarter. In addition, yields on
money market instruments have been fairly stable throughout the period and the
90-day Treasury bill yield ended the year about 18 basis points higher than it
began, at 5.35%.
We believe the overall environment for U.S. fixed income markets should
continue to be attractive in 1998. Short-term rates have remained in a narrow
range for some time, and we feel the economic environment augurs well for
continued stability. We concur with Federal Reserve (the Fed) Chairman
Greenspan's recent comments that effects of the Asian crisis have not yet fully
impacted U.S. markets. We expect weakness in Asia to moderate economic growth
somewhat, but believe its potential negative effect on U.S. profits and growth
in 1998 will be counterbalanced by its positive effect on inflation and interest
rates.
Additionally, we see reasonable potential for further declines in interest
rates. Inflation is at its lowest level in over 40 years, and productivity is
strong -- all positive cost factors we think will support U.S. profitability
even as product pricing remains under pressure. This environment (a new one for
investors) may necessitate a shift in policy stance by the Fed, whereby, instead
of constantly fighting inflation, they must also be concerned with deflation.
Our concerns about Fed tightening have been virtually erased, and we feel
the potential grows that the Fed may soon lower interest rates. In keeping with
our outlook, the average maturity of holdings in the Fund has been increased
moderately while still maintaining a high degree of liquidity for investors.
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of
GT Investment Portfolios, Inc.:
We have audited the accompanying statement of assets and liabilities of GT
Global Dollar Fund, a series of shares of common stock of GT Investment
Portfolios, Inc., including the schedule of portfolio investments, as of
December 31, 1997, the related statement of operations for the year then ended,
the statements of changes in net assets for each of the two years in the period
then ended and the financial highlights for each of the five years in the period
then ended. These financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and the financial highlights
referred to above present fairly, in all material respects, the financial
position of GT Global Dollar Fund as of December 31, 1997, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND, L.L.P.
BOSTON, MASSACHUSETTS
FEBRUARY 17, 1998
[GT GLOBAL LOGO]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FS-11
<PAGE> 141
GT GLOBAL DOLLAR FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY PRINCIPAL VALUE % OF NET
SHORT-TERM INVESTMENTS YIELD DATE AMOUNT (NOTE 1) ASSETS
- ----------------------------------------------------------------- --------- --------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Commercial Paper - Discounted (47.4%)
John Deere Capital Corp. ...................................... 5.73% 19-Mar-98 12,000,000 $ 11,854,982 4.3
Walt Disney Co. ............................................... 5.59% 14-Apr-98 12,000,000 11,812,884 4.3
American Express Credit Corp. ................................. 5.71% 21-May-98 12,000,000 11,740,067 4.2
Kingdom of Sweden ............................................. 5.62% 26-Jan-98 10,000,000 9,961,875 3.6
AIG Funding, Inc. ............................................. 5.73% 30-Jan-98 10,000,000 9,954,245 3.6
E.I. DuPont de Nemours & Co. .................................. 5.62% 09-Feb-98 10,000,000 9,940,742 3.6
Ford Motor Credit Corp. ....................................... 5.63% 13-Feb-98 10,000,000 9,934,544 3.6
Bellsouth Telecommunications, Inc. ............................ 5.78% 25-Feb-98 10,000,000 9,912,611 3.6
General Electric Capital Corp. ................................ 5.71% 11-Mar-98 10,000,000 9,893,625 3.6
3M Corp. ...................................................... 5.68% 24-Apr-98 10,000,000 9,824,850 3.5
AT&T Corp. .................................................... 5.58% 15-Jan-98 9,500,000 9,479,902 3.4
Motorola, Inc. ................................................ 5.59% 09-Feb-98 9,000,000 8,946,375 3.2
Emerson Electric Co. .......................................... 5.66% 05-Jan-98 8,000,000 7,995,111 2.9
------------ -----
Total Commercial Paper - Discounted (amortized cost
$131,251,813) .................................................. 131,251,813 47.4
------------ -----
Government & Government Agency Obligations (3.6%)
Federal Home Loan Bank ........................................ 5.59% 06-Mar-98 10,000,000 9,903,289 3.6
------------ -----
Total Government & Government Agency Obligations (amortized cost
$9,903,289) .................................................... 9,903,289 3.6
------------ -----
TOTAL SHORT-TERM INVESTMENTS (cost $141,155,102) ................ 141,155,102 51.0
------------ -----
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENTS (NOTE 1) ASSETS
- ----------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Dated December 31, 1997, with State Street Bank & Trust Co.,
due January 2, 1998, for an effective yield of 5.80%,
collateralized by $45,775,000 U.S. Treasury Bills, 6.25% due
6/30/98 (market value of collateral is $45,946,656 including
accrued interest) ........................................... 45,041,000 16.3
Dated December 31, 1997, with BancAmerica Robertson Stephens,
due January 2, 1998, for an effective yield of 6.10%,
collateralized by $40,190,000 U.S. Treasury Bills and Notes,
6.25% due 6/30/98 & 3/31/99, respectively (market value of
collateral is $40,808,921 including accrued interest) ....... 40,000,000 14.4
------------ -----
TOTAL REPURCHASE AGREEMENTS (cost $85,041,000) .................. 85,041,000 30.7
------------ -----
TOTAL INVESTMENTS (cost $226,196,102) * ........................ 226,196,102 81.7
Other Assets and Liabilities .................................... 50,692,653 18.3
------------ -----
NET ASSETS ...................................................... $276,888,755 100.0
------------ -----
------------ -----
</TABLE>
- --------------
* For Federal income tax purposes, cost is $226,196,102
The accompanying notes are an integral part of the financial statements.
FS-12
<PAGE> 142
GT GLOBAL DOLLAR FUND
STATEMENT OF ASSETS
AND LIABILITIES
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (amortized cost $141,155,102) (Note 1)....................... $141,155,102
Repurchase agreement, at value and cost (Note 1)................................................. 85,041,000
U.S. currency.................................................................................... 22,315
Receivable for Fund shares sold.................................................................. 72,954,035
Interest receivable.............................................................................. 14,034
-----------
Total assets................................................................................... 299,186,486
-----------
Liabilities:
Payable for Fund shares repurchased.............................................................. 21,805,756
Payable for investment management and administration fees (Note 2)............................... 134,841
Distribution payable............................................................................. 97,586
Payable for registration and filing fees......................................................... 91,486
Payable for service and distribution expenses (Note 2)........................................... 65,528
Payable for transfer agent fees (Note 2)......................................................... 35,773
Payable for printing and postage expenses........................................................ 26,318
Payable for professional fees.................................................................... 24,747
Payable for fund accounting fees (Note 2)........................................................ 4,326
Payable for Directors' fees and expenses (Note 2)................................................ 3,682
Payable for custodian fees....................................................................... 1,701
Other accrued expenses........................................................................... 5,987
-----------
Total liabilities.............................................................................. 22,297,731
-----------
Net assets......................................................................................... $276,888,755
-----------
-----------
Class A:
Net asset value and redemption price per share ($186,610,657 DIVIDED BY 186,670,776 shares
outstanding)...................................................................................... $ 1.00
-----------
-----------
Class B:+
Net asset value and offering price per share ($83,498,094 DIVIDED BY 83,456,702 shares
outstanding)...................................................................................... $ 1.00
-----------
-----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($6,780,004 DIVIDED BY
6,779,978 shares outstanding)..................................................................... $ 1.00
-----------
-----------
Net assets: At December 31, 1997, net assets consisted of paid-in capital of
$276,888,755.
<FN>
- --------------
+ Redemption price per share is equal to the net asset value per share less
any applicable contingent deferred sales charge.
</TABLE>
The accompanying notes are an integral part of the financial statements.
FS-13
<PAGE> 143
GT GLOBAL DOLLAR FUND
STATEMENT OF OPERATIONS
Year ended December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Interest income.............................................................................. $15,170,711
Expenses:
Service and distribution expenses: (Note 2)
Class A......................................................................... $ 422,808
Class B......................................................................... 995,797 1,418,605
---------
Investment management and administration fees (Note 2)....................................... 1,384,735
Transfer agent fees (Note 2)................................................................. 725,305
Registration and filing fees................................................................. 400,217
Professional fees............................................................................ 102,864
Printing and postage expenses................................................................ 101,842
Fund accounting fees (Note 2)................................................................ 69,517
Custodian fees (Note 4)...................................................................... 43,930
Directors' fees and expenses (Note 2)........................................................ 13,971
Other expenses............................................................................... 13,326
----------
Total expenses before reductions........................................................... 4,274,312
----------
Expenses waived by Chancellor LGT Asset Management, Inc. (Note 2)........................ (671,757)
Expenses reimbursed by Chancellor LGT Asset Management, Inc. (Note 2).................... (88,707)
Expense reductions (Note 2).............................................................. (43,916)
----------
Total net expenses......................................................................... 3,469,932
----------
Net investment income.......................................................................... 11,700,779
----------
Net increase in net assets resulting from operations........................................... $11,700,779
----------
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
FS-14
<PAGE> 144
GT GLOBAL DOLLAR FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1996
-------------- ---------------
Increase (Decrease) in net assets
Operations:
Net investment income................................................... $ 11,700,779 $ 15,135,332
-------------- ---------------
Net increase in net assets resulting from operations.................. 11,700,779 15,135,332
-------------- ---------------
Class A:
Distributions to shareholders: (Note 1)
From net investment income.............................................. (7,587,680) (11,055,154)
Class B:
Distributions to shareholders: (Note 1)
From net investment income.............................................. (3,720,785) (3,791,539)
Advisor Class:
Distributions to shareholders: (Note 1)
From net investment income.............................................. (392,314) (288,639)
-------------- ---------------
Total distributions................................................... (11,700,779) (15,135,332)
-------------- ---------------
Capital share transactions: (Note 3)
Increase from capital shares sold and reinvested........................ 8,215,928,197 16,871,270,679
Decrease from capital shares repurchased................................ (8,474,948,990) (16,620,368,622)
-------------- ---------------
Net increase (decrease) from capital share transactions............... (259,020,793) 250,902,057
-------------- ---------------
Total increase (decrease) in net assets................................... (259,020,793) 250,902,057
Net assets:
Beginning of year....................................................... 535,909,548 285,007,491
-------------- ---------------
End of year *........................................................... $ 276,888,755 $ 535,909,548
-------------- ---------------
-------------- ---------------
<FN>
- --------------
* Includes undistributed net investment income of $0.
</TABLE>
The accompanying notes are an integral part of the financial statements.
FS-15
<PAGE> 145
GT GLOBAL DOLLAR FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS A+
----------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net investment income................... 0.045 0.044 0.050 0.032 0.022
Distributions from net investment
income................................. (0.045) (0.044) (0.050) (0.032) (0.022)
---------- ---------- ---------- ---------- ----------
Net asset value (unchanged during the
period)................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total investment return (b)............. 4.62% 4.50% 5.08% 3.3% 2.2%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 186,611 $ 392,623 $ 183,761 $ 320,858 $ 87,822
Ratio of net investment income to
average net assets:
With expense reductions, waivers, and
reimbursement by Chancellor LGT Asset
Management, Inc. (a) (Notes 2 & 4)... 4.50% 4.39% 4.94% 3.40% 2.17%
Without expense reductions, waivers,
and reimbursement by Chancellor LGT
Asset Management, Inc. (a)........... 4.20% 4.08% 4.66% 3.15% 1.46%
Ratio of expenses to average net
assets: (a)
With expense reductions, waivers, and
reimbursement by Chancellor LGT Asset
Management, Inc. (a) (Notes 2 & 4)... 0.98% 0.99% 0.97% 0.92% 1.00%
Without expense reductions, waivers,
and reimbursement by Chancellor LGT
Asset Management, Inc. (a)........... 1.28% 1.30% 1.25% 1.17% 1.72%
</TABLE>
- ----------------
(a) Annualized for periods of less than one year.
(b) Not annualized for periods of less than one year.
+ All capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
The accompanying notes are an integral part of the financial statements.
FS-16
<PAGE> 146
GT GLOBAL DOLLAR FUND
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS B++
-------------------------------------------------------------
APRIL 1, 1993
YEAR ENDED DECEMBER 31, TO
---------------------------------------------- DECEMBER 31,
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Net investment income................... 0.038 0.037 0.040 0.025 0.010
Distributions from net investment
income................................. (0.038) (0.037) (0.040) (0.025) (0.010)
---------- ---------- ---------- ---------- -------------
Net asset value (unchanged during the
period)................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- -------------
---------- ---------- ---------- ---------- -------------
Total investment return (b)............. 3.84% 3.73% 4.29% 2.53% 1.4%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 83,498 $ 128,308 $ 99,151 $ 109,936 $ 3,478
Ratio of net investment income to
average net assets:
With expense reductions, waivers, and
reimbursement by Chancellor LGT Asset
Management, Inc. (a) (Notes 2 & 4)... 3.75% 3.64% 4.19% 2.65% 1.42%
Without expense reductions, waivers,
and reimbursement by Chancellor LGT
Asset Management, Inc. (a)........... 3.45% 3.33% 3.91% 2.40% 0.86%
Ratio of expenses to average net
assets: (a)
With expense reductions, waivers, and
reimbursement by Chancellor LGT Asset
Management, Inc. (a) (Notes 2 & 4)... 1.73% 1.74% 1.72% 1.67% 1.75%
Without expense reductions, waivers,
and reimbursement by Chancellor LGT
Asset Management, Inc. (a)........... 2.03% 2.05% 2.00% 1.92% 2.31%
</TABLE>
- ----------------
(a) Annualized for periods of less than one year.
(b) Not annualized for periods of less than one year.
+ All capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
The accompanying notes are an integral part of the financial statements.
FS-17
<PAGE> 147
GT GLOBAL DOLLAR FUND
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
ADVISOR CLASS+++
-------------------------------------
YEAR ENDED DECEMBER JUNE 1, 1995
31, TO
---------------------- DECEMBER 31,
1997 1996 1995
---------- ---------- -------------
<S> <C> <C> <C>
Net investment income................... 0.045 0.044 0.030
Distributions from net investment
income................................. (0.045) (0.044) (0.030)
---------- ---------- -------------
Net asset value (unchanged during the
period)................................ $ 1.00 $ 1.00 $ 1.00
---------- ---------- -------------
---------- ---------- -------------
Total investment return (b)............. 4.61% 4.50% 2.92%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 6,780 $ 14,978 $ 2,096
Ratio of net investment income to
average net assets:
With expense reductions, waivers, and
reimbursement by Chancellor LGT Asset
Management, Inc. (a) (Notes 2 & 4)... 4.50% 4.39% 4.94%
Without expense reductions, waivers,
and reimbursement by Chancellor LGT
Asset Management, Inc. (a)........... 4.45% 4.33% 4.91%
Ratio of expenses to average net
assets: (a)
With expense reductions, waivers, and
reimbursement by Chancellor LGT Asset
Management, Inc. (a) (Notes 2 & 4)... 0.98% 0.99% 0.97%
Without expense reductions, waivers,
and reimbursement by Chancellor LGT
Asset Management, Inc. (a)........... 1.03% 1.05% 1.0%
</TABLE>
- ----------------
(a) Annualized for periods of less than one year.
(b) Not annualized for periods of less than one year.
+ All capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
The accompanying notes are an integral part of the financial statements.
FS-18
<PAGE> 148
GT GLOBAL DOLLAR FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Dollar Fund ("Fund") is a diversified series of GT Investment
Portfolios, Inc. ("Company"). The Company is registered under the Investment
Company Act of 1940, as amended (1940 Act), as an open-end management investment
company.
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Each class has exclusive voting
rights with respect to its distribution plan. Investment income, realized and
unrealized capital gains and losses, and the common expenses of the Fund are
allocated on a pro rata basis to each class based on the relative net assets of
each class to the total net assets of the Fund. Each class of shares differs in
its respective distribution expenses, and may differ in its transfer agent,
registration, and certain other class-specific fees and expenses.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.
(A) PORTFOLIO VALUATION
Securities are valued at amortized cost, which approximates market value.
(B) FEDERAL INCOME TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, and unrealized appreciation of securities held, or for excise tax on
income and capital gains. The Fund currently has a capital loss carryforward of
$3,382 which expires in 2005.
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, U.S. government securities or other
high quality debt securities of which the value, including accrued interest, is
at least equal to the amount to be repaid to the Fund under each agreement at
its maturity. Chancellor LGT Asset Management, Inc. (the "Manager") is
responsible for determining that the value of these underlying securities
remains at least equal to the resale price.
(D) OTHER
Security transactions are recorded on the trade date (date the order to buy or
sell is executed). Interest income is recorded on an accrual basis. Dividends to
shareholders from net investment income are declared daily and paid or
reinvested monthly.
2. RELATED PARTIES
The Manager serves as the investment manager and administrator of the Fund. The
Fund pays the Manager investment management and administration fees at the
annualized rate of 0.50% of the Fund's average daily net assets. These fees are
computed daily and paid monthly, and are subject to reduction in any year to the
extent that the Fund's expenses (exclusive of brokerage commissions, taxes,
interest, distribution-related expenses and extraordinary expenses) exceed the
most stringent limits prescribed by the laws or regulations of any state in
which the Fund's shares are sold.
GT Global, Inc. ("GT Global"), an affiliate of the Manager, serves as the Fund's
distributor. The Fund offers Class A shares for purchase. Certain redemptions of
Class A shares made within two years of purchase are subject to contingent
deferred sales charges ("CDSCs"), in accordance with the Fund's current
prospectus. Class B shares of the Fund are available only through an exchange of
Class B shares of other GT Global Mutual Funds. Certain redemptions of Class B
shares made within six years of purchase are also subject to CDSCs, in
accordance with the Fund's current prospectus. For the year ended December 31,
1997, GT Global collected CDSCs in the amount of $1,241,407. In addition, GT
Global may, from time to time, make ongoing payments to brokerage firms,
financial institutions (including banks) and others that facilitate the
administration and servicing of shareholder accounts.
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Directors has
adopted separate distribution plans with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares less any amounts paid by the Fund as the aforementioned service
fee for GT Global's expenditures incurred in providing services as distributor.
GT Global does not currently intend to seek reimbursement of any amounts under
the Class A Plan. All expenses for which GT Global is reimbursed under the Class
A Plan will have been incurred within one year of such reimbursement.
Pursuant to the Fund's Class B Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in providing services as
distributor. GT Global does not currently intend to seek reimbursement of any
FS-19
<PAGE> 149
GT GLOBAL DOLLAR FUND
amounts in excess of 0.75% of average daily net assets under the Class B Plan.
Expenses incurred under the Class B Plan in excess of 1.00% annually may be
carried forward for reimbursement in subsequent years as long as that Plan
continues in effect.
The Manager and GT Global have voluntarily undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, interest, taxes and extraordinary
expenses) to the annual rate of 1.00%, 1.75%, and 1.00% of the average daily net
assets of the Fund's Class A, Class B, and Advisor Class shares, respectively.
If necessary, this limitation will be effected by waivers by the Manager of its
investment management and administration fees, waivers by GT Global of payments
under the Class A Plan and/or Class B Plan and/or reimbursements by the Manager
or GT Global of portions of the Fund's other operating expenses.
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent for the Fund. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. The Transfer Agent also is reimbursed
by the Fund for its out-of-pocket expenses for such items as postage, forms,
telephone charges, stationery and office supplies.
The Company pays each of its Directors who is not an employee, officer or
director of the Manager, GT Global or GT Services $1,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Director.
The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by LGT and 0.02% to the assets in excess of $5 billion and allocating
the result according to the Fund's average daily net assets.
3. CAPITAL SHARES
At December 31, 1997, there were 2,000,000,000 shares of the Company's common
stock authorized, at $0.001 per share. Of this number, 1,500,000,000 shares have
been classified as shares of the Fund; 500 million shares have been classified
as Class A shares, 500 million have been classified as Class B shares, and 500
million have been classified as Advisor Class shares. These amounts may be
increased from time to time at the discretion of the Board of Directors.
Transactions in capital shares of the Fund were as follows:
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
---------------------- ----------------------
CLASS A SHARES & AMOUNT SHARES & AMOUNT
- ---------------------------------------- ---------------------- ----------------------
<S> <C> <C>
Shares sold............................. 6,222,351,251 14,275,856,684
Shares issued in connection with
reinvestment of distributions......... 4,193,093 7,664,536
---------------------- ----------------------
6,226,544,344 14,283,521,220
Shares repurchased...................... (6,432,557,179) (14,074,631,817)
---------------------- ----------------------
Net increase (decrease)................. (206,012,835) 208,889,403
---------------------- ----------------------
---------------------- ----------------------
<CAPTION>
CLASS B SHARES & AMOUNT SHARES & AMOUNT
- ---------------------------------------- ---------------------- ----------------------
<S> <C> <C>
Shares sold............................. 1,763,392,144 2,348,173,773
Shares issued in connection with
reinvestment of distributions......... 2,479,264 2,261,688
---------------------- ----------------------
1,765,871,408 2,350,435,461
Shares repurchased...................... (1,810,681,116) (2,321,320,722)
---------------------- ----------------------
Net increase (decrease)................. (44,809,708) 29,114,739
---------------------- ----------------------
---------------------- ----------------------
<CAPTION>
ADVISOR CLASS SHARES & AMOUNT SHARES & AMOUNT
- ---------------------------------------- ---------------------- ----------------------
<S> <C> <C>
Shares sold............................. 223,289,952 237,098,781
Shares issued in connection with
reinvestment of distributions......... 222,493 215,804
---------------------- ----------------------
223,512,445 237,314,585
Shares repurchased...................... (231,710,695) (224,416,508)
---------------------- ----------------------
Net increase (decrease)................. (8,198,250) 12,898,077
---------------------- ----------------------
---------------------- ----------------------
</TABLE>
4. EXPENSE REDUCTIONS
For the year ended December 31, 1997, the Fund's custody fees were offset by
$43,916 of credits on cash held at the custodian.
5. SUBSEQUENT EVENT
On January 30, 1998, Liechtenstein Global Trust ("LGT") and AMVESCAP PLC
("AMVESCAP") entered into an agreement by which AMVESCAP will acquire LGT's
Asset Management Division, including Chancellor LGT Asset Management, Inc.
AMVESCAP is the holding company of the AIM and INVESCO asset management
businesses.
FS-20
<PAGE> 150
PART C
OTHER INFORMATION
Item 24. (a) Financial Statements:
Class A, Class B and Advisor Class shares of the AIM Dollar
Fund
In Part A: Financial Highlights
In Part B: (1) Reports of Independent Accountants
(2) Portfolios of Investments as of December 31,
1997 (audited), and June 30, 1998 (unaudited)
(3) Statements of Assets and Liabilities as of
December 31, 1997 (audited), and June 30,
1998 (unaudited)
(4) Statements of Operations for the year ended
December 31, 1997 (audited), and June 30,
1998 (unaudited)
(5) Statements of Changes in Net Assets for the
years ended December 31, 1997 and 1996
(b) Exhibits:
Exhibit
Number Description
- ------- -----------
(1) - Agreement and Declaration of Trust of AIM Investment
Portfolios is filed herewith electronically.
(2) - By-Laws of AIM Investment Portfolios are filed herewith
electronically.
(3) - Voting Trust Agreements - None.
(4) - Provisions of instruments defining the rights of holders of
Registrant's securities are contained in the Declaration of
Trust Articles II, VI, VII, VIII and IX and By-laws Articles
IV, V, VI, VII and VIII, which are included as part of
Exhibits (b)(1) and (2) of this Registration Statement.
(5) (a) - Investment Management and Administration Contract,
dated May 29, 1998, between Registrant and A I M Advisors,
Inc. is filed herewith electronically.
(b) - Investment Management and Administration Contract, dated
September 8, 1998, between AIM Investment Portfolios and
A I M Advisors, Inc. is filed herewith electronically.
(c) - Sub-Advisory and Sub-Administration Contract, dated May 29,
1998, between A I M Advisors, Inc. and INVESCO (NY), Inc.
with respect to Registrant is filed herewith electronically.
(d) - Sub-Advisory and Sub-Administration Contract, dated
September 8, 1998, between A I M Advisors, Inc. and INVESCO
(NY), Inc. with respect to AIM Investment Portfolios is
filed herewith electronically.
(6) (a) - Distribution Agreement, dated May 29, 1998, between
Registrant and A I M Distributors, Inc. with respect to
Class A shares is filed herewith electronically.
(b) - Distribution Agreement, dated September 8, 1998, between
AIM Investment Portfolios and A I M Distributors, Inc. with
respect to Class A shares is filed herewith electronically.
(c) - Distribution Agreement, dated May 29, 1998, between
Registrant and A I M Distributors, Inc. with respect to
Class B shares is filed herewith electronically.
(d) - Distribution Agreement, dated September 8, 1998 between
AIM Investment Portfolios and A I M Distributors, Inc. with
respect to Class B shares is filed herewith electronically.
C-1
<PAGE> 151
(e) - Distribution Agreement, dated May 29, 1998, between
Registrant and A I M Distributors, Inc. with respect to
Advisor Class shares is filed herewith electronically.
(f) - Distribution Agreement, dated September 8, 1998, between
AIM Investment Portfolios and A I M Distributors, Inc. with
respect to Advisor Class shares is filed herewith
electronically.
(7) - Agreements Concerning Officers and Directors/Trustees
Benefits - None.
(9) (a) - (1) Form of Transfer Agency and Service Agreement between
Registrant and A I M Fund Services, Inc. is filed herewith
electronically.
- (2) Remote Access and Related Services Agreement, dated as
of December 23, 1994, between the Registrant and First Data
Investor Services Group, Inc. (formerly, The Shareholder
Services Group, Inc.) is filed herewith electronically.
- (3) Amendment No. 1, dated October 4, 1995, to the Remote
Access and Related Services Agreement, dated as of December
23, 1994, between Registrant and First Data Investor
Services Group, Inc. (formerly, The Shareholder Services
Group, Inc.) is filed herewith electronically.
- (4) Addendum No. 2, dated October 12, 1995, to the Remote
Access and Related Services Agreement, dated as of December
23, 1994, between Registrant and First Data Investor
Services Group, Inc. (formerly, The Shareholder Services
Group, Inc.) is filed herewith electronically.
- (5) Amendment No. 3, dated February 1, 1997, to the Remote
Access and Related Services Agreement, dated December 23,
1994, between Registrant and First Data Investor Services
Group, Inc. (formerly, The Shareholder Services Group, Inc.)
is filed herewith electronically.
- (6) Exhibit 1, effective as of August 4, 1997, to the Remote
Access and Related Services Agreement, dated December 23,
1994, between Registrant and First Data Investor Services
Group, Inc. (formerly, The Shareholder Services Group, Inc.)
is filed herewith electronically.
- (7) Preferred Registration Technology Escrow Agreement,
dated September 10, 1997, between Registrant and First Data
Investor Services Group, Inc. (formerly, The Shareholder
Services Group, Inc.) is filed herewith electronically.
(b) - Form of Fund Accounting and Pricing Agent Agreement between
AIM Investment Portfolios and INVESCO (NY), Inc. is filed
herewith electronically.
(c) - (1) Selected Dealer Agreement was filed as an Exhibit to
Post-Effective Amendment No. 25 to the Registration
Statement on Form N-1A, filed May 29, 1998, and is hereby
incorporated by reference.
- (2) Bank Sales Contract was filed as an Exhibit to
Post-Effective Amendment No. 25 to the Registration
Statement on Form N-1A, filed May 29, 1998, and is hereby
incorporated by reference.
- (3) Shareholder Service Agreement was filed as an Exhibit to
Post-Effective Amendment No. 25 to the Registration
Statement on Form N-1A, filed May 29, 1998, and is hereby
incorporated by reference.
- (4) Bank Shareholder Service Agreement was filed as an
Exhibit to Post-Effective Amendment No. 25 to the
Registration Statement on Form N-1A, filed May 29, 1998, and
is hereby incorporated by reference.
- (5) Service Agreement for Bank Trust Department and for
Broker is filed herewith electronically.
C-2
<PAGE> 152
(10) (a) - Opinion and Consent of Kirkpatrick & Lockhart LLP is filed
herewith electronically.
(b) - Opinion and Consent of Delaware Counsel is filed herewith
electronically.
(11) - Consent of PricewaterhouseCoopers LLP is filed herewith
electronically.
(12) - Financial Statements - None.
(13) - Agreements Concerning Initial Capitalization - None.
(14) (a) - IRA Application was filed as an Exhibit to Post-Effective
Amendment No. 25 to the Registration Statement on Form N-1A,
filed on May 29, 1998, and is hereby incorporated by
reference.
(b) - SEP and SARSEP IRA Adoption Agreement was filed as an
Exhibit to Post-Effective Amendment No. 25 to the
Registration Statement on Form N-1A, filed on May 29, 1998,
and is hereby incorporated by reference.
(c) - Profit Sharing/Money Purchase Pension Plan was filed as an
Exhibit to Post-Effective Amendment No. 25 to the
Registration Statement on Form N-1A, filed on May 29, 1998,
and is hereby incorporated by reference.
(d) - 403(b) Plan was filed as an Exhibit to Post-Effective
Amendment No. 25 to the Registration Statement on Form N-1A,
filed on May 29, 1998, and is hereby incorporated by
reference.
(e) - SIMPLE IRA Application was filed as an Exhibit to
Post-Effective Amendment No. 25 to the Registration
Statement on Form N-1A, filed on May 29, 1998, and is hereby
incorporated by reference.
(f) - Roth IRA Application was filed as an Exhibit to
Post-Effective Amendment No. 25 to the Registration
Statement on Form N-1A, filed on May 29, 1998, and is hereby
incorporated by reference.
(15) (a) - Form of Distribution Plan adopted pursuant to Rule 12b-1
with respect to Class A shares was filed as an Exhibit to
Post-Effective Amendment No. 25 to the Registration
Statement on Form N-1A, filed on May 29, 1998, and is hereby
incorporated by reference.
(b) - Form of Distribution Plan adopted pursuant to Rule 12b-1
with respect to Class B shares was filed as an Exhibit to
Post-Effective Amendment No. 25 to the Registration
Statement on Form N-1A, filed on May 29, 1998, and is hereby
incorporated by reference.
(16) - Computation of Performance Quotations relating to the Class
A, Class B and Advisor Class shares of AIM Dollar Fund was
filed as an Exhibit to Post-Effective Amendment No. 22 to
the Registration Statement on Form N-1A, filed on April 24,
1997, and is hereby incorporated by reference.
(18) - Rule 18f-3 Multiple Class Plan is filed herewith
electronically.
(27) - Financial Data Schedule was filed as an Exhibit to
Post-Effective Amendment No. 23 to Registration Statement on
Form N-1A, filed March 10, 1998, and is hereby incorporated
by reference.
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<PAGE> 153
Other Exhibits:
(a) - Power of Attorney for Helge K. Lee and Michael A. Silver
for AIM Investment Portfolios, Inc. was filed as an Exhibit
to Post-Effective Amendment No. 23 to the Registration
Statement on Form N-1A, filed on March 10, 1998, and is
hereby incorporated by reference.
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 of Class as of August 13, 1998
-------------- -------------------------
<S> <C>
Capital Stock, $0.01 par value, of:
AIM Dollar Fund Class A..................................................6,165
AIM Dollar Fund Class B..................................................4,629
AIM Dollar Advisor Class................................................. 210
</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.
Article VII(g) of the Registrant's Articles of Incorporation provides
for indemnification of certain persons acting on behalf of the
Registrant.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended ("1933 Act"), may be permitted to Directors,
officers and controlling persons by the Registrant's Articles of
Incorporation, By-Laws, 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 1933 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 Director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such Director, 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 1933 Act and will be
governed by the final adjudication of such issues.
C-4
<PAGE> 154
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 the material under the heading "Management" included in Part A
(Prospectus) of this Amendment and the material appearing under the
headings "Trustees and Executive Officers" and "Management" included
in Part B (Statement of Additional Information) of this Amendment.
Information as to the Directors and Officers of A I M Advisors, Inc.
and INVESCO (NY), Inc. is included in Schedule A and Schedule D of Part
I of each entity's Form ADV (File No. 801-12313 and File No. 801-10254,
respectively), filed with the Securities and Exchange Commission, which
are incorporated herein by reference thereto.
Item 29. Principal Underwriters
(a) A I M Distributors, Inc., the Registrant's principal
underwriter, also acts as a principal underwriter to
the following investment companies:
AIM Advisor Funds, Inc.
AIM Equity Funds, Inc. (Retail Classes)
AIM Funds Group
AIM Growth Series
AIM International Funds, Inc.
AIM Investment Funds, Inc.
AIM Investment Securities Funds
AIM Series Trust
AIM Summit Fund, Inc.
AIM Tax-Exempt Funds, Inc.
AIM Variable Insurance Funds, Inc.
GT Global Floating Rate Fund, Inc. d/b/a AIM Floating
Rate Fund
(b)
<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 Directors None
Michael J. Cemo President & Director None
Gary T. Crum Director Vice President
Robert H. Graham Senior Vice President & Director Vice President
William G. Littlepage Senior Vice President & Director None
John Caldwell Senior Vice President None
Marilyn M. Miller Senior Vice President None
James L. Salners Senior Vice President None
Gordon J. Sprague Senior Vice President None
</TABLE>
- ------------------------------------
* 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173
C-5
<PAGE> 155
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Principal Underwriter with Registrant
- ------------------- --------------------------- ---------------
<S> <C> <C>
Michael C. Vessels Senior Vice President None
B.J. Thompson First Vice President None
James R. Anderson Vice President None
John J. Arthur Vice President & Treasurer Vice President
Mary K. Coleman Vice President None
Melville B. Cox Vice President & Chief Vice President
Compliance Officer
Charles R. Dewey Vice President None
Sidney M. Dilgren Vice President None
Tony D. Green Vice President None
William H. Kleh Vice President None
Ofelia M. Mayo Vice President, General Counsel None
& Assistant Secretary
Terri L. Ransdell Vice President None
Carol F. Relihan Vice President Vice President
Kamala C. Sachidanandan Vice President None
Frank V. Serebrin Vice President None
Christopher T. Simutis Vice President None
Robert D. Van Sant, Jr. Vice President None
Gary K. Wendler Vice President None
David E. Hessel Assistant Vice President, None
Assistant Treasurer
& Controller
Kathleen J. Pflueger Secretary None
Luke P. Beausoleil Assistant Vice President None
Tisha B. Christopher Assistant Vice President None
Glenda A. Dayton Assistant Vice President None
Kathleen M. Douglas Assistant Vice President None
</TABLE>
- ------------------------------------
* 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173
C-6
<PAGE> 156
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Principal Underwriter with Registrant
- ------------------- --------------------------- ----------------
<S> <C> <C>
Terri N. Fiedler Assistant Vice President None
Mary E. Gentempo Assistant Vice President None
Jeffrey L. Horne Assistant Vice President None
Melissa E. Hudson Assistant Vice President None
Jodie L. Johnson Assistant Vice President None
Kathryn A. Jordan Assistant Vice President None
Wayne W. LaPlante Assistant Vice President None
Kim T. Lankford Assistant Vice President None
Ivy B. McLemore Assistant Vice President None
David B. O'Neil Assistant Vice President None
Patricia M. Shyman Assistant Vice President None
Nicholas D. White Assistant Vice President None
Norman W. Woodson Assistant Vice President None
Nancy L. Martin Assistant General Counsel None
& Assistant Secretary
Samuel D. Sirko Assistant General Counsel Assistant Secretary
& Assistant Secretary
Stephen I. Winer Assistant Secretary None
Dana S. Sutton None Vice President and
Assistant Treasurer
Mary Benson None Assistant Treasurer
</TABLE>
- ------------------------------------
* 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173
(c) - Not Applicable
C-7
<PAGE> 157
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.
Accounts, books and other records required by Rules 31a-1 and 31a-2
under the Investment Company Act of 1940, as amended, are maintained
and held in the offices of the Registrant and its sub-advisor, INVESCO
(NY), Inc., 50 California Street, 27th Floor, San Francisco, CA 94111,
and its custodian, State Street Bank and Trust Company, 225 Franklin
Street, Boston, MA 02110.
Records covering shareholder accounts and portfolio transactions are
also maintained and kept by the Registrant's Transfer Agent, A I M Fund
Services, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046, and
by the Registrant's custodian, State Street Bank and Trust Company, 225
Franklin Street, Boston, MA 02110.
Item 31. Management Services
Furnish a summary of the substantive provisions of any
management-related service contract not discussed in Part A or Part B of this
Form (because the contract was not believed to be of interest to a purchaser of
securities of the 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
None.
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<PAGE> 158
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, the Registrant hereby
certifies that it meets all of the requirements for effectiveness of this
Amendment pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment to this Registration Statement to be signed
on its behalf by the undersigned, thereto duly authorized, in the City of San
Francisco, and State of California, on the 27th day of August, 1998.
AIM INVESTMENT PORTFOLIOS, INC.
By: Robert H. Graham*
President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment has been signed below by the following persons in the
capacities indicated on the 27th day of August, 1998.
Robert H. Graham* President, Director and
Chairman of the Board
(Principal Executive Officer)
/s/ KENNETH W. CHANCEY
- ------------------------------------ Vice President and
Kenneth W. Chancey Principal Accounting Officer
C. Derek Anderson* Director
Arthur C. Patterson* Director
Frank S. Bayley* Director
Ruth H. Quigley* Director
*By: /s/ MICHAEL A. SILVER
--------------------------------
Michael A. Silver
Attorney-in-Fact, pursuant to
Power of Attorney filed herewith
<PAGE> 159
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, the Registrant hereby
certifies that it meets all of the requirements for effectiveness of this
Amendment pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment to this Registration Statement to be signed
on its behalf by the undersigned, thereto duly authorized, in the City of San
Francisco, and State of California, on the 27th day of August, 1998.
AIM INVESTMENT PORTFOLIOS
By: Robert H. Graham*
President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment has been signed below by the following persons in the
capacities indicated on the 27th day of August, 1998.
Robert H. Graham* President, Trustee and
Chairman of the Board
(Principal Executive Officer)
/s/ KENNETH W. CHANCEY
- ------------------------------------ Vice President and
Kenneth W. Chancey Principal Accounting Officer
C. Derek Anderson* Trustee
Arthur C. Patterson* Trustee
Frank S. Bayley* Trustee
Ruth H. Quigley* Trustee
*By: /s/ MICHAEL A. SILVER
--------------------------------
Michael A. Silver
Attorney-in-Fact, pursuant to
Power of Attorney filed herewith
<PAGE> 160
INDEX TO EXHIBITS
AIM INVESTMENT PORTFOLIOS, INC.
Exhibit Number
- --------------
1 Agreement and Declaration of Trust of AIM Investment Portfolios
2 By-Laws of AIM Investment Portfolios
5(a) Investment Management and Administration Contract, dated May 29,
1998, between Registrant and A I M Advisors, Inc.
5(b) Investment Management and Administration Contract, dated
September 8, 1998, between AIM Investment Portfolios and A I M
Advisors, Inc.
5(c) Sub-Advisory and Sub-Administration Contract, dated May 29,
1998, between A I M Advisors, Inc. and INVESCO (NY), Inc.
5(d) Sub-Advisory and Sub-Administration Contract, dated September 8,
1998, between A I M Advisors, Inc. and INVESCO (NY), Inc.
6(a) Distribution Agreement, dated May 29, 1998, between Registrant
and A I M Distributors, Inc. with respect to Class A shares
6(b) Distribution Agreement, dated September 8, 1998, between AIM
Investment Portfolios and A I M Distributors, Inc. with respect
to Class A shares
6(c) Distribution Agreement, dated May 29, 1998, between Registrant
and A I M Distributors, Inc. with respect to Class B shares
6(d) Distribution Agreement, dated September 8, 1998, between AIM
Investment Portfolios and A I M Distributors, Inc. with respect
to Class B shares
6(e) Distribution Agreement, dated May 29, 1998, between Registrant
and A I M Distributors, Inc. with respect to Advisor Class
shares
6(f) Distribution Agreement, dated September 8, 1998, between AIM
Investment Portfolios and A I M Distributors, Inc. with respect
to Advisor Class shares
9(a)(1) Form of Transfer Agency and Service Agreement between Registrant
and A I M Fund Services, Inc.
9(a)(2) Remote Access and Related Services Agreement, dated December 23,
1994, between Registrant and First Data Investor Services Group,
Inc.
9(a)(3) Amendment No. 1, dated October 4, 1995, to the Remote Access and
Related Services Agreement, dated December 23, 1994, between
Registrant and First Data Investor Services Group, Inc.
9(a)(4) Addendum No. 2, dated October 12, 1995, to the Remote Access and
Related Services Agreement, dated December 23, 1994, between
Registrant and First Data Investor Services Group, Inc.
9(a)(5) Amendment No. 3, dated February 1, 1997, to the Remote Access
and Related Services Agreement, dated December 23, 1994, between
Registrant and First Data Investor Services Group, Inc.
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<PAGE> 161
9(a)(6) Exhibit 1, effective as of August 4, 1997, to the Remote Access
and Related Services Agreement, dated December 23, 1994, between
the Registrant and First Data Investor Services Group, Inc.
9(a)(7) Preferred Registration Technology Escrow Agreement, dated
September 10, 1997, between the Registrant and First Data
Investor Services Group, Inc.
9(b) Form of Fund Accounting and Pricing Agent Agreement between AIM
Investment Portfolios and INVESCO (NY), Inc.
9(c)(5) Service Agreement for Bank Trust Department and for Broker
10(a) Opinion and Consent of Kirkpatrick & Lockhart LLP
10(b) Opinion and Consent of Delaware Counsel
11 Consent of PricewaterhouseCoopers LLP
18 Multiple Class Plan (Rule 18f-3)
C-10
<PAGE> 1
EXHIBIT 1
AGREEMENT AND DECLARATION OF TRUST
OF
AIM INVESTMENT PORTFOLIOS
WHEREAS, THIS AGREEMENT AND DECLARATION OF TRUST is made and entered
into as of May 7, 1998, among William J. Guilfoyle, C. Derek Anderson, Frank
S. Bayley, Arthur C. Patterson, and Ruth H. Quigley, as Trustees, and each
person who becomes a Shareholder in accordance with the terms hereinafter set
forth.
WHEREAS, the parties hereto desire to create a business trust pursuant
to the Delaware Act for the investment and reinvestment of funds contributed
thereto;
NOW, THEREFORE, the Trustees hereby direct that a Certificate of Trust
be filed with the Office of the Secretary of State of Delaware and do hereby
declare that all money and property contributed to the trust hereunder shall be
held and managed in trust under this Agreement for the benefit of the
Shareholders as herein set forth below.
ARTICLE I
NAME, DEFINITIONS, PURPOSE AND CERTIFICATE OF TRUST
Section 1.1. Name. The name of the business trust created hereby is
"AIM Investment Portfolios," and the Trustees may transact the Trust's affairs
in that name. The Trust shall constitute a Delaware business trust in
accordance with the Delaware Act.
Section 1.2. Definitions. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) "Affiliated Person," "Company," "Person," and "Principal
Underwriter" shall have the meanings given them in the 1940
Act, as modified by or interpreted by any applicable order or
orders of the Commission or any rules or regulations adopted
or interpretive releases of the Commission thereunder. The
term "Commission" shall have the meaning given it in the 1940
Act;
(b) "Agreement" means this Agreement and Declaration of Trust, as
it may be amended from time to time;
(c) "Bylaws" means the Bylaws referred to in Article IV, Section
4.1(e) hereof, as from time to time amended;
<PAGE> 2
(d) "Class" means a portion of Shares of a Portfolio of the Trust
established in accordance with the provisions of Article II,
Section 2.3(b) hereof;
(e) "Covered Person" means every person who is, or has been, a
Trustee or an officer or employee of the Trust;
(f) The "Delaware Act" refers to the Delaware Business Trust Act,
12 Del. C.Section 3801 et seq., as such Act may be amended
from time to time;
(g) "Majority Shareholder Vote" means "the vote of a majority of
the outstanding voting securities" (as defined in the 1940
Act) of the Trust, Portfolio, or Class, as applicable;
(h) The "1940 Act" refers to the Investment Company Act of 1940,
as amended from time to time;
(i) "Outstanding Shares" means Shares shown on the books of the
Trust or its transfer agent as then issued and outstanding,
but does not include Shares that have been repurchased or
redeemed by the Trust;
(j) "Portfolio" means a series of Shares of the Trust established
in accordance with the provisions of Article II, Section
2.3(a) hereof;
(k) "Shareholder" means a record owner of Outstanding Shares of
the Trust;
(l) "Shares" means, as to a Portfolio or any Class thereof, the
equal proportionate transferable units of beneficial interest
into which the beneficial interest of such Portfolio of the
Trust or such Class thereof shall be divided and may include
fractions of Shares as well as whole Shares;
(m) The "Trust" means AIM Investment Portfolios, the Delaware
business trust established hereby, and reference to the Trust,
when applicable to one or more Portfolios, shall refer to each
such Portfolio;
(n) The "Trustees" means the Persons who have signed this
Agreement as trustees so long as they shall continue to serve
as trustees of the Trust in accordance with the terms hereof,
and all other Persons who may from time to time be duly
appointed as Trustee in accordance with the provisions of
Article III, Section 3.4 hereof or elected as Trustee in
accordance with the provisions of Article III, Section 3.6
hereof, and reference herein to a Trustee or to the Trustees
shall refer to such Persons in their capacity as Trustees
hereunder; and
(o) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the
account of the Trust or any Portfolio, or by the Trustees on
behalf of the Trust or any Portfolio.
2
<PAGE> 3
Section 1.3. Purpose. The purpose of the Trust is to conduct,
operate and carry on the business of a management investment company registered
under the 1940 Act through one or more Portfolios investing primarily in
securities and to carry on such other business as the Trustees may from time to
time determine pursuant to their authority under this Agreement.
Section 1.4. Certificate of Trust. Immediately upon the execution of
this Agreement, the Trustees shall file a Certificate of Trust with respect to
the Trust in the Office of the Secretary of State of the State of Delaware
pursuant to the Delaware Act.
ARTICLE II
BENEFICIAL INTEREST
Section 2.1. Shares of Beneficial Interest. The beneficial interest
in the Trust shall be divided into an unlimited number of Shares, with par
value of $0.01 per Share. The Trustees may, from time to time, (a) authorize
the division of the Shares into one or more series, each of which constitutes a
Portfolio, in accordance with Article II, Section 2.3(a) hereof, and (b) may
further authorize the division of the Shares of any Portfolio into one or more
separate and distinct Classes, in accordance with Article II, Section 2.3(b)
hereof. All Shares issued hereunder, including without limitation, Shares
issued in connection with a dividend or other distribution in Shares or a split
or reverse split of Shares, shall be fully paid and nonassessable.
Section 2.2. Issuance of Shares. The Trustees in their discretion
may, from time to time, without vote of the Shareholders, issue Shares, in
addition to the then issued and outstanding Shares and Shares held in the
treasury, to such party or parties and for such amount and type of
consideration, subject to applicable law, including cash or securities, at such
time or times and on such terms as the Trustees may deem appropriate, and may
in such manner acquire other assets (including the acquisition of assets
subject to, and in connection with, the assumption of liabilities) and
businesses. In connection with any issuance of Shares, the Trustees may issue
fractional Shares and Shares held in the treasury. The Trustees may from time
to time divide or combine the Shares into a greater or lesser number without
thereby changing the proportionate beneficial interests in the Trust.
Contributions to the Trust may be accepted for, and Shares shall be redeemed
as, whole Shares and/or 1/1,000th of a Share or integral multiples thereof.
Section 2.3. Establishment of Portfolios and Classes. (a) The Trust
shall consist of one or more separate and distinct Portfolios, each with an
unlimited number of Shares unless otherwise specified. The Trustees hereby
establish and designate the Portfolios listed on Schedule A attached hereto and
made a part hereof ("Schedule A"). Each additional Portfolio shall be
established by the adoption of a resolution by the Trustees and shall be
effective upon the date stated therein (or, if no such date is stated, upon the
date of such adoption). The Shares of each Portfolio shall have the relative
rights and preferences provided for herein and such rights and preferences as
may be designated by the Trustees. The Trust shall maintain separate and
distinct records for each Portfolio and shall hold and account for the assets
belonging thereto separately from the other Trust Property and the assets
belonging to any other Portfolio. Each Share of a Portfolio shall represent an
equal
3
<PAGE> 4
beneficial interest in the net assets belonging to that Portfolio, except to
the extent of expenses separately allocated to Classes thereof as permitted
herein. A Portfolio may have exclusive voting rights with respect to matters
affecting only that Portfolio.
(b) The Trustees may divide the Shares of any Portfolio into two
or more Classes, each with an unlimited number of Shares unless otherwise
specified. Each Class so established and designated shall represent a
Proportionate Interest (as defined in Article II, Section 2.3.2(c) hereof) in
the net assets belonging to that Portfolio and shall have identical voting,
dividend, liquidation, and other rights and be subject to the same terms and
conditions, except that (1) expenses, costs, charges, and reserves allocated to
a Class in accordance with Article II, Section 2.3.2(d) hereof may be borne
solely by that Class, (2) dividends declared and payable to a Class pursuant to
Article VII, Section 7.1, shall reflect the items separately allocated thereto
pursuant to the preceding clause, (3) each Class may have separate rights to
convert to another Class, exchange rights, and similar rights, each as
determined by the Trustees, and (4) each Class may have exclusive voting rights
with respect to matters affecting only that Class. The Trustees hereby
establish for each Portfolio listed on Schedule A the Classes listed thereon.
Each additional Class for any or all Portfolios shall be established by the
adoption of a resolution by the Trustees and shall be effective upon the date
stated therein (or, if no such date is stated, upon the date of such adoption).
Section 2.3.1. Subject to Article VI, Section 6.1 of this Agreement,
the Trustees shall have full power and authority, in their sole discretion
without obtaining any prior authorization or vote of the Shareholders of any
Portfolio, or Class thereof, to establish and designate and to change in any
manner any Portfolio of Shares, or any Class or Classes thereof; to fix such
preferences, voting powers, rights, and privileges of any Portfolio, or Classes
thereof, as the Trustees may from time to time determine (but the Trustees may
not change the preferences, voting powers, rights, and privileges of
Outstanding Shares in a manner materially adverse to the Shareholders of such
Shares without the prior approval of the affected Shareholders); to divide or
combine the Shares of any Portfolio, or Classes thereof, into a greater or
lesser number; to classify or reclassify any issued Shares of any Portfolio, or
Classes thereof, into one or more Portfolios or Classes of Shares of a
Portfolio; and to take such other action with respect to the Shares as the
Trustees may deem desirable. A Portfolio and any Class thereof may issue any
number of Shares but need not issue any shares. At any time that there are no
Outstanding Shares of any particular Portfolio or Class previously established
and designated, the Trustees may abolish that Portfolio or Class and the
establishment and designation thereof.
Section 2.3.2. Unless the establishing resolution or any other
resolution adopted pursuant to this Section 2.3 otherwise provides, Shares of
each Portfolio or Class thereof established hereunder shall have the following
relative rights and preferences:
(a) Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued
by the Trust or the Trustees, whether of the same or other
Portfolio (or Class).
(b) All consideration received by the Trust for the issue or sale
of Shares of a particular Portfolio, together with all assets
in which such consideration is invested or
4
<PAGE> 5
reinvested, all income, earnings, profits, and proceeds
thereof, including any proceeds derived from the sale,
exchange, or liquidation of such assets, and any funds or
payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall be held and accounted for
separately from the other assets of the Trust and of every
other Portfolio and may be referred to herein as "assets
belonging to" that Portfolio. The assets belonging to a
particular Portfolio shall belong to that Portfolio for all
purposes, and to no other Portfolio, subject only to the
rights of creditors of that Portfolio. In addition, any
assets, income, earnings, profits, or funds, or payments and
proceeds with respect thereto, which are not readily
identifiable as belonging to any particular Portfolio shall be
allocated by the Trustees between and among one or more of the
Portfolios for all purposes and such assets, income, earnings,
profits, or funds, or payments and proceeds with respect
thereto, shall be assets belonging to that Portfolio.
(c) Each Class of a Portfolio shall have a proportionate undivided
interest (as determined by or at the direction of, or pursuant
to authority granted by, the Trustees, consistent with
industry practice) ("Proportionate Interest") in the net
assets belonging to that Portfolio. References herein to
assets, expenses, charges, costs, and reserves "allocable" or
"allocated" to a particular Class of a Portfolio shall mean
the aggregate amount of such item(s) of the Portfolio
multiplied by the Class's Proportionate Interest.
(d) A particular Portfolio shall be charged with the liabilities
of that Portfolio, and all expenses, costs, charges and
reserves attributable to any particular Portfolio shall be
borne by such Portfolio; provided that the Trustees may, in
their sole discretion, allocate or authorize the allocation of
particular expenses, costs, charges and/or reserves of a
Portfolio to less than all the Classes thereof, in which event
payment or other discharge of the expense(s), cost(s),
charge(s) and/or reserve(s) allocated to a particular Class
shall be chargeable first against the assets allocable to that
Class and shall be chargeable against the assets allocable to
the other Classes of that Portfolio only to the extent the
amount of the payment or other discharge exceeds such
particular Class's allocable assets. Any general liabilities,
expenses, costs, charges or reserves of the Trust (or any
Portfolio) that are not readily identifiable as chargeable to
or bearable by any particular Portfolio (or any particular
Class) shall be allocated and charged by the Trustees between
or among any one or more of the Portfolios (or Classes) in
such manner as the Trustees in their sole discretion deem fair
and equitable. Each such allocation shall be conclusive and
binding upon the Shareholders of all Portfolios (or Classes)
for all purposes. Without limitation of the foregoing
provisions of this Subsection 2.3.2, the debts, liabilities,
obligations and expenses incurred, contracted for or otherwise
existing with respect to a particular Portfolio shall be
enforceable against the assets of such Portfolio only, and not
against the assets of the Trust generally or the assets
belonging to any other Portfolio. Notice of this contractual
limitation on inter-Portfolio liabilities shall be set forth
in the Certificate of Trust described in Article I, Section
1.4 of this Agreement (whether originally or by amendment),
and upon the giving of such
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notice in the Certificate of Trust, the statutory provisions
of Section 3804 of the Delaware Act relating to limitations on
inter-Portfolio liabilities (and the statutory effect under
Section 3804 of setting forth such notice in the Certificate
of Trust) shall become applicable to the Trust and each
Portfolio.
All references to Shares in this Agreement shall be deemed to be
shares of any or all Portfolios, or Classes thereof, as the context may
require. All provisions herein relating to the Trust shall apply equally to
each Portfolio of the Trust, and each Class thereof, except as the context
otherwise requires.
Section 2.4. Investment in the Trust. Investments may be accepted by
the Trust from such Persons, at such times, on such terms, and for such
consideration, which may consist of cash or tangible or intangible property or
a combination thereof, as the Trustees from time to time may authorize. At the
Trustees' sole discretion, such investments, subject to applicable law, may be
in the form of cash or securities in which the affected Portfolio is authorized
to invest, valued as provided in applicable law. Each such investment shall be
credited to the individual Shareholder's account in the form of full and
fractional Shares of the Trust, in such Portfolio (or Class) as the Shareholder
shall select.
Section 2.5. Personal Liability of Shareholders. As provided by
applicable law, no Shareholder of the Trust shall be personally liable for the
debts, liabilities, obligations, and expenses incurred by, contracted for, or
otherwise existing with respect to, the Trust or any Portfolio (or Class)
thereof. Neither the Trust nor the Trustees, nor any officer, employee, or
agent of the Trust shall have any power to bind personally any Shareholder or,
except as provided herein or by applicable law, to call upon any Shareholder
for the payment of any sum of money or assessment whatsoever other than such as
the Shareholder may at any time personally agree to pay by way of subscription
for any Shares or otherwise. The Shareholders shall be entitled, to the
fullest extent permitted by applicable law, to the same limitation of personal
liability as is extended under the Delaware General Corporation Law to
stockholders of private corporations for profit. Every note, bond, contract,
or other undertaking issued by or on behalf of the Trust or the Trustees
relating to the Trust or to any Portfolio shall include a recitation limiting
the obligation represented thereby to the Trust and its assets or to one or
more Portfolios and the assets belonging thereto (but the omission of such a
recitation shall not operate to bind any Shareholder or Trustee of the Trust).
Section 2.6. Assent to Agreement. Every Shareholder, by virtue of
having purchased a Share, shall be held to have expressly assented to, and
agreed to be bound by, the terms hereof. The death of a Shareholder during the
continuance of the Trust shall not operate to terminate the same nor entitle
the representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but only to
rights of said decedent under this Trust.
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ARTICLE III
THE TRUSTEES
Section 3.1. Management of the Trust. The Trustees shall have
exclusive and absolute control over the Trust Property and over the business of
the Trust to the same extent as if the Trustees were the sole owners of the
Trust Property and business in their own right, but with such powers of
delegation as may be permitted by this Agreement. The Trustees shall have
power to conduct the business of the Trust and carry on its operations in any
and all of its branches and maintain offices both within and without the State
of Delaware, in any and all states of the United States of America, in the
District of Columbia, in any and all commonwealths, territories, dependencies,
colonies, or possessions of the United States of America, and in any and all
foreign jurisdictions and to do all such other things and execute all such
instruments as they deem necessary, proper or desirable in order to promote the
interests of the Trust although such things are not herein specifically
mentioned. Any determination as to what is in the interests of the Trust made
by the Trustees in good faith shall be conclusive. In construing the provisions
of this Agreement, the presumption shall be in favor of a grant of power to the
Trustees.
The enumeration of any specific power in this Agreement shall not be
construed as limiting the aforesaid power. The powers of the Trustees may be
exercised without order of or resort to any court or other authority.
Section 3.2. Initial Trustees. The initial Trustees shall be the
persons named herein.
Section 3.3. Terms of Office of Trustees. The Trustees shall hold
office during the lifetime of this Trust, and until its termination as herein
provided; except (a) that any Trustee may resign his trusteeship or may retire
by written instrument signed by him and delivered to the other Trustees, which
shall take effect upon such delivery or upon such later date as is specified
therein; (b) that any Trustee may be removed at any time by written instrument,
signed by at least two-thirds of the number of Trustees prior to such removal,
specifying the date when such removal shall become effective; (c) that any
Trustee who has died, become physically or mentally incapacitated by reason of
disease or otherwise, or is otherwise unable to serve, may be retired by
written instrument signed by a majority of the other Trustees, specifying the
date of his retirement; and (d) that a Trustee may be removed at any meeting of
the Shareholders of the Trust by a vote of the Shareholders owning at least
two-thirds of the Outstanding Shares.
Section 3.4. Vacancies and Appointment of Trustees. A vacancy shall
occur in case of the declination to serve, death, resignation, retirement or
removal of a Trustee, or a Trustee is otherwise unable to serve, or an increase
in the number of Trustees. Whenever a vacancy in the Board of Trustees shall
occur, until such vacancy is filled, the other Trustees shall have all the
powers hereunder and the certification of the other Trustees of such vacancy
shall be conclusive. In the case of an existing vacancy, the remaining Trustees
may fill such vacancy by appointment of such other person as they in their
discretion shall see fit, or may leave such vacancy unfilled or may reduce the
number of Trustees to not less than two (2) Trustees. Such appointment shall be
evidenced by a written instrument signed by a majority of the Trustees in
office or by resolution of the Trustees,
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duly adopted, which shall be recorded in the minutes of a meeting of the
Trustees, whereupon the appointment shall take effect.
An appointment of a Trustee may be made by the Trustees then in office
in anticipation of a vacancy to occur by reason of retirement, resignation, or
removal of a Trustee or an increase in number of Trustees effective at a later
date, provided that said appointment shall become effective only at the time or
after the expected vacancy occurs. As soon as any Trustee appointed pursuant to
this Section 3.4 shall have accepted this appointment in writing and agreed in
writing to be bound by the terms of the Agreement, the Trust estate shall vest
in the new Trustee or Trustees, together with the continuing Trustees, without
any further act or conveyance, and he shall be deemed a Trustee hereunder.
Section 3.5. Temporary Absence of Trustee. Any Trustee may, by power
of attorney, delegate his power for a period not exceeding six months at any
one time to any other Trustee or Trustees, provided that in no case shall less
than two Trustees personally exercise the other powers hereunder except as
herein otherwise expressly provided.
Section 3.6. Number of Trustees. The number of Trustees shall
initially be five (5), and thereafter shall be such number as shall be fixed
from time to time by a majority of the Trustees; provided, however, that the
number of Trustees shall in no event be less than two (2) nor more than twelve
(12). The Shareholders shall elect the Trustees (other than the initial
Trustees) on such dates as the Trustees may fix from time to time.
Section 3.7. Effect of Death, Resignation, etc. of a Trustee. The
declination to serve, death, resignation, retirement, removal, incapacity, or
inability of the Trustees, or any one of them, shall not operate to terminate
the Trust or to revoke any existing agency created pursuant to the terms of
this Trust Agreement.
Section 3.8. Ownership of Assets of the Trust. The assets of the
Trust and of each Portfolio thereof shall be held separate and apart from any
assets now or hereafter held in any capacity other than as Trustee hereunder by
the Trustees or any successor Trustees. Legal title in all of the assets of the
Trust and the right to conduct any business shall at all times be considered as
vested in the Trustees on behalf of the Trust, except that the Trustees may
cause legal title to any Trust Property to be held by, or in the name of the
Trust, or in the name of any Person as nominee. No Shareholder shall be deemed
to have a severable ownership in any individual asset of the Trust, or
belonging to any Portfolio, or allocable to any Class thereof, or any right of
partition or possession thereof, but each Shareholder shall have, except as
otherwise provided for herein, a proportionate undivided beneficial interest in
the Trust or in the assets belonging to the Portfolio (or allocable to the
Class) in which the Shareholder holds Shares. The Shares shall be personal
property giving only the rights specifically set forth in this Agreement or the
Delaware Act.
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ARTICLE IV
POWERS OF THE TRUSTEES
Section 4.1. Powers. The Trustees in all instances shall act as
principals, and are and shall be free from the control of the Shareholders. The
Trustees shall have full power and authority to do any and all acts and to make
and execute any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust.
Without limiting the foregoing and subject to any applicable limitation in this
Agreement or the Bylaws of the Trust, the Trustees shall have power and
authority:
(a) To invest and reinvest cash and other property, and to hold
cash or other property uninvested, without in any event being
bound or limited by any present or future law or custom in
regard to investments by Trustees, and to sell, exchange,
lend, pledge, mortgage, hypothecate, write options on, and
lease any or all of the assets of the Trust;
(b) To operate as, and to carry on the business of, an investment
company, and exercise all the powers necessary and appropriate
to the conduct of such operations;
(c) To borrow money and in this connection issue notes or other
evidence of indebtedness; to secure borrowings by mortgaging,
pledging, or otherwise subjecting as security the Trust
Property; to endorse, guarantee, or undertake the performance
of an obligation or engagement of any other Person and to lend
Trust Property;
(d) To provide for the distribution of interests of the Trust
either through a principal underwriter in the manner hereafter
provided for or by the Trust itself, or both, or otherwise
pursuant to a plan of distribution of any kind;
(e) To adopt Bylaws not inconsistent with this Agreement providing
for the conduct of the business of the Trust and to amend and
repeal them to the extent that they do not reserve such right
to the shareholders; such Bylaws shall be deemed incorporated
and included in this Agreement;
(f) To elect and remove such officers and appoint and terminate
such agents as they consider appropriate;
(g) To employ one or more banks, trust companies or companies that
are members of a national securities exchange, or such other
domestic or foreign entities as custodians of any assets of
the Trust subject to any conditions set forth in this
Agreement or in the Bylaws;
(h) To retain one or more transfer agents or Shareholder servicing
agents, or both;
(i) To set record dates in the manner provided herein or in the
Bylaws;
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(j) To delegate such authority as they consider desirable to any
officers of the Trust and to any investment adviser, manager,
administrator, custodian, underwriter, or other agent or
independent contractor;
(k) To sell or exchange any or all of the assets of the Trust,
subject to the provisions of Article VI, Section 6.1 hereof;
(l) To vote or give assent, or exercise any rights of ownership,
with respect to stock or other securities or property; and to
execute and deliver proxies and powers of attorney to such
person or persons as the Trustees shall deem proper, granting
to such person or persons such power and discretion with
relation to securities or property as the Trustee shall deem
proper;
(m) To exercise powers and rights of subscription or otherwise
which in any manner arise out of ownership of securities;
(n) To hold any security or property in a form not indicating any
trust, whether in bearer, book entry, unregistered, or other
negotiable form; or either in the name of the Trust or of a
Portfolio or of a custodian or a nominee or nominees, subject
in either case to proper safeguards according to the usual
practice of Delaware business trusts or investment companies;
(o) To establish separate and distinct Portfolios with separately
defined investment objectives and policies and distinct
investment purposes in accordance with the provisions of
Article II hereof and to establish Classes of such Portfolios
having relative rights, powers, and duties as they may provide
consistent with applicable law;
(p) Subject to the provisions of Section 3804 of the Delaware Act,
to allocate assets, liabilities, and expenses of the Trust to
a particular Portfolio or to apportion the same between or
among two or more Portfolios, provided that any liabilities or
expenses incurred by a particular Portfolio shall be payable
solely out of the assets belonging to that Portfolio as
provided for in Article II hereof;
(q) To consent to or participate in any plan for the
reorganization, consolidation, or merger of any corporation or
concern, any security of which is held in the Trust; to
consent to any contract, lease, mortgage, purchase, or sale of
property by such corporation or concern, and to pay calls or
subscriptions with respect to any security held in the Trust;
(r) To compromise, arbitrate, or otherwise adjust claims in favor
of or against the Trust or any matter in controversy
including, but not limited to, claims for taxes;
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(s) To declare and pay dividends and make distributions of income
and of capital gains and capital to Shareholders in the manner
hereinafter provided;
(t) To establish, from time to time, a minimum investment for
Shareholders in the Trust or in one or more Portfolios or
Classes, and to require the redemption of the Shares of any
Shareholder whose investment is less than such minimum upon
giving notice to such Shareholder;
(u) Subject to the requirements of the 1940 Act, to establish one
or more committees, to delegate any of the powers of the
Trustees to said committees, and to adopt a committee charter
providing for such responsibilities, membership (including
Trustees, officers, or other agents of the Trust therein) and
any other characteristics of said committees as the Trustees
may deem proper. Notwithstanding the provisions of this
Article IV, and in addition to such provisions or any other
provision of this Agreement or of the Bylaws, the Trustees may
by resolution appoint a committee consisting of less than the
whole number of Trustees then in office, which committee may
be empowered to act for and bind the Trustees and the Trust,
as if the acts of such committee were the acts of all the
Trustees then in office, with respect to the institution,
prosecution, dismissal, settlement, review, or investigation
of any action, suit, or proceeding which shall be pending or
threatened to be brought before any court, administrative
agency, or other adjudicatory body;
(v) To interpret the investment policies, practices or limitations
of any Portfolios;
(w) To establish a registered office and have a registered agent
in the State of Delaware; and
(x) In general to carry on any other business in connection with
or incidental to any of the foregoing powers, to do everything
necessary, suitable, or proper for the accomplishment of any
purpose or the attainment of any object or the furtherance of
any power hereinbefore set forth, either alone or in
association with others, and to do every other act or thing
incidental or appurtenant to or growing out of or connected
with the aforesaid business or purposes, objects, or powers.
The foregoing clauses shall be construed both as objects and powers,
and the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees. Any action by one or
more of the Trustees in their capacity as such hereunder shall be deemed an
action on behalf of the Trust or the applicable Portfolio, and not an action in
an individual capacity.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust.
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No one dealing with the Trustees shall be under any obligation to make
any inquiry concerning the authority of the Trustees, or to see to the
application of any payments made or property transferred to the Trustees or
upon their order.
Section 4.2. Issuance and Repurchase of Shares. The Trustees shall
have the power to issue, sell, repurchase, redeem, retire, cancel, acquire,
hold, resell, reissue, dispose of, and otherwise deal in Shares and, subject to
the provisions set forth in Articles II and VII, to apply to any such
repurchase, redemption, retirement, cancellation, or acquisition of Shares any
funds or property of the Trust, or any assets belonging to the particular
Portfolio or any assets allocable to the particular Class, with respect to
which such Shares are issued.
Section 4.3. Action by the Trustees. The Trustees shall act by
majority vote of those present at a meeting duly called (including a meeting by
telephonic or other electronic means, unless the 1940 Act requires that a
particular action be taken only at a meeting of the Trustees in person) at
which a quorum is present or by unanimous written consent of the Trustees (or
by written consent of a majority of the Trustees if the President of the Trust
determines that such exceptional circumstances exist, and are of such urgency,
as to make unanimous written consent impossible or impractical, which
determination shall be conclusive and binding on all Trustees and not otherwise
subject to challenge) without a meeting. A majority of the Trustees shall
constitute a quorum at any meeting. Meetings of the Trustees may be called
orally or in writing by the President of the Trust or by any two Trustees.
Notice of the time, date, and place of all meetings of the Trustees shall be
given to each Trustee by telephone, facsimile, electronic-mail, or other
electronic mechanism sent to his or her home or business address at least
twenty-four hours in advance of the meeting or in person at another meeting of
the Trustees or by written notice mailed to his or her home or business address
at least seventy-two hours in advance of the meeting. Notice need not be given
to any Trustee who attends the meeting without objecting to the lack of notice
or who signs a waiver of notice either before or after the meeting. Subject to
the requirements of the 1940 Act, the Trustees by majority vote may delegate to
any Trustee or Trustees authority to approve particular matters or take
particular actions on behalf of the Trust. Any written consent or waiver may be
provided and delivered to the Trust by any means by which notice may be given
to a Trustee.
Section 4.4. Principal Transactions. The Trustees may, on behalf of
the Trust, buy any securities from or sell any securities to, or lend any
assets of the Trust to, any Trustee or officer of the Trust or any firm of
which any such Trustee or officer is a member acting as principal, or have any
such dealings with any investment adviser, distributor, or transfer agent for
the Trust or with any Affiliated Person of such Person; and the Trust may
employ any such Person, or firm or Company in which such Person is an
Affiliated Person, as broker, legal counsel, registrar, investment adviser,
distributor, administrator, transfer agent, dividend disbursing agent,
custodian, or in any capacity upon customary terms, subject in all cases to
applicable laws, rules, and regulations and orders of regulatory authorities.
Section 4.5. Payment of Expenses by the Trust. The Trustees are
authorized to pay or cause to be paid out of the principal or income of the
Trust or any Portfolio, or partly out of the principal and partly out of
income, and to charge or allocate to, between or among such one or more of the
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Portfolios (or Classes), as they deem fair, all expenses, fees, charges, taxes,
and liabilities incurred or arising in connection with the Trust or Portfolio
(or Class), or in connection with the management thereof, including, but not
limited, to the Trustees' compensation and such expenses and charges for the
services of the Trust's officers, employees, investment adviser and manager,
administrator, principal underwriter, auditors, counsel, custodian, transfer
agent, Shareholder servicing agent, and such other agents or independent
contractors and such other expenses and charges as the Trustees may deem
necessary or proper to incur.
Section 4.6. Trustee Compensation. The Trustees as such shall be
entitled to reasonable compensation from the Trust. They may fix the amount of
their compensation. Nothing herein shall in any way prevent the employment of
any Trustee for advisory, management, administrative, legal, accounting,
investment banking, underwriting, brokerage, or investment dealer or other
services and the payment for the same by the Trust.
ARTICLE V
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND
TRANSFER AGENT
Section 5.1. Investment Adviser. Subject to any vote of the
Shareholders pursuant to Article VI, Section 6.1(3) that is required by the
1940 Act, the Trustees may in their discretion, from time to time, enter into
an investment advisory or management contract or contracts with respect to the
Trust or any Portfolio whereby the other party or parties to such contract or
contracts shall undertake to furnish the Trustees with such management,
investment advisory, statistical, and research facilities and services and such
other facilities and services, if any, and all upon such terms and conditions,
as the Trustees may in their discretion determine.
The Trustees may authorize the investment adviser to employ, from time
to time, one or more sub-advisers to perform such of the acts and services of
the investment adviser, and upon such terms and conditions, as may be agreed
upon among the Trustees, the investment adviser, and the sub-adviser. Any
references in this Agreement to the investment adviser shall be deemed to
include such sub-advisers, unless the context otherwise requires.
Section 5.2. Other Service Contracts. The Trustees may authorize the
engagement of a principal underwriter, transfer agent, administrator,
custodian, and similar service providers.
Section 5.3. Parties to Contract. Any contract of the character
described in Sections 5.1 and 5.2 of this Article V may be entered into with
any corporation, firm, partnership, trust, or association, although one or more
of the Trustees or officers of the Trust may be an officer, director, trustee,
shareholder, or member of such other party to the contract.
Section 5.4. Miscellaneous. The fact that (i) any of the
Shareholders, Trustees, or officers of the Trust is a shareholder, director,
officer, partner, trustee, employee, manager, adviser, principal underwriter or
distributor, or agent of or for any Company or of or for any parent or
affiliate of any Company, with which an advisory or administration contract, or
principal
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underwriter's or distributor's contract, or transfer, shareholder servicing,
custodian, or other agency contract may have been or may hereafter be made, or
that any such Company, or any parent or affiliate thereof, is a Shareholder or
has an interest in the Trust, or that (ii) any Company with which an advisory
or administration contract or principal underwriter's or distributor's
contract, or transfer, shareholder servicing, custodian, or other agency
contract may have been or may hereafter be made also has an advisory or
administration contract, or principal underwriter's or distributor's contract,
or transfer, shareholder servicing, custodian, or other agency contract with
one or more other companies, or has other business or interests shall not
affect the validity of any such contract or disqualify any Shareholder,
Trustee, or officer of the Trust from voting upon or executing the same or
create any liability or accountability to the Trust or its Shareholders.
ARTICLE VI
SHAREHOLDERS' VOTING POWERS AND MEETING
Section 6.1. Voting Powers. The Shareholders shall have power to
vote only with respect to (1) the election of Trustees as provided in Article
III, Section 3.6, (2) the removal of a Trustee as provided in Article III,
Section 3.3(d), (3) any investment advisory contract to the extent required by
the 1940 Act, (4) termination of the Trust or a Portfolio or Class thereof as
provided in Article IX, Section 9.3, (5) amendment of this Agreement only as
provided in Article IX, Section 9.7, (6) the sale of all or substantially all
the assets of the Trust or belonging to any Portfolio, unless the primary
purpose of such sale is to change the Trust's domicile or form of organization
or form of business trust; (7) the merger or consolidation of the Trust or any
Portfolio with and into another Company or a series or portfolio thereof,
unless (A) the primary purpose of such merger or consolidation is to change the
Trust's domicile or form of organization or form of business trust, or (B)
after giving effect to such merger or consolidation, based on the number of
Outstanding Shares as of a date selected by the Trustees, the Shareholders of
the Trust or such Portfolio will have a majority of the outstanding shares of
the surviving Company or series or portfolio thereof, as the case may be; and
(8) such additional matters relating to the Trust as may be required by law or
as the Trustees may consider desirable.
Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may make any action required or permitted by law, this
Agreement or any of the Bylaws of the Trust to be taken by Shareholders.
On any matter submitted to a vote of the Shareholders, all Shares
shall be voted together, except when required by applicable law or when the
Trustees have determined that the matter affects the interests of one or more
Portfolios (or Classes), then only the Shareholders of all such Portfolios (or
Classes) shall be entitled to vote thereon. Each whole Share shall be entitled
to one vote as to any matter on which it is entitled to vote, and each
fractional Share shall be entitled to a proportionate fractional vote. The vote
necessary to approve any such matter shall be set forth in this Agreement or in
the Bylaws.
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ARTICLE VII
DISTRIBUTIONS AND REDEMPTIONS
Section 7.1. Distributions. The Trustees may from time to time
declare and pay dividends and make other distributions with respect to any
Portfolio, or Class thereof, which may be from income, capital gains, or
capital. The amount of such dividends or distributions and the payment of them
and whether they are in cash or any other Trust Property shall be wholly in the
discretion of the Trustees. Dividends and other distributions may be paid
pursuant to a standing resolution adopted once or more often as the Trustees
determine. All dividends and other distributions on Shares of a particular
Portfolio or Class shall be distributed pro rata to the Shareholders of that
Portfolio or Class, as the case may be, in proportion to the number of Shares
of that Portfolio or Class they held on the record date established for such
payment, provided that such dividends and other distributions on Shares of a
Class shall appropriately reflect expenses allocated to that Class. The
Trustees may adopt and offer to Shareholders such dividend reinvestment plans,
cash distribution payout plans, or similar plans as the Trustees deem
appropriate.
Section 7.2. Redemptions. Any holder of record of Shares of a
particular Portfolio, or Class thereof, shall have the right to require the
Trust to redeem his Shares, or any portion thereof, subject to such terms and
conditions as are set forth in the Bylaws or are prescribed by the Trustees.
Section 7.3. Redemption of Shares by Trustees. Upon the terms and
conditions set forth in the Bylaws, the Trustees may call for the redemption of
the Shares of any Person or may refuse to transfer or issue Shares to any
Person to the extent that the same is necessary to comply with applicable law
or advisable to further the purposes of which the Trust is formed. To the
extent permitted by law, the Trustees may retain the proceeds of any redemption
of Shares required by them for payment of amounts due and owing by a
Shareholder to the Trust or any Portfolio.
Section 7.4. Redemption of De Minimis Accounts. If, at any time,
when a request for transfer or redemption of Shares of any Portfolio is
received by the Trust or its agent, the value of the Shares of such Portfolio
in a Shareholder's account is less than Five Hundred Dollars ($500.00), or such
greater amount as the Trustees in their discretion shall have determined in
accordance with Article IV, Section 4.1(t) hereof, after giving effect to such
transfer or redemption, the Trust may, at any time following such transfer or
redemption and upon giving thirty (30) days' notice to the Shareholder, cause
the remaining Shares of such Portfolio in such Shareholder's account to be
redeemed at net asset value and in accordance with such procedures as are set
forth in the Bylaws.
Section 7.5. Suspension of Right of Redemption. Notwithstanding
Section 7.2 of this Article VII, the Trustees may postpone payment of the
redemption price and suspend the Shareholders' right to require any Portfolio
or Class to redeem Shares during any period when and to the extent permissible
under the 1940 Act. Any such postponement and suspension shall take effect at
the time the Trustees shall specify, but not later than the close of business
on the business day next following the declaration thereof, and shall continue
until the Trustees declare the end thereof. If the right of redemption is
suspended, a Shareholder may either withdraw his or her request for redemption
or receive payment based on the net asset value per Share next determined after
the suspension terminates.
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ARTICLE VIII
LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 8.1. Limitation of Liability. A Trustee, when acting in such
capacity, shall not be personally liable to any person for any act, omission,
or obligation of the Trust or any Trustee; provided, however, that nothing
contained herein or in the Delaware Act shall protect any Trustee against any
liability to the Trust or to Shareholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of the office of
Trustee hereunder.
Section 8.2. Indemnification of Covered Persons. Every Covered
Person shall be indemnified by the Trust to the fullest extent permitted by the
Delaware Act and other applicable law.
Section 8.3. Indemnification of Shareholders. In case any
Shareholder or former Shareholder of the Trust shall be held to be personally
liable solely by reason of his being or having been a Shareholder of the Trust
or any Portfolio or Class and not because of his acts or omissions or for some
other reason, the Shareholder or former Shareholder (or his heirs, executors,
administrators, or other legal representatives, or, in the case of a
corporation or other entity, its corporate or general successor) shall be
entitled, out of the assets belonging to the applicable Portfolio (or allocable
to the applicable Class), to be held harmless from and indemnified against all
loss and expense arising from such liability in accordance with the Bylaws and
applicable law. The Trust, on behalf of the affected Portfolio (or Class),
shall, upon request by the Shareholder, assume the defense of any claim made
against the Shareholder for any act or obligation of that Portfolio (or Class).
ARTICLE IX
MISCELLANEOUS
Section 9.1. Trust Not a Partnership; Taxation. It is hereby
expressly declared that a trust and not a partnership is created hereby. No
Trustee hereunder shall have any power to bind personally either the Trust's
officers or any Shareholder. All persons extending credit to, contracting with
or having any claim against the Trust or the Trustees shall look only to the
assets of the appropriate Portfolio or, until the Trustees shall have
established any separate Portfolio, of the Trust for payment under such credit,
contract, or claim; and neither the Shareholders nor the Trustee, nor any of
their agents, whether past, present, or future, shall be personally liable
therefor.
It is intended that the Trust, or each Portfolio if there is more than
one Portfolio, be classified for income tax purposes as an association taxable
as a corporation, and the Trustees shall do all things that they, in their sole
discretion, determine are necessary to achieve that objective, including (if
they so determine) electing such classification on Internal Revenue Form 8832.
Any Trustee is hereby authorized to sign such form on behalf of the Trust or
any Portfolio, and the
16
<PAGE> 17
Trustees may delegate such authority to any executive officer(s) of any
Portfolio's investment adviser. The Trustees, in their sole discretion and
without the vote or consent of the Shareholders, may amend this Agreement to
ensure that this objective is achieved.
Section 9.2. Trustee's Good Faith Action, Expert Advice, No Bond or
Surety. The exercise by the Trustees of their powers and discretion hereunder
in good faith and with reasonable care under the circumstances then prevailing
shall be binding upon everyone interested. Subject to the provisions of Article
VIII hereof and to Section 9.1 of this Article IX, the Trustees shall not be
liable for errors of judgment or mistakes of fact or law. The Trustees may take
advice of counsel or other experts with respect to the meaning and operation of
this Agreement, and subject to the provisions of Article VIII hereof and
Section 9.1 of this Article IX, shall be under no liability for any act or
omission in accordance with such advice or for failing to follow such advice.
The Trustees shall not be required to give any bond as such, nor any surety if
a bond is obtained.
Section 9.3. Termination of Trust or Portfolio or Class. (a) The
Trust or any Portfolio (or Class) may be terminated by (1) a Majority
Shareholder Vote of the Trust or the affected Portfolio (or Class),
respectively, or (2) if there are fewer than 100 Shareholders of record of the
Trust or of such terminating Portfolio (or Class), the Trustees pursuant to
written notice to the Shareholders of the Trust or the affected Portfolio (or
Class).
(b) On termination of the Trust or any Portfolio pursuant to
paragraph (a),
(1) the Trust or that Portfolio thereafter shall carry on
no business except for the purpose of winding up its affairs,
(2) the Trustees shall (i) proceed to wind up the affairs
of the Trust or that Portfolio, and all powers of the Trustees under
this Agreement with respect thereto shall continue until such affairs
have been wound up, including the powers to fulfill or discharge the
contracts of the Trust or that Portfolio, (ii) collect its assets or
the assets belonging thereto, (iii) sell, convey, assign, exchange, or
otherwise dispose of all or any part of those assets to one or more
persons at public or private sale for consideration that may consist
in whole or in part of cash, securities, or other property of any
kind, (iv) discharge or pay its liabilities, and (v) do all other acts
appropriate to liquidate its business, and
(3) after paying or adequately providing for the payment
of all liabilities, and upon receipt of such releases, indemnities,
and refunding agreements as they deem necessary for their protection,
the Trustees shall distribute the remaining assets ratably among the
Shareholders of the Trust or that Portfolio.
(c) On termination of any Class pursuant to paragraph (a),
(1) the Trust thereafter shall carry on no business with
respect to that Class except for the purpose of winding up its
affairs,
17
<PAGE> 18
(2) the Trustees shall (i) proceed to wind up all affairs
respecting that Class, and all powers of the Trustees under this
Agreement with respect thereto shall continue until such affairs have
been wound up, including the powers to fulfill or discharge the
contracts respecting that Class, and (ii) do all other acts
appropriate to liquidate its business respecting that Class, and
(3) the Trustees shall distribute ratably among the
Shareholders of that Class, in cash or in kind, an amount equal to the
net value of the assets allocable to that Class (after taking into
account any fees, expenses, or charges allocated thereto), and in
connection with any such distribution in cash the Trustees are
authorized to sell, convey, assign, exchange, or otherwise dispose of
such assets of the Portfolio of which that Class is a part as they
deem necessary.
(d) On completion of distribution of the remaining assets pursuant
to paragraph (b)(3) (or the net value of allocable assets pursuant to paragraph
(c)(3)), the Trust or the affected Portfolio (or Class) shall terminate and the
Trustees and the Trust shall be discharged from all further liabilities and
duties hereunder with respect thereto and the rights and interests of all
parties therein shall be canceled and discharged. On termination of the Trust,
following completion of winding up of its business, the Trustees shall cause a
Certificate of Cancellation of the Trust's Certificate of Trust to be filed in
accordance with the Delaware Act, which Certificate may be signed by any one
Trustee.
Section 9.4. Sale of Assets; Merger and Consolidation. Subject to
Article VI, Section 6.1 of this Agreement, the Trustees may cause (i) the Trust
or one or more of its Portfolios to the extent consistent with applicable law
to sell all or substantially all of its assets, or be merged into or
consolidated with another business trust or Company, (ii) the Shares of the
Trust or any Portfolio (or Class) to be converted into beneficial interests in
another business trust (or series thereof) created pursuant to this Section 9.4
of Article IX, or (iii) the Shares to be exchanged under or pursuant to any
state or federal statute to the extent permitted by law. In all respects not
governed by statute or applicable law, the Trustees shall have power to
prescribe the procedure necessary or appropriate to accomplish a sale of
assets, merger or consolidation including the power to create one or more
separate business trusts to which all or any part of the assets, liabilities,
profits or losses of the Trust may be transferred and to provide for the
conversion of Shares of the Trust or any Portfolio (or Class) into beneficial
interests in such separate business trust or trusts (or series or class
thereof).
Section 9.5. Filing of Copies, References, Headings. The original or
a copy of this Agreement or any amendment hereto or any supplemental Agreement
shall be kept at the office of the Trust where it may be inspected by any
Shareholder. In this Agreement or in any such amendment or supplemental
Agreement, references to this Agreement, and all expressions like "herein,"
"hereof," and "hereunder," shall be deemed to refer to this Agreement as
amended or affected by any such supplemental Agreement. All expressions like
"his," "he," and "him," shall be deemed to include the feminine and neuter, as
well as masculine, genders. Headings are placed herein for convenience of
reference only and in case of any conflict, the text of this Agreement,
18
<PAGE> 19
rather than the headings, shall control. This Agreement may be executed in any
number of counterparts each of which shall be deemed an original.
Section 9.6. Governing Law. The Trust and this Agreement, and the
rights, obligations and remedies of the Trustees and Shareholders hereunder,
are to be governed by and construed and administered according to the Delaware
Act and the other laws of the State of Delaware; provided, however, that there
shall not be applicable to the Trust, the Trustees, the Shareholders or this
Trust Agreement (a) the provisions of Section 3540 of Title 12 of the Delaware
Code or (b) any provisions of the laws (statutory or common) of the State of
Delaware (other than the Delaware Act) pertaining to trusts which relate to or
regulate (i) the filing with any court or governmental body or agency of
trustee accounts or schedules of trustee fees and charges, (ii) affirmative
requirements to post bonds for trustees, officers, agents, or employees of a
trust, (iii) the necessity for obtaining court or other governmental approval
concerning the acquisition, holding, or disposition of real or personal
property, (iv) fees or other sums payable to trustees, officers, agents, or
employees of a trust, (v) the allocation of receipts and expenditures to income
or principal, (vi) restrictions or limitations on the permissible nature,
amount, or concentration of trust investments or requirements relating to the
titling, storage, or other manner of holding of trust assets, or (vii) the
establishment of fiduciary or other standards or responsibilities or
limitations on the indemnification, acts or powers of trustees or other
Persons, which are inconsistent with the limitations of liabilities or
authorities and powers of the Trustees or officers of the Trust set forth or
referenced in this Agreement.
The Trust shall be of the type commonly called a "business trust," and
without limiting the provisions hereof, the Trust may exercise all powers which
are ordinarily exercised by such a trust under Delaware law. The Trust
specifically reserves the right to exercise any of the powers or privileges
afforded to trusts or actions that may be engaged in by trusts under the
Delaware Act, and the absence of a specific reference herein to any such power,
privilege, or action shall not imply that the Trust may not exercise such power
or privilege or take such actions, provided, however, that the exercise of any
such power, privilege, or action shall not otherwise violate applicable law.
Section 9.7. Amendments. Except as specifically provided herein, the
Trustees may, without any Shareholder vote, amend this Agreement by making an
amendment, an Agreement supplemental hereto, or an amended and restated trust
instrument. Any amendment submitted to Shareholders that the Trustees determine
would affect the Shareholders of less than all Portfolios (or less than all
Classes thereof) shall be authorized by vote of only the Shareholders of the
affected Portfolio(s) (or Class(es)), and no vote shall be required of
Shareholders of any Portfolio (or Class) that is not affected. Notwithstanding
anything else herein to the contrary, any amendment to Article VIII that would
have the effect of reducing the indemnification provided thereby to Covered
Persons or to Shareholders or former Shareholders, and any repeal or amendment
of this sentence shall each require the affirmative vote of Shareholders owning
at least two-thirds of the Outstanding Shares entitled to vote thereon. A
certification signed by a majority of the Trustees setting forth an amendment
to this Agreement and reciting that it was duly adopted by the Shareholders or
by the Trustees as aforesaid, or a copy of this Agreement, as amended, executed
by a majority of the Trustees, shall be conclusive evidence of such amendment
when lodged among the records of the Trust.
19
<PAGE> 20
Section 9.8. Provisions in Conflict with Law. The provisions of this
Agreement are severable, and the Trustees shall determine, with the advice of
counsel, that any of such provisions is in conflict with applicable law the
conflicting provision shall be deemed never to have constituted a part of this
Agreement; provided, however, that such determination shall not affect any of
the remaining provisions of this Agreement or render invalid or improper any
action taken or omitted prior to such determination. If any provision of this
Agreement shall be held invalid or enforceable in any jurisdiction, such
invalidity or unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provisions in any other
jurisdiction or any other provision of this Agreement in any jurisdiction.
Section 9.9. Shareholders' Right to Inspect Shareholder List. One or
more Persons who together and for at least six months have been Shareholders of
at least five percent (5%) of the Outstanding Shares of any Class may present
to any officer or resident agent of the Trust a written request for a list of
its Shareholders. Within twenty (20) days after such request is made, the
Trust shall prepare and have available on file at its principal office a list
verified under oath by one of its officers or its transfer agent or registrar
which sets forth the name and address of each Shareholder and the number of
Shares of each Class which the Shareholder holds. The rights provided for
herein shall not extend to any Person who is a beneficial owner but not also a
record owner of Shares of the Trust.
20
<PAGE> 21
Adoption of the foregoing resolutions as the acts of the Board of
Trustees shall be effective as of May 7, 1998.
/s/ WILLIAM J. GUILFOYLE /s/ ARTHUR C. PATTERSON
- ------------------------------------ --------------------------------------
William J. Guilfoyle Arthur C. Patterson
/s/ C. DEREK ANDERSON /s/ RUTH H. QUIGLEY
- ------------------------------------ --------------------------------------
C. Derek Anderson Ruth H. Quigley
/s/ FRANK S. BAYLEY
- ------------------------------------
Frank S. Bayley
Date: May , 1998
21
<PAGE> 22
SCHEDULE A
AIM Investment Portfolios shall be divided into the following
Portfolios, each of which shall have two Classes (Class A and Class B):
AIM Dollar Fund
Date: May 7, 1998
22
<PAGE> 1
EXHIBIT 2
BYLAWS
OF
AIM INVESTMENT PORTFOLIOS,
A DELAWARE BUSINESS TRUST
ADOPTED EFFECTIVE MAY 7, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I OFFICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Registered Office. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Other Offices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Number. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 3. Vacancy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 4. Delegation of Power. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 5. Inability to Serve Full Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 6. Powers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 7. Meetings of the Trustees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 8. Regular Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 9. Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 10. Action Without Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 11. Designation, Powers, and Name of Committees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 12. Minutes of Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 13. Compensation of Trustees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1. Executive Officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2. Term of Office. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3. President. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 4. Chairman of the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 5. Other Officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 6. Secretary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 7. Treasurer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 8. Surety Bond. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE IV MEETINGS OF SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 1. Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2. Nominations of Trustees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3. Election of Trustees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4. Notice of Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5. Special Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 6. Notice of Special Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 7. Conduct of Special Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 8. Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 9. Organization of Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 10. Voting Standard. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 11. Voting Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 12. Action Without Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE V NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1. Methods of Giving Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2. Written Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE VI CERTIFICATES OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 1. Issuance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2. Countersignature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3. Lost Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4. Transfer of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5. Fixing Record Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6. Registered Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VII GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 1. Dividends and Distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2. Redemptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4. Advance Payments of Indemnifiable Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5. Seal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 6. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 7. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VIII AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 1. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
ii
<PAGE> 4
BYLAWS
OF
AIM INVESTMENT PORTFOLIOS,
A DELAWARE BUSINESS TRUST
Capitalized terms not specifically defined herein
shall have the meanings ascribed to them in the Trust's
Agreement and Declaration of Trust ("Agreement").
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of AIM Investment
Portfolios (the "Trust") shall be in the County of New Castle, State of
Delaware.
Section 2. Other Offices. The Trust may also have offices at such
other places both within and without the State of Delaware as the Trustees may
from time to time determine or the business of the Trust may require.
ARTICLE II
TRUSTEES
Section 1. Number. The number of Trustees shall initially be five, and
thereafter shall be such number as shall be fixed from time to time by
resolution of the Board of Trustees; provided, however, that the number of
Trustees shall in no event be less than two nor more than twelve.
Section 2. Term. The Trustees shall hold office during the lifetime
of the Trust, except (a) that any Trustee may resign his trusteeship or may
retire by written instrument signed by him and delivered to the other Trustees,
which shall take effect upon such delivery or upon such later date as is
specified therein; (b) that any Trustee may be removed at any time by written
instrument, signed by at least two-thirds of the number of Trustees prior to
such removal, specifying the date when such removal shall become effective; (c)
that any Trustee who has died, become physically or mentally incapacitated by
reason of disease or otherwise, or is otherwise unable to serve, may be retired
by written instrument signed by a majority of the other Trustees, specifying
the date of his retirement; and (d) that a Trustee may be removed at any
meeting of the shareholders of the Trust.
Section 3. Vacancy. In case of the declination to serve, death,
resignation, retirement or removal of a Trustee, or a Trustee is otherwise
unable to serve, or an increase in the number of Trustees, a vacancy shall
occur. Whenever a vacancy in the Trustees shall occur, until such vacancy is
filled, the other Trustees shall have all the powers hereunder and the
certification of
<PAGE> 5
the other Trustees of such vacancy shall be conclusive. In the case of an
existing vacancy, the remaining Trustees may fill such vacancy by appointing
such other person as they in their discretion shall see fit, or may leave such
vacancy unfilled or may reduce the number of Trustees to not less than two
Trustees. Such appointment shall be evidenced by a written instrument signed by
a majority of the Trustees in office or by resolution of the Trustees, duly
adopted, which shall be recorded in the minutes of a meeting of the Trustees,
whereupon the appointment shall take effect.
An appointment of a Trustee may be made by the Trustees then in office
in anticipation of a vacancy to occur by reason of retirement, resignation or
increase in number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date of said
retirement, resignation or increase in number of Trustees. As soon as any
Trustee appointed pursuant to Sections 2 and 3 of Article II of these Bylaws,
or elected pursuant to Section 3 of Article IV, and the Agreement shall have
accepted this appointment in writing and agreed in writing to be bound by the
terms of the Trust Agreement, the Trust estate shall vest in the new Trustee or
Trustees, together with the continuing Trustees, without any further act or
conveyance, and he shall be deemed a Trustee hereunder.
Section 4. Delegation of Power. Any Trustee may, by power of attorney,
delegate his power for a period not exceeding six months at any one time to any
other Trustee or Trustees, provided that in no case shall less than two Trustees
personally exercise the other powers hereunder except as herein otherwise
expressly provided.
Section 5. Inability to Serve Full Term. The declination to serve,
death, resignation, retirement, removal, incapacity, or inability of the
Trustees, or any one of them, shall not operate to terminate the Trust or to
revoke any existing agency created pursuant to the terms of the Agreement.
Section 6. Powers. The Trustees shall have exclusive and absolute
control over the trust property and over the business of the Trust to the same
extent as if the Trustees were the sole owners of the trust property and
business in their own right, but with such powers of delegation as may be
permitted by the Agreement. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its
branches and maintain offices both within and without the State of Delaware, in
any and all states of the United States of America, in the District of
Columbia, in any and all commonwealths, territories, dependencies, colonies, or
possessions of the United States of America, and in any foreign jurisdiction
and to do all such other things and execute all such instruments as they deem
necessary, proper or desirable in order to promote the interests of the Trust
although such things are not herein specifically mentioned. Any determination
as to what is in the interests of the Trust made by the Trustees in good faith
shall be conclusive. In construing the provisions of these Bylaws and the
Agreement, the presumption shall be in favor of a grant of power to the
Trustees.
Section 7. Meetings of the Trustees. The Trustees of the Trust
may hold meetings, both regular and special, either within or without the State
of Delaware.
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Section 8. Regular Meetings. Regular meetings of the Board of
Trustees shall be held each year, at such time and place as the Board of
Trustees may determine.
Section 9. Notice of Meetings. Notice of the time, date, and
place of all meetings of the Trustees shall be given to each Trustee by
telephone, facsimile, electronic-mail, or other electronic mechanism sent to
his or her home or business address at least twenty-four hours in advance of
the meeting or in person at another meeting of the Trustees or by written
notice mailed to his or her home or business address at least seventy-two hours
in advance of the meeting.
Section 10. Quorum. At all meetings of the Trustees, a majority
of the Trustees then in office (but in no event less than two Trustees) shall
constitute a quorum for the transaction of business and the act of a majority
of the Trustees present at any meeting at which there is a quorum shall be the
act of the Board of Trustees, except as may be otherwise specifically provided
by applicable law or by the Agreement or these Bylaws. If a quorum shall not be
present at any meeting of the Board of Trustees, the Trustees present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 11. Action Without Meeting. Unless otherwise restricted
by the Agreement or these Bylaws, any action required or permitted to be taken
at any meeting of the Board of Trustees or of any committee thereof may be
taken without a meeting by unanimous written consent of the Trustees or
committee members (or by written consent of a majority of the Trustees if the
President of the Trust determines that such exceptional circumstances exist,
and are of such urgency, as to make unanimous written consent impossible or
impractical, which determination shall be conclusive and binding on all
Trustees and not otherwise subject to challenge) and the writing or writings
are filed with the minutes of proceedings of the board or committee.
Section 12. Designation, Powers, and Name of Committees. The Board
of Trustees may, by resolution passed by a majority of the whole Board,
designate one or more committees, each committee to consist of two or more of
the Trustees of the Trust. The Board may designate one or more Trustee as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of such committee. Each committee, to the extent provided
in the resolution, shall have and may exercise the powers of the Board of
Trustees in the management of the business and affairs of the Trust; provided,
however, that in the absence or disqualification of any member of such
committee or committees, the member or members thereof present at any meeting
and not disqualified from voting, whether or not such members constitute a
quorum, may unanimously appoint another member of the Board of Trustees to act
at the meeting in the place of any such absent or disqualified member. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the Board of Trustees.
Section 13. Minutes of Committee. Each committee shall keep regular
minutes of its meetings and report the same to the Board of Trustees when
required.
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Section 14. Compensation of Trustees. The Trustees as such shall
be entitled to reasonable compensation for their services as determined from
time to time by the Board of Trustees. Nothing herein shall in any way prevent
the employment of any Trustee for advisory, management, administrative, legal,
accounting, investment banking, underwriting, brokerage, or investment dealer
or other services and the payment for the same by the Trust.
ARTICLE III
OFFICERS
Section 1. Executive Officers. The initial executive officers of
the Trust shall be elected by the Board of Trustees as soon as practicable
after the organization of the Trust. The executive officers may include a
Chairman of the Board, and shall include a President, one or more Vice
Presidents (the number thereof to be determined by the Board of Trustees), a
Secretary and a Treasurer. The Chairman of the Board, if any, shall be selected
from among the Trustees. The Board of Trustees may also in its discretion
appoint Assistant Vice Presidents, Assistant Secretaries, Assistant Treasurers,
and other officers, agents and employees, who shall have such authority and
perform such duties as the Board may determine. The Board of Trustees may fill
any vacancy which may occur in any office. Any two offices, except for those of
President and Vice President, may be held by the same person, but no officer
shall execute, acknowledge or verify any instrument on behalf of the Trust in
more than one capacity, if such instrument is required by law or by these
Bylaws to be executed, acknowledged or verified by two or more officers.
Section 2. Term of Office. Unless otherwise specifically determined
by the Board of Trustees, the officers shall serve at the pleasure of the Board
of Trustees. If the Board of Trustees in its judgment finds that the best
interests of the Trust will be served, the Board of Trustees may remove any
officer of the Trust at any time with or without cause. The Trustees may
delegate this power to the President with respect to any other officer. Such
removal shall be without prejudice to the contract rights, if any, of the person
so removed. Any officer may resign from office at any time by delivering a
written resignation to the Trustees or the President. Unless otherwise
specified therein, such resignation shall take effect upon delivery.
Section 3. President. The President shall be the chief executive
officer of the Trust and, subject to the Board of Trustees, shall generally
manage the business and affairs of the Trust. If there is no Chairman of the
Board, or if the Chairman of the Board has been appointed but is absent, the
President shall, if present, preside at all meetings of the shareholders and
the Board of Trustees.
Section 4. Chairman of the Board. The Chairman of the Board, if any,
shall preside at all meetings of the shareholders and the Board of Trustees, if
the Chairman of the Board is present. The Chairman of the Board shall have such
other powers and duties as shall be determined by the Board of Trustees, and
shall undertake such other assignments as may be requested by the President.
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Section 5. Other Officers. The Chairman of the Board or one or more
Vice Presidents shall have and exercise such powers and duties of the President
in the absence or inability to act of the President, as may be assigned to
them, respectively, by the Board of Trustees or, to the extent not so assigned,
by the President. In the absence or inability to act of the President, the
powers and duties of the President not otherwise assigned by the Board of
Trustees or the President shall devolve upon the Chairman of the Board, or in
the Chairman's absence, the Vice Presidents in the order of their election.
Section 6. Secretary. The Secretary shall (a) have custody of the
seal of the Trust; (b) attend meetings of the shareholders, the Board of
Trustees, and any committees of Trustees and keep the minutes of such meetings
of shareholders, Board of Trustees and any committees thereof; and (c) issue all
notices of the Trust. The Secretary shall have charge of the shareholder records
and such other books and papers as the Board may direct, and shall perform such
other duties as may be incidental to the office or which are assigned by the
Board of Trustees. The Secretary shall also keep or cause to be kept a
shareholder book, which may be maintained by means of computer systems,
containing the names, alphabetically arranged, of all persons who are
shareholders of the Trust, showing their places of residence, the number and
class or series of any class of shares of beneficial interest held by them,
respectively, and the dates when they became the record owners thereof, and such
book shall be open for inspection as prescribed by the laws of the State of
Delaware.
Section 7. Treasurer. The Treasurer shall have the care and custody
of the funds and securities of the Trust and shall deposit the same in the name
of the Trust in such bank or banks or other depositories, subject to withdrawal
in such manner as these Bylaws or the Board of Trustees may determine. The
Treasurer shall, if required by the Board of Trustees, give such bond for the
faithful discharge of duties in such form as the Board of Trustees may require.
Section 8. Surety Bond. The Trustees may require any officer or
agent of the Trust to execute a bond (including, without limitation, any bond
required by the Investment Company Act of 1940, as amended ("1940 Act") and the
rules and regulations of the Securities and Exchange Commission ("Commission")
to the Trust in such sum and with such surety or sureties as the Trustees may
determine, conditioned upon the faithful performance of his or her duties to
the Trust, including responsibility for negligence and for the accounting of
any of the Trust's property, funds, or securities that may come into his or her
hands.
ARTICLE IV
MEETINGS OF SHAREHOLDERS
Section 1. Purpose. All meetings of the shareholders for the
election of Trustees shall be held at such place as may be fixed from time to
time by the Trustees, or at such other place either within or without the State
of Delaware as shall be designated from time to time by the Trustees and stated
in the notice indicating that a meeting has been called for such purpose.
Meetings of shareholders may be held for any purpose determined by the Trustees
and may be held at such time and place, within or without the State of Delaware
as shall be stated in the notice of the
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meeting or in a duly executed waiver of notice thereof. At all meetings of the
shareholders, every shareholder of record entitled to vote thereat shall be
entitled to vote at such meeting either in person or by written proxy signed by
the shareholder or by his duly authorized attorney in fact. A shareholder may
duly authorize such attorney in fact through written, electronic, telephonic,
computerized, facsimile, telecommunication, telex or oral communication or by
any other form of communication. Unless a proxy provides otherwise, such proxy
is not valid more than eleven months after its date. A proxy with respect to
shares held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to exercise of the proxy the Trust receives
a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a shareholder shall be deemed
valid unless challenged at or prior to its exercise and the burden of proving
invalidity shall rest on the challenger.
Section 2. Nominations of Trustees. Nominations of individuals for
election to the Board of Trustees shall be made by the Board of Trustees or a
nominating committee of the Board of Trustees, if one has been established (the
"Nominating Committee"). Any shareholder of the Trust may submit names of
individuals to be considered by the Nominating Committee or the Board of
Trustees, as applicable, provided, however, (i) that such person was a
shareholder of record at the time of submission of such names and is entitled
to vote at the meeting, and (ii) that the Nominating Committee or the Board of
Trustees, as applicable, shall make the final determination of persons to be
nominated.
Section 3. Election of Trustees. All meetings of shareholders for
the purpose of electing Trustees shall be held on such date and at such time as
shall be designated from time to time by the Trustees and stated in the notice
of the meeting, at which the shareholders shall elect by a plurality vote any
number of Trustees as the notice for such meeting shall state are to be
elected, and transact such other business as may properly be brought before the
meeting in accordance with Section 1 of this Article IV.
Section 4. Notice of Meetings. Written notice of any meeting stating
the place, date, and hour of the meeting shall be given to each shareholder
entitled to vote at such meeting not less than ten days before the date of the
meeting in accordance with Article V hereof.
Section 5. Special Meetings. Special meetings of the shareholders,
for any purpose or purposes, unless otherwise prescribed by applicable law or
by the Agreement, may be called by any Trustee; provided, however, that the
Trustees shall promptly call a meeting of the shareholders solely for the
purpose of removing one or more Trustees, when requested in writing so to do by
the record holders of not less than ten percent of the outstanding shares of
the Trust.
Section 6. Notice of Special Meeting. Written notice of a special
meeting stating the place, date, and hour of the meeting and the purpose of
purposes for which the meeting is called, shall be given not less than ten days
before the date of the meeting, to each shareholder entitled to vote at such
meeting.
Section 7. Conduct of Special Meeting. Business transacted at any
special meeting of shareholders shall be limited to the purpose stated in the
notice.
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Section 8. Quorum. The holders of one-third of the shares of
beneficial interests that are issued and outstanding and entitled to vote
thereat, present in person or represented by proxy, shall constitute a quorum
at all meetings of the shareholders for the transaction of business except as
otherwise provided by applicable law or by the Agreement. If, however, such
quorum shall not be present or represented at any meeting of the shareholders,
the vote of the holders of a majority of shares cast shall have power to
adjourn the meeting from time to time, without notice other than announcement
at the meeting, until a quorum shall be present or represented. At such
adjourned meeting, at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified.
Section 9. Organization of Meetings.
(a) The Chairman of the Board of Trustees shall preside
at each meeting of shareholders. In the absence of the Chairman of the Board,
the meeting shall be chaired by the President, or if the President shall not be
present, by a Vice President. In the absence of all such officers, the meeting
shall be chaired by a person elected for such purpose at the meeting. The
Secretary of the Trust, if present, shall act as Secretary of such meetings, or
if the Secretary is not present, an Assistant Secretary of the Trust shall so
act, and if no Assistant Secretary is present, then a person designated by the
Secretary of the Trust shall so act, and if the Secretary has not designated a
person, then the meeting shall elect a secretary for the meeting.
(b) The Board of Trustees of the Trust shall be entitled
to make such rules and regulations for the conduct of meetings of shareholders
as it shall deem necessary, appropriate or convenient. Subject to such rules
and regulations of the Board of Trustees, if any, the chairman of the meeting
shall have the right and authority to prescribe such rules, regulations and
procedures and to do all such acts as, in the judgment of such chairman, are
necessary, appropriate or convenient for the proper conduct of the meeting,
including, without limitation, establishing: an agenda or order of business for
the meeting; rules and procedures for maintaining order at the meeting and the
safety of those present; limitations on participation in such meeting to
shareholders of record of the Trust and their duly authorized and constituted
proxies, and such other persons as the chairman shall permit; restrictions on
entry to the meeting after the time fixed for the commencement thereof;
limitations on the time allotted to questions or comments by participants; and
regulation of the opening and closing of the polls for balloting on matters
which are to be voted on by ballot, unless and to the extent the Board of
Trustees or the chairman of the meeting determines that meetings of
shareholders shall not be required to be held in accordance with the rules of
parliamentary procedure.
Section 10. Voting Standard. When a quorum is present at any
meeting, the vote of the holders of a majority of the shares cast shall decide
any question brought before such meeting, unless the question is one on which,
by express provision of applicable law, the Agreement, these Bylaws, or
applicable contract, a different vote is required, in which case such express
provision shall govern and control the decision of such question.
Section 11. Voting Procedure. Each whole share shall be entitled to
one vote, and each fractional share shall be entitled to a proportionate
fractional vote. On any matter submitted to a
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vote of the shareholders, all shares shall be voted together, except when
required by applicable law or when the Trustees have determined that the matter
affects the interests of one or more Portfolios (or Classes), then only the
shareholders of such Portfolios (or Classes) shall be entitled to vote thereon.
Section 12. Action Without Meeting. Unless otherwise provided in the
Agreement or applicable law, any action required to be taken at any meeting of
shareholders of the Trust, or any action which may be taken at any meeting of
such shareholders, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding shares having not less than the
minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted. Prompt notice of the taking of any such action without a meeting by
less than unanimous written consent shall be given to those shareholders who
have not consented in writing.
ARTICLE V
NOTICES
Section 1. Methods of Giving Notice. Whenever, under the provisions
of applicable law or of the Agreement or of these Bylaws, notice is required to
be given to any Trustee or shareholder, it shall not, unless otherwise provided
herein, be construed to mean personal notice, but such notice may be given
orally in person, or by telephone (promptly confirmed in writing) or in
writing, by mail addressed to such Trustee or shareholder, at his address as it
appears on the records of the Trust, with postage thereon prepaid, and such
notice shall be deemed to be given at the time when the same shall be deposited
in the United States mail. Notice to Trustees or members of a committee may
also be given by telex, telegram, telecopier or via overnight courier. If sent
by telex or telecopier, notice to a Trustee or member of a committee shall be
deemed to be given upon transmittal; if sent by telegram, notice to a Trustee
or member of a committee shall be deemed to be given when the telegram, so
addressed, is delivered to the telegraph company, and if sent via overnight
courier, notice to a Trustee or member of a committee shall be deemed to be
given when delivered against a receipt therefor.
Section 2. Written Waiver. Whenever any notice is required to be
given under the provisions of applicable law or of the Agreement or of these
Bylaws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be
deemed equivalent thereto.
ARTICLE VI
CERTIFICATES OF SHARES
Section 1. Issuance. Upon request, every holder of shares in the
Trust shall be entitled to have a certificate, signed by, or in the name of the
Trust by, a Trustee, certifying the number of shares owned by him in the Trust.
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Section 2. Countersignature. Where a certificate is countersigned
(1) by a transfer agent other than the Trust or its employee, or, (2) by a
registrar other than the Trust or its employee, the signature of the Trustee
may be a facsimile.
Section 3. Lost Certificates. The Board of Trustees may direct a new
certificate or certificates to be issued in place of any certificate or
certificates therefore issued by the Trust alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of the fact by the person claiming
the certificate to be lost, stolen or destroyed. When authorizing such issue of
a new certificate or certificates, the Board of Trustees may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost, stolen or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require and/or
to give the Trust a bond in such sum as it may direct as indemnity against any
claim that may be made against the Trust with respect to the certificate
alleged to have been lost, stolen or destroyed.
Section 4. Transfer of Shares. The Trustees shall make such rules
as they consider appropriate for the transfer of shares and similar matters. To
the extent certificates are issued in accordance with Section 1 of this Article
VI, upon surrender to the Trust or the transfer agent of the Trust of such
certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
Trust to issue a new certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon its books.
Section 5. Fixing Record Date. In order that the Trustees may
determine the shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or to express consent to action in
writing without a meeting, or entitled to receive payment of any dividend or
other distribution of allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of beneficial interests
or for the purpose of any other lawful action, the Board of Trustees may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Trustees, and
which record date shall not be more than ninety nor less than ten days before
the date of such meeting, nor more than ten days after the date upon which the
resolution fixing the record date is adopted by the Board of Trustees for
action by shareholder consent in writing without a meeting, nor more than
ninety days prior to any other action. A determination of shareholders of
record entitled to notice of or to vote at a meeting of shareholders shall
apply to any adjournment of the meeting; provided, however, that the Board of
Trustees may fix a new record date for the adjourned meeting.
Section 6. Registered Shareholders. The Trust shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice hereof, except as otherwise provided by
the laws of Delaware.
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ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends and Other Distributions. The Trustees may from
time to time declare and pay dividends and make other distributions with respect
to any Portfolio, or Class thereof, which may be from income, capital gains or
capital. The amount of such dividends or other distributions and the payment of
them and whether they are in cash or any other Trust Property shall be wholly in
the discretion of the Trustees.
Section 2. Redemptions. Any holder of record of shares of a
particular Portfolio, or Class thereof, shall have the right to require the
Trust to redeem his shares, or any portion thereof, subject to the terms and
conditions set forth in the registration statement in effect from time to time.
The redemption price may in any case or cases be paid wholly or partly in kind
if the Trustees determine that such payment is advisable in the interest of the
remaining shareholders of the Portfolio or Class thereof for which the shares
are being redeemed. Subject to the foregoing, the fair value, selection and
quantity of securities or other property so paid or delivered as all or part of
the redemption price may be determined by or under authority of the Trustees.
In no case shall the Trust be liable for any delay of any Person in
transferring securities selected for delivery as all or part of any payment in
kind.
The Trustees may, at their option, and at any time, have the right to
redeem shares of any shareholder of a particular Portfolio or Class thereof in
accordance with Section 2 of this Article VII. The Trustees may refuse to
transfer or issue shares to any person to the extent that the same is necessary
to comply with applicable law or advisable to further the purposes for which
the Trust is formed.
If, at any time when a request for transfer or redemption of Shares of
any Portfolio is received by the Trust or its agent, the value of the shares of
such Portfolio in a Shareholder's account is less than Five Hundred Dollars
($500.00), after giving effect to such transfer or redemption, the Trust may,
at any time following such transfer or redemption and upon giving thirty (30)
days' notice to the Shareholder, cause the remaining Shares of such Portfolio
in such Shareholder's account to be redeemed at net asset value in accordance
with such procedures set forth above.
Section 3. Indemnification. Every person who is, or has been, a
Trustee or officer of the Trust shall be indemnified by the Trust to the fullest
extent permitted by the Delaware Business Trust Act, these Bylaws and other
applicable law.
Section 4. Advance Payments of Indemnifiable Expenses. To the maximum
extent permitted by the Delaware Act and other applicable law, the Trust or
applicable Portfolio may advance to a Covered Person, in connection with the
preparation and presentation of a defense to any claim, action, suit, or
proceeding, expenses for which the Covered Person would ultimately be entitled
to indemnification; provided that the Trust or applicable Portfolio has received
an undertaking by or on behalf of such Covered Person that such amount will be
paid over by him to the Trust or applicable Portfolio if it is ultimately
determined that he is not entitled to
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indemnification for such expenses, and further provided that (i) such Covered
Person shall have provided appropriate security for such undertaking, (ii) the
Trust is insured against losses arising out of any such advance payments, or
(iii) either a majority of the Trustees who are not interested persons (as
defined in the 1940 Act) of the Trust nor parties to the matter, or independent
legal counsel in a written opinion shall have determined, based upon a review
of readily available facts (as opposed to a full trial-type inquiry) that there
is reason to believe that such Covered Person will not be disqualified from
indemnification for such expenses.
Section 5. Seal. The business seal shall have inscribed thereon the
name of the business trust, the year of its organization and the word "Business
Seal, Delaware." The seal may be used by causing it or a facsimile thereof to
be impressed or affixed or otherwise reproduced. Any officer or Trustee of the
Trust shall have authority to affix the corporate seal of the Trust to any
document requiring the same.
Section 6. Severability. The provisions of these Bylaws are
severable. If the Board of Trustees determines, with the advice of counsel,
that any provision hereof conflicts with the 1940 Act, the regulated investment
company provisions of the Internal Revenue Code, or other applicable laws and
regulations, the conflicting provision shall be deemed never to have
constituted a part of these Bylaws; provided, however, that such determination
shall not affect any of the remaining provisions of these Bylaws or render
invalid or improper any action taken or omitted prior to such determination.
If any provision hereof shall be held invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall attach only to such
provision only in such jurisdiction and shall not affect any other provision of
these Bylaws.
Section 7. Headings. Headings are placed in these Bylaws for
convenience of reference only and in case of any conflict, the text of these
Bylaws rather than the headings shall control.
ARTICLE VIII
AMENDMENTS
Section 1. Amendments. These Bylaws may be altered or repealed at
any regular or special meeting of the Board of Trustees without prior notice.
These Bylaws may also be altered or repealed at any special meeting of the
shareholders, but only if the Board of Trustees resolves to put a proposed
alteration or repealer to the vote of the shareholders and notice of such
alteration or repealer is contained in a notice of the special meeting being
held for such purpose.
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EXHIBIT 5(a)
AIM INVESTMENT PORTFOLIOS, INC.
INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
BETWEEN
AIM INVESTMENT PORTFOLIOS, INC.
AND
A I M ADVISORS, INC.
Contract made as of May 29, 1998, between AIM Investment Portfolios,
Inc., a Maryland Corporation ("Company"), and A I M Advisors, Inc., a Delaware
corporation (the "Adviser").
WHEREAS the Company is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company,
and intends to offer for public sale shares of AIM Dollar Fund, a series of the
Company's shares of common stock; and
WHEREAS the Company hereafter may establish additional series of its
shares of common stock (any such additional series, together with the series
named in the paragraph immediately preceding, are collectively referred to
herein as the "Funds," and singly may be referred to as a "Fund"); and
WHEREAS the Company desires to retain Adviser as investment manager
and administrator to furnish certain investment advisory, portfolio management
and administration services to the Company and the Funds, and Adviser is
willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints Adviser as investment manager
and administrator of each Fund for the period and on the terms set forth in
this Contract. Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. Duties as Investment Manager.
(a) Subject to the supervision of the Company's Board of Directors
("Board"), Adviser will provide a continuous investment program for each Fund,
including investment research and management with respect to all securities and
investments and cash equivalents of the Fund. Adviser will determine from time
to time what securities and other investments will be purchased, retained or
sold by each Fund, and the brokers and dealers through whom trades will be
executed.
(b) Adviser agrees that in placing orders with brokers and dealers
it will attempt to obtain the best net results in terms of price and execution.
Consistent with this obligation
<PAGE> 2
Adviser may, in its discretion, purchase and sell portfolio securities to and
from brokers and dealers who sell shares of the Funds or provide the Funds or
Adviser's other clients with research, analysis, advice and similar services.
Adviser may pay to brokers and dealers, in return for research and analysis, a
higher commission or spread than may be charged by other brokers and dealers,
subject to Adviser's determining in good faith that such commission or spread
is reasonable in terms either of the particular transaction or of the overall
responsibility of Adviser to the Funds and its other clients and that the total
commissions or spreads paid by each Fund will be reasonable in relation to the
benefits to the Fund over the long term. In no instance will portfolio
securities be purchased from or sold to Adviser or any affiliated person
thereof except in accordance with the federal securities laws and the rules and
regulations thereunder and any exemptive orders currently in effect. Whenever
Adviser simultaneously places orders to purchase or sell the same security on
behalf of a Fund and one or more other accounts advised by Adviser, such orders
will be allocated as to price and amount among all such accounts in a manner
believed to be equitable to each account. The Company recognizes that in some
cases this procedure may adversely affect the results obtained for each Fund.
(c) Adviser will oversee the maintenance of all books and records
with respect to the securities transactions of the Funds, and will furnish the
Board with such periodic and special reports as the Board reasonably may
request. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
Adviser hereby agrees that all records which it maintains for the Company are
the property of the Company, agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any records which it maintains for the Company
and which are required to be maintained by Rule 31a-1 under the 1940 Act, and
further agrees to surrender promptly to the Company any records which it
maintains for the Company upon request by the Company.
3. Duties as Administrator. Adviser will administer the affairs of each Fund
subject to the supervision of the Board and the following understandings:
(a) Adviser will supervise all aspects of the operations of each
Fund, including the oversight of transfer agency and custodial services, except
as hereinafter set forth; provided, however, that nothing herein contained
shall be deemed to relieve or deprive the Board of its responsibility for
control of the conduct of the affairs of the Funds.
(b) At Adviser's expense, Adviser will provide the Company and the
Funds with such corporate, administrative and clerical personnel (including
officers of the Company) and services as are reasonably deemed necessary or
advisable by the Board.
(c) Adviser will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of each Fund's
prospectus, statement of additional information, proxy material, tax returns
and required reports with or to the Fund's shareholders, the Securities and
Exchange Commission and other appropriate federal or state regulatory
authorities.
<PAGE> 3
(d) Adviser will provide the Company and the Funds with, or obtain
for them, adequate office space and all necessary office equipment and
services, including telephone service, heat, utilities, stationery supplies and
similar items.
4. Further Duties. In all matters relating to the performance of this
Contract, Adviser will act in conformity with the Articles of Incorporation,
By-Laws and Registration Statement of the Company and with the instructions and
directions of the Board and will comply with the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations.
5. Delegation of Adviser's Duties as Investment Manager and Administrator.
With respect to one or more of the Funds, Adviser may enter into one or more
contracts ("Sub-Advisory or Sub-Administration Contract") with a sub-adviser or
sub-administrator in which Adviser delegates to such sub-adviser or
sub-administrator the performance of any or all of the services specified in
Paragraphs 2 and 3 of this Contract, provided that: (i) each Sub-Advisory and
Sub-Administration Contract imposes on the sub-adviser or sub-administrator
bound thereby all the duties and conditions to which Adviser is subject with
respect to the services under Paragraphs 2, 3 and 4 of this Contract; (ii) each
Sub-Advisory and Sub-Administration Contract meets all requirements of the 1940
Act and rules thereunder, and (iii) Adviser shall not enter into a Sub-Advisory
or Sub-Administration Contract unless it is approved by the Board prior to
implementation.
6. Services Not Exclusive. The services furnished by Adviser hereunder are
not to be deemed exclusive and Adviser shall be free to furnish similar
services to others so long as its services under this Contract are not impaired
thereby. Nothing in this Contract shall limit or restrict the right of any
director, officer or employee of Adviser, who may also be a Director, officer
or employee of the Company, to engage in any other business or to devote his or
her time and attention in part to the management or other aspects of any other
business, whether of a similar nature or a dissimilar nature.
7. Expenses.
(a) During the term of this Contract, each Fund will bear all
expenses, not specifically assumed by Adviser, incurred in its operations and
the offering of its shares.
(b) Expenses borne by each Fund will include but not be limited to
the following: (i) all direct charges relating to the purchase and sale of
portfolio securities, including the cost (including brokerage commissions, if
any) of securities purchased or sold by the Fund and any losses incurred in
connection therewith; (ii) fees payable to and expenses incurred on behalf of
the Fund by Adviser under this Contract; (iii) investment consulting fees and
related costs; (iv) expenses of organizing the Company and the Fund; (v)
expenses of preparing filing reports and other documents with governmental and
regulatory agencies; (vi) filing fees and expenses relating to the registration
and qualification of the Fund's shares and the Company under federal and/or
state securities laws and maintaining such registrations and qualifications;
(vii) costs incurred in connection
<PAGE> 4
with the issuance, sale or repurchase of the Fund's shares of common stock;
(viii) fees and salaries payable to the Company's Directors who are not parties
to this Contract or interested persons of any such party ("Independent
Directors"); (ix) all expenses incurred in connection with the Independent
Directors' services, including travel expenses; (x) taxes (including any income
or franchise taxes) and governmental fees; (xi) costs of any liability,
uncollectible items of deposit and other insurance and fidelity bonds; (xii)
any costs, expenses or losses arising out of a liability of or claim for
damages or other relief asserted against the Company or the Fund for violation
of any law; (xiii) interest charges; (xiv) legal, accounting and auditing
expenses, including legal fees of special counsel for the Independent
Directors; (xv) charges of custodians, transfer agents, pricing agents and
other agents; (xvi) expenses of disbursing dividends and distributions; (xvii)
costs of preparing share certificates; (xviii) expenses of setting in type,
printing and mailing prospectuses and supplements thereto, statements of
additional information and supplements thereto, reports, notices and proxy
materials for existing shareholders; (xix) any extraordinary expenses
(including fees and disbursements of counsel, costs of actions, suits or
proceedings to which the Company is a party and the expenses the Company may
incur as a result of its legal obligation to provide indemnification to its
officers, Directors, employees and agents) incurred by the Company or the Fund;
(xx) fees, voluntary assessments and other expenses incurred in connection with
membership in investment company organizations; (xxi) costs of mailing and
tabulating proxies and costs of meetings of shareholders, the Board and any
committees thereof; (xxii) the cost of investment company literature and other
publications provided by the Company to its Directors and officers; and (xxiii)
costs of mailing, stationery and communications equipment.
(c) All general expenses of the Company and joint expenses of the
Funds shall be allocated among each Fund on a basis deemed fair and equitable
by Adviser, subject to the Board's supervision.
(d) Adviser will assume the cost of any compensation for services
provided to the Company received by the officers of the Company and by the
Directors of the Company who are not Independent Directors.
(e) The payment or assumption by Adviser of any expense of the
Company or any Fund that Adviser is not required by this Contract to pay or
assume shall not obligate Adviser to pay or assume the same or any similar
expense of the Company or any Fund on any subsequent occasion.
8. Compensation.
(a) For the services provided to a Fund under this Contract, the
Company shall pay the Adviser an annual fee, payable monthly, based upon the
average daily net assets of such Fund as forth in Appendix A attached hereto.
Such compensation shall be paid solely from the assets of such Fund.
<PAGE> 5
(b) For the services provided under this Contract, each Fund as
hereafter may be established will pay to Adviser a fee in an amount to be
agreed upon in a written Appendix to this Contract executed by the Company on
behalf of such Fund and by Adviser.
(c) The fee shall be computed daily and paid monthly to Adviser on
or before the last business day of the next succeeding calendar month.
(d) If this Contract becomes effective or terminates before the
end of any month, the fee for the period from the effective date to the end of
the month or from the beginning of such month to the date of termination, as
the case may be, shall be prorated according to the proportion which such
period bears to the full month in which such effectiveness or termination
occurs.
9. Limitation of Liability of Adviser and Indemnification. Adviser shall not
be liable and each Fund shall indemnify Adviser and its directors, officers and
employees, for any costs or liabilities arising from any error of judgment or
mistake of law or any loss suffered by the Fund or the Company in connection
with the matters to which this Contract relates except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of Adviser in
the performance by Adviser of its duties or from reckless disregard by Adviser
of its obligations and duties under this Contract. Any person, even though also
an officer, partner, employee, or agent of Adviser, who may be or become an
officer, Director, employee or agent of the Company shall be deemed, when
rendering services to a Fund or the Company or acting with respect to any
business of a Fund or the Company, to be rendering such service to or acting
solely for the Fund or the Company and not as an officer, partner, employee, or
agent or one under the control or direction of Adviser even though paid by it.
10. Duration and Termination.
(a) This Contract shall become effective upon the date hereabove
written, provided that this Contract shall not take effect with respect to any
Fund unless it has first been approved (i) by a vote of a majority of the
Independent Directors, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of that Fund's
outstanding voting securities.
(b) Unless sooner terminated as provided herein, this Contract
shall continue in effect for two years from the above written date. Thereafter,
if not terminated, with respect to each Fund this Contract shall continue
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually (i) by a vote
of a majority of the Independent Directors, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by the Board or by vote of
a majority of the outstanding voting securities of that Fund.
(c) Notwithstanding the foregoing, with respect to any Fund this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a
<PAGE> 6
vote of a majority of the outstanding voting securities of the Fund on sixty
days' written notice to Adviser or by Adviser at any time, without the payment
of any penalty, on sixty days' written notice to the Company. Termination of
this Contract with respect to one Fund shall not affect the continued
effectiveness of this Contract with respect to any other Fund. This Contract
will automatically terminate in the event of its assignment.
11. Amendment of this Contract. No provision of this Contract may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Contract shall be
effective until approved by vote of a majority of the Fund's outstanding voting
securities, when required by the 1940 Act.
12. Governing Law. This Contract shall be construed in accordance with the
laws of the State of Delaware (without regard to Delaware conflict or choice of
law provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.
13. License Agreement. The Company shall have the non-exclusive right to use
the name "AIM" to designate any current or future series of shares only so long
as A I M Advisors, Inc. serves as investment manager or adviser to the Company
with respect to such series of shares.
14. Miscellaneous. The captions in this Contract are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be
affected thereby. This Contract shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors. As used in this
Contract, the terms "majority of the outstanding voting securities,"
"interested person," "assignment," "broker," "dealer," "investment adviser,"
"national securities exchange," "net assets," "prospectus," "sale," "sell" and
"security" shall have the same meaning as such terms have in the 1940 Act,
subject to such exemption as may be granted by the Securities and Exchange
Commission by any rule, regulation or order. Where the effect of a requirement
of the 1940 Act reflected in any provision of this Contract is made less
restrictive by a rule, regulation or order of the Securities and Exchange
Commission, whether of special or general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.
<TABLE>
<S> <C> <C>
Attest: /s/ MICHAEL SILVER AIM INVESTMENT PORTFOLIOS, INC.
---------------------------
Michael A. Silver
Assistant Secretary By: /s/ HELGE K. LEE
----------------------------
Name: Helge K. Lee
Title: Vice President and
Assistant Secretary
Attest: /s/ KATHLEEN J. PFLUEGER A I M ADVISORS, INC.
---------------------------
Name: Kathleen J. Pflueger By: /s/ CAROL F. RELIHAN
Title: Assistant Secretary ----------------------------
Name: Carol F. Relihan
Title: Senior Vice President
</TABLE>
<PAGE> 8
APPENDIX A
TO
INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
OF
AIM INVESTMENT PORTFOLIOS, INC.
The Company shall pay the Adviser, 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.
AIM DOLLAR FUND
ANNUAL RATE
------------
0.50% of net
assets
<PAGE> 1
EXHIBIT 5(b)
AIM INVESTMENT PORTFOLIOS
INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
BETWEEN
AIM INVESTMENT PORTFOLIOS
AND
A I M ADVISORS, INC.
Contract made as of September 8, 1998, between AIM Investment
Portfolios, a Delaware business trust ("Company), and A I M Advisors, Inc., a
Delaware corporation (the "Adviser").
WHEREAS the Company is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company, and
intends to offer for public sale shares of AIM Dollar Fund, a series of the
Company's shares of beneficial interest; and
WHEREAS the Company hereafter may establish additional series of its
shares of beneficial interest (any such additional series, together with the
series named in the paragraph immediately preceding, are collectively referred
to herein as the "Funds," and singly may be referred to as a "Fund"); and
WHEREAS the Company desires to retain Adviser as investment manager and
administrator to furnish certain investment advisory, portfolio management and
administration services to the Company and the Funds, and Adviser is willing to
furnish such services;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints Adviser as investment manager and
administrator of each Fund for the period and on the terms set forth in this
Contract. Adviser accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided.
2. Duties as Investment Manager.
(a) Subject to the supervision of the Company's Board of Trustees
("Board"), Adviser will provide a continuous investment program for each Fund,
including investment research and management with respect to all securities and
investments and cash equivalents of the Fund. Adviser will determine from time
to time what securities and other investments will be purchased, retained or
sold by each Fund, and the brokers and dealers through whom trades will be
executed.
(b) Adviser agrees that in placing orders with brokers and dealers it
will attempt to obtain the best net results in terms of price and execution.
Consistent with this obligation
<PAGE> 2
Adviser may, in its discretion, purchase and sell portfolio securities to and
from brokers and dealers who sell shares of the Funds or provide the Funds or
Adviser's other clients with research, analysis, advice and similar services.
Adviser may pay to brokers and dealers, in return for research and analysis, a
higher commission or spread than may be charged by other brokers and dealers,
subject to Adviser's determining in good faith that such commission or spread is
reasonable in terms either of the particular transaction or of the overall
responsibility of Adviser to the Funds and its other clients and that the total
commissions or spreads paid by each Fund will be reasonable in relation to the
benefits to the Fund over the long term. In no instance will portfolio
securities be purchased from or sold to Adviser or any affiliated person thereof
except in accordance with the federal securities laws and the rules and
regulations thereunder and any exemptive orders currently in effect. Whenever
Adviser simultaneously places orders to purchase or sell the same security on
behalf of a Fund and one or more other accounts advised by Adviser, such orders
will be allocated as to price and amount among all such accounts in a manner
believed to be equitable to each account. The Company recognizes that in some
cases this procedure may adversely affect the results obtained for each Fund.
(c) Adviser will oversee the maintenance of all books and records with
respect to the securities transactions of the Funds, and will furnish the Board
with such periodic and special reports as the Board reasonably may request. In
compliance with the requirements of Rule 31a-3 under the 1940 Act, Adviser
hereby agrees that all records which it maintains for the Company are the
property of the Company, agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act any records which it maintains for the Company and
which are required to be maintained by Rule 31a-1 under the 1940 Act, and
further agrees to surrender promptly to the Company any records which it
maintains for the Company upon request by the Company.
3. Duties as Administrator. Adviser will administer the affairs of each Fund
subject to the supervision of the Board and the following understandings:
(a) Adviser will supervise all aspects of the operations of each Fund,
including the oversight of transfer agency and custodial services, except as
hereinafter set forth; provided, however, that nothing herein contained shall be
deemed to relieve or deprive the Board of its responsibility for control of the
conduct of the affairs of the Funds.
(b) At Adviser's expense, Adviser will provide the Company and the
Funds with such corporate, administrative and clerical personnel (including
officers of the Company) and services as are reasonably deemed necessary or
advisable by the Board.
(c) Adviser will arrange, but not pay, for the periodic preparation,
updating, filing and dissemination (as applicable) of each Fund's prospectus,
statement of additional information, proxy material, tax returns and required
reports with or to the Fund's shareholders, the Securities and Exchange
Commission and other appropriate federal or state regulatory authorities.
<PAGE> 3
(d) Adviser will provide the Company and the Funds with, or obtain for
them, adequate office space and all necessary office equipment and services,
including telephone service, heat, utilities, stationery supplies and similar
items.
4. Further Duties. In all matters relating to the performance of this Contract,
Adviser will act in conformity with the Agreement and Declaration of Trust,
By-Laws and Registration Statement of the Company and with the instructions and
directions of the Board and will comply with the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations.
5. Delegation of Adviser's Duties as Investment Manager and Administrator. With
respect to one or more of the Funds, Adviser may enter into one or more
contracts ("Sub-Advisory or Sub-Administration Contract") with a sub-adviser or
sub-administrator in which Adviser delegates to such sub-adviser or
sub-administrator the performance of any or all of the services specified in
Paragraphs 2 and 3 of this Contract, provided that: (i) each Sub-Advisory and
Sub-Administration Contract imposes on the sub-adviser or sub-administrator
bound thereby all the duties and conditions to which Adviser is subject with
respect to the services under Paragraphs 2, 3 and 4 of this Contract; (ii) each
Sub-Advisory and Sub-Administration Contract meets all requirements of the 1940
Act and rules thereunder, and (iii) Adviser shall not enter into a Sub-Advisory
or Sub-Administration Contract unless it is approved by the Board prior to
implementation.
6. Services Not Exclusive. The services furnished by Adviser hereunder are not
to be deemed exclusive and Adviser shall be free to furnish similar services to
others so long as its services under this Contract are not impaired thereby.
Nothing in this Contract shall limit or restrict the right of any director,
officer or employee of Adviser, who may also be a Trustee, officer or employee
of the Company, to engage in any other business or to devote his or her time and
attention in part to the management or other aspects of any other business,
whether of a similar nature or a dissimilar nature.
7. Expenses.
(a) During the term of this Contract, each Fund will bear all expenses,
not specifically assumed by Adviser, incurred in its operations and the offering
of its shares.
(b) Expenses borne by each Fund will include but not be limited to the
following: (i) all direct charges relating to the purchase and sale of portfolio
securities, including the cost (including brokerage commissions, if any) of
securities purchased or sold by the Fund and any losses incurred in connection
therewith; (ii) fees payable to and expenses incurred on behalf of the Fund by
Adviser under this Contract; (iii) investment consulting fees and related costs;
(iv) expenses of organizing the Company and the Fund; (v) expenses of preparing
filing reports and other documents with governmental and regulatory agencies;
(vi) filing fees and expenses relating to the registration and qualification of
the Fund's shares and the Company under federal and/or state securities laws and
maintaining such registrations and qualifications; (vii) costs incurred in
connection
<PAGE> 4
with the issuance, sale or repurchase of the Fund's shares of beneficial
interest; (viii) fees and salaries payable to the Company's Trustees who are not
parties to this Contract or interested persons of any such party ("Independent
Trustees"); (ix) all expenses incurred in connection with the Independent
Trustees' services, including travel expenses; (x) taxes (including any income
or franchise taxes) and governmental fees; (xi) costs of any liability,
uncollectible items of deposit and other insurance and fidelity bonds; (xii) any
costs, expenses or losses arising out of a liability of or claim for damages or
other relief asserted against the Company or the Fund for violation of any law;
(xiii) interest charges; (xiv) legal, accounting and auditing expenses,
including legal fees of special counsel for the Independent Trustees; (xv)
charges of custodians, transfer agents, pricing agents and other agents; (xvi)
expenses of disbursing dividends and distributions; (xvii) costs of preparing
share certificates; (xviii) expenses of setting in type, printing and mailing
prospectuses and supplements thereto, statements of additional information and
supplements thereto, reports, notices and proxy materials for existing
shareholders; (xix) any extraordinary expenses (including fees and disbursements
of counsel, costs of actions, suits or proceedings to which the Company is a
party and the expenses the Company may incur as a result of its legal obligation
to provide indemnification to its officers, Trustees, employees and agents)
incurred by the Company or the Fund; (xx) fees, voluntary assessments and other
expenses incurred in connection with membership in investment company
organizations; (xxi) costs of mailing and tabulating proxies and costs of
meetings of shareholders, the Board and any committees thereof; (xxii) the cost
of investment company literature and other publications provided by the Company
to its Trustees and officers; and (xxiii) costs of mailing, stationery and
communications equipment.
(c) All general expenses of the Company and joint expenses of the Funds
shall be allocated among each Fund on a basis deemed fair and equitable by
Adviser, subject to the Board's supervision.
(d) Adviser will assume the cost of any compensation for services
provided to the Company received by the officers of the Company and by the
Trustees of the Company who are not Independent Trustees.
(e) The payment or assumption by Adviser of any expense of the Company
or any Fund that Adviser is not required by this Contract to pay or assume shall
not obligate Adviser to pay or assume the same or any similar expense of the
Company or any Fund on any subsequent occasion.
8. Compensation.
(a) For the services provided to a Fund under this Contract, the
Company shall pay the Adviser an annual fee, payable monthly, based upon the
average daily net assets of such Fund as forth in Appendix A attached hereto.
Such compensation shall be paid solely from the assets of such Fund.
<PAGE> 5
(b) For the services provided under this Contract, each Fund as
hereafter may be established will pay to Adviser a fee in an amount to be agreed
upon in a written Appendix to this Contract executed by the Company on behalf of
such Fund and by Adviser.
(c) The fee shall be computed daily and paid monthly to Adviser on or
before the last business day of the next succeeding calendar month.
(d) If this Contract becomes effective or terminates before the end of
any month, the fee for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.
9. Limitation of Liability of Adviser and Indemnification. Adviser shall not be
liable and each Fund shall indemnify Adviser and its directors, officers and
employees, for any costs or liabilities arising from any error of judgment or
mistake of law or any loss suffered by the Fund or the Company in connection
with the matters to which this Contract relates except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of Adviser in the
performance by Adviser of its duties or from reckless disregard by Adviser of
its obligations and duties under this Contract. Any person, even though also an
officer, partner, employee, or agent of Adviser, who may be or become an
officer, Trustee, employee or agent of the Company shall be deemed, when
rendering services to a Fund or the Company or acting with respect to any
business of a Fund or the Company, to be rendering such service to or acting
solely for the Fund or the Company and not as an officer, partner, employee, or
agent or one under the control or direction of Adviser even though paid by it.
10. Duration and Termination.
(a) This Contract shall become effective upon the date hereabove
written, provided that this Contract shall not take effect with respect to any
Fund unless it has first been approved (i) by a vote of a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of that Fund's
outstanding voting securities.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, with respect to each Fund this Contract shall continue automatically
for successive periods not to exceed twelve months each, provided that such
continuance is specifically approved at least annually (i) by a vote of a
majority of the Independent Trustees, cast in person at a meeting called for the
purpose of voting on such approval, and (ii) by the Board or by vote of a
majority of the outstanding voting securities of that Fund.
(c) Notwithstanding the foregoing, with respect to any Fund this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a
<PAGE> 6
vote of a majority of the outstanding voting securities of the Fund on sixty
days' written notice to Adviser or by Adviser at any time, without the payment
of any penalty, on sixty days' written notice to the Company. Termination of
this Contract with respect to one Fund shall not affect the continued
effectiveness of this Contract with respect to any other Fund. This Contract
will automatically terminate in the event of its assignment.
11. Amendment of this Contract. No provision of this Contract may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought, and no amendment of this Contract shall be effective
until approved by vote of a majority of the Fund's outstanding voting
securities, when required by the 1940 Act.
12. Governing Law. This Contract shall be construed in accordance with the laws
of the State of Delaware (without regard to Delaware conflict or choice of law
provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.
13. License Agreement. The Company shall have the non-exclusive right to use
the name "AIM" to designate any current or future series of shares only so long
as A I M Advisors, Inc. serves as investment manager or adviser to the Company
with respect to such series of shares.
14. Limitation of Shareholder Liability. It is expressly agreed that the
obligations of the Company hereunder shall not be binding upon any of the
Trustees, shareholders, nominees, officers, agents or employees of the Company
personally, but shall only bind the assets and property of the Funds, as
provided in the Company's Agreement and Declaration of Trust. The execution and
delivery of this Contract have been authorized by the Trustees of the Company
and shareholders of the Funds, and this Contract has been executed and delivered
by an authorized officer of the Company acting as such; neither such
authorization by such Trustees and shareholders nor such execution and delivery
by such officer shall be deemed to have been made by any of them individually or
to impose any liability on any of them personally, but shall bind only the
assets and property of the Funds, as provided in the Company's Agreement and
Declaration of Trust.
15. Miscellaneous. The captions in this Contract are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this Contract
shall be held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Contract shall not be affected thereby. This Contract
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors. As used in this Contract, the terms "majority of
the outstanding voting securities," "interested person," "assignment," "broker,"
"dealer," "investment adviser," "national securities exchange," "net assets,"
"prospectus," "sale," "sell" and "security" shall have the same meaning as such
terms have in the 1940 Act, subject to such exemption as may be granted by the
Securities and Exchange Commission by any rule, regulation or order. Where the
effect of a requirement of the 1940 Act reflected
<PAGE> 7
in any provision of this Contract is made less restrictive by a rule, regulation
or order of the Securities and Exchange Commission, whether of special or
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.
Attest: /s/ SAMUEL D. SIRKO AIM INVESTMENT PORTFOLIOS
----------------------------
Name: Samuel D. Sirko
Title: Assistant Secretary By: /s/ ROBERT H. GRAHAM
----------------------------
Name: Robert H. Graham
Title: President
Attest: /s/ KATHLEEN J. PFLUEGER A I M ADVISORS, INC.
----------------------------
Name: Kathleen J. Pflueger By: /s/ JOHN J. ARTHUR
Title: Assistant Secretary ----------------------------
Name: John J. Arthur
Title: Senior Vice President
<PAGE> 8
APPENDIX A
TO
INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
OF
AIM INVESTMENT PORTFOLIOS
The Company shall pay the Adviser, 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.
AIM DOLLAR FUND
ANNUAL RATE
------------
0.50% of net
assets
<PAGE> 1
EXHIBIT 5(c)
AIM INVESTMENT PORTFOLIOS, INC.
SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT
BETWEEN
A I M ADVISORS, INC.
AND
INVESCO (NY), INC.
Contract made as of May 29, 1998, between A I M Advisors, Inc., a
Delaware corporation ("Adviser"), and INVESCO (NY), INC., a California
corporation ("Sub-Adviser").
WHEREAS Adviser has entered into an Investment Management and
Administration Contract with AIM Investment Portfolios, Inc. ("Company"), an
open-end management investment company registered under the Investment Company
Act of 1940, as amended ("1940 Act"), with respect to AIM Dollar Fund, a series
of the Company's shares of common stock (the "Fund"); and
WHEREAS Adviser desires to retain Sub-Adviser as sub-adviser and
sub-administrator to furnish certain advisory and administrative services to the
Fund, and Sub-Adviser is willing to furnish such services;
NOW THEREFORE, in consideration of the promises and the mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment. Adviser hereby appoints Sub-Adviser as sub-adviser and
sub-administrator of the Fund for the period and on the terms set forth in this
Contract. Sub-Adviser accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided.
2. Duties as Sub-Adviser.
(a) Subject to the supervision of the Company's Board of Directors
("Board") and Adviser, the Sub-Adviser will provide a continuous investment
program for the Fund, including investment research and management, with
respect to all securities and investments and cash equivalents of the Fund. The
Sub-Adviser will determine from time to time what securities and other
investments will be purchased, retained or sold by the Fund, and the brokers
and dealers through whom trades will be executed.
(b) The Sub-Adviser agrees that, in placing orders with brokers and
dealers, it will attempt to obtain the best net result in terms of price and
execution. Consistent with this obligation, the Sub-Adviser may, in its
discretion, purchase and sell portfolio securities from and to brokers and
dealers who sell shares of the Fund or provide the Fund, Adviser's other
clients, or Sub-Adviser's other clients with research, analysis, advice and
similar services. The Sub-Adviser may pay to brokers and dealers, in return for
such research and analysis, a higher commission or spread than may be charged by
other brokers
<PAGE> 2
and dealers, subject to the Sub-Adviser determining in good faith that such
commission or spread is reasonable in terms either of the particular transaction
or of the overall responsibility of the Adviser and the Sub-Adviser to the Fund
and their other clients and that the total commissions or spreads paid by the
Fund will be reasonable in relation to the benefits to the Fund over the long
term. In no instance will portfolio securities be purchased from or sold to the
Sub-Adviser, or any affiliated person thereof, except in accordance with the
federal securities laws and the rules and regulations thereunder and any
exemptive orders currently in effect. Whenever the Sub-Adviser simultaneously
places orders to purchase or sell the same security on behalf of the Fund and
one or more other accounts advised by the Sub-Adviser, such orders will be
allocated as to price and amount among all such accounts in a manner believed
to be equitable to each account.
(c) The Sub-Adviser will maintain all books and records with respect to
the securities transactions of the Fund, and will furnish the Board and Adviser
with such periodic and special reports as the Board or Adviser reasonably may
request. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Sub-Adviser hereby agrees that all records which it maintains for the
Company are the property of the Company, agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any records which it maintains for
the Company and which are required to be maintained by Rule 31a-1 under the 1940
Act, and further agrees to surrender promptly to the Company any records which
it maintains for the Company upon request by the Company.
3. Duties as Sub-Administrator. Sub-Adviser will administer the affairs of the
Fund subject to the supervision of the Company's Board of Directors ("Board"),
the Adviser and the following understandings:
(a) Sub-Adviser will supervise all aspects of the operations of the
Fund, including the oversight of transfer agency and custodial services except
as hereinafter set forth; provided, however, that nothing herein contained shall
be deemed to relieve or deprive the Board of its responsibility for control of
the conduct of the affairs of the Fund.
(b) At Sub-Adviser's expense, Sub-Adviser will provide the Company and
the Fund with such corporate, administrative and clerical personnel (including
officers of the Company) and services as are reasonably deemed necessary or
advisable by the Board.
(c) Sub-Adviser will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of the Fund's
prospectus, statement of additional information, proxy material, tax returns and
required reports with or to the Fund's shareholders, the Securities and Exchange
Commission and other appropriate federal or state regulatory authorities.
(d) Sub-Adviser will provide the Company and the Fund with, or obtain
for them, adequate office space and all necessary office equipment and services,
including telephone service, heat, utilities, stationery supplies and similar
items.
<PAGE> 3
4. Further Duties. In all matters relating to the performance of this Contract,
Sub-Adviser will act in conformity with the Articles of Incorporation, By-Laws
and Registration Statement of the Company and with the instructions and
directions of the Board and will comply with the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations.
5. Services Not Exclusive. The services furnished by Sub-Adviser hereunder are
not to be deemed exclusive and Sub-Adviser shall be free to furnish similar
services to others so long as its services under this Contract are not impaired
thereby. Nothing in this Contract shall limit or restrict the right of any
director, officer or employee of Sub-Adviser, who may also be a Director,
officer or employee of the Company, to engage in any other business or to devote
his or her time and attention in part to the management or other aspects of any
other business, whether of a similar nature or a dissimilar nature.
6. Expenses.
(a) During the term of this Contract, the Fund will bear all expenses,
not specifically assumed by Adviser and Sub-Adviser, incurred in its operations
and the offering of its shares.
(b) Expenses borne by the Fund will include but not be limited to the
following: (i) all direct charges relating to the purchase and sale of portfolio
securities, including the cost (including brokerage commissions, if any) of
securities purchased or sold by the Fund and any losses incurred in connection
therewith; (ii) fees payable to and expenses incurred on behalf of the Fund by
Sub-Adviser under this Contract; (iii) investment consulting fees and related
costs; (iv) expenses of organizing the Company and the Fund; (v) expenses of
preparing and filing reports and other documents with governmental and
regulatory agencies; (vi) filing fees and expenses relating to the registration
and qualification of the Fund's shares and the Company under federal and/or
state securities laws and maintaining such registrations and qualifications;
(vii) costs incurred in connection with the issuance, sale or repurchase of the
Fund's shares of common stock; (viii) fees and salaries payable to the Company's
Directors who are not parties to this Contract or interested persons of any such
party ("Independent Directors"); (ix) all expenses incurred in connection with
the Independent Directors' services, including travel expenses; (x) taxes
(including any income or franchise taxes) and governmental fees; (xi) costs of
any liability, uncollectible items of deposit and other insurance and fidelity
bonds; (xii) any costs, expenses or losses arising out of a liability of or
claim for damages or other relief asserted against the Company or the Fund for
violation of any law; (xiii) interest charges; (xiv) legal, accounting and
auditing expenses, including legal fees of special counsel for the Independent
Directors; (xv) charges of custodians, transfer agents, pricing agents and other
agents; (xvi) expenses of disbursing dividends and distributions; (xvii) costs
of preparing share certificates; (xviii) expenses of setting in type, printing
and mailing prospectuses and supplements thereto, statements of additional
information, reports, notices and proxy materials for existing shareholders;
(xix) any extraordinary expenses (including fees and disbursements of counsel,
costs of actions, suits or proceedings to which the Company is a
<PAGE> 4
party and the expenses the Company may incur as a result of its legal obligation
to provide indemnification to its officers, Directors, employees and agents)
incurred by the Company; (xx) fees, voluntary assessments and other expenses
incurred in connection with membership in investment company organizations;
(xxi) costs of mailing and tabulating proxies and costs of meetings of
shareholders, the Board and any committees thereof; (xxii) the cost of
investment company literature and other publications provided by the Company to
its Directors and officers; and (xxiii) costs of mailing, stationery and
communications equipment.
(c) Sub-Adviser will assume the cost of any compensation for services
provided to the Company received by the officers of the Company and by the
Directors of the Company who are not Independent Directors.
(d) The payment or assumption by Sub-Adviser of any expense of the
Company or the Fund that Sub-Adviser is not required by this Contract to pay or
assume shall not obligate Sub-Adviser to pay or assume the same or any similar
expense of the Company or any Fund on any subsequent occasion.
7. Compensation.
(a) For the services provided to the Fund under this Contract, Adviser
will pay Sub-Adviser a fee, computed weekly and paid monthly, as set forth in
Appendix A hereto.
(b) For the services provided under this Contract to the Fund as
hereafter may be established, Adviser will pay to Sub-Adviser a fee in an amount
to be agreed upon in a written Appendix to this Contract executed by Adviser and
by Sub-Adviser.
(c) The fee shall be computed weekly and paid monthly to Sub-Adviser on
or before the last business day of the next succeeding calendar month.
(d) If this Contract becomes effective or terminates before the end of
any month, the fee for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.
8. Limitation of Liability of Sub-Adviser and Indemnification. Sub-Adviser shall
not be liable for any costs or liabilities arising from any error of judgment or
mistake of law or any loss suffered by the Fund or the Company in connection
with the matters to which this Contract relates except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of Sub-Adviser in
the performance by Sub-Adviser of its duties or from reckless disregard by
Sub-Adviser of its obligations and duties under this Contract. Any person, even
though also an officer, partner, employee, or agent of Sub-Adviser, who may be
or become a Director, officer, employee or agent of the Company, shall be
deemed, when rendering services to the Fund or the Company or acting with
respect to any business of
<PAGE> 5
the Fund or the Company to be rendering such service to or acting solely for the
Fund or the Company and not as an officer, partner, employee, or agent or one
under the control or direction of Sub-Adviser even though paid by it.
9. Duration and Termination.
(a) This Contract shall become effective upon the date hereabove
written, provided that this Contract shall not take effect with respect to the
Fund unless it has first been approved (i) by a vote of a majority of the
Independent Directors, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of the Fund's
outstanding voting securities.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, with respect to the Fund, this Contract shall continue
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually (i) by a vote
of a majority of the Independent Directors, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by the Board or by vote of
a majority of the outstanding voting securities of the Fund.
(c) Notwithstanding the foregoing, with respect to the Fund this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of the Fund on sixty days' written notice to Sub-Adviser or by
Sub-Adviser at any time, without the payment of any penalty, on sixty days'
written notice to the Company. This Contract will automatically terminate in
the event of its assignment.
10. Amendment. No provision of this Contract may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, and no amendment of this Contract shall be effective until approved by
vote of a majority of the Fund's outstanding voting securities, when required by
the 1940 Act.
11. Governing Law. This Contract shall be construed in accordance with the laws
of the State of Delaware (without regard to Delaware conflict or choice of law
provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.
12. Miscellaneous. The captions in this Contract are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this Contract
shall be held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Contract shall not be affected thereby. This Contract
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors. As used in this Contract, the terms "majority of
the
<PAGE> 6
outstanding voting securities," "interested person," "assignment," "broker,"
"dealer," "investment adviser," "national securities exchange," "net assets,"
"prospectus," "sale," "sell" and "security" shall have the same meaning as such
terms have in the 1940 Act, subject to such exemption as may be granted by the
Securities and Exchange Commission by any rule, regulation or order. Where the
effect of a requirement of the 1940 Act reflected in any provision of this
Contract is made less restrictive by a rule, regulation or order of the
Securities and Exchange Commission, whether of special or general application,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.
AIM ADVISORS, INC.
Attest: /s/ KATHLEEN J. PFLUEGER By: /s/ CAROL F. RELIHAN
------------------------ -------------------------------
Name: Kathleen J. Pfluger Name: Carol F. Relihan
Title: Assistant Secretary Title: Senior Vice President &
Secretary
INVESCO (NY), INC.
Attest: /s/ MICHAEL A. SILVER By: /s/ HELGE K. LEE
---------------------- -------------------------------
Michael A. Silver Name: Helge K. Lee
Title: Chief Legal and Compliance
Officer and Secretary
<PAGE> 8
APPENDIX A
TO
SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT
AIM INVESTMENT PORTFOLIOS, INC.
AIM DOLLAR FUND
ANNUAL RATE
0.20% OF NET ASSETS
<PAGE> 1
EXHIBIT 5(d)
AIM INVESTMENT PORTFOLIOS
SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT
BETWEEN
A I M ADVISORS, INC.
AND
INVESCO (NY), INC.
Contract made as of September 8, 1998, between A I M Advisors, Inc., a
Delaware corporation ("Adviser"), and INVESCO (NY), Inc., a California
corporation ("Sub-Adviser").
WHEREAS Adviser has entered into an Investment Management and
Administration Contract with AIM Investment Portfolios ("Company"), an open-end
management investment company registered under the Investment Company Act of
1940, as amended ("1940 Act"), with respect to AIM Dollar Fund, a series of the
Company's shares of common stock (the "Fund"); and
WHEREAS Adviser desires to retain Sub-Adviser as sub-adviser and
sub-administrator to furnish certain advisory and administrative services to the
Fund, and Sub-Adviser is willing to furnish such services;
NOW THEREFORE, in consideration of the promises and the mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment. Adviser hereby appoints Sub-Adviser as sub-adviser and
sub-administrator of the Fund for the period and on the terms set forth in this
Contract. Sub-Adviser accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided.
2. Duties as Sub-Adviser.
(a) Subject to the supervision of the Company's Board of Trustees
("Board") and Adviser, the Sub-Adviser will provide a continuous investment
program for the Fund, including investment research and management, with
respect to all securities and investments and cash equivalents of the Fund. The
Sub-Adviser will determine from time to time what securities and other
investments will be purchased, retained or sold by the Fund, and the brokers
and dealers through whom trades will be executed.
(b) The Sub-Adviser agrees that, in placing orders with brokers and
dealers, it will attempt to obtain the best net result in terms of price and
execution. Consistent with this obligation, the Sub-Adviser may, in its
discretion, purchase and sell portfolio securities from and to brokers and
dealers who sell shares of the Fund or provide the Fund, Adviser's other
clients, or Sub-Adviser's other clients with research, analysis, advice and
similar services. The Sub-Adviser may pay to brokers and dealers, in return for
such research and analysis, a higher commission or spread than may be charged by
other brokers
<PAGE> 2
and dealers, subject to the Sub-Adviser determining in good faith that such
commission or spread is reasonable in terms either of the particular transaction
or of the overall responsibility of the Adviser and the Sub-Adviser to the Fund
and their other clients and that the total commissions or spreads paid by the
Fund will be reasonable in relation to the benefits to the Fund over the long
term. In no instance will portfolio securities be purchased from or sold to the
Sub-Adviser, or any affiliated person thereof, except in accordance with the
federal securities laws and the rules and regulations thereunder and any
exemptive orders currently in effect. Whenever the Sub-Adviser simultaneously
places orders to purchase or sell the same security on behalf of the Fund and
one or more other accounts advised by the Sub-Adviser, such orders will be
allocated as to price and amount among all such accounts in a manner believed
to be equitable to each account.
(c) The Sub-Adviser will maintain all books and records with respect to
the securities transactions of the Fund, and will furnish the Board and Adviser
with such periodic and special reports as the Board or Adviser reasonably may
request. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Sub-Adviser hereby agrees that all records which it maintains for the
Company are the property of the Company, agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any records which it maintains for
the Company and which are required to be maintained by Rule 31a-1 under the 1940
Act, and further agrees to surrender promptly to the Company any records which
it maintains for the Company upon request by the Company.
3. Duties as Sub-Administrator. Sub-Adviser will administer the affairs of the
Fund subject to the supervision of the Company's Board of Trustees ("Board"),
the Adviser and the following understandings:
(a) Sub-Adviser will supervise all aspects of the operations of the
Fund, including the oversight of transfer agency and custodial services except
as hereinafter set forth; provided, however, that nothing herein contained shall
be deemed to relieve or deprive the Board of its responsibility for control of
the conduct of the affairs of the Fund.
(b) At Sub-Adviser's expense, Sub-Adviser will provide the Company and
the Fund with such corporate, administrative and clerical personnel (including
officers of the Company) and services as are reasonably deemed necessary or
advisable by the Board.
(c) Sub-Adviser will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of the Fund's
prospectus, statement of additional information, proxy material, tax returns and
required reports with or to the Fund's shareholders, the Securities and Exchange
Commission and other appropriate federal or state regulatory authorities.
(d) Sub-Adviser will provide the Company and the Fund with, or obtain
for them, adequate office space and all necessary office equipment and services,
including telephone service, heat, utilities, stationery supplies and similar
items.
<PAGE> 3
4. Further Duties. In all matters relating to the performance of this Contract,
Sub-Adviser will act in conformity with the Agreement and Declaration of Trust,
By-Laws and Registration Statement of the Company and with the instructions and
directions of the Board and will comply with the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations.
5. Services Not Exclusive. The services furnished by Sub-Adviser hereunder are
not to be deemed exclusive and Sub-Adviser shall be free to furnish similar
services to others so long as its services under this Contract are not impaired
thereby. Nothing in this Contract shall limit or restrict the right of any
director, officer or employee of Sub-Adviser, who may also be a Trustee, officer
or employee of the Company, to engage in any other business or to devote his or
her time and attention in part to the management or other aspects of any other
business, whether of a similar nature or a dissimilar nature.
6. Expenses.
(a) During the term of this Contract, the Fund will bear all expenses,
not specifically assumed by Adviser and Sub-Adviser, incurred in its operations
and the offering of its shares.
(b) Expenses borne by the Fund will include but not be limited to the
following: (i) all direct charges relating to the purchase and sale of portfolio
securities, including the cost (including brokerage commissions, if any) of
securities purchased or sold by the Fund and any losses incurred in connection
therewith; (ii) fees payable to and expenses incurred on behalf of the Fund by
Sub-Adviser under this Contract; (iii) investment consulting fees and related
costs; (iv) expenses of organizing the Company and the Fund; (v) expenses of
preparing and filing reports and other documents with governmental and
regulatory agencies; (vi) filing fees and expenses relating to the registration
and qualification of the Fund's shares and the Company under federal and/or
state securities laws and maintaining such registrations and qualifications;
(vii) costs incurred in connection with the issuance, sale or repurchase of the
Fund's shares of beneficial interest; (viii) fees and salaries payable to the
Company's Trustees who are not parties to this Contract or interested persons of
any such party ("Independent Trustees"); (ix) all expenses incurred in
connection with the Independent Trustees' services, including travel expenses;
(x) taxes (including any income or franchise taxes) and governmental fees; (xi)
costs of any liability, uncollectible items of deposit and other insurance and
fidelity bonds; (xii) any costs, expenses or losses arising out of a liability
of or claim for damages or other relief asserted against the Company or the Fund
for violation of any law; (xiii) interest charges; (xiv) legal, accounting and
auditing expenses, including legal fees of special counsel for the Independent
Trustees; (xv) charges of custodians, transfer agents, pricing agents and other
agents; (xvi) expenses of disbursing dividends and distributions; (xvii) costs
of preparing share certificates; (xviii) expenses of setting in type, printing
and mailing prospectuses and supplements thereto, statements of additional
information, reports, notices and proxy materials for existing shareholders;
(xix) any extraordinary expenses (including fees and disbursements of counsel,
costs of actions, suits or proceedings to which
<PAGE> 4
the Company is a party and the expenses the Company may incur as a result of its
legal obligation to provide indemnification to its officers, Trustees, employees
and agents) incurred by the Company; (xx) fees, voluntary assessments and other
expenses incurred in connection with membership in investment company
organizations; (xxi) costs of mailing and tabulating proxies and costs of
meetings of shareholders, the Board and any committees thereof; (xxii) the cost
of investment company literature and other publications provided by the Company
to its Trustees and officers; and (xxiii) costs of mailing, stationery and
communications equipment.
(c) Sub-Adviser will assume the cost of any compensation for services
provided to the Company received by the officers of the Company and by the
Trustees of the Company who are not Independent Trustees.
(d) The payment or assumption by Sub-Adviser of any expense of the
Company or the Fund that Sub-Adviser is not required by this Contract to pay or
assume shall not obligate Sub-Adviser to pay or assume the same or any similar
expense of the Company or any Fund on any subsequent occasion.
7. Compensation.
(a) For the services provided to the Fund under this Contract, Adviser
will pay Sub-Adviser a fee, computed weekly and paid monthly, as set forth in
Appendix A hereto.
(b) For the services provided under this Contract to the Fund as
hereafter may be established, Adviser will pay to Sub-Adviser a fee in an amount
to be agreed upon in a written Appendix to this Contract executed by Adviser and
by Sub-Adviser.
(c) The fee shall be computed weekly and paid monthly to Sub-Adviser on
or before the last business day of the next succeeding calendar month.
(d) If this Contract becomes effective or terminates before the end of
any month, the fee for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.
8. Limitation of Liability of Sub-Adviser and Indemnification. Sub-Adviser shall
not be liable for any costs or liabilities arising from any error of judgment or
mistake of law or any loss suffered by the Fund or the Company in connection
with the matters to which this Contract relates except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of Sub-Adviser in
the performance by Sub-Adviser of its duties or from reckless disregard by
Sub-Adviser of its obligations and duties under this Contract. Any person, even
though also an officer, partner, employee, or agent of Sub-Adviser, who may be
or become a Trustee, officer, employee or agent of the Company, shall be deemed,
when rendering services to the Fund or the Company or acting with respect to any
business of
<PAGE> 5
the Fund or the Company to be rendering such service to or acting solely for the
Fund or the Company and not as an officer, partner, employee, or agent or one
under the control or direction of Sub-Adviser even though paid by it.
9. Duration and Termination.
(a) This Contract shall become effective upon the date hereabove
written, provided that this Contract shall not take effect with respect to the
Fund unless it has first been approved (i) by a vote of a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of the Fund's
outstanding voting securities.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, with respect to the Fund, this Contract shall continue
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually (i) by a vote
of a majority of the Independent Trustees, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by the Board or by vote of
a majority of the outstanding voting securities of the Fund.
(c) Notwithstanding the foregoing, with respect to the Fund this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of the Fund on sixty days' written notice to Sub-Adviser or by
Sub-Adviser at any time, without the payment of any penalty, on sixty days'
written notice to the Company. This Contract will automatically terminate in
the event of its assignment.
10. Amendment. No provision of this Contract may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, and no amendment of this Contract shall be effective until approved by
vote of a majority of the Fund's outstanding voting securities, when required by
the 1940 Act.
11. Governing Law. This Contract shall be construed in accordance with the laws
of the State of Delaware (without regard to Delaware conflict or choice of law
provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.
12. Miscellaneous. The captions in this Contract are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this Contract
shall be held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Contract shall not be affected thereby. This Contract
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors. As used in this Contract, the terms "majority of
the
<PAGE> 6
outstanding voting securities," "interested person," "assignment," "broker,"
"dealer," "investment adviser," "national securities exchange," "net assets,"
"prospectus," "sale," "sell" and "security" shall have the same meaning as such
terms have in the 1940 Act, subject to such exemption as may be granted by the
Securities and Exchange Commission by any rule, regulation or order. Where the
effect of a requirement of the 1940 Act reflected in any provision of this
Contract is made less restrictive by a rule, regulation or order of the
Securities and Exchange Commission, whether of special or general application,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.
AIM ADVISORS, INC.
Attest: /s/ KATHLEEN J. PFLUEGER By: /s/ CAROL F. RELIHAN
---------------------------- ------------------------------------
Name: Kathleen J. Pflueger Name: Carol F. Relihan
Title: Assistant Secretary Title: Senior Vice President & Secretary
INVESCO (NY), INC.
Attest: /s/ ILLEGIBLE By: /s/ DANIEL R. WALTCHER
---------------------------- ------------------------------------
Name: Daniel R. Waltcher
Title: Managing Director
<PAGE> 7
APPENDIX A
TO
SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT
AIM INVESTMENT PORTFOLIOS
AIM DOLLAR FUND
ANNUAL RATE
0.20% OF NET ASSETS
<PAGE> 1
EXHIBIT 6(a)
DISTRIBUTION AGREEMENT
BETWEEN
AIM INVESTMENT PORTFOLIOS, INC.
AND
A I M DISTRIBUTORS, INC.
CLASS A SHARES
THIS AGREEMENT made this 29th day of May, 1998, by and between AIM
Investment Portfolios, Inc., a Maryland Corporation (the "Company"), with
respect to the series of common stock set forth on Appendix A to this Agreement,
and any applicable classes thereof, (the "Portfolios"), and A I M Distributors,
Inc., a Delaware corporation (the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt whereof is hereby acknowledged, the
parties hereto agree as follows:
FIRST: The Company on behalf of the Portfolios hereby appoints the
Distributor as its exclusive agent for the sale of shares of the Portfolios to
the public directly and through investment dealers and financial institutions in
the United States and throughout the world.
SECOND: The Company shall not sell any shares of the Portfolios except
through the Distributor and under the terms and conditions set forth in
paragraph FOURTH below. Notwithstanding the provisions of the foregoing
sentence, however:
(A) the Company may issue shares of the Portfolios to any other
investment company or personal holding company, or to the shareholders thereof,
in exchange for all or a majority of the shares or assets of any such company;
and
(B) the Company may issue shares of the Portfolios at their net asset
value in connection with certain classes of transactions or to certain classes
of persons, in accordance with Rule 22d-1 under the Investment Company Act of
1940, as amended (the "1940 Act"), provided that any such class is specified in
the then current prospectus of the applicable Portfolio.
THIRD: The Distributor hereby accepts appointment as exclusive agent
for the sale of the shares of the Portfolios and agrees that it will use its
best efforts to sell such shares; provided, however, that:
(A) the Distributor may, and when requested by the Company on behalf of
a Portfolio shall, suspend its efforts to effectuate such sales at any time
when, in the opinion of the Distributor or of the
<PAGE> 2
Company, no sales should be made because of market or other economic
considerations or abnormal circumstances of any kind; and
(B) the Company may withdraw the offering of the shares of a Portfolio
(i) at any time with the consent of the Distributor, or (ii) without such
consent when so required by the provisions of any statute or of any order, rule
or regulation of any governmental body having jurisdiction. It is mutually
understood and agreed that the Distributor does not undertake to sell any
specific amount of the shares of the Portfolios. The Company shall have the
right to specify minimum amounts for initial and subsequent orders for the
purchase of shares of any Portfolio.
FOURTH:
(A) The public offering price of Class A shares of a Portfolio (the
"offering price") shall be the net asset value per share of the applicable
Portfolio plus a sales charge, if any. Net asset value per share shall be
determined in accordance with the provisions of the then current prospectus and
statement of additional information of the applicable Portfolio. The sales
charge shall be established by the Distributor, may reflect scheduled variations
in, or the elimination of, sales charges on sales of a Portfolio's Class A
shares either generally to the public, or to any specified class of investors or
in connection with any specified class of transactions, in accordance with Rule
22d-1 and as set forth in the then current prospectus and statement of
additional information of the applicable Portfolio. The Distributor shall apply
any scheduled variation in, or elimination of, the selling commission uniformly
to all offerees in the class specified. The Distributor shall be entitled to
receive the amount of any applicable contingent deferred sales charge that has
been subtracted from gross redemption proceeds (the "CDSC"), provided that the
Shares being redeemed were (i) issued by a Portfolio during the term of this
Agreement and any predecessor Agreement between the Company and the Distributor
or Distributor's predecessor, GT Global, Inc. ("GT Global"), or (ii) issued by a
Portfolio during or after the term of this Agreement or any predecessor
Agreement between the Company and the Distributor or GT Global in one or a
series of free exchanges of Shares for shares of the same class of another
portfolio, which can be traced to Shares or shares of the same class of another
portfolio initially issued by a Portfolio or such other portfolio during the
term of this Agreement, any predecessor Agreement or any other distribution
agreement with the Distributor or GT Global with respect to such other portfolio
(the "Distributor's Earned CDSC"). The Company shall pay or cause the Company's
transfer agent to pay the Distributor's Earned CDSC to the Distributor on the
date net redemption proceeds are payable to the redeeming shareholder.
(B) The Company shall allow directly to investment dealers and other
financial institutions through whom Class A shares of the Portfolios are sold
such portion of the sales charge as may be payable to them and specified by the
Distributor, up to but not exceeding the amount of the total sales charge. The
difference between any commissions so payable and the total sales charges
included in the offering price shall be paid to the Distributor.
(C) No provision of this Agreement shall be deemed to prohibit any
payments by a Portfolio to the Distributor or by a Portfolio or the Distributor
to investment dealers, financial institutions and 401(k) plan service providers
where such payments are made under a distribution plan adopted by the Company on
behalf of a Portfolio pursuant to Rule 12b-1 under the 1940 Act.
FIFTH: The Distributor shall act as agent of the Company on behalf of
the Portfolios in connection with the sale and repurchase of shares of the
Portfolios. Except with respect to such sales and repurchases, the Distributor
shall act as principal in all matters relating to the promotion of the sale of
2
<PAGE> 3
shares of the Portfolios and shall enter into all of its own engagements,
agreements and contracts as principal on its own account. The Distributor shall
enter into agreements with investment dealers and financial institutions
selected by the Distributor, authorizing such investment dealers and financial
institutions to offer and sell shares of the Portfolios to the public upon the
terms and conditions set forth therein, which shall not be inconsistent with the
provisions of this Agreement. Each agreement shall provide that the investment
dealer and financial institution shall act as a principal, and not as an agent,
of the Company on behalf of the Portfolios.
SIXTH: The Portfolios shall bear:
(A) the expenses of qualification of shares of the Portfolios for sale
in connection with such public offerings in such states as shall be selected by
the Distributor, and of continuing the qualification therein until the
Distributor notifies the Company that it does not wish such qualification
continued; and
(B) all legal expenses in connection with the foregoing.
SEVENTH:
(A) The Distributor shall bear the expenses of printing from the final
proof and distributing the Portfolios' prospectuses and statements of additional
information (including supplements thereto) relating to public offerings made
by the Distributor pursuant to this Agreement (which shall not include those
prospectuses and statements of additional information, and supplements thereto,
to be distributed to shareholders of the Portfolios), and any other promotional
or sales literature used by the Distributor or furnished by the Distributor to
dealers in connection with such public offerings, and expenses of advertising in
connection with such public offerings.
(B) The Distributor may be reimbursed for all or a portion of such
expenses, or may receive reasonable compensation for distribution related
services, to the extent permitted by a distribution plan adopted by the Company
on behalf of a Portfolio pursuant to Rule 12b-1 under the 1940 Act.
EIGHTH: The Distributor will accept orders for the purchase of shares
of the Portfolios only to the extent of purchase orders actually received and
not in excess of such orders, and it will not avail itself of any opportunity of
making a profit by expediting or withholding orders. It is mutually understood
and agreed that the Company may reject purchase orders where, in the judgment of
the Company, such rejection is in the best interest of the Company.
NINTH: The Company, on behalf of the Portfolios, and the Distributor
shall each comply with all applicable provisions of the 1940 Act, the Securities
Act of 1933 and all other federal and state laws, rules and regulations
governing the issuance and sale of shares of the Portfolios.
TENTH:
(A) In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties hereunder on the part of the
Distributor, the Company on behalf of the Portfolios agrees to indemnify the
Distributor against any and all claims, demands, liabilities and expenses which
the Distributor may incur under the Securities Act of 1933, or common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of a
Portfolio, or any omission to state a material fact therein, the omission of
which makes any statement contained therein misleading, unless such statement or
omission was made in reliance
3
<PAGE> 4
upon, and in conformity with, information furnished to the Company or a
Portfolio in connection therewith by or on behalf of the Distributor. The
Distributor agrees to indemnify the Company and the Portfolios against any and
all claims, demands, liabilities and expenses which the Company or a Portfolio
may incur arising out of or based upon any act or deed of the Distributor or its
sales representatives which has not been authorized by the Company or a
Portfolio in its prospectus or in this Agreement.
(B) The Distributor agrees to indemnify the Company and the Portfolios
against any and all claims, demands, liabilities and expenses which the Company
or the Portfolios may incur under the Securities Act of 1933, or common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of a
Portfolio, or any omission to state a material fact therein if such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Company or a Portfolio in connection therewith by or on behalf
of the Distributor.
(C) Notwithstanding any other provision of this Agreement, the
Distributor shall not be liable for any errors of the Portfolios' transfer
agent(s), or for any failure of any such transfer agent to perform its duties.
ELEVENTH: Nothing herein contained shall require the Company to take
any action contrary to any provision of its Articles of Incorporation, or to any
applicable statute or regulation.
TWELFTH: This Agreement shall become effective with respect to each
Portfolio as of the date hereof, shall continue in force and effect until two
years from the date hereof, and shall continue in force and effect from year to
year thereafter, provided, that such continuance is specifically approved with
respect to such Portfolio at least annually (a)(i) by the Board of Directors of
the Company or (ii) by the vote of a majority of the outstanding voting
securities (as defined in Section 2(a)(42) of the 1940 Act), and (b) by vote of
a majority of the Company's Directors who are not parties to this Agreement or
"interested persons" (as defined in Section 2(a)(19) of the 1940 Act) of any
party to this Agreement cast in person at a meeting called for such purpose.
THIRTEENTH:
(A) This Agreement may be terminated with respect to any Portfolio at
any time, without the payment of any penalty, by vote of the Board of Directors
of the Company or by vote of a majority of the outstanding voting securities of
the applicable Portfolio, or by the Distributor, on sixty (60) days' written
notice to the other party.
(B) This Agreement shall automatically terminate in the event of its
assignment, the term "assignment" having the meaning set forth in Section
2(a)(4) of the 1940 Act.
FOURTEENTH: Any notice under this Agreement shall be in writing,
addressed and delivered, or mailed postage prepaid, to the other party at such
address as the other party may designate for the receipt of notices. Until
further notice to the other party, it is agreed that the addresses of both the
Company and the Distributor shall be 11 Greenway Plaza, Suite 100, Houston,
Texas 77046.
FIFTEENTH: This Agreement shall be deemed to be a contract made in the
State of Delaware and governed by, construed in accordance with and enforced
pursuant to the internal laws of the State of Delaware without reference to its
conflicts of laws rules.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate on the day and year first above written.
AIM INVESTMENT PORTFOLIOS, INC.
By: /s/ WILLIAM J. GUILFOYLE
-----------------------------------
Name: William J. Guilfoyle
Title: President
Attest:
/s/ MICHAEL A. SILVER
- ----------------------------------
Name: Michael A. Silver
Title: Assistant Secretary
A I M DISTRIBUTORS, INC.
By: /s/ JOHN CALDWELL
-----------------------------------
Name: John Caldwell
Title: Senior Vice President
Attest:
/s/ KATHLEEN J. PFLUEGER
- ----------------------------------
Name: Kathleen J. Pflueger
Title: Secretary
5
<PAGE> 6
APPENDIX A
TO
DISTRIBUTION AGREEMENT
OF
AIM INVESTMENT PORTFOLIOS, INC.
CLASS A SHARES
AIM Dollar Fund
6
<PAGE> 1
EXHIBIT 6(b)
DISTRIBUTION AGREEMENT
BETWEEN
AIM INVESTMENT PORTFOLIOS
AND
A I M DISTRIBUTORS, INC.
CLASS A SHARES
THIS AGREEMENT made this 8th day of September, 1998, by and between AIM
Investment Portfolios, a Delaware business trust (the "Company"), with respect
to the series of common stock set forth on Appendix A to this Agreement, and any
applicable classes thereof, (the "Portfolios"), and A I M Distributors, Inc., a
Delaware corporation (the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt whereof is hereby acknowledged, the
parties hereto agree as follows:
FIRST: The Company on behalf of the Portfolios hereby appoints the
Distributor as its exclusive agent for the sale of shares of the Portfolios to
the public directly and through investment dealers and financial institutions in
the United States and throughout the world.
SECOND: The Company shall not sell any shares of the Portfolios except
through the Distributor and under the terms and conditions set forth in
paragraph FOURTH below. Notwithstanding the provisions of the foregoing
sentence, however:
(A) the Company may issue shares of the Portfolios to any other
investment company or personal holding company, or to the shareholders thereof,
in exchange for all or a majority of the shares or assets of any such company;
and
(B) the Company may issue shares of the Portfolios at their net
asset value in connection with certain classes of transactions or to certain
classes of persons, in accordance with Rule 22d-1 under the Investment Company
Act of 1940, as amended (the "1940 Act"), provided that any such class is
specified in the then current prospectus of the applicable Portfolio.
THIRD: The Distributor hereby accepts appointment as exclusive agent
for the sale of the shares of the Portfolios and agrees that it will use its
best efforts to sell such shares; provided, however, that:
(A) the Distributor may, and when requested by the Company on
behalf of a Portfolio shall, suspend its efforts to effectuate such sales at any
time when, in the opinion of the Distributor or of the
<PAGE> 2
Company, no sales should be made because of market or other economic
considerations or abnormal circumstances of any kind; and
(B) the Company may withdraw the offering of the shares of a
Portfolio (i) at any time with the consent of the Distributor, or (ii) without
such consent when so required by the provisions of any statute or of any order,
rule or regulation of any governmental body having jurisdiction. It is mutually
understood and agreed that the Distributor does not undertake to sell any
specific amount of the shares of the Portfolios. The Company shall have the
right to specify minimum amounts for initial and subsequent orders for the
purchase of shares of any Portfolio.
FOURTH:
(A) the public offering price of Class A shares of a Portfolio (the
"offering price") shall be the net asset value per share of the applicable
Portfolio plus a sales charge, if any. Net asset value per share shall be
determined in accordance with the provisions of the then current prospectus and
statement of additional information of the applicable Portfolio. The sales
charge shall be established by the Distributor, may reflect scheduled variations
in, or the elimination of, sales charges on sales of a Portfolio's Class A
shares either generally to the public, or to any specified class of investors or
in connection with any specified class of transactions, in accordance with Rule
22d-1 and as set forth in the then current prospectus and statement of
additional information of the applicable Portfolio. The Distributor shall apply
any scheduled variation in, or elimination of, the selling commission uniformly
to all offerees in the class specified. The Distributor shall be entitled to
receive the amount of any applicable contingent deferred sales charge that has
been subtracted from gross redemption proceeds (the "CDSC"), provided that the
Shares being redeemed were (i) issued by a Portfolio during the term of this
Agreement and any predecessor Agreement between the Company and the Distributor
or Distributor's predecessor, GT Global, Inc. ("GT Global"), or (ii) issued by a
Portfolio during or after the term of this Agreement or any predecessor
Agreement between the Company and the Distributor or GT Global in one or a
series of free exchanges of Shares for shares of the same class of another
portfolio, which can be traced to Shares or shares of the same class of another
portfolio initially issued by a Portfolio or such other portfolio during the
term of this Agreement, any predecessor Agreement or any other distribution
agreement with the Distributor or GT Global with respect to such other portfolio
(the "Distributor's Earned CDSC"). The Company shall pay or cause the Company's
transfer agent to pay the Distributor's Earned CDSC to the Distributor on the
date net redemption proceeds are payable to the redeeming shareholder.
(B) the Company shall allow directly to investment dealers and
other financial institutions through whom Class A shares of the Portfolios are
sold such portion of the sales charge as may be payable to them and specified by
the Distributor, up to but not exceeding the amount of the total sales charge.
The difference between any commissions so payable and the total sales charges
included in the offering price shall be paid to the Distributor.
(C) no provision of this Agreement shall be deemed to prohibit any
payments by a Portfolio to the Distributor or by a Portfolio or the Distributor
to investment dealers, financial institutions and 401(k) plan service providers
where such payments are made under a distribution plan adopted by the Company on
behalf of a Portfolio pursuant to Rule 12b-1 under the 1940 Act.
FIFTH: The Distributor shall act as agent of the Company on behalf of
the Portfolios in connection with the sale and repurchase of shares of the
Portfolios. Except with respect to such sales and repurchases, the Distributor
shall act as principal in all matters relating to the promotion of the sale of
2
<PAGE> 3
shares of the Portfolios and shall enter into all of its own engagements,
agreements and contracts as principal on its own account. The Distributor shall
enter into agreements with investment dealers and financial institutions
selected by the Distributor, authorizing such investment dealers and financial
institutions to offer and sell shares of the Portfolios to the public upon the
terms and conditions set forth therein, which shall not be inconsistent with the
provisions of this Agreement. Each agreement shall provide that the investment
dealer and financial institution shall act as a principal, and not as an agent,
of the Company on behalf of the Portfolios.
SIXTH: The Portfolios shall bear:
(A) the expenses of qualification of shares of the Portfolios for
sale in connection with such public offerings in such states as shall be
selected by the Distributor, and of continuing the qualification therein until
the Distributor notifies the Company that it does not wish such qualification
continued; and
(B) all legal expenses in connection with the foregoing.
SEVENTH:
(A) the Distributor shall bear the expenses of printing from the
final proof and distributing the Portfolios' prospectuses and statements of
additional information (including supplements thereto) relating to public
offerings made by the Distributor pursuant to this Agreement (which shall not
include those prospectuses and statements of additional information, and
supplements thereto, to be distributed to shareholders of the Portfolios), and
any other promotional or sales literature used by the Distributor or furnished
by the Distributor to dealers in connection with such public offerings, and
expenses of advertising in connection with such public offerings.
(B) the Distributor may be reimbursed for all or a portion of such
expenses, or may receive reasonable compensation for distribution related
services, to the extent permitted by a distribution plan adopted by the Company
on behalf of a Portfolio pursuant to Rule 12b-1 under the 1940 Act.
EIGHTH: The Distributor will accept orders for the purchase of shares
of the Portfolios only to the extent of purchase orders actually received and
not in excess of such orders, and it will not avail itself of any opportunity of
making a profit by expediting or withholding orders. It is mutually understood
and agreed that the Company may reject purchase orders where, in the judgment of
the Company, such rejection is in the best interest of the Company.
NINTH: The Company, on behalf of the Portfolios, and the Distributor
shall each comply with all applicable provisions of the 1940 Act, the Securities
Act of 1933 and all other federal and state laws, rules and regulations
governing the issuance and sale of shares of the Portfolios.
TENTH:
(A) in the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Distributor, the Company on behalf of the Portfolios agrees to indemnify
the Distributor against any and all claims, demands, liabilities and expenses
which the Distributor may incur under the Securities Act of 1933, or common law
or otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of a
Portfolio, or any omission to state a material fact therein, the omission of
which makes any statement contained therein misleading, unless such statement or
omission was made in reliance
3
<PAGE> 4
upon, and in conformity with, information furnished to the Company or a
Portfolio in connection therewith by or on behalf of the Distributor. The
Distributor agrees to indemnify the Company and the Portfolios against any and
all claims, demands, liabilities and expenses which the Company or a Portfolio
may incur arising out of or based upon any act or deed of the Distributor or its
sales representatives which has not been authorized by the Company or a
Portfolio in its prospectus or in this Agreement.
(B) the Distributor agrees to indemnify the Company and the
Portfolios against any and all claims, demands, liabilities and expenses which
the Company or the Portfolios may incur under the Securities Act of 1933, or
common law or otherwise, arising out of or based upon any alleged untrue
statement of a material fact contained in any registration statement or
prospectus of a Portfolio, or any omission to state a material fact therein if
such statement or omission was made in reliance upon, and in conformity with,
information furnished to the Company or a Portfolio in connection therewith by
or on behalf of the Distributor.
(C) notwithstanding any other provision of this Agreement, the
Distributor shall not be liable for any errors of the Portfolios' transfer
agent(s), or for any failure of any such transfer agent to perform its duties.
ELEVENTH: Nothing herein contained shall require the Company to take
any action contrary to any provision of its Articles of Incorporation, or to any
applicable statute or regulation.
TWELFTH: This Agreement shall become effective with respect to each
Portfolio as of the date hereof, shall continue in force and effect until two
years from the date hereof, and shall continue in force and effect from year to
year thereafter, provided, that such continuance is specifically approved with
respect to such Portfolio at least annually (a)(i) by the Board of Trustees of
the Company or (ii) by the vote of a majority of the outstanding voting
securities (as defined in Section 2(a)(42) of the 1940 Act), and (b) by vote of
a majority of the Company's Trustees who are not parties to this Agreement or
"interested persons" (as defined in Section 2(a)(19) of the 1940 Act) of any
party to this Agreement cast in person at a meeting called for such purpose.
THIRTEENTH:
(A) this Agreement may be terminated with respect to any Portfolio
at any time, without the payment of any penalty, by vote of the Board of
Trustees of the Company or by vote of a majority of the outstanding voting
securities of the applicable Portfolio, or by the Distributor, on sixty (60)
days' written notice to the other party.
(B) this Agreement shall automatically terminate in the event of
its assignment, the term "assignment" having the meaning set forth in Section
2(a)(4) of the 1940 Act.
FOURTEENTH: Any notice under this Agreement shall be in writing,
addressed and delivered, or mailed postage prepaid, to the other party at such
address as the other party may designate for the receipt of notices. Until
further notice to the other party, it is agreed that the addresses of both the
Company and the Distributor shall be 11 Greenway Plaza, Suite 100, Houston,
Texas 77046.
FIFTEENTH: This Agreement shall be deemed to be a contract made in the
State of Delaware and governed by, construed in accordance with and enforced
pursuant to the internal laws of the State of Delaware without reference to its
conflicts of laws rules.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate on the day and year first above written.
AIM INVESTMENT PORTFOLIOS
By: /s/ ROBERT H. GRAHAM
----------------------------------
Name: Robert H. Graham
Title: President
Attest:
/s/ MICHAEL A. SILVER
- ---------------------------------
Name: Michael A. Silver
Title: Assistant Secretary
A I M DISTRIBUTORS, INC.
By: /s/ W.G. LITTLEPAGE
----------------------------------
Name: W. Gary Littlepage
Title: Senior Vice President
Attest:
/s/ KATHLEEN J. PFLUEGER
- ---------------------------------
Name: Kathleen J. Pflueger
Title: Secretary
5
<PAGE> 6
APPENDIX A
TO
DISTRIBUTION AGREEMENT
OF
AIM INVESTMENT PORTFOLIOS
CLASS A SHARES
AIM Dollar Fund
6
<PAGE> 1
EXHIBIT 6(c)
DISTRIBUTION AGREEMENT
BETWEEN
AIM INVESTMENT PORTFOLIOS, INC.
AND
A I M DISTRIBUTORS, INC.
CLASS B SHARES
THIS AGREEMENT made this 29th day of May, 1998, by and between AIM
Investment Portfolios, Inc., a Maryland Corporation (the "Company"), with
respect to each of the Class B shares (the "Shares") of each series of shares of
common stock set forth on Schedule A to this agreement (the "Portfolios"), and
A I M Distributors, Inc., a Delaware corporation (the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt whereof is hereby acknowledged, the
parties hereto agree as follows:
FIRST: The Company hereby appoints the Distributor as its exclusive
agent for the sale of the Shares to the public directly and through investment
dealers in the United States and throughout the world. If subsequent to the
termination of the Distributor's services to the Company pursuant to this
Agreement, the Company retains the services of another distributor, the
distribution agreement with such distributor shall contain provisions comparable
to Clauses FOURTH and SEVENTH hereof and Exhibit A hereto, and without limiting
the generality of the foregoing, will require such distributor to maintain and
make available to the Distributor records regarding sales, redemptions and
reinvestments of Shares necessary to implement the terms of Clauses FOURTH,
SEVENTH and EIGHTH hereof.
SECOND: The Company shall not sell any Shares except through the
Distributor and under the terms and conditions set forth in paragraph FOURTH
below. Notwithstanding the provisions of the foregoing sentence, however:
(A) the Company may issue Shares to any other investment company or
personal holding company, or to the shareholders thereof, in exchange for all or
a majority of the shares or assets of any such company;
(B) the Company may issue Shares at their net asset value in connection
with certain classes of transactions or to certain classes of persons, in
accordance with Rule 22d-1 under the Investment Company Act of 1940, as amended
(the "1940 Act"), provided that any such class is specified in the then current
prospectus of the applicable Shares; and
(C) the Company shall have the right to specify minimum amounts for
initial and subsequent orders for the purchase of Shares.
<PAGE> 2
THIRD: The Distributor hereby accepts appointment as exclusive agent
for the sale of the Shares and agrees that it will use its best efforts to sell
such Shares; provided, however, that:
(A) the Distributor may, and when requested by the Company on behalf of
the Shares shall, suspend its efforts to effectuate such sales at any time when,
in the opinion of the Distributor or of the Company, no sales should be made
because of market or other economic considerations or abnormal circumstances of
any kind;
(B) the Company may withdraw the offering of the Shares (i) at any time
with the consent of the Distributor, or (ii) without such consent when so
required by the provisions of any statute or of any order, rule or regulation of
any governmental body having jurisdiction; and
(C) the Distributor, as agent, does not undertake to sell any specific
amount of the Shares.
FOURTH:
(A) The public offering price of the Shares shall be the net asset
value per share of the applicable Shares. Net asset value per share shall be
determined in accordance with the provisions of the then current prospectus and
statement of additional information of the applicable Portfolio. The Distributor
may establish a schedule of contingent deferred sales charges to be imposed at
the time of redemption of the Shares, and such schedule shall be disclosed in
the current prospectus of each Portfolio. Such schedule of contingent deferred
sales charges may reflect variations in or waivers of such charges on
redemptions of Shares, either generally to the public or to any specified class
of shareholders and/or in connection with any specified class of transactions,
in accordance with applicable rules and regulations and exemptive relief granted
by the Securities and Exchange Commission, and as set forth in the Portfolios'
current prospectus(es). The Distributor and the Company shall apply any then
applicable scheduled variation in or waiver of contingent deferred sales charges
uniformly to all shareholders and/or all transactions belonging to a specified
class.
(B) The Distributor may pay to investment dealers and other financial
institutions through whom Shares are sold, such sales commission as the
Distributor may specify from time to time. Payment of any such sales commissions
shall be the sole obligation of the Distributor.
(C) No provision of this Agreement shall be deemed to prohibit any
payments by the Company to the Distributor or by the Company or the Distributor
to investment dealers, financial institutions and 401(k) plan service providers
where such payments are made under a distribution plan adopted by the Company
pursuant to Rule 12b-1 under the 1940 Act.
(D) The Company shall redeem the Shares from shareholders in accordance
with the terms set forth from time to time in the current prospectus and
statement of additional information of each Portfolio. The price to be paid to a
shareholder to redeem the Shares shall be equal to the net asset value of the
Shares being redeemed ("gross redemption proceeds"), less any applicable
contingent deferred sales charge, calculated pursuant to the then applicable
schedule of contingent deferred sales charges ("net redemption proceeds"). The
Distributor shall be entitled to receive the amount of the contingent deferred
sales charge that has been subtracted from gross redemption proceeds (the
"CDSC"), provided that the Shares being redeemed were (i) issued by a Portfolio
during the term of this Agreement and any predecessor Agreement between the
Company and the Distributor or Distributor's predecessor, GT Global, Inc. ("GT
Global"), or (ii) issued by a Portfolio during or after the term of this
Agreement or any predecessor Agreement between the Company and the Distributor
or GT Global in one or a series of free
2
<PAGE> 3
exchanges of Shares for Class B shares of another portfolio, which can be traced
to Shares or Class B shares of another portfolio initially issued by a Portfolio
or such other portfolio during the term of this Agreement, any predecessor
Agreement or any other distribution agreement with the Distributor or GT Global
with respect to such other portfolio (the "Distributor's Earned CDSC"). The
Company shall pay or cause the Company's transfer agent to pay the Distributor's
Earned CDSC to the Distributor on the date net redemption proceeds are payable
to the redeeming shareholder.
(E) The Distributor shall maintain adequate books and records to
identify Shares (i) issued by a Portfolio during the term of this Agreement and
any predecessor Agreement between the Company and the Distributor or GT Global
or (ii) issued by a Portfolio during or after the term of this Agreement or any
predecessor Agreement between the Company and the Distributor or GT Global in
one or a series of free exchanges of Shares for class B shares of another
portfolio, which can be traced to Shares or class B shares of another portfolio
initially issued by a Portfolio or such other portfolio during the term of this
Agreement, any predecessor Agreement or any other distribution agreement with
the Distributor or GT Global with respect to such other portfolio and shall
calculate the Distributor's Earned CDSC, if any, with respect to such Shares,
upon their redemption. The Company shall be entitled to rely on Distributor's
books, records and calculations with respect to Distributor's Earned CDSC.
FIFTH: The Distributor shall act as an agent of the Company in
connection with the sale and redemption of Shares. Except with respect to such
sales and redemptions, the Distributor shall act as principal in all matters
relating to the promotion of the sale of Shares and shall enter into all of its
own engagements, agreements and contracts as principal on its own account. The
Distributor shall enter into agreements with investment dealers and financial
institutions selected by the Distributor, authorizing such investment dealers
and financial institutions to offer and sell the Shares to the public upon the
terms and conditions set forth therein, which shall not be inconsistent with the
provisions of this Agreement. Each agreement shall provide that the investment
dealer or financial institution shall act as a principal, and not as an agent,
of the Company.
SIXTH: The Shares shall bear:
(A) the expenses of qualification of Shares for sale in connection with
such public offerings in such states as shall be selected by the Distributor,
and of continuing the qualification therein until the Distributor notifies the
Company that it does not wish such qualification continued; and
(B) all legal expenses in connection with the foregoing.
SEVENTH:
(A) The Distributor shall bear the expenses of printing from the final
proof and distributing the prospectuses and statements of additional information
for the Shares (including supplements thereto) relating to public offerings made
by the Company pursuant to such prospectuses (which shall not include those
prospectuses and statements of additional information, and supplements thereto,
to be distributed to existing shareholders of the Shares), and any other
promotional or sales literature used by the Distributor or furnished by the
Distributor to dealers in connection with such public offerings, and expenses of
advertising in connection with such public offerings.
(B) Subject to the limitations, if any, of applicable law including the
NASD Conduct Rules (formerly, the NASD Rules of Fair Practice) regarding
asset-based sales charges, the Company shall pay to the Distributor as a
reimbursement for all or a portion of such expenses, or as reasonable
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<PAGE> 4
compensation for distribution of the Shares, an asset-based sales charge in an
amount equal to 0.75% per annum of the average daily net asset value of the
Shares of each Portfolio from time to time (the "Distributor's 12b-1 Share"),
such sales charge to be payable pursuant to the distribution plan adopted
pursuant to Rule 12b-1 under the 1940 Act (the "Plan"). The Distributor's 12b-1
Share shall be a percentage, which shall be recomputed periodically (but not
less than monthly) in accordance with Exhibit A to this Agreement. The
Distributor's 12b-1 Share shall accrue daily and be paid to the Distributor as
soon as practicable after the end of each calendar month within which it accrues
but in any event within 10 business days after the end of each such calendar
month (unless the Distributor shall specify a later date in written instructions
to the Company) provided, however, that any notices and calculation required by
Section EIGHTH: (B) and (C) have been received by the Company.
(C) The Distributor shall maintain adequate books and records to permit
calculations periodically (but not less than monthly) of, and shall calculate on
a monthly basis, the Distributor's 12b-1 Share to be paid to the Distributor.
The Company shall be entitled to rely on Distributor's books, records and
calculations relating to Distributor's 12b-1 Share.
EIGHTH:
(A) The Distributor may, from time to time, assign, transfer or pledge
("Transfer") to one or more designees (each an "Assignee"), its rights to all or
a designated portion of (i) the Distributor's 12b-1 Share (but not the
Distributor's duties and obligations pursuant hereto or pursuant to the Plan),
and (ii) the Distributor's Earned CDSC, free and clear of any offsets or claims
the Company may have against the Distributor. Each such Assignee's ownership
interest in a Transfer of a designated portion of a Distributor's 12b-1 Share
and a Distributor's Earned CDSC is hereinafter referred to as an "Assignee's
12b-1 Portion" and an "Assignee's CDSC Portion," respectively. A Transfer
pursuant to this Section EIGHTH: (A) shall not reduce or extinguish any claim of
the Company against the Distributor.
(B) The Distributor shall promptly notify the Company in writing of
each Transfer pursuant to Section EIGHTH: (A) by providing the Company with the
name and address of each such Assignee.
(C) The Distributor may direct the Company to pay directly to an
Assignee such Assignee's 12b-1 Portion and Assignee's CDSC Portion. In such
event, Distributor shall provide the Company with a monthly calculation of (i)
the Distributor's Earned CDSC and Distributor's 12b-1 Share and (ii) each
Assignee's 12b-1 Portion and Assignee's CDSC Portion, if any, for such month
(the "Monthly Calculation"). The Monthly Calculation shall be provided to the
Company by the Distributor promptly after the close of each month or such other
time as agreed to by the Company and the Distributor which allows timely payment
of the Distributor's 12b-1 Share and Distributor's Earned CDSC and/or the
Assignee's 12b-1 Portion and Assignee's CDSC Portion. The Company shall not be
liable for any interest on such payments occasioned by delayed delivery of the
Monthly Calculation by the Distributor. In such event following receipt from the
Distributor of (i) notice of Transfer referred to in Section EIGHTH: (B) and
(ii) each Monthly Calculation, the Company shall make all payments directly to
the Assignee or Assignees in accordance with the information provided in such
notice and Monthly Calculation, on the same terms and conditions as if such
payments were to be paid directly to the Distributor. The Company shall be
entitled to rely on Distributor's notices, and Monthly Calculations in respect
of amounts to be paid pursuant to this Section EIGHTH: (B).
(D) Alternatively, in connection with a Transfer the Distributor may
direct the Company to pay all of such Distributor's 12b-1 Share and
Distributor's Earned CDSC from time to time to a depository or collection agent
designated by any Assignee, which depository or collection agent may be
4
<PAGE> 5
delegated the duty of dividing such Distributor's 12b-1 Share and Distributor's
Earned CDSC between the Assignee's 12b-1 Portion and Assignee's CDSC Portion and
the balance of the Distributor's 12b-1 Share (such balance, when distributed to
the Distributor by the depository or collection agent, the "Distributor's 12b-1
Portion") and of the Distributor's Earned CDSC (such balance, when distributed
to the Distributor by the depository or collection agent, the "Distributor's
Earned CDSC Portion"), in which case only the Distributor's 12b-1 Portion and
Distributor's Earned CDSC Portion may be subject to offsets or claims the
Company may have against the Distributor.
(E) The Company shall not amend the Plan to reduce the amount payable
to the Distributor or any Assignee under Section SEVENTH: (B) hereof with
respect to the Shares for any Shares which have been issued prior to the date of
such amendment.
NINTH: The Distributor will accept orders for the purchase of Shares
only to the extent of purchase orders actually received and not in excess of
such orders, and it will not avail itself of any opportunity of making a profit
by expediting or withholding orders.
TENTH:
(A) Pursuant to the Plan and this Agreement, the Distributor, as agent,
shall enter into Shareholder Service Agreements with investment dealers,
financial institutions and certain 401(K) plan service providers (collectively
"Service Providers") selected by the Distributor for the provision of certain
continuing personal services to customers of such Service Providers who have
purchased Shares. Such agreements shall authorize Service Providers to provide
continuing personal shareholder services to their customers upon the terms and
conditions set forth therein, which shall not be inconsistent with the
provisions of this Agreement. Each Shareholder Service Agreement shall provide
that the Service Provider shall act as principal, and not as an agent of the
Company.
(B) Shareholder Service Agreements may provide that the Service
Providers may receive a service fee in the amount of 0.25% of the average daily
net assets of the Shares held by customers of such Service Providers provided
that such Service Providers furnish continuing personal shareholder services to
their customers in respect of such Shares. The continuing personal services to
be rendered by Service Providers under the Shareholder Service Agreements may
include, but shall not be limited to, some or all of the following: distributing
sales literature; answering routine customer inquiries concerning the Company;
assisting customers in changing dividend elections, options, account
designations and addresses, and in enrolling in any of several special
investment plans offered in connection with the purchase of Shares; assisting in
the establishment and maintenance of or establishing and maintaining customer
accounts and records and the processing of purchase and redemption transactions;
performing subaccounting; investing dividends and any capital gains
distributions automatically in the Company's shares; providing periodic
statements showing a customer's account balance and the integration of such
statements with those of other transactions and balances in the customer's
account serviced by the Service Provider; forwarding applicable prospectus,
proxy statements, reports and notices to customers who hold Shares and providing
such other information and services as the Company or the customers may
reasonably request.
(C) The Distributor may advance service fees payable to Service
Providers pursuant to the Plan or any other distribution plan adopted by the
Company with respect to Shares of one or more of the Portfolios pursuant to Rule
12b-1 under the 1940 Act; and thereafter the Distributor may be reimbursed for
such advances through retention of service fee payments during the period for
which the service fees were advanced.
5
<PAGE> 6
ELEVENTH: The Company and the Distributor shall each comply with all
applicable provisions of the 1940 Act, the Securities Act of 1933, as amended,
and of all other federal and state laws, rules and regulations governing the
issuance and sale of the Shares.
TWELFTH:
(A) In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties hereunder on the part of the
Distributor, the Company shall indemnify the Distributor against any and all
claims, demands, liabilities and expenses which the Distributor may incur under
the Securities Act of 1933, or common law or otherwise, arising out of or based
upon any alleged untrue statement of a material fact contained in any
registration statement or prospectus of the Shares, or any omission to state a
material fact therein, the omission of which makes any statement contained
therein misleading, unless such statement or omission was made in reliance upon,
and in conformity with, information furnished to the Company in connection
therewith by or on behalf of the Distributor. The Distributor shall indemnify
the Company and the Shares against any and all claims, demands, liabilities and
expenses which the Company or the Shares may incur arising out of or based upon
(i) any act or deed of the Distributor or its sales representatives which has
not been authorized by the Company in its prospectus or in this Agreement and
(ii) the Company's reliance on the Distributor's books, records, calculations
and notices in Sections FOURTH: (E), SEVENTH: (C), EIGHTH: (B), EIGHTH: (C) and
EIGHTH: (D).
(B) The Distributor shall indemnify the Company and the Shares against
any and all claims, demands, liabilities and expenses which the Company or the
Shares may incur under the Securities Act of 1933, as amended, or common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of the
Shares, or any omission to state a material fact therein if such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Company in connection therewith by or on behalf of the
Distributor.
(C) Notwithstanding any other provision of this Agreement, the
Distributor shall not be liable for any errors of the transfer agent(s) of the
Shares, or for any failure of any such transfer agent to perform its duties.
THIRTEENTH: Nothing herein contained shall require the Company to take
any action contrary to any provision of its Articles of Incorporation, as
amended, or to any applicable statute or regulation.
FOURTEENTH: This Agreement shall become effective with respect to the
Shares of each Portfolio upon its approval by the Board of Directors of the
Company and by vote of a majority of the Company's Directors who are not
interested parties to this Agreement or "interested persons" (as defined in
Section 2(a)(19) of the 1940 Act) of any party to this Agreement cast in person
at a meeting called for such purpose, shall continue in force and effect until
two years from the date hereof, and from year to year thereafter, provided, that
such continuance is specifically approved with respect to the Shares of each
Portfolio at least annually (a)(i) by the Board of Directors of the Company or
(ii) by the vote of a majority of the outstanding Shares of such class of such
Portfolio, and (b) by vote of a majority of the Company's Directors who are not
parties to this Agreement or "interested persons" (as defined in Section
2(a)(19) of the 1940 Act) of any party to this Agreement cast in person at a
meeting called for such purpose.
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<PAGE> 7
FIFTEENTH:
(A) This Agreement may be terminated with respect to the Shares of any
Portfolio, at any time, without the payment of any penalty, by vote of the Board
of Directors of the Company or by vote of a majority of the outstanding Shares
of such Portfolio, or by the Distributor, on sixty (60) days' written notice to
the other party; and
(B) This Agreement shall also automatically terminate in the event of
its assignment, the term "assignment" having the meaning set forth in Section
2(a)(4) of the 1940 Act; provided, that, subject to the provisions of the
following sentence, if this Agreement is terminated for any reason, the
obligations of the Company and the Distributor pursuant to Sections FOURTH: (D),
FOURTH: (E), SEVENTH: (B), SEVENTH: (C), EIGHTH: (A) through (E) and TWELFTH:
(A) of this Agreement will continue and survive any such termination.
Notwithstanding the foregoing, upon Complete Termination of the Plan (as such
term is defined in Section 8 of the Plan in effect at the date of this
Agreement), the obligations of the Company pursuant to the terms of Sections
SEVENTH: (B), EIGHTH: (A), EIGHTH: (C), EIGHTH: (D) and EIGHTH: (E) (with
respect to payments of Distributor's 12b-1 Share and Assignee's 12b-1 Portion)
of this Agreement shall terminate. A termination of the Plan with respect to any
or all Shares of any or all Portfolios shall not affect the obligations of the
Company pursuant to Sections FOURTH: (D), EIGHTH: (A), EIGHTH: (C), EIGHTH: (D)
and EIGHTH: (E) (with respect to payments of Distributor's Earned CDSC or
Assignee's CDSC Portion) hereof or of the obligations of the Distributor
pursuant to Section FOURTH: (E) or EIGHTH: (B) hereof.
(C) The Transfer of the Distributor's rights to Distributor's 12b-1
Share or Distributor's Earned CDSC shall not cause a termination of this
Agreement or be deemed to be an assignment for purposes of Section FIFTEENTH:
(B) above.
SIXTEENTH: Any notice under this Agreement shall be in writing,
addressed and delivered, or mailed postage prepaid, to the other party at such
address as the other party may designate for the receipt of notices. Until
further notice to the other party, the addresses of both the Company and the
Distributor shall be 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173.
SEVENTEENTH: This Agreement shall be deemed to be a contract made in
the State of Delaware and governed by, construed in accordance with and enforced
pursuant to the internal laws of the State of Delaware without reference to its
conflicts of laws rules.
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<PAGE> 8
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate on the day and year first above written.
AIM INVESTMENT PORTFOLIOS, INC.
By: /s/ WILLIAM J. GUILFOYLE
--------------------------------------
Name: William J. Guilfoyle
Title: President
Attest:
/s/ MICHAEL A. SILVER
- ------------------------------------
Name: Michael A. Silver
Title: Assistant Secretary
A I M DISTRIBUTORS, INC.
By: /s/ JOHN CALDWELL
--------------------------------------
Name: John Caldwell
Title: Senior Vice President
Attest:
/s/ KATHLEEN J. PFLUEGER
- ------------------------------------
Name: Kathleen J. Pflueger
Title: Secretary
8
<PAGE> 9
SCHEDULE A
TO
DISTRIBUTION AGREEMENT
OF
AIM INVESTMENT PORTFOLIOS, INC.
CLASS B SHARES
AIM Dollar Fund
9
<PAGE> 10
EXHIBIT A
The Distributor's 12b-1 Share in respect of each Portfolio shall be 100
percent until such time as the Distributor shall cease to serve as exclusive
distributor of the Shares of such Portfolio and thereafter shall be a
percentage, recomputed first on the date of any termination of the Distributor's
services as exclusive distributor of Shares of any Portfolio and thereafter
periodically (but not less than monthly), representing the percentage of Shares
of such Portfolio outstanding on each such computation date allocated to the
Distributor in accordance with the following rules:
1. DEFINITIONS. For purposes of this Exhibit A defined terms used
herein shall have the meaning assigned to such terms in the Distribution
Agreement and the following terms shall have the following meanings:
"Commission Shares" shall mean shares of the Portfolio or another
portfolio the redemption of which would, in the absence of the application of
some standard waiver provision, give rise to the payment of a CDSC and shall
include Commission Shares which due to the expiration of the CDSC period no
longer bear a CDSC.
"Distributor" shall mean the Distributor and the Distributor's
predecessor, GT Global, Inc.
"Other Distributor" shall mean each person appointed as the exclusive
distributor for the Shares of the Portfolio after the Distributor ceases to
serve in that capacity.
2. ALLOCATION RULES. In determining the Distributor's 12b-1 Share in
respect of a particular Portfolio:
(a) There shall be allocated to the Distributor and each Other
Distributor all Commission Shares of such Portfolio which were sold while such
Distributor or such Other Distributor, as the case may be, was the exclusive
distributor for the Shares of the Portfolio, determined in accordance with the
transfer records maintained for such Portfolio.
(b) Reinvested Shares: On the date that any Shares are issued by a
Portfolio as a result of the reinvestment of dividends or other distributions,
whether ordinary income, capital gains or exempt-interest dividend or
distributions ("Reinvested Shares"), Reinvested Shares shall be allocated to the
Distributor and each Other Distributor in a number obtained by multiplying the
total number of Reinvested Shares issued on such date by a fraction, the
numerator of which is the total number of all Shares outstanding in such Fund as
of the opening of business on such date and allocated to the Distributor or
Other Distributor as of such date of determination pursuant to these allocation
procedures and the denominator is the total number of Shares outstanding as of
the opening of business on such date.
(c) Exchange Shares: There shall be allocated to the Distributor and
each Other Distributor, as the case may be, all Commission Shares of such
Portfolio which were issued during or after the period referred to in (a) as a
consequence of one or more free exchanges of Commission Shares of the Portfolio
or of another portfolio (other than Free Appreciation Shares) (the "Exchange
Shares"), which in accordance with the transfer records maintained for such
Portfolio can be traced to Commission Shares of the Portfolio or another
portfolio initially issued by the Company or such other
A-1
<PAGE> 11
portfolio during the time the Distributor or such Other Distributor, as the case
may be, was the exclusive distributor for the Shares of the Portfolio or such
other portfolio.
(d) Free Appreciation Shares: Shares (other than Exchange
Shares) that were acquired by the holders of such Shares in a free exchange of
Shares of any other Portfolio, which represent the appreciated value of the
Shares of the exiting portfolio over the initial purchase price paid for the
Shares being redeemed and exchanged and for which the original purchase date and
the original purchase price are not identified on an on-going basis, shall be
allocated to the Distributor and each Other Distributor ("Free Appreciation
Shares") daily in a number obtained by multiplying the total number of Free
Appreciation Shares issued by the exiting portfolio on such date by a fraction,
the numerator of which is the total number of all Shares outstanding as of the
opening of business on such date allocated to the Distributor or such Other
Distributor as of such date of determination pursuant to these allocation
procedures and the denominator is the total number of Shares outstanding as of
the opening of business on such date.
(e) Redeemed Shares: Shares (other than Reinvested Shares
and Free Appreciation Shares) that are redeemed will be allocated to the
Distributor and each Other Distributor to the extent such Share was previously
allocated to the Distributor or such Other Distributor in accordance with the
rules set forth in 2(a) or (c) above. Reinvested Shares and Free Appreciation
Shares that are redeemed will be allocated to the Distributor and each Other
Distributor daily in an amount equal to the number of Free Appreciation Shares
and Reinvested Shares of such Portfolio being redeemed on such date, which
amount is obtained by multiplying the total number of Free Appreciation Shares
and Reinvested Shares being redeemed by such Portfolio on such date by a
fraction, the numerator of which is the total number of all Free Appreciation
Shares and Reinvested Shares of such Portfolio outstanding as of the opening of
business on such date allocated to the Distributor or to such Other Distributor
as of such date of determination and the denominator is the total number of Free
Appreciation Shares and Reinvested Shares of such Portfolio outstanding as of
the opening of business on such date.
The Fund shall use its best efforts to assure that the transfer agents
and sub-transfer agents for each Portfolio maintain the data necessary to
implement the foregoing rules. If, notwithstanding the foregoing, the transfer
agents or sub-transfer agents for such Portfolio are unable to maintain the data
necessary to implement the foregoing rules as written, and if the Distributor
shall cease to serve as exclusive distributor of the Shares of the Portfolio,
the Distributor and the Portfolio agree to negotiate in good faith with each
other, with the transfer agents and sub-transfer agents for such Portfolio and
with any third party that has obtained an interest in the Distributor's 12b-1
Share in respect of such Portfolio with a view to arriving at mutually
satisfactory modifications to the foregoing rules designed to accomplish
substantially identical results on the basis of data which can be made
available.
A-2
<PAGE> 1
EXHIBIT 6(d)
DISTRIBUTION AGREEMENT
BETWEEN
AIM INVESTMENT PORTFOLIOS
AND
A I M DISTRIBUTORS, INC.
CLASS B SHARES
THIS AGREEMENT made this 8th day of September, 1998, by and between AIM
Investment Portfolios, a Delaware business trust (the "Company"), with respect
to each of the Class B shares (the "Shares") of each series of shares of common
stock set forth on Schedule A to this agreement (the "Portfolios"), and A I M
Distributors, Inc., a Delaware corporation (the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt whereof is hereby acknowledged, the
parties hereto agree as follows:
FIRST: The Company hereby appoints the Distributor as its
exclusive agent for the sale of the Shares to the public directly and through
investment dealers in the United States and throughout the world. If subsequent
to the termination of the Distributor's services to the Company pursuant to this
Agreement, the Company retains the services of another distributor, the
distribution agreement with such distributor shall contain provisions comparable
to Clauses FOURTH and SEVENTH hereof and Exhibit A hereto, and without limiting
the generality of the foregoing, will require such distributor to maintain and
make available to the Distributor records regarding sales, redemptions and
reinvestments of Shares necessary to implement the terms of Clauses FOURTH,
SEVENTH and EIGHTH hereof.
SECOND: The Company shall not sell any Shares except through the
Distributor and under the terms and conditions set forth in paragraph FOURTH
below. Notwithstanding the provisions of the foregoing sentence, however:
(A) the Company may issue Shares to any other investment company
or personal holding company, or to the shareholders thereof, in exchange for all
or a majority of the shares or assets of any such company;
(B) the Company may issue Shares at their net asset value in
connection with certain classes of transactions or to certain classes of
persons, in accordance with Rule 22d-1 under the Investment Company Act of 1940,
as amended (the "1940 Act"), provided that any such class is specified in the
then current prospectus of the applicable Shares; and
(C) the Company shall have the right to specify minimum amounts for
initial and subsequent orders for the purchase of Shares.
<PAGE> 2
THIRD: The Distributor hereby accepts appointment as exclusive
agent for the sale of the Shares and agrees that it will use its best efforts to
sell such Shares; provided, however, that:
(A) the Distributor may, and when requested by the Company on
behalf of the Shares shall, suspend its efforts to effectuate such sales at any
time when, in the opinion of the Distributor or of the Company, no sales should
be made because of market or other economic considerations or abnormal
circumstances of any kind;
(B) the Company may withdraw the offering of the Shares (i) at any
time with the consent of the Distributor, or (ii) without such consent when so
required by the provisions of any statute or of any order, rule or regulation of
any governmental body having jurisdiction; and
(C) the Distributor, as agent, does not undertake to sell any
specific amount of the Shares.
FOURTH:
(A) The public offering price of the Shares shall be the net asset
value per share of the applicable Shares. Net asset value per share shall be
determined in accordance with the provisions of the then current prospectus and
statement of additional information of the applicable Portfolio. The Distributor
may establish a schedule of contingent deferred sales charges to be imposed at
the time of redemption of the Shares, and such schedule shall be disclosed in
the current prospectus of each Portfolio. Such schedule of contingent deferred
sales charges may reflect variations in or waivers of such charges on
redemptions of Shares, either generally to the public or to any specified class
of shareholders and/or in connection with any specified class of transactions,
in accordance with applicable rules and regulations and exemptive relief granted
by the Securities and Exchange Commission, and as set forth in the Portfolios'
current prospectus(es). The Distributor and the Company shall apply any then
applicable scheduled variation in or waiver of contingent deferred sales charges
uniformly to all shareholders and/or all transactions belonging to a specified
class.
(B) The Distributor may pay to investment dealers and other
financial institutions through whom Shares are sold, such sales commission as
the Distributor may specify from time to time. Payment of any such sales
commissions shall be the sole obligation of the Distributor.
(C) No provision of this Agreement shall be deemed to prohibit any
payments by the Company to the Distributor or by the Company or the Distributor
to investment dealers, financial institutions and 401(k) plan service providers
where such payments are made under a distribution plan adopted by the Company
pursuant to Rule 12b-1 under the 1940 Act.
(D) The Company shall redeem the Shares from shareholders in
accordance with the terms set forth from time to time in the current prospectus
and statement of additional information of each Portfolio. The price to be paid
to a shareholder to redeem the Shares shall be equal to the net asset value of
the Shares being redeemed ("gross redemption proceeds"), less any applicable
contingent deferred sales charge, calculated pursuant to the then applicable
schedule of contingent deferred sales charges ("net redemption proceeds"). The
Distributor shall be entitled to receive the amount of the contingent deferred
sales charge that has been subtracted from gross redemption proceeds (the
"CDSC"), provided that the Shares being redeemed were (i) issued by a Portfolio
during the term of this Agreement and any predecessor Agreement between the
Company and the Distributor or Distributor's predecessor, GT Global, Inc. ("GT
Global"), or (ii) issued by a Portfolio during or after the term of this
Agreement or any predecessor Agreement between the Company and the Distributor
or GT Global in one or a series of free
2
<PAGE> 3
exchanges of Shares for Class B shares of another portfolio, which can be traced
to Shares or Class B shares of another portfolio initially issued by a Portfolio
or such other portfolio during the term of this Agreement, any predecessor
Agreement or any other distribution agreement with the Distributor or GT Global
with respect to such other portfolio (the "Distributor's Earned CDSC"). The
Company shall pay or cause the Company's transfer agent to pay the Distributor's
Earned CDSC to the Distributor on the date net redemption proceeds are payable
to the redeeming shareholder.
(E) The Distributor shall maintain adequate books and records to
identify Shares (i) issued by a Portfolio during the term of this Agreement and
any predecessor Agreement between the Company and the Distributor or GT Global
or (ii) issued by a Portfolio during or after the term of this Agreement or any
predecessor Agreement between the Company and the Distributor or GT Global in
one or a series of free exchanges of Shares for class B shares of another
portfolio, which can be traced to Shares or class B shares of another portfolio
initially issued by a Portfolio or such other portfolio during the term of this
Agreement, any predecessor Agreement or any other distribution agreement with
the Distributor or GT Global with respect to such other portfolio and shall
calculate the Distributor's Earned CDSC, if any, with respect to such Shares,
upon their redemption. The Company shall be entitled to rely on Distributor's
books, records and calculations with respect to Distributor's Earned CDSC.
FIFTH: The Distributor shall act as an agent of the Company in
connection with the sale and redemption of Shares. Except with respect to such
sales and redemptions, the Distributor shall act as principal in all matters
relating to the promotion of the sale of Shares and shall enter into all of its
own engagements, agreements and contracts as principal on its own account. The
Distributor shall enter into agreements with investment dealers and financial
institutions selected by the Distributor, authorizing such investment dealers
and financial institutions to offer and sell the Shares to the public upon the
terms and conditions set forth therein, which shall not be inconsistent with the
provisions of this Agreement. Each agreement shall provide that the investment
dealer or financial institution shall act as a principal, and not as an agent,
of the Company.
SIXTH: The Shares shall bear:
(A) the expenses of qualification of Shares for sale in connection
with such public offerings in such states as shall be selected by the
Distributor, and of continuing the qualification therein until the Distributor
notifies the Company that it does not wish such qualification continued; and
(B) all legal expenses in connection with the foregoing.
SEVENTH:
(A) The Distributor shall bear the expenses of printing from the
final proof and distributing the prospectuses and statements of additional
information for the Shares (including supplements thereto) relating to public
offerings made by the Company pursuant to such prospectuses (which shall not
include those prospectuses and statements of additional information, and
supplements thereto, to be distributed to existing shareholders of the Shares),
and any other promotional or sales literature used by the Distributor or
furnished by the Distributor to dealers in connection with such public
offerings, and expenses of advertising in connection with such public offerings.
(B) Subject to the limitations, if any, of applicable law including
the NASD Conduct Rules (formerly, the NASD Rules of Fair Practice) regarding
asset-based sales charges, the Company shall pay to the Distributor as a
reimbursement for all or a portion of such expenses, or as reasonable
3
<PAGE> 4
compensation for distribution of the Shares, an asset-based sales charge in an
amount equal to 0.75% per annum of the average daily net asset value of the
Shares of each Portfolio from time to time (the "Distributor's 12b-1 Share"),
such sales charge to be payable pursuant to the distribution plan adopted
pursuant to Rule 12b-1 under the 1940 Act (the "Plan"). The Distributor's 12b-1
Share shall be a percentage, which shall be recomputed periodically (but not
less than monthly) in accordance with Exhibit A to this Agreement. The
Distributor's 12b-1 Share shall accrue daily and be paid to the Distributor as
soon as practicable after the end of each calendar month within which it accrues
but in any event within 10 business days after the end of each such calendar
month (unless the Distributor shall specify a later date in written instructions
to the Company) provided, however, that any notices and calculation required by
Section EIGHTH: (B) and (C) have been received by the Company.
(C) The Distributor shall maintain adequate books and records to
permit calculations periodically (but not less than monthly) of, and shall
calculate on a monthly basis, the Distributor's 12b-1 Share to be paid to the
Distributor. The Company shall be entitled to rely on Distributor's books,
records and calculations relating to Distributor's 12b-1 Share.
EIGHTH:
(A) The Distributor may, from time to time, assign, transfer or
pledge ("Transfer") to one or more designees (each an "Assignee"), its rights to
all or a designated portion of (i) the Distributor's 12b-1 Share (but not the
Distributor's duties and obligations pursuant hereto or pursuant to the Plan),
and (ii) the Distributor's Earned CDSC, free and clear of any offsets or claims
the Company may have against the Distributor. Each such Assignee's ownership
interest in a Transfer of a designated portion of a Distributor's 12b-1 Share
and a Distributor's Earned CDSC is hereinafter referred to as an "Assignee's
12b-1 Portion" and an "Assignee's CDSC Portion," respectively. A Transfer
pursuant to this Section EIGHTH: (A) shall not reduce or extinguish any claim of
the Company against the Distributor.
(B) The Distributor shall promptly notify the Company in writing of
each Transfer pursuant to Section EIGHTH: (A) by providing the Company with the
name and address of each such Assignee.
(C) The Distributor may direct the Company to pay directly to an
Assignee such Assignee's 12b-1 Portion and Assignee's CDSC Portion. In such
event, Distributor shall provide the Company with a monthly calculation of (i)
the Distributor's Earned CDSC and Distributor's 12b-1 Share and (ii) each
Assignee's 12b-1 Portion and Assignee's CDSC Portion, if any, for such month
(the "Monthly Calculation"). The Monthly Calculation shall be provided to the
Company by the Distributor promptly after the close of each month or such other
time as agreed to by the Company and the Distributor which allows timely payment
of the Distributor's 12b-1 Share and Distributor's Earned CDSC and/or the
Assignee's 12b-1 Portion and Assignee's CDSC Portion. The Company shall not be
liable for any interest on such payments occasioned by delayed delivery of the
Monthly Calculation by the Distributor. In such event following receipt from the
Distributor of (i) notice of Transfer referred to in Section EIGHTH: (B) and
(ii) each Monthly Calculation, the Company shall make all payments directly to
the Assignee or Assignees in accordance with the information provided in such
notice and Monthly Calculation, on the same terms and conditions as if such
payments were to be paid directly to the Distributor. The Company shall be
entitled to rely on Distributor's notices, and Monthly Calculations in respect
of amounts to be paid pursuant to this Section EIGHTH: (B).
(D) Alternatively, in connection with a Transfer the Distributor
may direct the Company to pay all of such Distributor's 12b-1 Share and
Distributor's Earned CDSC from time to time to a depository or collection agent
designated by any Assignee, which depository or collection agent may be
4
<PAGE> 5
delegated the duty of dividing such Distributor's 12b-1 Share and Distributor's
Earned CDSC between the Assignee's 12b-1 Portion and Assignee's CDSC Portion and
the balance of the Distributor's 12b-1 Share (such balance, when distributed to
the Distributor by the depository or collection agent, the "Distributor's 12b-1
Portion") and of the Distributor's Earned CDSC (such balance, when distributed
to the Distributor by the depository or collection agent, the "Distributor's
Earned CDSC Portion"), in which case only the Distributor's 12b-1 Portion and
Distributor's Earned CDSC Portion may be subject to offsets or claims the
Company may have against the Distributor.
(E) The Company shall not amend the Plan to reduce the amount
payable to the Distributor or any Assignee under Section SEVENTH: (B) hereof
with respect to the Shares for any Shares which have been issued prior to the
date of such amendment.
NINTH: The Distributor will accept orders for the purchase of
Shares only to the extent of purchase orders actually received and not in excess
of such orders, and it will not avail itself of any opportunity of making a
profit by expediting or withholding orders.
TENTH:
(A) Pursuant to the Plan and this Agreement, the Distributor, as
agent, shall enter into Shareholder Service Agreements with investment dealers,
financial institutions and certain 401(K) plan service providers (collectively
"Service Providers") selected by the Distributor for the provision of certain
continuing personal services to customers of such Service Providers who have
purchased Shares. Such agreements shall authorize Service Providers to provide
continuing personal shareholder services to their customers upon the terms and
conditions set forth therein, which shall not be inconsistent with the
provisions of this Agreement. Each Shareholder Service Agreement shall provide
that the Service Provider shall act as principal, and not as an agent of the
Company.
(B) Shareholder Service Agreements may provide that the Service
Providers may receive a service fee in the amount of 0.25% of the average daily
net assets of the Shares held by customers of such Service Providers provided
that such Service Providers furnish continuing personal shareholder services to
their customers in respect of such Shares. The continuing personal services to
be rendered by Service Providers under the Shareholder Service Agreements may
include, but shall not be limited to, some or all of the following: distributing
sales literature; answering routine customer inquiries concerning the Company;
assisting customers in changing dividend elections, options, account
designations and addresses, and in enrolling in any of several special
investment plans offered in connection with the purchase of Shares; assisting in
the establishment and maintenance of or establishing and maintaining customer
accounts and records and the processing of purchase and redemption transactions;
performing subaccounting; investing dividends and any capital gains
distributions automatically in the Company's shares; providing periodic
statements showing a customer's account balance and the integration of such
statements with those of other transactions and balances in the customer's
account serviced by the Service Provider; forwarding applicable prospectus,
proxy statements, reports and notices to customers who hold Shares and providing
such other information and services as the Company or the customers may
reasonably request.
(C) The Distributor may advance service fees payable to Service
Providers pursuant to the Plan or any other distribution plan adopted by the
Company with respect to Shares of one or more of the Portfolios pursuant to Rule
12b-1 under the 1940 Act; and thereafter the Distributor may be reimbursed for
such advances through retention of service fee payments during the period for
which the service fees were advanced.
5
<PAGE> 6
ELEVENTH: The Company and the Distributor shall each comply
with all applicable provisions of the 1940 Act, the Securities Act of 1933, as
amended, and of all other federal and state laws, rules and regulations
governing the issuance and sale of the Shares.
TWELFTH:
(A) In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Distributor, the Company shall indemnify the Distributor against any and
all claims, demands, liabilities and expenses which the Distributor may incur
under the Securities Act of 1933, or common law or otherwise, arising out of or
based upon any alleged untrue statement of a material fact contained in any
registration statement or prospectus of the Shares, or any omission to state a
material fact therein, the omission of which makes any statement contained
therein misleading, unless such statement or omission was made in reliance upon,
and in conformity with, information furnished to the Company in connection
therewith by or on behalf of the Distributor. The Distributor shall indemnify
the Company and the Shares against any and all claims, demands, liabilities and
expenses which the Company or the Shares may incur arising out of or based upon
(i) any act or deed of the Distributor or its sales representatives which has
not been authorized by the Company in its prospectus or in this Agreement and
(ii) the Company's reliance on the Distributor's books, records, calculations
and notices in Sections FOURTH: (E), SEVENTH: (C), EIGHTH: (B), EIGHTH: (C) and
EIGHTH: (D).
(B) The Distributor shall indemnify the Company and the Shares
against any and all claims, demands, liabilities and expenses which the Company
or the Shares may incur under the Securities Act of 1933, as amended, or common
law or otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of the
Shares, or any omission to state a material fact therein if such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Company in connection therewith by or on behalf of the
Distributor.
(C) Notwithstanding any other provision of this Agreement, the
Distributor shall not be liable for any errors of the transfer agent(s) of the
Shares, or for any failure of any such transfer agent to perform its duties.
THIRTEENTH: Nothing herein contained shall require the Company to take
any action contrary to any provision of its Articles of Incorporation, as
amended, or to any applicable statute or regulation.
FOURTEENTH: This Agreement shall become effective with respect
to the Shares of each Portfolio upon its approval by the Board of Trustees of
the Company and by vote of a majority of the Company's Trustees who are not
interested parties to this Agreement or "interested persons" (as defined in
Section 2(a)(19) of the 1940 Act) of any party to this Agreement cast in person
at a meeting called for such purpose, shall continue in force and effect until
two years from the date hereof, and from year to year thereafter, provided, that
such continuance is specifically approved with respect to the Shares of each
Portfolio at least annually (a)(i) by the Board of Trustees of the Company or
(ii) by the vote of a majority of the outstanding Shares of such class of such
Portfolio, and (b) by vote of a majority of the Company's Trustees who are not
parties to this Agreement or "interested persons" (as defined in Section
2(a)(19) of the 1940 Act) of any party to this Agreement cast in person at a
meeting called for such purpose.
6
<PAGE> 7
FIFTEENTH:
(A) This Agreement may be terminated with respect to the Shares of
any Portfolio, at any time, without the payment of any penalty, by vote of the
Board of Trustees of the Company or by vote of a majority of the outstanding
Shares of such Portfolio, or by the Distributor, on sixty (60) days' written
notice to the other party; and
(B) This Agreement shall also automatically terminate in the event
of its assignment, the term "assignment" having the meaning set forth in Section
2(a)(4) of the 1940 Act; provided, that, subject to the provisions of the
following sentence, if this Agreement is terminated for any reason, the
obligations of the Company and the Distributor pursuant to Sections FOURTH: (D),
FOURTH: (E), SEVENTH: (B), SEVENTH: (C), EIGHTH: (A) through (E) and TWELFTH:
(A) of this Agreement will continue and survive any such termination.
Notwithstanding the foregoing, upon Complete Termination of the Plan (as such
term is defined in Section 8 of the Plan in effect at the date of this
Agreement), the obligations of the Company pursuant to the terms of Sections
SEVENTH: (B), EIGHTH: (A), EIGHTH: (C), EIGHTH: (D) and EIGHTH: (E) (with
respect to payments of Distributor's 12b-1 Share and Assignee's 12b-1 Portion)
of this Agreement shall terminate. A termination of the Plan with respect to any
or all Shares of any or all Portfolios shall not affect the obligations of the
Company pursuant to Sections FOURTH: (D), EIGHTH: (A), EIGHTH: (C), EIGHTH: (D)
and EIGHTH: (E) (with respect to payments of Distributor's Earned CDSC or
Assignee's CDSC Portion) hereof or of the obligations of the Distributor
pursuant to Section FOURTH: (E) or EIGHTH: (B) hereof.
(C) The Transfer of the Distributor's rights to Distributor's
12b-1 Share or Distributor's Earned CDSC shall not cause a termination of this
Agreement or be deemed to be an assignment for purposes of Section FIFTEENTH:
(B) above.
SIXTEENTH: Any notice under this Agreement shall be in writing,
addressed and delivered, or mailed postage prepaid, to the other party at such
address as the other party may designate for the receipt of notices. Until
further notice to the other party, the addresses of both the Company and the
Distributor shall be 11 Greenway Plaza, Suite 100, Houston. Texas 77046-1173.
SEVENTEENTH: This Agreement shall be deemed to be a contract made in
the State of Delaware and governed by, construed in accordance with and
enforced pursuant to the internal laws of the State of Delaware without
reference to its conflicts of laws rules.
7
<PAGE> 8
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate on the day and year first above written.
AIM INVESTMENT PORTFOLIOS
By: /s/ ROBERT H. GRAHAM
----------------------------
Name: Robert H. Graham
Title: President
Attest:
/s/ SAMUEL D. SIRKO
- ---------------------------
Name: Samuel D. Sirko
Title: Assistant Secretary
A I M DISTRIBUTORS, INC.
By: /s/ W.G. LITTLEPAGE
----------------------------
Name: W.G. Littlepage
Title: Senior Vice President
Attest:
/s/ KATHLEEN J. PFLUEGER
- -----------------------------
Name: Kathleen J. Pflueger
Title: Secretary
8
<PAGE> 9
SCHEDULE A
TO
DISTRIBUTION AGREEMENT
OF
AIM INVESTMENT PORTFOLIOS
CLASS B SHARES
AIM Dollar Fund
9
<PAGE> 10
EXHIBIT A
The Distributor's 12b-1 Share in respect of each Portfolio shall be 100
percent until such time as the Distributor shall cease to serve as exclusive
distributor of the Shares of such Portfolio and thereafter shall be a
percentage, recomputed first on the date of any termination of the Distributor's
services as exclusive distributor of Shares of any Portfolio and thereafter
periodically (but not less than monthly), representing the percentage of Shares
of such Portfolio outstanding on each such computation date allocated to the
Distributor in accordance with the following rules:
1. DEFINITIONS. For purposes of this Exhibit A defined terms used
herein shall have the meaning assigned to such terms in the Distribution
Agreement and the following terms shall have the following meanings:
"Commission Shares" shall mean shares of the Portfolio or
another portfolio the redemption of which would, in the absence of the
application of some standard waiver provision, give rise to the payment of a
CDSC and shall include Commission Shares which due to the expiration of the CDSC
period no longer bear a CDSC.
"Distributor" shall mean the Distributor and the Distributor's
predecessor, GT Global, Inc.
"Other Distributor" shall mean each person appointed as the
exclusive distributor for the Shares of the Portfolio after the Distributor
ceases to serve in that capacity.
2. ALLOCATION RULES. In determining the Distributor's 12b-1 Share
in respect of a particular Portfolio:
(a) There shall be allocated to the Distributor and each
Other Distributor all Commission Shares of such Portfolio which were sold while
such Distributor or such Other Distributor, as the case may be, was the
exclusive distributor for the Shares of the Portfolio, determined in accordance
with the transfer records maintained for such Portfolio.
(b) Reinvested Shares: On the date that any Shares are
issued by a Portfolio as a result of the reinvestment of dividends or other
distributions, whether ordinary income, capital gains or exempt-interest
dividend or distributions ("Reinvested Shares"), Reinvested Shares shall be
allocated to the Distributor and each Other Distributor in a number obtained by
multiplying the total number of Reinvested Shares issued on such date by a
fraction, the numerator of which is the total number of all Shares outstanding
in such Fund as of the opening of business on such date and allocated to the
Distributor or Other Distributor as of such date of determination pursuant to
these allocation procedures and the denominator is the total number of Shares
outstanding as of the opening of business on such date.
(c) Exchange Shares: There shall be allocated to the
Distributor and each Other Distributor, as the case may be, all Commission
Shares of such Portfolio which were issued during or after the period referred
to in (a) as a consequence of one or more free exchanges of Commission Shares of
the Portfolio or of another portfolio (other than Free Appreciation Shares) (the
"Exchange Shares"), which in accordance with the transfer records maintained for
such Portfolio can be traced to Commission Shares of the Portfolio or another
portfolio initially issued by the Company or such other
A-1
<PAGE> 11
portfolio during the time the Distributor or such Other Distributor, as the case
may be, was the exclusive distributor for the Shares of the Portfolio or such
other portfolio.
(d) Free Appreciation Shares: Shares (other than Exchange
Shares) that were acquired by the holders of such Shares in a free exchange of
Shares of any other Portfolio, which represent the appreciated value of the
Shares of the exiting portfolio over the initial purchase price paid for the
Shares being redeemed and exchanged and for which the original purchase date and
the original purchase price are not identified on an on-going basis, shall be
allocated to the Distributor and each Other Distributor ("Free Appreciation
Shares") daily in a number obtained by multiplying the total number of Free
Appreciation Shares issued by the exiting portfolio on such date by a fraction,
the numerator of which is the total number of all Shares outstanding as of the
opening of business on such date allocated to the Distributor or such Other
Distributor as of such date of determination pursuant to these allocation
procedures and the denominator is the total number of Shares outstanding as of
the opening of business on such date.
(e) Redeemed Shares: Shares (other than Reinvested Shares
and Free Appreciation Shares) that are redeemed will be allocated to the
Distributor and each Other Distributor to the extent such Share was previously
allocated to the Distributor or such Other Distributor in accordance with the
rules set forth in 2(a) or (c) above. Reinvested Shares and Free Appreciation
Shares that are redeemed will be allocated to the Distributor and each Other
Distributor daily in an amount equal to the number of Free Appreciation Shares
and Reinvested Shares of such Portfolio being redeemed on such date, which
amount is obtained by multiplying the total number of Free Appreciation Shares
and Reinvested Shares being redeemed by such Portfolio on such date by a
fraction, the numerator of which is the total number of all Free Appreciation
Shares and Reinvested Shares of such Portfolio outstanding as of the opening of
business on such date allocated to the Distributor or to such Other Distributor
as of such date of determination and the denominator is the total number of Free
Appreciation Shares and Reinvested Shares of such Portfolio outstanding as of
the opening of business on such date.
The Fund shall use its best efforts to assure that the transfer agents
and sub-transfer agents for each Portfolio maintain the data necessary to
implement the foregoing rules. If, notwithstanding the foregoing, the transfer
agents or sub-transfer agents for such Portfolio are unable to maintain the data
necessary to implement the foregoing rules as written, and if the Distributor
shall cease to serve as exclusive distributor of the Shares of the Portfolio,
the Distributor and the Portfolio agree to negotiate in good faith with each
other, with the transfer agents and sub-transfer agents for such Portfolio and
with any third party that has obtained an interest in the Distributor's 12b-1
Share in respect of such Portfolio with a view to arriving at mutually
satisfactory modifications to the foregoing rules designed to accomplish
substantially identical results on the basis of data which can be made
available.
A-2
<PAGE> 1
EXHIBIT 6(e)
DISTRIBUTION AGREEMENT
BETWEEN
AIM INVESTMENT PORTFOLIOS, INC.
AND
A I M DISTRIBUTORS, INC.
ADVISOR CLASS SHARES
THIS AGREEMENT made this 29th day of May, 1998, by and between AIM
Investment Portfolios, Inc., a Maryland Corporation (the "Company"), with
respect to the Advisor Class shares (the "Shares") of each series of common
stock set forth on Appendix A to this Agreement (the "Portfolios"), and A I M
Distributors, Inc., a Delaware corporation (the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt whereof is hereby acknowledged, the
parties hereto agree as follows:
FIRST: The Company on behalf of the Portfolios hereby appoints the
Distributor as its exclusive agent for the sale of Shares to the public directly
and through investment dealers and financial institutions in the United States
and throughout the world.
SECOND: The Company shall not sell any Shares except through the
Distributor and under the terms and conditions set forth in paragraph FOURTH
below. Notwithstanding the provisions of the foregoing sentence, however:
(A) the Company may issue Shares to any other investment company or
personal holding company, or to the shareholders thereof, in exchange for all or
a majority of the shares or assets of any such company; and
(B) the Company shall have the right to specify minimum amounts for
initial and subsequent orders for the purchase of Shares in connection with
certain classes of transactions or to certain classes of persons, in accordance
with Rule 22d-1 under the Investment Company Act of 1940, as amended (the "1940
Act"), provided that any such class is specified in the then current prospectus
of the applicable Portfolio.
THIRD: The Distributor hereby accepts appointment as exclusive agent
for the sale of the Shares and agrees that it will use its best efforts to sell
such Shares; provided, however, that:
<PAGE> 2
(A) the Distributor may, and when requested by the Company on behalf of
the Shares shall, suspend its efforts to effectuate such sales at any time when,
in the opinion of the Distributor or of the Company, no sales should be made
because of market or other economic considerations or abnormal circumstances of
any kind;
(B) the Company may withdraw the offering of the Shares (i) at any time
with the consent of the Distributor, or (ii) without such consent when so
required by the provisions of any statute or of any order, rule or regulation of
any governmental body having jurisdiction; and
(C) the Distributor, as agent, does not undertake to sell any specific
amount of the Shares.
FOURTH:
(A) The public offering price of Shares (the "offering price") shall be
the net asset value per share of the applicable Portfolio. Net asset value per
share shall be determined in accordance with the provisions of the then current
prospectus and statement of additional information of the applicable Portfolio.
FIFTH: The Distributor shall act as agent of the Company in connection
with the sale and repurchase of Shares. Except with respect to such sales and
repurchases, the Distributor shall act as principal in all matters relating to
the promotion of the sale of Shares and shall enter into all of its own
engagements, agreements and contracts as principal on its own account. The
Distributor shall enter into agreements with investment dealers and financial
institutions selected by the Distributor, authorizing such investment dealers
and financial institutions to offer and sell the Shares to the public upon the
terms and conditions set forth therein, which shall not be inconsistent with the
provisions of this Agreement. Each agreement shall provide that the investment
dealer and financial institution shall act as a principal, and not as an agent,
of the Company.
SIXTH: The Shares shall bear:
(A) the expenses of qualification of Shares for sale in connection with
such public offerings in such states as shall be selected by the Distributor,
and of continuing the qualification therein until the Distributor notifies the
Company that it does not wish such qualification continued; and
(B) all legal expenses in connection with the foregoing.
SEVENTH: The Distributor shall bear the expenses of printing from the
final proof and distributing the prospectuses and statements of additional
information for the Shares (including supplements thereto) relating to public
offerings made by the Company pursuant to such prospectuses (which shall not
include those prospectuses and statements of additional information, and
supplements thereto, to be distributed to existing shareholders of the Shares),
and any other promotional or sales literature used by the Distributor or
furnished by the
2
<PAGE> 3
Distributor to dealers in connection with such public offerings, and expenses of
advertising in connection with such public offerings.
EIGHTH: The Distributor will accept orders for the purchase of Shares
only to the extent of purchase orders actually received and not in excess of
such orders, and it will not avail itself of any opportunity of making a profit
by expediting or withholding orders. It is mutually understood and agreed that
the Company may reject purchase orders where, in the judgment of the Company,
such rejection is in the best interest of the Company.
NINTH: The Company, on behalf of the Portfolios, and the Distributor
shall each comply with all applicable provisions of the 1940 Act, the Securities
Act of 1933 and all other federal and state laws, rules and regulations
governing the issuance and sale of Shares.
TENTH:
(A) In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties hereunder on the part of the
Distributor, the Company on behalf of the Portfolios agrees to indemnify the
Distributor against any and all claims, demands, liabilities and expenses which
the Distributor may incur under the Securities Act of 1933, or common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of a
Portfolio, or any omission to state a material fact therein, the omission of
which makes any statement contained therein misleading, unless such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Company or a Portfolio in connection therewith by or on behalf
of the Distributor. The Distributor agrees to indemnify the Company and the
Portfolios against any and all claims, demands, liabilities and expenses which
the Company or a Portfolio may incur arising out of or based upon any act or
deed of the Distributor or its sales representatives which has not been
authorized by the Company or a Portfolio in its prospectus or in this Agreement.
(B) The Distributor agrees to indemnify the Company and the Portfolios
against any and all claims, demands, liabilities and expenses which the Company
or the Portfolios may incur under the Securities Act of 1933, or common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of a
Portfolio, or any omission to state a material fact therein if such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Company or a Portfolio in connection therewith by or on behalf
of the Distributor.
(C) Notwithstanding any other provision of this Agreement, the
Distributor shall not be liable for any errors of the Portfolios' transfer
agent(s), or for any failure of any such transfer agent to perform its duties.
ELEVENTH: Nothing herein contained shall require the Company to take
any action contrary to any provision of its Agreement and Declaration of Trust,
or to any applicable statute or regulation.
3
<PAGE> 4
TWELFTH: This Agreement shall become effective with respect to the
Shares of each Portfolio as of the date hereof, shall continue in force and
effect for two years from the date hereof, and shall continue in force and
effect from year to year thereafter, provided, that such continuance is
specifically approved with respect to such Portfolio at least annually (a)(i) by
the Board of Trustees of the Company or (ii) by the vote of a majority of the
outstanding voting securities (as defined in Section 2(a)(42) of the 1940 Act),
and (b) by vote of a majority of the Company's trustees who are not parties to
this Agreement or "interested persons" (as defined in Section 2(a)(19) of the
1940 Act) of any party to this Agreement cast in person at a meeting called for
such purpose.
THIRTEENTH:
(A) This Agreement may be terminated with respect to the Shares of any
Portfolio at any time, without the payment of any penalty, by vote of the Board
of Trustees of the Company or by vote of a majority of the outstanding voting
securities of the applicable Portfolio, or by the Distributor, on sixty (60)
days' written notice to the other party.
(B) This Agreement shall automatically terminate in the event of its
assignment, the term "assignment" having the meaning set forth in Section
2(a)(4) of the 1940 Act.
FOURTEENTH: Any notice under this Agreement shall be in writing,
addressed and delivered, or mailed postage prepaid, to the other party at such
address as the other party may designate for the receipt of notices. Until
further notice to the other party, it is agreed that the addresses of both the
Company and the Distributor shall be 11 Greenway Plaza, Suite 100, Houston,
Texas 77046.
FIFTEENTH: This Agreement shall be deemed to be a contract made in the
State of Delaware and governed by, construed in accordance with and enforced
pursuant to the internal laws of the State of Delaware without reference to its
conflicts of laws rules.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate on the day and year first above written.
AIM INVESTMENT PORTFOLIOS, INC.
By: /s/ WILLIAM J. GUILFOYLE
-------------------------------------
Name: William J. Guilfoyle
Title: President
Attest:
/s/ MICHAEL A. SILVER
- ---------------------------------
Name: Michael A. Silver
Title: Assistant Secretary
A I M DISTRIBUTORS, INC.
By: /s/ JOHN CALDWELL
-------------------------------------
Name: John Caldwell
Title: Senior Vice President
Attest:
/s/ KATHLEEN J. PFLUEGER
- ---------------------------------
Name: Kathleen J. Pflueger
Title: Secretary
5
<PAGE> 6
APPENDIX A
TO
DISTRIBUTION AGREEMENT
OF
AIM INVESTMENT PORTFOLIOS, INC.
ADVISOR CLASS SHARES
AIM Dollar Fund
6
<PAGE> 1
EXHIBIT 6(f)
DISTRIBUTION AGREEMENT
BETWEEN
AIM INVESTMENT PORTFOLIOS
AND
A I M DISTRIBUTORS, INC.
ADVISOR CLASS SHARES
THIS AGREEMENT made this 8th day of September, 1998, by and between AIM
Investment Portfolios, a Delaware business trust (the "Company"), with respect
to the Advisor Class shares (the "Shares") of each series of common stock set
forth on Appendix A to this Agreement (the "Portfolios"), and A I M
Distributors, Inc., a Delaware corporation (the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt whereof is hereby acknowledged, the
parties hereto agree as follows:
FIRST: The Company on behalf of the Portfolios hereby appoints the
Distributor as its exclusive agent for the sale of Shares to the public directly
and through investment dealers and financial institutions in the United States
and throughout the world.
SECOND: The Company shall not sell any Shares except through the
Distributor and under the terms and conditions set forth in paragraph FOURTH
below. Notwithstanding the provisions of the foregoing sentence, however:
(A) the Company may issue Shares to any other investment company or
personal holding company, or to the shareholders thereof, in exchange for all or
a majority of the shares or assets of any such company; and
(B) the Company shall have the right to specify minimum amounts for
initial and subsequent orders for the purchase of Shares in connection with
certain classes of transactions or to certain classes of persons, in accordance
with Rule 22d-1 under the Investment Company Act of 1940, as amended (the "1940
Act"), provided that any such class is specified in the then current prospectus
of the applicable Portfolio.
<PAGE> 2
THIRD: The Distributor hereby accepts appointment as exclusive agent
for the sale of the Shares and agrees that it will use its best efforts to sell
such Shares; provided, however, that:
(A) the Distributor may, and when requested by the Company on
behalf of the Shares shall, suspend its efforts to effectuate such sales at any
time when, in the opinion of the Distributor or of the Company, no sales should
be made because of market or other economic considerations or abnormal
circumstances of any kind;
(B) the Company may withdraw the offering of the Shares (i) at any
time with the consent of the Distributor, or (ii) without such consent when so
required by the provisions of any statute or of any order, rule or regulation of
any governmental body having jurisdiction; and
(C) the Distributor, as agent, does not undertake to sell any
specific amount of the Shares.
FOURTH:
(A) The public offering price of Shares (the "offering price")
shall be the net asset value per share of the applicable Portfolio. Net asset
value per share shall be determined in accordance with the provisions of the
then current prospectus and statement of additional information of the
applicable Portfolio.
FIFTH: The Distributor shall act as agent of the Company in connection
with the sale and repurchase of Shares. Except with respect to such sales and
repurchases, the Distributor shall act as principal in all matters relating to
the promotion of the sale of Shares and shall enter into all of its own
engagements, agreements and contracts as principal on its own account. The
Distributor shall enter into agreements with investment dealers and financial
institutions selected by the Distributor, authorizing such investment dealers
and financial institutions to offer and sell the Shares to the public upon the
terms and conditions set forth therein, which shall not be inconsistent with the
provisions of this Agreement. Each agreement shall provide that the investment
dealer and financial institution shall act as a principal, and not as an agent,
of the Company.
SIXTH: The Shares shall bear:
(A) the expenses of qualification of Shares for sale in connection
with such public offerings in such states as shall be selected by the
Distributor, and of continuing the qualification therein until the Distributor
notifies the Company that it does not wish such qualification continued; and
(B) all legal expenses in connection with the foregoing.
SEVENTH: The Distributor shall bear the expenses of printing from the
final proof and distributing the prospectuses and statements of additional
information for the Shares (including supplements thereto) relating to public
offerings made by the Company pursuant to such prospectuses (which shall not
include those prospectuses and statements of additional
2
<PAGE> 3
information, and supplements thereto, to be distributed to existing shareholders
of the Shares), and any other promotional or sales literature used by the
Distributor or furnished by the Distributor to dealers in connection with such
public offerings, and expenses of advertising in connection with such public
offerings.
EIGHTH: The Distributor will accept orders for the purchase of Shares
only to the extent of purchase orders actually received and not in excess of
such orders, and it will not avail itself of any opportunity of making a profit
by expediting or withholding orders. It is mutually understood and agreed that
the Company may reject purchase orders where, in the judgment of the Company,
such rejection is in the best interest of the Company.
NINTH: The Company, on behalf of the Portfolios, and the Distributor
shall each comply with all applicable provisions of the 1940 Act, the Securities
Act of 1933 and all other federal and state laws, rules and regulations
governing the issuance and sale of Shares.
TENTH:
(A) In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Distributor, the Company on behalf of the Portfolios agrees to indemnify
the Distributor against any and all claims, demands, liabilities and expenses
which the Distributor may incur under the Securities Act of 1933, or common law
or otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of a
Portfolio, or any omission to state a material fact therein, the omission of
which makes any statement contained therein misleading, unless such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Company or a Portfolio in connection therewith by or on behalf
of the Distributor. The Distributor agrees to indemnify the Company and the
Portfolios against any and all claims, demands, liabilities and expenses which
the Company or a Portfolio may incur arising out of or based upon any act or
deed of the Distributor or its sales representatives which has not been
authorized by the Company or a Portfolio in its prospectus or in this Agreement.
(B) The Distributor agrees to indemnify the Company and the
Portfolios against any and all claims, demands, liabilities and expenses which
the Company or the Portfolios may incur under the Securities Act of 1933, or
common law or otherwise, arising out of or based upon any alleged untrue
statement of a material fact contained in any registration statement or
prospectus of a Portfolio, or any omission to state a material fact therein if
such statement or omission was made in reliance upon, and in conformity with,
information furnished to the Company or a Portfolio in connection therewith by
or on behalf of the Distributor.
(C) Notwithstanding any other provision of this Agreement, the
Distributor shall not be liable for any errors of the Portfolios' transfer
agent(s), or for any failure of any such transfer agent to perform its duties.
3
<PAGE> 4
ELEVENTH: Nothing herein contained shall require the Company to take
any action contrary to any provision of its Agreement and Declaration of Trust,
or to any applicable statute or regulation.
TWELFTH: This Agreement shall become effective with respect to the
Shares of each Portfolio as of the date hereof, shall continue in force and
effect for two years from the date hereof, and shall continue in force and
effect from year to year thereafter, provided, that such continuance is
specifically approved with respect to such Portfolio at least annually (a)(i) by
the Board of Trustees of the Company or (ii) by the vote of a majority of the
outstanding voting securities (as defined in Section 2(a)(42) of the 1940 Act),
and (b) by vote of a majority of the Company's trustees who are not parties to
this Agreement or "interested persons" (as defined in Section 2(a)(19) of the
1940 Act) of any party to this Agreement cast in person at a meeting called for
such purpose.
THIRTEENTH:
(A) This Agreement may be terminated with respect to the Shares of
any Portfolio at any time, without the payment of any penalty, by vote of the
Board of Trustees of the Company or by vote of a majority of the outstanding
voting securities of the applicable Portfolio, or by the Distributor, on sixty
(60) days' written notice to the other party.
(B) This Agreement shall automatically terminate in the event of
its assignment, the term "assignment" having the meaning set forth in Section
2(a)(4) of the 1940 Act.
FOURTEENTH: Any notice under this Agreement shall be in writing,
addressed and delivered, or mailed postage prepaid, to the other party at such
address as the other party may designate for the receipt of notices. Until
further notice to the other party, it is agreed that the addresses of both the
Company and the Distributor shall be 11 Greenway Plaza, Suite 100, Houston,
Texas 77046.
FIFTEENTH: This Agreement shall be deemed to be a contract made in the
State of Delaware and governed by, construed in accordance with and enforced
pursuant to the internal laws of the State of Delaware without reference to its
conflicts of laws rules.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate on the day and year first above written.
AIM INVESTMENT PORTFOLIOS
By: /s/ ROBERT H. GRAHAM
---------------------------------
Name: Robert H. Graham
Title: President
Attest:
/s/ SAMUEL D. SIRKO
- -----------------------------------
Name: Samuel D. Sirko
Title: Assistant Secretary
A I M DISTRIBUTORS, INC.
By: /s/ W.G. LITTLEPAGE
---------------------------------
Name: W.G. Littlepage
Title: Senior Vice President
Attest:
/s/ KATHLEEN J. PFLUEGER
- -----------------------------------
Name: Kathleen J. Pflueger
Title: Secretary
5
<PAGE> 6
APPENDIX A
TO
DISTRIBUTION AGREEMENT
OF
AIM INVESTMENT PORTFOLIOS
ADVISOR CLASS SHARES
AIM Dollar Fund
<PAGE> 1
EXHIBIT 9(a)(1)
TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
AIM INVESTMENT PORTFOLIOS
AND
A I M FUND SERVICES, INC.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE 1 TERMS OF APPOINTMENT; DUTIES OF THE TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2 FEES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT . . . . . . . . . . . . . . . . . . . 3
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE FUND . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 5 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 6 COVENANTS OF THE FUND AND THE TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 7 TERMINATION OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 8 ADDITIONAL FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 9 ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 10 AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 11 TEXAS LAW TO APPLY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 12 MERGER OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 13 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 14 LIMITATION OF SHAREHOLDER LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
</TABLE>
<PAGE> 3
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the _______ day of __________, 1998, by and
between AIM INVESTMENT PORTFOLIOS, as Delaware business trust, having its
principal office and place of business at 11 Greenway Plaza, Suite 100,
Houston, Texas 77046 (the "Fund"), and A I M Fund Services, Inc., a Delaware
corporation having its principal office and place of business at 11 Greenway
Plaza, Suite 100, Houston, Texas 77046 (the "Transfer Agent").
WHEREAS, the Transfer Agent is registered as such with the Securities
and Exchange Commission (the "SEC"); and
WHEREAS, the Fund is authorized to issue shares in separate series and
classes, with each such series representing interests in a separate portfolio
of securities and other assets and each such class having different
distribution arrangements; and
WHEREAS, the Fund on behalf of each portfolio thereof (the
"Portfolios") desires to appoint the Transfer Agent as its transfer agent, and
agent in connection with certain other activities, with respect to the
Portfolios, and the Transfer Agent desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE 1
TERMS OF APPOINTMENT; DUTIES OF THE TRANSFER AGENT
1.01 Subject to the terms and conditions set forth in this
Agreement, the Fund hereby employs and appoints the Transfer Agent to act as,
and the Transfer Agent agrees to act as, its transfer agent for the authorized
and issued shares of beneficial interest of the Fund representing interests of
each of the respective Portfolios ("Shares"), dividend disbursing agent, and
agent in connection with any accumulation or similar plans provided to
shareholders of each of the Portfolios (the "Shareholders"), including without
limitation any periodic investment plan or periodic withdrawal program, as
provided in the currently effective prospectus and statement of additional
information (the "Prospectus") of the Fund on behalf of the Portfolios.
1.02 The Transfer Agent agrees that it will perform the following
services:
(a) The Transfer Agent shall, in accordance with procedures
established from time to time by agreement between the Fund on behalf of each
of the Portfolios, as applicable, and the Transfer Agent:
(i) receive for acceptance, orders for the purchase of
Shares, and promptly deliver payment and appropriate
documentation thereof to the Custodian of the Fund
authorized pursuant to the Agreement and Declaration
of Trust and Bylaws of the Fund (the "Custodian");
(ii) pursuant to purchase orders, issue the appropriate
number of Shares and hold such Shares in the
appropriate Shareholder account;
1
<PAGE> 4
(iii) receive for acceptance redemption requests and
redemption directions and deliver the appropriate
documentation thereof to the Custodian;
(iv) at the appropriate time as and when it receives
monies paid to it by the Custodian with respect to
any redemption, pay over or cause to be paid over in
the appropriate manner such monies as instructed by
the Fund;
(v) effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions;
(vi) prepare and transmit payments for dividends and
distributions declared by the Fund on behalf of the
Shares;
(vii) maintain records of account for and advise the Fund
and its Shareholders as to the foregoing; and
(viii) record the issuance of Shares of the Fund and
maintain pursuant to SEC Rule 17Ad-10(e) a record of
the total number of Shares which are authorized,
based upon data provided to it by the Fund, and
issued and outstanding.
The Transfer Agent shall also provide the Fund on a regular basis with
the total number of Shares which are authorized and issued and outstanding and
shall have no obligation, when recording the issuance of Shares, to monitor the
issuance of such Shares or to take cognizance of any laws relating to the issue
or sale of such Shares, which function shall be the sole responsibility of the
Fund.
(b) In addition to the services set forth in the above paragraph
(a), the Transfer Agent shall: (i) perform the customary services of a transfer
agent, including but not limited to: maintaining all Shareholder accounts,
mailing Shareholder reports and prospectuses to current Shareholders, preparing
and mailing confirmation forms and statements of accounts to Shareholders for
all purchases and redemptions of Shares and other confirmable transactions in
Shareholder accounts, preparing and mailing activity statements for
Shareholders, and providing Shareholder account information.
(c) Procedures as to who shall provide certain of these services
in Article 1 may be established from time to time by agreement between the Fund
on behalf of each Portfolio and the Transfer Agent. The Transfer Agent may at
times perform only a portion of these services and the Fund or its agent may
perform these services on the Fund's behalf.
ARTICLE 2
FEES AND EXPENSES
2.01 For performance by the Transfer Agent pursuant to this
Agreement, the Fund agrees on behalf of each of the Portfolios to pay the
Transfer Agent fees as set out in the initial fee schedule attached hereto.
Such fees and out-of-pocket expenses and advances identified under Section 2.02
below may be changed from time to time subject to mutual written agreement
between the Fund and the Transfer Agent.
2
<PAGE> 5
2.02 In addition to the fee paid under Section 2.01 above, the Fund
agrees to reimburse the Transfer Agent for out-of-pocket expenses or advances
incurred by the Transfer Agent for the items set out in the fee schedule
attached hereto. In addition, any other expenses incurred by the Transfer
Agent at the request or with the consent of the Fund, will be reimbursed by the
Fund on behalf of the applicable Shares.
2.03 The Fund agrees on behalf of each of the Portfolios to pay all
fees and reimbursable expenses following the mailing of the respective billing
notice. Postage for mailing of dividends, proxies, Fund reports and other
mailings to all Shareholder accounts shall be advanced to the Transfer Agent by
the Fund at least seven (7) days prior to the mailing date of such materials.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT
The Transfer Agent represents and warrants to the Fund that:
3.01 It is a corporation duly organized and existing and in good
standing under the laws of the state of Delaware.
3.02 It is duly qualified to carry on its business in Delaware and
in Texas.
3.03 It is empowered under applicable laws and by its Charter and
By-Laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
3.06 It is registered as a Transfer Agent as required by the
federal securities laws.
3.07 This Agreement is a legal, valid and binding obligation to it.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund represents and warrants to the Transfer Agent that:
4.01 It is a business trust duly organized and existing and in good
standing under the laws of Delaware.
4.02 It is empowered under applicable laws and by its Agreement and
Declaration of Trust and Bylaws to enter into and perform this Delaware.
4.03 All corporate proceedings required by said Agreement and
Declaration of Trust and Bylaws have been taken to authorize it to enter into
and perform this Agreement.
3
<PAGE> 6
4.04 It is an open-end, diversified management investment company
registered under the Investment Company Act of 1940, as amended.
4.05 A registration statement under the Securities Act of 1933, as
amended on behalf of each of the Portfolios is currently effective and will
remain effective, with respect to all Shares of the Fund being offered for
sale.
ARTICLE 5
INDEMNIFICATION
5.01 The Transfer Agent shall not be responsible for, and the Fund
shall on behalf of the applicable Portfolio, indemnify and hold the Transfer
Agent harmless from and against, any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liability arising out of or attributable
to:
(a) all actions of the Transfer Agent or its agents or
subcontractors required to be taken pursuant to this Agreement, provided that
such actions are taken in good faith and without negligence or willful
misconduct;
(b) the Fund's lack of good faith, negligence or willful
misconduct which arise out of the breach of any representation or warranty of
the Fund hereunder;
(c) the reliance on or use by the Transfer Agent or its agents or
subcontractors of information, records and documents or services which (i) are
received or relied upon by the Transfer Agent or its agents or subcontractors
and/or furnished to it or performed by on behalf of the Fund, and (ii) have
been prepared, maintained and/or performed by the Fund or any other person or
firm on behalf of the Fund; provided such actions are taken in good faith and
without negligence or willful misconduct;
(d) the reliance on, or the carrying out by the Transfer Agent or
its agents or subcontractors of any instructions or requests of the Fund on
behalf of the applicable Portfolio; provided such actions are taken in good
faith and without negligence or willful misconduct; or
(e) the offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such state or in
violation of any stop order or other determination or ruling by any federal
agency or any state with respect to the offer or sale of such Shares in such
state.
5.02 The Transfer Agent shall indemnify and hold the Fund harmless
from and against any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liability arising out of or attributable to any action
or failure or omission to act by the Transfer Agent as result of the Transfer
Agent's lack of good faith, negligence or willful misconduct.
5.03 At any time the Transfer Agent may apply to any officer of the
Fund for instructions, and may consult with legal counsel with respect to any
matter arising in connection with the services to be performed by the Transfer
Agent under this Agreement, and the Transfer Agent and its agents or
subcontractors shall not be liable to and shall be indemnified by the Fund on
behalf
4
<PAGE> 7
of the applicable Portfolio for any action taken or omitted by it in reliance
upon such instructions or upon the opinion of such counsel. The Transfer Agent
shall be protected and indemnified in acting upon any paper or document
furnished by or on behalf of the Fund, reasonably believed to be genuine and to
have been signed by the proper person or persons, or upon any instruction,
information, data, records or documents provided to the Transfer Agent or its
agents or subcontractors by machine readable input, telex, CRT data entry or
other similar means authorized by the Fund, and shall not be held to have
notice of any change of authority of any person, until receipt of written
notice thereof from the Fund.
5.04 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to
the other for any damages resulting from such failure to perform or otherwise
from such causes.
5.05 Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this Agreement or for
any consequential damages arising out of any act or failure to act hereunder.
5.06 In order that the indemnification provisions contained in this
Article 5 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The
party who may be required to indemnify shall have the option to participate
with the party seeking indemnification in the defense of such claim. The party
seeking indemnification shall in no case confess any claim or make any
compromise in any case in which the other party may be required to indemnify it
except with the other party's prior written consent.
ARTICLE 6
COVENANTS OF THE FUND AND THE TRANSFER AGENT
6.01 The Fund shall, upon request, on behalf of each of the
Portfolios promptly furnish to the Transfer Agent the following:
(a) a certified copy of the resolution of the Board of Trustees of
the Fund authorizing the appointment of the Transfer Agent and the execution
and delivery of this Agreement; and
(b) a copy of the Agreement and Declaration of Trust and Bylaws of
the Fund and all amendments thereto.
6.02 The Transfer Agent shall keep records relating to the services
to be performed hereunder, in the form and manner as it may deem advisable. To
the extent required by Section 31 of the Investment Company Act of 1940, as
amended, and the Rules thereunder, the Transfer Agent agrees that all such
records prepared or maintained by the Transfer Agent relating to the services
to be performed by the Transfer Agent hereunder are the property of the Fund
and will be preserved, maintained and made available in accordance with such
Section and Rules, and will be surrendered promptly to the Fund on and in
accordance with its request.
5
<PAGE> 8
6.03 The Transfer Agent and the Fund agree that all books, records,
information and data pertaining to the business of the other party which are
exchanged or received pursuant to the negotiation or the carrying out of this
Agreement shall remain confidential, and shall not be voluntarily disclosed to
any other person, except as may be required by law.
6.04 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, the Transfer Agent will endeavor to notify the
Fund and to secure instructions from an authorized officer of the Fund as to
such inspection. The Transfer Agent reserves the right, however, to exhibit
the Shareholder records to any person whenever it is advised by its counsel
that it may be held liable for the failure to exhibit the Shareholder records
to such person.
ARTICLE 7
TERMINATION OF AGREEMENT
7.01 This Agreement may be terminated by either party upon sixty
(60) days written notice to the other.
7.02 Should the Fund exercise its right to terminate this
Agreement, all out-of-pocket expenses associated with the movement of records
and material will be borne by the Fund on behalf of the applicable Portfolios.
Additionally, the Transfer Agent reserves the right to charge for any other
reasonable expenses associated with such termination and/or a charge equivalent
to the average of three (3) months' fees.
ARTICLE 8
ADDITIONAL FUNDS
8.01 In the event that the Fund establishes one or more series of
Shares in addition to the Portfolios with respect to which it desires to have
the Transfer Agent render services as transfer agent under the terms hereof, it
shall so notify the Transfer Agent in writing, and if the Transfer Agent agrees
in writing to provide such services, such series of Shares shall become a
Portfolio hereunder.
ARTICLE 9
ASSIGNMENT
9.01 Except as provided in Section 9.03 below, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party.
9.02 This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and assigns.
9.03 The Transfer Agent may, without further consent on the part of
the Fund, subcontract for the performance hereof with any entity which is duly
registered as a transfer agent pursuant to Section 17A(c)(1) of the Securities
Exchange Act of 1934 as amended ("Section 17A(c)(1)"); provided, however, that
the Transfer Agent shall be as fully responsible to the Fund for the acts and
omissions of any subcontractor as it is for its own acts and omissions.
6
<PAGE> 9
ARTICLE 10
AMENDMENT
10.01 This Agreement may be amended or modified by a written
agreement executed by both parties and authorized or approved by a resolution
of the Board of Trustees of the Fund.
ARTICLE 11
TEXAS LAW TO APPLY
11.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Texas.
ARTICLE 12
MERGER OF AGREEMENT
12.01 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
ARTICLE 13
COUNTERPARTS
13.01 This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
ARTICLE 14
LIMITATION OF SHAREHOLDER LIABILITY
14.01 Notice is hereby given that this Agreement is being executed
by the Fund by a duly authorized officer thereof acting as such and not
individually. The obligations of this Agreement are not binding upon any of
the Trustees, officers, shareholders or the investment advisor of the Fund
individually but are binding only upon the assets and property belonging to the
Fund, on its own behalf or on behalf of a Portfolio, for the benefit of which
the Trustees or officers have caused this Agreement to be executed.
7
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf by and through their duly
authorized officers, as of the day and year first above written.
<TABLE>
<S> <C>
AIM INVESTMENT PORTFOLIOS
By: ----------------------
President
ATTEST:
- ----------------------
Assistant Secretary
A I M FUND SERVICES, INC.
By: ---------------------
President
ATTEST:
- -----------------------
Assistant Secretary
</TABLE>
8
<PAGE> 11
FEE SCHEDULE
1. For performance by the Transfer Agent pursuant to this Agreement, the Fund
agrees on behalf of each of the Portfolios to pay the Transfer Agent an
annualized fee for shareholder accounts that are open during any monthly
period as set forth below, and an annualized fee of $.70 per shareholder
account that is closed during any monthly period. Both fees shall be
billed by the Transfer Agent monthly in arrears on a prorated basis of
1/12 of the annualized fee for all such accounts.
<TABLE>
<CAPTION>
Per Account Fee
Fund Type Annualized
--------- ----------
<S> <C>
Class A Annual/Semi-Annual Dividends $15.15
Class A Quarterly & Monthly Dividend 17.15
Class A Daily Accrual 19.65
Class B 19.65
Advisor Class 19.65
</TABLE>
2. The Transfer Agent shall provide the various mutual funds that are advised
by A I M Advisors, Inc. or its affiliates and distributed by A I M
Distributors, Inc. (the "AIM Funds") with an annualized credit to the
monthly billings of (a) $1.50 for each open account in excess of 100,000
open AIM Funds Accounts up to and including 125,000 open AIM Funds
Accounts; (b) $1.75 for each open account in excess of 125,000 open AIM
Funds Accounts up to and including 150,000 open AIM Funds Accounts; (c)
$2.00 for each open AIM Funds Account in excess of 150,000 open AIM Funds
Accounts up to and including 200,000 open AIM Funds Accounts; (d) $2.25
for each open AIM Funds Account in excess of 200,000 open AIM Funds
Accounts up to and including 500,000 open AIM Funds Accounts; (e) $2.50
for each open AIM Funds Account in excess of 500,000 open AIM Funds
Accounts up to and including 1,000,000 open AIM Funds Accounts; and (f)
$3.00 for each open AIM Funds Account in excess of 1,000,000 open AIM
Funds Accounts.
3. In addition, beginning on the anniversary date of the execution of the
Remote Services Agreement with The Shareholder Services Group, Inc., and
on each subsequent anniversary date, the per account fees shall each be
increased by a percentage amount equal to the percentage increase in the
then current Consumer Price Index (all urban consumers) or its successor
index, though in no event shall such increase be greater than a 7%
increase over the previous fees.
4. Other Fees
<TABLE>
<S> <C>
IRA Annual Maintenance Fee $10 per IRA account per year (paid by investor per tax I.D.
number).
Balance Credit The total fees due to the Transfer Agent from all funds
affiliated with the Fund shall be reduced by an amount equal
to one half of investment income earned by the Transfer
Agent on the DDA balances of the disbursement accounts for
those funds.
</TABLE>
9
<PAGE> 12
<TABLE>
<S> <C>
Remote Services Fee $3.60 per open account per year, payable monthly and $1.80
per closed account per year, payable monthly.
</TABLE>
5. OUT-OF-POCKET EXPENSES
The Fund shall reimburse the Transfer Agent monthly for applicable
out-of-pocket expenses, including, but not limited to the following items:
<TABLE>
<S> <C>
- Microfiche/microfilm production & equipment
- Magnetic media tapes and freight
- Printing costs, including, without limitation, certificates, envelopes, checks, stationery, confirmations
and statements
- Postage (bulk, pre-sort, ZIP+4, bar coding, first class) direct pass through to the Fund
- Due diligence mailings
- Telephone and telecommunication costs, including all lease, maintenance and line costs
- Ad hoc reports
- Proxy solicitations, mailings and tabulations
- Daily & Distribution advice mailings
- Shipping, Certified and Overnight mail and insurance
- Year-end form production and mailings
- Terminals, communication lines, printers and other equipment and any expenses incurred in connection with
such terminals and lines
- Duplicating services
- Courier services
- Banking charges, including without limitation incoming and outgoing wire charges @ $8.00 per wire
- Rendering fees as billed
- Federal Reserve charges for check clearance
- Record retention, retrieval and destruction costs, including, but not limited to exit fees charged by
third party record keeping vendors
- Third party audit reviews
- All client specific Systems enhancements will be at the Funds' cost.
- Certificate Insurance
- Such other miscellaneous expenses reasonably incurred by the Transfer Agent in performing its duties and
responsibilities under this Agreement
- Check writing fee of $.75 per check redemption.
</TABLE>
The Fund agrees that postage and mailing expenses will be paid on the day
of or prior to mailing. In addition, the Fund will promptly reimburse the
Transfer Agent for any other unscheduled expenses incurred by the Transfer
Agent whenever the Fund and the Transfer Agent mutually agree that such
expenses are not otherwise properly borne by the Transfer Agent as part of
its duties and obligations under the Agreement.
10
<PAGE> 1
EXHIBIT 9(a)(2)
REMOTE ACCESS
-------------
AND
---
RELATED SERVICES AGREEMENT
--------------------------
AGREEMENT dated as December 23, 1994 between each registered investment
company listed on the signature pages hereof, either for itself or, with respect
to each such company that is a series investment company, on behalf of each of
the series or class named on the signature pages hereof (the "Fund") and THE
SHAREHOLDER SERVICES GROUP, INC. ("TSSG"), a Massachusetts corporation with
principal offices at One Exchange Place, Boston, Massachusetts 02109.
W I T N E S S E T H
-------------------
That for and in consideration of the mutual promises hereinafter set forth,
the Fund and TSSG agree as follows:
1. Appointment of TSSG. The Fund appoints TSSG as servicing agent to provide
and support remote terminal access through dedicated transmission lines to
its computerized data processing record keeping system for Fund shareholder
accounting more fully described on the attached Schedule A (the "TSSG
System") installed on TSSG computer hardware and using TSSG software ("TSSG
Facilities") to provide and support remote terminal access to the TSSG
System and the TSSG Facilities for the maintenance of Fund shareholder
records, processing of information and generation of information with
respect thereto. TSSG hereby accepts such appointment for the compensation
described below.
2. Oral and Written Instructions. "Written Instructions" shall mean a written
communication signed by a person reasonably believed by TSSG to be a person
named on the list of authorized persons as it may be amended by amendment
provided by the Fund to TSSG from time to time ("Schedule B"). "Oral
Instructions" shall mean instructions, other than Written Instructions,
actually received by TSSG from a person reasonably believed by TSSG to be
an Authorized Person listed on Schedule B. Written communication shall
include manually executed originals and authorized electronic
transmissions, including telefacsimile of a manually executed original or
other process.
3. Compensation.
(a) The Fund will compensate TSSG for the performance of its obligations
hereunder in accordance with the Fee Schedule attached hereto as
Schedule C. Such fees may be adjusted from time to time by attaching
to or substituting for Schedule C a revised Fee Schedule, dated and
signed by an authorized officer of each party hereto.
<PAGE> 2
(b) In addition to the fees payable pursuant to Schedule C, the Fund will
pay all out-of-pocket expenses incurred by TSSG in performing its
duties hereunder. Out-of-pocket expenses shall include the items
specified in the written schedule of out-of-pocket charges attached
hereto as Schedule D. Upon written approval of the Fund, Schedule D
may be modified by TSSG. The Fund agrees to approve all reasonable
changes in Schedule D. Unscheduled out-of-pocket expenses shall be
limited to those out-of-pocket expenses directly related to TSSG's
performance of its obligations hereunder.
(c) TSSG will provide an invoice as soon as practicable after the end of
each calendar month detailed in accordance with Schedule C and
Schedule D. The Fund will pay to TSSG the amount so billed within
fifteen (15) days after the Fund's receipt of the invoice.
4. Duties of TSSG.
(a) Subject to the provisions of this Agreement, the Fund hereby agrees to
use or employ the TSSG System and the TSSG Facilities to maintain
certain Fund shareholder records and generate output with respect to
the Fund's shareholders, and subject to the provisions of this
Agreement, TSSG will provide the use of the TSSG System and the TSSG
Facilities to maintain Fund shareholder records and generate such
output with respect to the Fund's shareholders.
(b) TSSG agrees to provide to the Fund at its facility located at Eleven
Greenway Plaza, Suite 1919, Houston, Texas 77046 or at such other
location as may be mutually agreed upon in writing by TSSG and the
Fund (the "Fund Facility") remote access to the use of information
processing capabilities of the TSSG System as it may be modified from
time to time by TSSG.
5. Changes and Modifications.
(a) During the term of this Agreement, TSSG will make available for Fund
use, without additional costs, all modifications and improvements to
the TSSG System (excluding those modifications and improvements TSSG
views as additional products and/or those developed exclusively for
other TSSG clients) made in the ordinary course of business. In
addition, TSSG will use its best efforts to make reasonable changes to
the TSSG System requested by the Fund, subject to payment of
additional fees as mutually agreed upon in writing and as reflected in
Schedule C.
(b) TSSG shall have the right, at any time, and from time to time, to
alter and modify any systems, programs, procedures or facilities used
or employed in performing its duties and obligations hereunder (a
"System Modification"), provided that no
2
<PAGE> 3
System Modification shall, without the consent of the Fund, materially
adversely change or affect the operations and procedures of the Fund
in using or employing the TSSG System or the TSSG Facilities
hereunder. TSSG will use its best efforts to notify the Fund in
writing at least five business days prior to implementing any System
Modification which impacts or effects AFS' day to day operations, and
in any event by 8 a.m. CST the following business day.
(c) TSSG agrees to make any System Modifications necessary to meet
federal, state or local government or self-regulatory organization
requirements ("Regulatory Adherence Enhancements") in a timely
fashion. TSSG agrees to advise the Fund promptly upon notification of
any change in or receipt of any information or advice concerning any
change in the requirements of any federal, state, local or
self-regulatory organization which might require such System
Modifications. The Fund shall obtain any additional software required
to comply with such changes in federal, state, and local government or
self regulatory organization requirements. Regulatory Adherence
Enhancements shall be limited to technically and commercially
practical System modifications which are within the scope of the
functions, capabilities and any database of the TSSG System. TSSG will
provide Regulatory Adherence Enhancements only after final
specification, agreed upon by TSSG, the Fund and affected third
parties, have been established and delivered to TSSG.
(d) During the term of this Agreement TSSG shall expend no less than
$1,000,000 (one million dollars) per calendar year for the enhancement
and maintenance of TSSG's recordkeeping and associated system that are
utilized by TSSG to provide services to the Fund under this Agreement
(or a successor Remote Service Agreement). At least once each calendar
year, TSSG shall provide the Fund with a schedule of the enhancements
planned by the TSSG for the succeeding 12 month period.
6. Duties of the Fund.
(a) The Fund will transmit all information and data required by TSSG
hereunder to the TSSG Facilities in the format and form specified by
TSSG, so that the output produced by the Fund shall be complete and
accurate when it is generated by the TSSG System and the TSSG
Facilities. The Fund shall be responsible and liable for the costs and
expenses of regenerating any output if the Fund provides nonconforming
or erroneous data or shall have failed to transmit any such data or
information or verify any such data and information when it is
generated by the TSSG System and the TSSG Facilities.
(b) In the event the Fund shall erroneously transmit information or shall
transmit incorrect information or data to the TSSG System or the TSSG
Facilities, the Fund
3
<PAGE> 4
shall correct such information and data and retransmit the same to the
TSSG System or to the TSSG Facilities. Upon consent of the Fund, which
shall not be unreasonably withheld, TSSG shall take the necessary
steps at Fund expense to correct any files affected by the original
incorrect transmission.
(c) In the event the TSSG System malfunctions or a TSSG programming error
(other than programming changes made pursuant to paragraph 5(a)
above), causes an error or mistake in any of the output generated by
the TSSG System under the terms of this Agreement, TSSG will, at its
expense, correct and retransmit such output so long as the Fund has
notified TSSG of such error or mistake within five (5) business days
of its discovery and the data used to generate such output is
available as set forth in Schedule E attached hereto.
If such data is available as set forth in Schedule E, the Fund shall
take reasonable necessary steps to manually correct any records due to
a TSSG system malfunction or programming error that TSSG is unable to
correct systematically and the parties shall mutually agree upon the
allocation of expenses related to such manual processing.
7. System Access and Training.
(a) TSSG shall provide the Fund on-line access as provided for and set
forth in the attached Schedule F, and agrees to meet the performance
standards set forth therein. Additional access to the TSSG System may
be arranged by mutual agreement of the parties.
(b) The Fund will reimburse TSSG for any reasonable costs and expenses
incurred for training hereunder. All travel and other out-of-pocket
expenses incurred by Fund personnel in connection with and during the
training periods shall be borne by the Fund.
8. Indemnification. TSSG shall not be responsible for and the Fund shall
indemnify and hold TSSG harmless from and against any and all claims,
costs, expenses (including reasonable attorneys' fees), losses, damages,
charges, payments and liabilities of any sort or kind which may be asserted
against TSSG or for which TSSG may be held to be liable (a "Claim")
arising out of or attributable to any of the following:
(a) Any actions of TSSG required to be taken pursuant to this Agreement
unless such Claim resulted from a negligent act or omission to act or
bad faith by TSSG in the performance of its duties hereunder.
(b) The Fund's failure to use and employ the TSSG System and the TSSG
Facilities in accordance with the procedures set forth in any on-line
documentation made
4
<PAGE> 5
available to the Fund, the Fund's failure to utilize the control
procedures set forth and described in the on-line user documentation,
or the Fund's failure to verify promptly reports or output received
through use of the TSSG System and the TSSG Facilities.
(c) The Fund's errors and mistakes in the use of the TSSG System, TSSG
Facilities and control procedures.
(d) TSSG's reasonable reliance on, or reasonable use of information, data,
records and documents received by TSSG from the Fund in the
performance of TSSG's duties and obligations hereunder.
(e) The reliance on, or the implementation of, any Written or Oral
Instructions or any other instructions or requests of the Fund.
(f) The Fund's refusal or failure to comply with the terms of this
Agreement, or any Claim which arises out of the Fund's negligence or
misconduct or the breach of any representation or warranty of the Fund
made herein.
(g) Unavailability of communications or utilities facilities or other
equipment failures provided TSSG has maintained such equipment
appropriately, Acts of God, acts of the public enemy,
governmentally-mandated priorities in allocating its services, labor
disputes, fires, floods, strikes, riots or war or other causes beyond
its control.
9. Standard of Care.
(a) TSSG shall at all times act in good faith and agrees to use its best
efforts within commercially reasonable standards to insure the
accuracy of all services performed under this Agreement, but assumes
no responsibility and shall not be liable for loss or damage due to
errors unless said errors are caused by its negligence, bad faith, or
willful misconduct or that of its employees.
(b) Notwithstanding the foregoing Section 9(a) or anything else contained
in this Agreement to the contrary, TSSG's liability hereunder shall,
in no event exceed four million dollars ($4,000,000.00).
The parties agree to review the limitation of liability provision set
forth in this Section 9(b) on an annual basis.
10. Instructions. TSSG may apply at any time to a person listed as an
Authorized Person identified on Schedule B for instructions with respect to
any matter arising in connection with this Agreement. TSSG may also consult
with legal counsel for the Fund or, at
5
<PAGE> 6
TSSG's expense, its own legal counsel with respect to actions to be taken
hereunder. TSSG shall not be liable for, and shall be indemnified by the
Fund against, any Claim arising from any action taken or omitted to be
taken by TSSG in good faith in reliance upon such instruction from the
Fund or upon the advice of such legal counsel.
11. Consequential Damages. In no event and under no circumstances shall either
party under this Agreement be liable to the other party for consequential
or indirect loss of profits, reputation or business or any other special
damages under any provision of this Agreement or for any act or failure to
act hereunder.
12. Covenants of TSSG.
(a) TSSG shall maintain the appropriate computer files of all required
information and data transmitted to the TSSG Facilities by the Fund,
provided, however, that TSSG shall not be responsible or liable for
any damage, alterations, modifications thereto or failure to maintain
the same if the Fund made, or TSSG made at the Fund's request, such
changes, alterations or modifications or if the Fund causes the
failure. It is expressly understood that all such shareholder records
transmitted by the Fund and maintained by TSSG remain the exclusive
property of the Fund.
(b) All information furnished by the Fund to TSSG is confidential and TSSG
agrees that it shall not disclose such information to any third party
except pursuant to Written or Oral Instructions received from the Fund
or to the extent that TSSG is required by law to make such disclosure.
13. Covenants of the Fund. The Fund shall utilize and employ all reasonable
control procedures available under the TSSG System of which the Fund may be
advised. The Fund will promptly advise TSSG of any errors or mistakes in
the data or information transmitted to the TSSG Facilities or in the
records maintained by TSSG or output generated hereunder. The Fund will
verify the accuracy of all output it receives consistent with industry
custom and practice by utilizing proper auditing procedures.
All information furnished to or obtained by the Fund pertaining to the TSSG
Facilities, the TSSG System, or TSSG procedures, data bases and programs is
confidential and proprietary to TSSG. The Fund shall not disclose such
information to any third party except to the extent that the Fund is
required by law to make such disclosures.
14. Term and Termination.
(a) This Agreement shall become effective on the date first set forth
above and shall continue in effect through December 31, 1997 ("Initial
Term").
6
<PAGE> 7
(b) Unless it is the intention of either party for this Agreement to
terminate upon the expiration of the Initial Term, within six (6)
months prior to the end of the Initial Term but no later than such
date, AIM and TSSG will negotiate diligently and in good faith and
either (i) enter into an agreement extending the term of this
Agreement; or (ii) enter into a new agreement for TSSG to provide
remote services substantially similar to those contemplated hereunder.
(c) Notwithstanding the foregoing, if a party hereto is guilty of a
material failure to perform its duties and obligations hereunder
(a "Defaulting Party") the other party (the "Non-Defaulting Party")
may give written notice thereof to the Defaulting Party, and if such
material breach shall not have been remedied within thirty (30) days
after such written notice is given, then the Non-Defaulting Party may
terminate this Agreement by giving thirty (30) days written notice of
such termination to the Defaulting Party. If TSSG is the
Non-Defaulting Party, its termination of this Agreement shall not
constitute a waiver of any other rights or remedies of TSSG with
respect to services performed prior to such termination or rights of
TSSG to be reimbursed for out-of-pocket expenses. In all cases,
termination by the Non-Defaulting Party shall not constitute a
waiver by the Non-Defaulting Party of any other rights it might have
under this Agreement or otherwise against the Defaulting Party.
15. Post-Termination Procedures. Upon termination for any reason by either
party to this Agreement TSSG shall promptly, at the Fund's expense, provide
immediate and full access to the Fund data files on magnetic tape in
machine readable form and shall cooperate with the Fund in its efforts to
transfer all such data files to another person chosen by the Fund. In
addition, TSSG agrees to return, at the expense of the terminating party,
all backup tapes and other storage media upon which Fund data is then
stored.
16. Amendment. This Agreement may only be amended or modified by written
agreement executed by both parties.
17. Assignment. This Agreement and any interest hereunder shall inure to
the benefit of and be binding upon the Parties and their respective
successors, legal representatives and permitted assigns including the
successor entity in any merger or reorganization of the Funds. Except as
otherwise expressly provided for in this Agreement, neither Party may
assign or delegate this Agreement or any of its rights or obligations
without the other Party's prior approval which shall not be unreasonably
withheld. Upon prior notice to the Fund, TSSG may assign this Agreement to
(i) any person in connection with the merger or consolidation of TSSG into
such person, or the sale of all or substantially all of the assets of TSSG
to such person or (ii) any direct or indirect subsidiary of First Data
Corporation in connection with any corporate reorganization. Any attempt to
assign, delegate or otherwise transfer this Agreement in violation of this
Section will be voidable by the other party.
7
<PAGE> 8
18. Subcontracting. TSSG may subcontract to agents the services required to be
performed pursuant to this Agreement and the Schedules hereto, if any. The
appointment of any such agent shall not relieve TSSG of its
responsibilities hereunder.
19. Use of TSSG's Name. The Fund shall not use TSSG's name in any Prospectus,
Statement of Additional Information, Shareholders's Report, sales
literature or other material relating to the Fund without TSSG's prior
written approval unless such use is required by law or merely refers in
accurate terms to the services rendered hereunder. Any reference to TSSG
shall include a statement to the effect that it is an indirect, wholly
owned subsidiary of First Data Corporation.
20. Use of the Fund's Name. Except as provided herein, TSSG shall not use the
name of the Fund, its Advisor or material relating to any of them on any
documents or forms (other than internal documents) without the Fund's prior
written approval unless such use is required by law or merely refers in
accurate terms to the services rendered hereunder.
21. Security.
(a) TSSG will provide the Fund with a User Identifier (also known as
"User I.D.") and a User Password. TSSG will also assign the initial
Operator Password to each of the Fund's employees who are authorized
to access the TSSG System. The Operator Passwords may be changed at
any time in the discretion of the Fund without any notice to or
knowledge of TSSG by using procedures set forth in the user manual.
(b) The Fund agrees that it is responsible for selection, use and
protection of the confidentiality of passwords; however, TSSG may for
security reasons at any time and from time to time, upon seven days
written notice to the Fund (or immediately upon notice by telephone,
confirmed in writing, in the event of an emergency), deny access to
the TSSG System until one or more User I.D.s is changed by the Fund.
(c) TSSG will provide the Fund with online procedures enabling the Fund to
reset passwords, correct password violations and add/change/delete
User I.D.s within existing security profiles.
(d) TSSG will use its best efforts to ensure that the Fund's data files
which are input into the TSSG System will remain confidential and
protected from unauthorized access by third persons. Specifically,
TSSG will adhere to its normal security procedures for protection of
computer-stored files or programs from unauthorized access. It is
agreed that such procedures will be subject to review by the Fund and
audit by its independent accountants and that TSSG will take under
advisement
8
<PAGE> 9
recommendations of such independent accountants concerning changes to
such procedures.
(e) The Fund or duly authorized independent auditors will have the right
upon 5 business days' notice under this Agreement to perform on-site
audits of records and accounts directly pertaining to Fund shareholder
accounts serviced by TSSG facilities in accordance with reasonable
procedures and at reasonable frequencies.
(f) The parties agree that all tapes, books, user manuals, instructions,
records, information and data pertaining to the business of the other
party, the TSSG System and the Fund clients services by the Fund which
are exchanged or received pursuant to the negotiation of or carrying
out of this Agreement shall remain confidential except to the extent
required by applicable laws, and shall not be voluntarily disclosed to
any other person and that all such tapes, books, reference manuals,
instructions, records, information and data in the possession of each
of the parties hereto shall be returned to the party from whom it was
obtained upon the termination or expiration of this Agreement.
(g) The Fund acknowledges that TSSG has proprietary rights in and to the
TSSG System and any other TSSG programs, data basis, supporting
documentation or procedures ("TSSG Protected Information") of which
the Fund or its employees or agents become aware as a result of the
Fund's access to the TSSG System or TSSG Facilities and that the TSSG
Protected Information constitutes confidential material and trade
secrets of TSSG. The Fund agrees to maintain the confidentiality of
the TSSG Protected Information. The Fund acknowledges that any
unauthorized use, misuse, disclosure or taking of TSSG Protected
Information which is confidential or which is a trade secret, whether
residing or existing internally or externally to a computer, computer
system or computer network, or the knowing and unauthorized accessing
or causing to be accessed of any computer, computer system or computer
network, may be subject to civil liabilities and criminal penalties
under applicable law. The Fund will advise all of its employees and
agents who have access to any TSSG Protected Information or to any
computer equipment capable of accessing TSSG Facilities of the
foregoing.
22. Additional Funds. In the event that additional funds, within the same family
as the Funds, are established ("Additional Funds") and such Additional Funds
desire to avail themselves of the benefits of and become a party to this
Agreement, the Additional Funds shall notify TSSG in writing, and if TSSG agrees
in writing, such Additional Funds shall become a party to this Agreement.
9
<PAGE> 10
23. Miscellaneous.
(a) Notices. Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Fund or TSSG shall be
sufficiently given if addressed to that party and received by it at
its office set forth below or at such other place as it may from time
to time designate in writing.
To: AIM Family of Funds
c/o John Caldwell, President
AIM Fund Services, Inc.
Eleven Greenway Plaza, Suite 1919
Houston, Texas 77046
Attention: William Kleh, Secretary
with a copy to:
Fund Legal Department at the same address
Attention: Carol Relihan, VP and General Counsel
To: The Shareholder Services Group, Inc.
One Exchange Place
Boston, Massachusetts 02109
Attention: Robert F. Radin, President
with a copy to:
General Counsel at the same address
(b) Successors. This Agreement shall extend to and shall be binding upon
the parties hereto, and their respective successors upon the parties
hereto, and their respective successors and assigns; provided,
however, that this Agreement may not be assigned without the written
consent of the other party.
(c) Governing Law. This Agreement shall be governed exclusively by and
interpreted in accordance with the internal substantive laws of the
Commonwealth of Massachusetts without reference to the choice of the
law provisions thereof.
(d) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or
invalidated.
10
<PAGE> 11
(e) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all
of which together will constitute only one instrument.
(f) Captions. The captions of this Agreement are included for convenience
of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
(g) Sole Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior agreement with
respect to the subject matter hereof.
(h) Specific Performance. Each of the parties hereto agrees that the other
party would be irreparably damaged by breaches of this Agreement
relating to confidential or proprietary information and accordingly
each agrees that each of them is entitled, without bond or other
security, to an injunction or injunctions to prevent breaches of the
provisions of this Agreement relating to such information.
(i) It is understood and agreed that all services performed hereunder by
TSSG shall be as an independent contractor and not as an employee,
joint venturer, or partner of the Fund. This Agreement is between the
Fund and TSSG, and there are no third party beneficiaries hereto.
(j) Limitation of Shareholder Liability. Notice is hereby given that the
Declaration of Trust of each Fund which is a Delaware business trust,
is on file with the Secretary of State of Delaware, and this Agreement
was executed on behalf of each such Trust by a duly authorized officer
thereof acting as such and not individually. The obligations of this
Agreement are not binding upon any of the Trustees, officers or
Shareholders of any such Trust individually but are binding only upon
the assets and property of the respective portfolio of each such Trust
for the benefit of which the Trustees have caused this Agreement to be
executed.
11
<PAGE> 12
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
AIM EQUITY FUNDS, INC.
on behalf of the Retail Classes of its AIM Charter
Fund, AIM Constellation Fund, AIM Weingarten Fund
and AIM Aggressive Growth Fund Portfolios
By: /s/ ROBERT H. GRAHAM
------------------
Title: President
---------------
AIM FUNDS GROUP,
on behalf of the Class A and Class B Shares of its
AIM Balanced Fund, AIM Government Securities Fund,
AIM Growth Fund, AIM High Yield Fund, AIM Income
Fund, AIM Municipal Bond Fund, AIM Utilities Fund
and AIM Value Fund portfolios and on behalf of the
Class A, Class B and Class C Shares of its AIM
Money Market Fund Portfolio
By: /s/ ROBERT H. GRAHAM
------------------
Title: President
---------------
AIM INTERNATIONAL FUNDS, INC.,
on behalf of the Class A and Class B shares of its
AIM International Equity Fund, AIM Global
Aggressive Growth Fund, AIM Global Growth Fund and
AIM Global Income Fund Portfolios
By: /s/ ROBERT H. GRAHAM
---------------------
Title: President
------------------
12
<PAGE> 13
AIM INVESTMENT SECURITIES FUNDS,
on behalf of its AIM Adjustable Rate Government
Fund portfolio and the AIM Limited Maturity
Treasury Shares class of its Limited Maturity
Treasury Portfolio
By: /s/ ROBERT H. GRAHAM
---------------------
Title: President
------------------
AIM TAX-EXEMPT FUNDS, INC.,
on behalf of its AIM Tax-Exempt Cash Fund and AIM
Tax-Exempt Bond Fund of Connecticut portfolios and
the AIM Tax-Free Intermediate Shares class of its
Intermediate Portfolio
By: /s/ ROBERT H. GRAHAM
---------------------
Title: President
------------------
THE SHAREHOLDER SERVICES GROUP, INC.
By: /s/ JACK PUTNER
----------------
Title: EVP - COO
-------------
13
<PAGE> 14
SCHEDULE A
SYSTEM FEATURES AND CAPABILITIES
The FSR System consists of computer hardware, operating system software and
application software which contains functions as defined below. The operating
environment configuration consists of IBM-compatible mainframe computers
running on an MVS operating system. The configuration includes controllers,
direct access storage devices, tape drives, security access software and other
operating system hardware and software that enable TSSG to meet the contractual
commitments herein.
The Transfer Agent Application includes Job Control Language (JCL), Catalog
Procedures (PROCS) and program modules written primarily in COBOL.
The FSR Transfer Agency System supports the following subsystems and third
party systems:
NSCC (National Securities Clearing Corporation) support:
- FundSERV
- Networking
- Commissions
- Exchanges
- ACATS (Automated Customer Account Transfer System)
- TNET
Cost basis accounting
UNISYS Interface
Sales file download
Price Waterhouse Blue Sky download
File downloads to support DDA (Demand Deposit Account) Reconciliation
<PAGE> 15
Year-End Statements and Tax Reporting:
- 1099D
- 1099R
- 1042S
- 5498
- 1099B
Transmission send/receive functionality for broker/dealers and other third
parties
Electronic Funds Transfer processing to move in and out of funds using automated
clearing house facilities
KMS Microfilm Interface
Third part interfaces with:
Applied Mailing Systems for print/mail support
Microdata for checkbook production
Mellon and Texas Commerce for banking services
Other third party software packages i.e. ACE/DISC
<PAGE> 16
SCHEDULE B
AIM FAMILY OF FUNDS - LIST OF AUTHORIZED PERSONS
/s/ ROBERT H. GRAHAM
-----------------------
Robert Graham
President, A I M Management Group Inc.
/s/ JOHN CALDWELL (JACK)
------------------------
Jack Caldwell
President, A I M Fund Services, Inc.
/s/ CAROL F. RELIHAN
-----------------------
Carol Relihan
Secretary and General Counsel,
A I M Management Group Inc.
/s/ NANCY MARTIN
-----------------------
Nancy Martin
Counsel, A I M Management Group Inc.
<PAGE> 17
SCHEDULE C
FEE SCHEDULE
I. SHAREHOLDER ACCOUNT FEES. The fund shall pay the following fees
("Shareholder Account Fees"):
For the period beginning on the date of this Agreement, and continuing through
December 31, 1997, the Fund shall pay TSSG an annualized fee of $3.60 per
shareholder account that is open during any monthly period ("Open Account
Fee"). The Fund also shall pay TSSG an annualized fee of $1.80 per shareholder
account that is closed during any monthly period ("Closed Account Fee") (The
Open Account Fees and the Closed Account Fees hereafter collectively referred
to as "Shareholder Account Fees"). The Shareholder Account Fees shall be billed
by TSSG monthly in arrears on a prorated basis of 1/12 of the annualized fee
for all such accounts.
In addition, beginning on the one year anniversary date of this Agreement, and
on each yearly anniversary date thereafter, the Shareholder Account fees may be
increased by TSSG in an amount equal to the lesser of (i) the cumulative
percentage increase in the Consumer Price Index for all Urban Consumers (CPI-U)
U.S. City Average, All Items (unadjusted -- (1982-84 + 100), published by the
U.S. Department of Labor, or (ii) seven percent (7%) of the Shareholder Account
Fees charged by TSSG to the Fund for the preceding twelve (12) month period.
II. FEES FOR DEDICATED PROGRAMMING SUPPORT
TSSG and the Fund will jointly determine the level of dedicated system
resources required to meet the Fund's enhancement priorities. At the Fund's
expense, TSSG agrees to use reasonable efforts to make dedicated programming
support available for all projects required by the Fund. The amount of the
resources required and the projects to be worked on shall be determined jointly
based upon joint periodic review of project requirements; however, the Fund
will decide the priorities which will be assigned to each project and will
determine what projects the dedicated resources are to work on. Such resources
will be charged to the Fund at the rates set forth below. All enhancement,
improvements, modifications or new features added to the TSSG System shall be,
and shall remain, the confidential, exclusive property of, and proprietary to,
TSSG. Request for software changes may be initiated by those representatives of
the Fund identified in Exhibit 1 of this Schedule C. The Fund will use its best
efforts to notify TSSG in writing of requests for software changes within 72
hours of an initial verbal request. TSSG reserves the right to stop work on a
request for which written specifications have not been received.
1
<PAGE> 18
a. SUPPORT TO BE PROVIDED TO THE FUND FREE OF CHARGE. TSSG will provide
the following support at no additional cost to the fund:
1. Coding to correct deficiencies in the system, unless such deficiencies
are included in item (II)(b)(9) below in which event the Fund will be
charged for such services. A system deficiency is defined as a system
process which does not operate according to the design of the computer
application or system specifications. To correct system deficiencies,
TSSG will, at its own expense, expend whatever resources are necessary
to analyze the deficiency and apply an appropriate remedy, in the form
of corrected application code as expeditiously as possible. An
alternate process, in the form of a functional work around, may be a
suitable substitute for the actual system fix, if the level of effort
to develop the system fix is deemed to be impractical or the elapsed
time to develop and apply the fix extends beyond the reasonable time
needed. For deficiencies identified by the Fund, the use of a
functional work around as an alternate process shall be mutually agreed
upon by the parties.
TSSG will evaluate all reported referrals, to validate deficiency
status or reclassify as a system enhancement, based on the above
definition.
2. Simple Maintenance determined to be core processing.
3. TSSG generated (i.e., internal) requests to extend system
functionality and ensure industry competitiveness.
4. Enhancements required to comply with regulatory changes; provided,
however, TSSG will only make such changes to the extent that they are
technically and commercially practical and are within the scope of the
software functions, capabilities and database.
b. SUPPORT TO BE PROVIDED TO THE FUND, BUT WHICH WILL BE BILLED AS
"DEDICATED PROGRAMING SUPPORT": The following activities are examples
of "dedicated programming support" which will be billed to the Fund:
1. Customized form output (i.e., statements, confirmation statements,
commission statements).
2. Customized reports.
3. Addition of new features (enhancements) requested by the Fund.
4. Addition of existing features not used by the Fund.
5. Addition of new funds to the fund group.
6. Customized year-end processing.
7. Conversions from other systems to FSR subsequent to initial funds
being live.
(continued on next page)
2
<PAGE> 19
8. Clean-up/Recovery project resulting from Fund error or causes beyond
the reasonable control of either party.
9. System "fixes" - coding to correct errors attributable to code
developed, and currently maintained by the dedicated teams.
10. Customization of existing functions specific to the Fund.
11. Program documentation as requested by the Fund.
Software Exclusivity. The Fund may choose to have exclusive use of
enhancement software developed by its dedicated programming staff. Such
exclusivity would extend for a period of nine (9) months from the date the
enhancement is placed into the production libraries. Software exclusivity
would be waived if the Fund accepts either of the following conditions:
a). If prior to implementation, TSSG or other TSSG clients agree to share
in the expense of the enhancements.
b). At any time during the 9 months following implementation, TSSG or
other TSSG clients agree to share the expense for the enhancements.
Access and Capability. The Funds' dedicated programmers will have access
and capability to update any part of the System. However, depending on the
skill set of the programmers, as well as the scope of the requested
enhancement, it may be in the best interest of both the Fund and TSSG to
utilize non-dedicated programmers to address certain enhancements. In
addition, because many programs are shared by multiple clients, some
enhancements may require approval from those clients. These enhancements
should be handled on an item by item basis.
c. FEES FOR DEDICATED PERSONNEL WHICH WILL BE BILLED TO THE FUND. TSSG
will bill the Fund monthly in arrears on a prorated basis of 1/12 of
the following annualized charges for each person dedicated to the
following positions:
<TABLE>
<S> <C>
Manager $100,000
Programmer $ 90,000
Business System Analyst/Tester $ 85,000
Non-dedicated programmer-hourly charge $100 per hour
</TABLE>
TSSG may adjust these salaries on the anniversary date of this agreement to
reflect salary increases, provided that they do not exceed seven percent (7%)
of the fees charged to the Fund for the identical positions during the
immediately preceding twelve (12) month period.
3
<PAGE> 20
SCHEDULE C
EXHIBIT 1
AIM FAMILY OF FUNDS
AUTHORIZED PERSONS REQUESTING
SYSTEM MODIFICATIONS
/s/ JOHN CALDWELL
-------------------------
John Caldwell
/s/ RICHARD SNYDER
---------------------
Richard Snyder
/s/ JOSEPH CHARPENTIER
----------------------
Joseph Charpentier
/s/ MARC VARGAS
---------------------
Marc Vargas
4
<PAGE> 21
SCHEDULED
OUT-OF-POCKET EXPENSES
The Fund shall reimburse TSSG monthly for applicable out-of-pocket expenses,
including, but not limited to the following items:
- Microfiche/microfilm production
- Magnetic media tapes and freight
- Telephone and telecommunication cost, including all lease, maintenance
and line costs
- NSCC transaction charges at $.15/per financial transaction
- Shipping, Certified and Overnight mail and insurance
- Year-End form production and mailings
- Terminals, communication lines, printers and other equipment and any
expenses incurred in connection with such terminals and lines
- Duplicating services, as per-approved by the Fund
- Courier services
- Due Diligence Mailings
- Rendering fees as billed
- Overtime, as pre-approved by the Fund
- Temporary staff, as pre-approved by the Fund
- Travel and entertainment, as pre-approved by the Fund
- Record retention, retrieval and destruction costs, including, but not
limited to exit fees charged by third party record keeping vendors
- Third party audit review
- All conversion costs: including System start up costs, but excluding
costs associated with conversations between TSSG systems.
- Such other miscellaneous expenses reasonably incurred by TSSG in
performing its duties and responsibilities under this Agreement. Such
expenses incurred with consent of the Fund, not to be unreasonably
withheld.
- The costs associated with the Year-End Support Services set forth on
the attached Exhibit 1 of this Schedule D.
- The costs associated with the Broker Dealer Support Services set forth
on the attached Exhibit 2 of this Schedule D.
<PAGE> 22
EXHIBIT 1 OF SCHEDULE D
Year-End Support Services: Flat rate of $.12/per shareholder account open as of
December 31, 1994.
The services listed below will be performed by TSSG for the Fund in support of
reporting for tax year 1994 and compliance mailings for calendar year 1994.
TSSG assumes responsibility for performing the services in compliance with
current IRS rules and regulations.
(a) Up-front year-end planning and communication of year-end related system
modifications.
(b) Production of IRS required tax forms and amended/corrected tax forms as
requested by the Fund.
(c) Production of IRS required 1099 magnetic tape filings.
(d) Production of tax forms on microfiche.
(e) Maintenance of year-end data files and the handling of transaction code
updates to those files.
(f) Submission of year-end jobs.
(g) B-notice processing as follows:
- receipt of B-notice listing from IRS or
- AFS upload of data entry of all accounts to B-Notice subsystem
- execution and generation of B-Notice defense reports
- analysis of B-Notice Defense Reports to ensure accurate coding
- coordination of mailings with vendor, including generation of vendor
tapes
- notification to Client Services of anticipated and actual mailing
dates, including volume, sample letters and confirmation of the date
backup withholding will be imposed if no response is received
- systematic upload of W-9 responses as volumes warrant
(h) Correction processing resulting from the monthly review of the year-end
files - "balancing."
(i) Production of cost basis information on 1099B forms.
(j) All required state filings as requested by the Fund.
(k) All IRS required mailings requested by the Fund: B-Notice, Safe Harbor,
W-9, TEFRA election, IRS Penalty Notice, and TIN solicitation.
<PAGE> 23
EXHIBIT 1 OF SCHEDULE D (cont'd)
(1) C-Notice processing as follows:
o receipt of C-Notice; imposition and release letters as received
from Fund or IRS
o performance of search function to identify all accounts associated
with the notice
o provide written instructions to Fund for proper account coding
(m) Initialization of Fund File in support of balancing tax reporting data
<PAGE> 24
EXHIBIT 2 OF SCHEDULE D
Broker/Dealer Support: Annualized fee of $.03/per shareholder account open
during any monthly period.
(a) NSCC Testing
(b) Back-up for NSCC redemption release
(c) Research and Problem Resolution
(d) Compliance and Support
<PAGE> 25
SCHEDULE E
DATA RETENTION AND RECOVERY STANDARDS
Data files included in the System are backed up according to a defined
retention schedule. This ensures availability of data for processing and
application recovery as well as compliance with regulatory requirements.
Critical files that are included in the retention process:
Shareholder Master
Shareholder History
Fund File
Dealer File
Global File
Certificate File
Broker/Client Cross Reference File
Additional Address File
Maintenance History File
Blue Sky Master
Price File
Rate File
Order Clearance File
These files are backed up as follows: daily and retained for six generations;
weekly and retained for 5 generations. The Shareholder Master, Shareholder
History and Fund Files are also backed up annually and retained for 7
generations.
In addition, the Acceptance File containing post-processing daily activity, and
the Daily File containing pre-processing transaction input, are backed up daily
and retained for six generations.
<PAGE> 26
SCHEDULE F
SYSTEM AVAILABILITY STANDARDS
These systems standards shall apply on business days.
<TABLE>
<S> <C>
o On-line systems availability between 7:00 a.m. and 7:00 p.m. CST - 95% measured monthly.
o Average response time (7:00 a.m. to 7:00 p.m. CST) of 3 seconds or less, in response to the system
employed by A I M Fund Services, Inc. as of September 1. 1994 - 95% measured monthly.
o Daily report bundles in queue for transmission no later than 7:00 a.m. CST each business day - 95%
measured monthly each bundle measured separately.
o Daily job PFSRXOED containing the Acceptance File download in queue for transmission no later than 4:00
a.m. CST each business day - 95% measured monthly.
o Daily job PFSRXCAD containing the Cap Stock File download in queue for transmission no later than 6:30
a.m. CST each business day - 95% measured monthly.
o Weekly job PFSXOHW containing the Dealer File download in queue for transmission no later than 9:00
a.m. CST each Saturday - 95% measured quarterly.
</TABLE>
<PAGE> 1
EXHIBIT 9(a)(3)
AMENDMENT NUMBER 1 TO THE REMOTE
ACCESS AND RELATED SERVICES AGREEMENT
This Amendment Number 1 effective October 4, 1995 is made to the
Remote Access and Related Services Agreement dated December 23, 1994 (the
"Remote Agreement") by and between each registered investment company listed on
the signature pages hereof, either for itself or, with respect to each such
company that is a series investment company, on behalf of each of the series or
class named on the signature pages hereof (the "Fund") and THE SHAREHOLDER
SERVICES GROUP, INC. ("TSSG"), a Massachusetts corporation with principal
offices at One Exchange Place, Boston, Massachusetts 02109.
WHEREAS, the Fund desires to incorporate any changes or deletions to
those registered investment companies listed on the signature page of the
Remote Agreement as set forth on the signature page hereof;
WHEREAS, the Fund in connection with its access to the TSSG System,
desires to access and use TSSG's proprietary software known as the Structured
Query Language Application Programming Interface Product Release 5.0 (the
"SQL/API Product"); and
WHEREAS, TSSG desires to provide such access to the Fund solely in
conjunction with the Fund's use of the TSSG System.
In consideration of their mutual promises contained herein, the Fund
and TSSG agree to modify the Remote Access and Related Services Agreement (the
"Remote Agreement") as follows:
1. TSSG grants to the Fund a non-transferable and non-exclusive license
to access and use TSSG's SQL/API Product, maintained on the TSSG
System at the TSSG Facility, solely to process data with respect to
the Fund's internal business. The Fund is authorized to use the
SQL/API product only in connection with the Fund's remote use of the
TSSG System. The Fund shall be prohibited from the further sale,
lease, transfer, license or sub-license, assignment or marketing in
any manner of the SQL/API Product, or any other proprietary software
used in conjunction with the TSSG System. The Fund shall also be
prohibited from the sale, lease, transfer, license, sub-license,
assignment, or marketing in any manner of any software product
developed in conjunction with the SQL/API Product.
2. It is acknowledged that the Fund acquires only the right to use the
SQL/API Product while the Remote Agreement is in effect between the
parties and such right and said license shall terminate upon
termination of the Remote Agreement. The Fund acknowledges that it
does not acquire any rights of ownership in the SQL/API Product. This
Agreement and the license granted pursuant hereto may not be assigned,
sublicensed or transferred.
<PAGE> 2
3. The Fund shall not have the right to use the SQL/API Product other
than in connection with the use of the TSSG System in compliance with
the Remote Agreement. The Fund may use the SQL/API Product to access
the TSSG System using only TSSG Proprietary Software or software
developed internally by the Fund.
4. EXCEPT AS EXPRESSLY PROVIDED FOR IN THIS AMENDMENT, TSSG MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, TO THE FUND OR ANY
OTHER PERSON, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES REGARDING
QUALITY, SUITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR OTHERWISE (IRRESPECTIVE OF ANY COURSE OF DEALING, CUSTOM OR
USAGE OF TRADE) OR ANY SERVICES PROVIDED UNDER THIS AGREEMENT.
5. Infringement Indemnity TSSG shall defend, at its expense, any action
brought against the Fund to the extent that is based on a claim that
the SQL/API Product infringes a United States copyright or duly issued
patent, or misappropriates the trade secrets of a third party. TSSG
shall indemnify and hold harmless the Fund against damages and costs
(including penalties, interest and reasonable attorney's fees) finally
awarded against the Fund directly attributable to such claim provided
that the Fund gives TSSG prompt written notice of such claim,
reasonable assistance and sole authority to defend or settle such
claim. If the SQL/API Product becomes, or in TSSG's opinion is likely
to become, the subject of such a claim then TSSG may, at its option:
(a) procure for the Fund the right to use the SQL/API Product free of
any liability for infringement or (b) replace or modify the SQL/API
Product to make it noninfringing. If TSSG is unable or determines
that it is commercially impracticable to undertake clause (a) or (b)
of this Section 5, the Fund will cease to use the directly affected
portion of the SQL/API Product, and if such SQL/API Product is in the
Fund's control, the Fund shall return or destroy it, and (c) TSSG will
grant to the Fund a pro-rata credit for the annual maintenance fee
that the Fund paid computed by dividing such fee by the total number
of months in the then current term of the license for the SQL/API
Product and multiplying the result by the number of months left in the
unexpired license term for the SQL/API Product.
TSSG shall have no obligation under this Section 5 if the alleged
infringement or violation is based upon the use of the SQL/API Product
in combination with other equipment or other software not furnished by
TSSG or if such claim arises from TSSG's compliance with the Fund's
designs, specifications or instructions or from the Fund's
modification of the SQL/API Product.
THIS SECTION STATES THE ENTIRE LIABILITY OF TSSG CONCERNING PATENT,
COPYRIGHT, TRADE SECRET OR OTHER PROPRIETARY RIGHTS INFRINGEMENT.
2
<PAGE> 3
6. Notwithstanding anything in this Amendment to the contrary, the Fund's
license to use the SQL/API Product will automatically terminate upon
termination of the Remote Agreement. This Amendment will terminate
automatically in the event of a breach of the sublicense.
7. TSSG shall take reasonable measures to enforce appropriate compliance
with the foregoing restrictions up to and including the institution
and diligent prosecution of proper legal proceedings.
8. The Fund will agree to compensate TSSG for all fees as referenced on
the attached Schedule #1 to this Amendment, and such other schedules
as may be agreed upon between the parties from time to time.
The Agreement as modified by this Amendment ("Modified Agreement") constitutes
the entire agreement between the parties with respect to the subject matter
hereof. The Modified Agreement supersedes all prior and contemporaneous
agreements between the parties in connection with the subject matter hereof.
No officer, employee, servant or other agent of either party is authorized to
make any representation, warranty or other promise not expressly contained
herein with respect to the subject matter hereof.
<PAGE> 4
The parties to this Amendment have caused it to be executed by their
duly authorized officers as of the date and year referenced above.
<TABLE>
<S> <C>
AIM EQUITY FUNDS, INC. AIM INVESTMENT SECURITIES FUNDS,
on behalf of the Class A and B Shares of on behalf of its AIM Limited Maturity
the Retail Classes of its AIM Charter Fund Treasury Shares
and AIM Weingarten Fund, and on behalf of the
Class A Shares of the Retail Classes
of AIM Constellation Fund and AIM By: /s/ ROBERT H. GRAHAM
Aggressive Growth Fund Portfolios -----------------------------------------------
Title: President
By: /s/ ROBERT H. GRAHAM ---------------------------------------------
-----------------------------------------------
Title: President AIM TAX-EXEMPT FUNDS, INC.,
--------------------------------------------- on behalf of its AIM Tax-Exempt Cash Fund and AIM
Tax-Exempt Bond Fund of Connecticut Portfolios and
the AIM Tax-Free Intermediate Shares of its
AIM FUNDS GROUP, Intermediate Portfolio
on behalf of the Class A and Class B
Shares of its AIM Balanced Fund, AIM
Intermediate Government Fund, AIM Growth By: /s/ ROBERT H. GRAHAM
Fund, AIM High Yield Fund, AIM Income -----------------------------------------------
Fund, AIM Municipal Bond Fund, AIM Global
Utilities Fund and AIM Value Fund Portfolios Title: President
and on behalf of the Class A, Class B and Class C ---------------------------------------------
Shares of its AIM Money Market Fund Portfolio
By: /s/ ROBERT H. GRAHAM THE SHAREHOLDER SERVICES
----------------------------------------------- GROUP, INC.
Title: President
--------------------------------------------- By: /s/ JACK P. KUTNER
------------------------------------------------
AIM INTERNATIONAL FUNDS, INC., Title: EVP - COO
of its AIM International Equity Fund, AIM Global ---------------------------------------------
Aggressive Growth Fund, AIM Global Growth Fund and
AIM Global Income Fund Portfolios
By: /s/ ROBERT H. GRAHAM
-----------------------------------------------
Title: President
---------------------------------------------
</TABLE>
4
<PAGE> 5
SCHEDULE #1 TO AMENDMENT NUMBER 1
SQL/API FEES
Listed below are TSSG's License Fees for the SQL/API Product
o One Time License Fee $30,000
o Annual Maintenance Fee(1) billed $15,000
quarterly in advance beginning the
first month of the Agreement
o On-Going Development Cost(2) $ 125 per hour
o Out of Pocket Expenses Per the existing
Remote Agreement
dated 12/23/94.
The Fund and TSSG intend to implement initially Release 5.0 of the SQL/API
Product on 150 Workstations. For additional workstations beyond the 150
licensed, the Fund shall pay TSSG the then-current license, usage and support
fees for each additional Workstation
__________________________________
(1) The increase in the maintenance fee after the first year will be
equal to the lesser of (i) the previous year's 12 month average increase in the
Consumer Price Index (CPI) or (ii) seven percent (7%) of the maintenance fee
charged by TSSG for the preceding twelve month period.
(2) Development work includes product installation, customization and
enhancements requested by the Fund.
<PAGE> 1
EXHIBIT 9(a)(4)
ADDENDUM NUMBER 2 TO THE REMOTE
ACCESS AND RELATED SERVICES AGREEMENT
This Amendment Number 2 effective October 12, 1995 is made to the
Remote Access and Related Services Agreement dated December 23, 1994 (the
"Remote Agreement") by and between each registered investment company listed on
the signature pages hereof, either for itself or, with respect to each such
company that is a series investment company, on behalf of each of the series or
class named on the signature pages hereof (the "Fund") and THE SHAREHOLDER
SERVICES GROUP, INC. ("TSSG"), a Massachusetts corporation with principal
offices at One Exchange Place, Boston, Massachusetts 02109.
WHEREAS, the Fund desires to incorporate any changes or deletions to
those registered investment companies listed on the signature page of the
Remote Agreement as set forth on the signature page hereof;
WHEREAS, the Fund desires to use an additional product to the TSSG
System known as the Price Rate Capture System (the "PRAT Application"); and
WHEREAS, TSSG desires to provide the PRAT Application to the Fund
solely in conjunction with the Fund's use of the TSSG System;
In consideration of their mutual promises contained herein, the Fund
and TSSG agree to modify the Remote Access and Related Services Agreement (the
"Remote Agreement") as follows:
1. Modify Schedule D to include the attached Exhibit 3 to Schedule D
The Agreement as modified by this Addendum ("Modified Agreement")
constitutes the entire agreement between the parties with respect to the
subject matter hereof. The Modified Agreement supersedes all prior and
contemporaneous agreements between the parties in connection with the subject
matter hereof. No officer, employee, servant or other agent of either party is
authorized to make any representation, warranty or other promise not expressly
contained herein with respect to the subject matter hereof.
The parties to this Addendum have caused it to be executed by their
duly authorized officers as of the date and year referenced above.
<TABLE>
<CAPTION>
<S> <C>
AIM EQUITY FUNDS, INC. AIM FUNDS GROUP,
on behalf of the Class A and B Shares of the Retail on behalf of the Class A and Class B Shares of its
Classes of its AIM Charter Fund and AIM AIM Balanced Fund, AIM Intermediate Government
Weingarten Fund, and on behalf of the Class A Fund, AIM Growth Fund, AIM High Yield Fund,
Shares of the Retail Classes of AIM Constellation AIM Income Fund, AIM Municipal Bond Fund,
Fund and AIM Aggressive Growth Fund Portfolios AIM Global Utilities Fund and AIM Value Fund
Portfolios and on behalf of the Class A, Class B and
BY:/s/ Robert H. Graham Class C Shares of its AIM Money Market Fund Portfolio
--------------------------
Title: President By:/s/ Robert H. Graham
----------------------- --------------------------
Title: President
----------------------
AIM INTERNATIONAL FUNDS, INC.
on behalf of the Class A and Class B Shares of its
AIM International Equity Fund, AIM Global
Aggressive Growth Fund, AIM Global Growth Fund
and AIM Global Income Fund Portfolios
By:/s/ Robert H. Graham
--------------------------
Title: President
-----------------------
</TABLE>
<PAGE> 2
AIM INVESTMENT SECURITIES FUNDS,
on behalf of its AIM Limited Maturity Treasury
Shares
By:/s/ Robert H. GRAHAM
--------------------------
Title: President
-----------------------
AIM TAX-EXEMPT FUNDS, INC.,
on behalf of its AIM Tax-Exempt Cash Fund and
AIM Tax-Exempt Bond Fund of Connecticut
Portfolios and the AIM Tax-Free Intermediate Shares
of its Intermediate Portfolio
By:/s/ Robert H. GRAHAM
--------------------------
Title: President
-----------------------
THE SHAREHOLDER SERVICES GROUP,
INC.
By:/s/ JACK PUTNER
--------------------------
Title: COO - EVP
-----------------------
<PAGE> 3
SCHEDULE D
OUT-OF-POCKET EXPENSES
The Fund shall reimburse TSSG monthly for applicable out-of-pocket expenses,
including, but not limited to the following items:
o Microfiche/microfilm production
o Magnetic media tapes and freight
o Telephone and telecommunication costs, including all lease,
maintenance and line costs
o NSCC transaction charges at $.15/per financial transaction
o Shipping, Certified and Overnight mail and insurance
o Year-End form production and mailings
o Terminals, communication lines, printers and other equipment and
any expenses incurred in connection with such terminals and lines
o Duplicating services, as pre-approved by the Fund
o Courier services
o Due Diligence Mailings
o Rendering fees as billed
o Overtime, as pre-approved by the Fund
o Temporary staff, as pre-approved by the Fund
o Travel and entertainment, as pre-approved by the Fund
o Record retention, retrieval and destruction costs, including,
but not limited to exit fees charged by third party record
keeping vendors
o Third party audit review
o All conversion costs: including System start up costs, but
excluding costs associated with conversations between TSSG
systems.
o Such other miscellaneous expenses reasonably incurred by TSSG in
performing its duties and responsibilities under this Agreement.
Such expenses incurred with consent of the Fund, not to be
unreasonably withheld.
o The costs associated with the Year-End Support Services set
forth on the attached Exhibit 1 of this Schedule D.
o The costs associated with the Broker Dealer Support Services set
forth on the attached Exhibit 2 of this Schedule D.
o The costs associated with the Price Rate Transmission Services
set forth on the attached Exhibit 3 of this Schedule D.
<PAGE> 4
EXHIBIT 3 TO SCHEDULE D
Price Rate Capture System Services (PRAT)
- - -----------------------------------------
The PRAT Application will accept prices and dividend rates from the Fund
Accounting Department of A I M Advisors, Inc. electronically and post them to
the TSSG Pricing System. The PRAT Application will run interconnected via
Local Area Network hardware and software.
The fees for the PRAT Service shall be as follows:
o One Time Set Up Fee $5,000.
o Annual Fee* $7,500.
*The annual fee provides system and personnel resources required to support a
maximum average of 50 transmissions per month. A charge of $30.00 per
transmission will be assessed for all transmissions incurred in excess of the
average 2 per day per month.
<PAGE> 1
EXHIBIT 9(a)(5)
AMENDMENT NUMBER 3 TO THE REMOTE
ACCESS AND RELATED SERVICES AGREEMENT
THIS AMENDMENT, dated as of February 1, 1997 is made to the Remote
Access and Related Services Agreement dated December 23, 1994, as amended (the
"Agreement") between each registered investment company listed on the attached
Exhibit 1 hereof, (the "Fund") and The Shareholder Services Group, Inc., now
known as First Data Investor Services Group, Inc. ("FDISG").
WITNESSETH
WHEREAS, the Fund and FDISG desire to further amend the Agreement to
reflect certain changes thereto.
NOW THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree that as of the date first referenced above, the
Agreement shall be amended as follows:
1. All references to "THE SHAREHOLDER SERVICES GROUP, INC." are hereby
deleted and replaced with "FIRST DATA INVESTOR SERVICES GROUP, INC." and all
references to "TSSG" are hereby deleted and replaced with "FDISG".
2. Delete the second sentence from Section 3(c) and replace with the
following:
"The Fund will pay to FDISG the amount so billed by Federal Funds Wire
within fifteen (15) business days after the Fund's receipt of the
invoice."
3. Section 4(b) of the Agreement is hereby deleted in its entirety and
replaced with the following new Section 4(b):
"FDISG agrees to provide to the Fund at its facilities located at 11
Greenway Plaza, Suite 100, Houston, Texas 77046, 12 Greenway Plaza,
Houston, Texas 77046, 301 Congress Street, Suite 1700, Austin, Texas
78701 and 12503 East Euclid Drive, Suite 250, Englewood, CO 80111 or
at such other locations as may be mutually agreed upon in writing by
FDISG and the Fund (the "Fund Facility") remote access to the use of
information processing capabilities of the FDISG System as it may be
modified from time to time by FDISG."
4. Section 12 of the Agreement is hereby amended by adding the following
new Sections 12(c), through 12(i):
"(c) FDISG shall retain title to and ownership of the FDISG System,
including any and all data bases, computer programs, screen
formats, report formats, interactive design techniques,
derivative works, inventions, discoveries, patentable or
copyrightable matters, concepts, expertise, patents,
copyrights, trade secrets, and
<PAGE> 2
other related legal rights utilized in connection with the
services provided by FDISG to the Fund hereunder other than
shareholder account and transaction information which shall
remain the exclusive property of the Fund.
(d) FDISG hereby grants to the Fund and the Fund accepts a limited
license to the FDISG System for the sole and limited purpose
of having FDISG provide the services contemplated hereunder
and nothing contained in this Agreement shall be construed or
interpreted otherwise and subject to Section 15 such license
shall immediately terminate with the termination of this
Agreement.
(e) The transmission of account inquiry and transaction
information, including but not limited to maintenances,
exchanges, purchases and redemptions, shall be limited to
direct entry to the FDISG System by means of on-line mainframe
terminal entry or PC emulation of such mainframe terminal
entry and any other non-conforming method of transmission of
information to the FDISG System is strictly prohibited without
the prior written consent of FDISG.
(f) FDISG warrants that the FDISG System shall include, at no
additional cost to the Fund, design and performance
capabilities so that prior to, during, and after the calendar
year 2000, the FDISG System will not malfunction, produce
invalid or incorrect results, or abnormally cease to function
due to the year 2000 date change. In connection with the
foregoing, FDISG agrees to provide the Fund with periodic
quarterly updates with respect to FDISG compliance with this
provision.
(g) Other than CPU Authorization Passwords, FDISG represents and
warrants to the Fund the software products provided by FDISG
hereunder (the "Products") do not contain any "back door" or
concealed access devices, any block or protection feature
which prevents the Fund from making additional copies of such
Products as permitted by this Agreement or any "self-help"
code, "Unauthorized Code", "software locks" or any other
similar devices which, upon the occurrence of a certain date
or event, the passage of a certain amount of time, or taking
of any action (or failure to take action) by or on behalf of
FDISG, will cause such Products or any software or system with
such Products are used to be destroyed, erased, damaged, or
otherwise made inoperable. "Unauthorized Code" shall mean any
virus, Trojan horse, worm, or other software routines designed
to permit unauthorized access: to disable, or otherwise harm
software, hardware, or data; or to perform any other such
actions.
(h) Provided the Fund gives FDISG reasonable written notice,
reasonable assistance, including assistance from the Fund's
employees, agents, affiliates and to the extent possible
independent contractors (collectively, "FUND'S AGENTS"), and
sole authority to defend or settle the action, then FDISG
shall do the following ("INFRINGEMENT INDEMNIFICATION"): (a)
defend or settle, at its expense, any action brought against
the Fund or the Fund's Agents to the extent the action is
based on a claim that the Fund's use of the FDISG System
infringes a duly issued United
<PAGE> 3
States' patent or copyright or violates a third party's
proprietary trade secrets or other similar intellectual
property rights ("INFRINGEMENT"); and (b) pay damages and
costs finally awarded against the Fund or the Fund's Agents
directly attributable to such claim. FDISG shall have no
Infringement Indemnification obligation if the alleged
Infringement is based upon the Fund's use of the FDISG System
with equipment or software not furnished or approved by FDISG
or if such claim arises from FDISG's compliance with the Fund's
designs, or from the Fund's modifications of the Software.
The Infringement Indemnification states FDISG's entire
liability for Infringement and shall be the Fund's sole and
exclusive remedy for such claims.
(i) Within sixty (60) days after the execution of this Amendment,
FDISG and the Fund shall enter into an escrow agreement
relating to the source code for (i) the FDISG proprietary
software used in connection with the FDISG System (as defined
in Section 1 of the Agreement: (ii) the "Software" (as that
term is defined in Schedule G), including the Third Party
Software set forth in Sections 2.1.1 and 2.1.2 of Exhibit 1 of
Schedule G; and (iii) the "FDISG Software" as that term is
defined in Schedule H (collectively, the "Source Code")
substantially in the form attached as Exhibit 2 of this
Amendment Number 3 ("Exhibit 2"). Promptly after signing the
escrow agreement, FDISG shall forward the agreement to the
escrow agent with a copy of the Source Code to be deposited
into escrow. FDISG agrees to update the Source Code held by
the escrow agent on a quarterly basis. The Fund shall be
responsible and pay for all fees of the escrow agent. The
Source Code may be released to the Fund only if (i) FDISG
ceases to do business, makes an assignment for the benefit of
creditors, becomes insolvent (as revealed by its books and
records or otherwise), is generally unable to pay its debts as
such debts become due, or commences, or has commenced against
it a case under any chapter of state or federal bankruptcy
laws; and FDISG fails to cure any such event within sixty (60)
days after receiving notice from the Fund; and (ii) the Fund
has paid all amounts due to FDISG under this Agreement. Upon
receipt of the Source Code from the escrow agent, the Fund
shall a have license to use the Software solely as set forth
herein for the remaining current term of the Agreement subject
to Section 15, which use shall be expanded to include the
right to modify the software solely in connection with support,
maintenance and operation of the software and not for any
other purpose or person."
5. Sections 14(a) and (b) of the Agreement are hereby deleted from the
Agreement and replaced with the following new Sections 14(a) and (b):
(a) This Agreement which became effective as of December 23, 1994
is hereby extended effective February 1, 1997 and shall
continue through January 31, 2000 (the "Initial Term"). Upon
the expiration of the Initial Term, this Agreement shall
automatically renew for successive terms of one (1) year
("Renewal Terms") each, unless the Fund or FDISG provides
written notice to the other of its intent not to
<PAGE> 4
renew. Such notice must be received not less than one-hundred
and eighty (180) days prior to the expiration of the Initial
Term or the then current Renewal Term.
(b) Notwithstanding the foregoing Section 14(a), in the event the
Fund provides notice of its intent to terminate as set forth in
Section 14(a), the Fund may extend the term of the Agreement
for up to an additional one-hundred and eighty (180) days (the
"Extension Period") by providing FDISG with written notice of
its intent to do so. Such notice must be received no later
than one-hundred and eighty (180) days prior to the expiration
of the Initial Term. During the Extension Period, the Fund may
terminate this Agreement at any time on thirty (30) days
written notice.
6. Section 15 is hereby amended by adding the following sentence to the
end of the paragraph:
"FDISG agrees to provide reasonable, supervised system access until
the Fund's conversion to another provider is complete".
7. Section 23(a) is hereby amended by deleting the information regarding
notices and inserting the following
To: The AIM Family of Funds
c/o A I M Fund Services, Inc.
Eleven Greenway Plaza, Suite 100
Houston, Texas 77046
Attention: John Caldwell, President
with copy to:
Fund Legal Counsel at same address
Attention: Carol F. Relihan, Senior Vice President &
General Counsel
To: First Data Investor Services Group, Inc.
4400 Computer Drive
Westborough, MA 02109
Attention: President
with copy to : General Counsel (same address)
8. Section 23 is hereby amended by adding the following new sub-section
(k):
"(k) Notwithstanding the indemnity provided by the Fund in Section
8(g), FDISG agrees to use commercially reasonable efforts to
maintain a Disaster Recovery Plan, at no cost to the Fund,
designed to minimize the impact of any unforeseen business
interruption or outage that renders the FDISG System or FDISG
Facility inoperable, a summary of which is attached hereto as
Schedule I."
<PAGE> 5
9. Schedule C is hereby deleted in its entirety and replaced with the
attached revised Schedule C.
10. Exhibit 1 and Exhibit 2 of Schedule D are hereby deleted in their
entirety.
11. Schedule F is hereby deleted in its entirety and replaced with the
attached revised Schedule F.
12. Addendum Number 2 to the Agreement is hereby deleted in its entirety
and the new revised Schedule D - Out of Pocket Expenses as referenced in
Section 3(b) is hereby added to the Agreement.
13. In addition to the foregoing, FDISG shall provide the Fund with a
software license to FDISG's proprietary IMPRESS Plus software and system in
accordance with the terms of and as more fully described in IMPRESS Plus
Software and Support Terms annexed hereto as Schedule G and incorporated
herein.
14. In addition to the foregoing, FDISG shall provide the Fund with a
software license to FDISG's proprietary Accounting Control Environment +
("ACE +") software in accordance with the terms of and as more fully described
in the ACE + Software and Support Terms annexed hereto as Schedule H and
incorporated herein.
The Agreement, as previously amended and as amended by this Amendment,
("Modified Agreement") constitutes the entire agreement between the parties
with respect to the subject matter hereof. The Modified Agreement supersedes all
prior and contemporaneous agreements between the parties in connection with the
subject matter hereof. No officer, employee, servant or other agent of either
party is authorized to make any representation, warranty, or other promises not
expressly contained herein with respect to the subject matter hereof.
<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their duly authorized officers, as of the day and year first
above written.
On behalf of the Funds and respective Portfolios and Classes set forth in
Exhibit 1 attached hereto as may be amended from time to time.
By: /s/ ROBERT H. GRAHAM
-------------------------------------
Title: President
----------------------------------
FIRST DATA INVESTOR SERVICES GROUP, INC.
By: /s/ GERALD G. KOKOS
-------------------------------------
Title: Executive Vice President
----------------------------------
<PAGE> 7
EXHIBIT 1
LIST OF FUNDS
<TABLE>
<S> <C>
AIM EQUITY FUNDS, INC.
Portfolios: Classes:
AIM Blue Chip Fund Class A and B Shares
AIM Capital Development Fund Class A and B Shares
AIM Charter Fund Class A and B Shares
AIM Weingarten Fund Class A and B Shares
AIM Aggressive Growth Fund Class A Shares
AIM Constellation Fund Class A Shares
AIM FUNDS GROUP
Portfolios: Classes:
AIM Balanced Fund Class A and Class B Shares
AIM Global Utilities Fund Class A and Class B Shares
AIM Growth Fund Class A and Class B Shares
AIM High Yield Fund Class A and Class B Shares
AIM Income Fund Class A and Class B Shares
AIM Intermediate Government Fund Class A and Class B Shares
AIM Municipal Bond Fund Class A and Class B Shares
AIM Value Fund Class A and Class B Shares
AIM Money Market Fund Class A, Class B, and
AIM Cash Reserve Shares
AIM INTERNATIONAL FUNDS, INC.
Portfolios: Classes:
AIM International Equity Fund Class A and Class B Shares
AIM Global Aggressive Growth Fund Class A and Class B Shares
AIM Global Growth Fund Class A and Class B Shares
AIM Global Income Fund Class A and Class B Shares
AIM INVESTMENT SECURITIES FUNDS
Portfolios: Classes:
Limited Maturity Treasury Portfolio AIM Limited Maturity Treasury Shares
AIM TAX-EXEMPT FUNDS, INC.
Portfolios: Classes:
AIM Tax-Exempt Cash Fund n/a
AIM Tax-Exempt Bond Fund of Connecticut n/a
Intermediate Portfolio AIM Tax-Free Intermediate Shares
</TABLE>
<PAGE> 8
EXHIBIT 2
PREFERRED REGISTRATION
TECHNOLOGY ESCROW AGREEMENT
Account Number __________
Recitals
This Preferred Registration Technology Escrow Agreement including any
Exhibits ("Agreement") is effective this ______ day of _____ 1997, by and among
Data Securities International, Inc. ("DSI"), a Delaware corporation, First Data
Investor Services Group, Inc. ("Depositor"), and each registered investment
company listed on the attached Schedule A hereof ("Preferred Registrant").
WHEREAS, Depositor has entered into a certain Remote Access and
Related Services Agreement dated December 23, 1994, as amended by Amendment
Number 3 dated as of February 1, 1997 (the "Remote Agreement") with the
Preferred Registrant which pursuant thereto certain proprietary software, as
described in Section 12(i) of the Remote Agreement, in object-code form and
other materials of Depositor have been licensed to Preferred Registrant (the
"Software");
WHEREAS, Depositor and Preferred Registrant desire the Agreement to be
supplementary to said contract pursuant to 11 United States Code Section
365(n);
WHEREAS, availability of or access to the source code and other
proprietary data related to the Software is critical to Preferred Registrant in
the conduct of its business;
WHEREAS, Depositor has deposited or will deposit with DSI such source
code and other proprietary data to provide for retention, administration and
controlled access for Preferred Registration under conditions specified herein;
NOW THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in consideration of the promises, mutual
covenants and conditions contained herein, the parties hereto agree as follows:
1. Deposit Account. Following the delivery of the executed Agreement, DSI
shall open a deposit account ("Deposit Account") for Depositor. The
opening of the Deposit Account means that DSI shall establish an account
ledger in the name of Depositor, assign a deposit account number
("Deposit Account Number"), calendar renewal notices to be sent to
Depositor as provided in Section 30, and request the initial deposit
("Initial Deposit") from Depositor. Depositor has an obligation to make
the Initial Deposit. In the event that Depositor has not made the
Initial Deposit within sixty (60) days of the execution of this
1
<PAGE> 9
Agreement, DSI shall request the initial Deposit from Depositor and
notify Preferred Registrant that such Initial Deposit has not been
received.
2. Preferred Registration Account. Following the execution and delivery of
the Agreement, DSI shall open a registration account ("Registration
Account") for Preferred Registrant. The opening of the Registration
Account means that DSI shall establish under the Deposit Account an
account ledger with a unique registration number ("Registration Number")
in the name of Preferred Registrant, calendar renewal notices to be sent
to Preferred Registrant as provided in Section 30, and request the
Initial Deposit from Depositor. DSI shall notify Preferred Registrant
upon receipt of Initial Deposit.
3. Term of Agreement. The Agreement will commence on the effective date
and continue through January 31, 2000, unless terminated earlier as
provided in the Agreement. The Agreement may be extended for one (1)
year terms.
4. Exhibit A, Notices and Communications. Notices and invoices to
Depositor, Preferred Registrant or DSI should be sent to the parties at
the addresses identified in the Exhibit A.
Documents, payment of fees, deposits of material, and any written
communication should be sent to the DSI offices as identified in the
Exhibit A.
Depositor and Preferred Registrant agree to each name their respective
designated contact ("Designated Contact") to receive notices from DSI
and to act on their behalf in the performance of their obligations as
set forth in the Agreement. Depositor and Preferred Registrant agree to
notify DSI immediately in the event of a change of their Designated
Contact in the manner stipulated in Exhibit A.
5. Exhibit B and Deposit Material. Depositor will submit proprietary data
and related material ("Deposit Material") to DSI for retention and
administration in the Deposit Account.
The Deposit Material will be submitted together with a completed
document called a "Description of Deposit Material", hereinafter
referred to as Exhibit B. Each Exhibit B should be signed by Depositor
prior to submission to DSI and will be signed by DSI upon completion of
the Deposit Material inspection.
Depositor represents and warrants that it lawfully possesses all Deposit
Material, can transfer Deposit Material to DSI and has the authority to
store Deposit Material in accordance with the terms of the Agreement.
6. Deposit Material Inspection. Upon receipt of an Exhibit B and Deposit
Material, DSI will be responsible only for reasonably matching the
labeling of the materials to the item descriptions listed on the Exhibit
B and validating the count of the materials to the quantity listed on
the Exhibit B. DSI will not be responsible for any other claims made by
2
<PAGE> 10
the Depositor on the Exhibit B. Acceptance will occur when DSI concludes
that the Deposit Material Inspection is complete. Upon acceptance DSI
will sign the Exhibit B and assign it the next Exhibit B number. DSI
shall issue a copy of the Exhibit B to Depositor and Preferred
Registrant within ten (10) days of acceptance.
7. Initial Deposit. The Initial Deposit will consist of all material
initially supplied by Depositor to DSI.
8. Deposit Changes. Depositor may desire or may be obligated to update the
Deposit Account with supplemental or replacement Deposit Material of
technology releases.
Supplemental Deposit ("Supplemental") is Deposit Material which is to be
added to the Deposit Account.
Replacement Deposit ("Replacement") is Deposit Material which will
replace existing Deposit Material as identified by any one or more
Exhibit B(s) in the Deposit Account. Replaced Deposit Material will be
destroyed or returned to Depositor.
9. Deposit. The existing deposit ("Deposit") means all Exhibit B(s) and
their associated Deposit Material currently in DSI's possession.
Destroyed or returned Deposit Material is not part of the Deposit;
however, DSI shall keep records of the destruction or return of Deposit
Material.
10. Replacement Option. Within ten (10) days of receipt of Replacement from
Depositor, DSI will send a letter to Preferred Registrant stating that
Depositor requests to replace existing Deposit Material, and DSI will
include a copy of the new Exhibit B(s) listing the new Deposit Material.
Preferred Registrant has twenty (20) days from the mailing of such
letter by DSI to instruct DSI to retain the existing Deposit Material
held by DSI, and if so instructed, DSI will change the Replacement to a
Supplemental. Conversion to Supplemental may cause an additional
storage unit fee as specified by DSI's Fee and Services Schedule.
If Preferred Registrant does not instruct DSI to retain the existing
Deposit Material, DSI shall permit such Deposit Material to be replaced
with the Replacement. Within ten (10) days of acceptance of the
Replacement by DSI, DSI shall issue a copy of the executed Exhibit B(s)
to Depositor and Preferred Registrant. DSI will either destroy or
return to Depositor all Deposit Material replaced by the Replacement.
11. Storage Unit. DSI will store the Deposit in defined units of space,
called storage units. The cost of the first storage unit will be
included in the annual Deposit Account fee.
12. Deposit Obligations of Confidentiality. DSI agrees to establish a locked
receptacle in which it shall place the Deposit and shall put the
receptacle under the administration of
3
<PAGE> 11
one or more of its officers, selected by DSI, whose identity shall be
available to Depositor at all times. DSI shall exercise a
professional level of care in carrying out the terms of the Agreement.
DSI acknowledges Depositor's assertion that the Deposit shall contain
proprietary data and that DSI has an obligation to preserve and
protect the confidentiality of the Deposit.
Except as provided for in the Agreement, DSI agrees that it shall not
divulge, disclose, make available to third parties, or make any use
whatsoever of the Deposit.
13. Audit Rights. DSI agrees to keep records of the activities undertaken
and materials prepared pursuant to the Agreement. DSI may issue to
Depositor and Preferred Registrant an annual report profiling the
Deposit Account. Such annual report will identify the Depositor,
Preferred Registrant, the current Designated Contacts, selected
special services, and the Exhibit B history, which includes Deposit
Material acceptance and destruction or return dates.
Upon reasonable notice, during normal business hours and during the
term of the Agreement, Depositor or Preferred Registrant will be
entitled to inspect the records of DSI pertaining to the Agreement,
and accompanied by an employee of DSI, inspect the physical status and
condition of the Deposit. The Deposit may not be changed during the
audit.
14. Renewal Period of Agreement. Upon payment of the initial fee or
renewal fee, the Agreement will be in full force and will have an
initial period of at least one (1) year unless otherwise specified.
The Agreement may be renewed for additional periods upon receipt by
DSI of the specified renewal fees prior to the last day of the period
("Expiration Date"). DSI may extend the period of the Agreement to
cover the processing of any outstanding instruction made during any
period of the Agreement.
Preferred Registrant has the right to pay renewal fees and other
related fees. In the event Preferred Registrant pays the renewal fees
and Depositor is of the opinion that any necessary condition for
renewal is not met, Depositor may so notify DSI and Preferred
Registrant in writing. The resulting dispute will be resolved
pursuant to the dispute resolution process defined in Section 25.
15. Expiration. If the Agreement is not renewed, or is otherwise
terminated, all duties and obligations of DSI to Depositor and
Preferred Registrant will terminate. If Depositor requests the return
of the Deposit, DSI shall return the Deposit to Depositor only after
any outstanding invoices and the Deposit return fee are paid. If the
fees are not received by the Expiration Date of the Agreement, DSI, at
its option, may destroy the Deposit.
16. Certification by Depositor. Depositor represents to Preferred
Registrant that:
4
<PAGE> 12
a. The Deposit delivered to DSI consists of the following: source
code deposited on computer magnetic media; all necessary and
available information, proprietary information, and technical
documentation which will enable a reasonably skilled
programmer of Preferred Registrant to create, maintain and/or
enhance the Software without the aid of Depositor or any other
person or reference to any other materials; maintenance tools
(test programs and program specifications); proprietary or
third party system utilities (compiler and assembler
descriptions); description of the system/program generation;
descriptions and locations of programs not owned by Depositor
but required for use and/or support; and names of key
developers for the technology on Depositor's staff.
b. The Deposit will be defined in the Exhibit B(s).
These representations shall be deemed to be made continuously
throughout the term of the Agreement.
17. Indemnification. Depositor and Preferred Registrant agree to defend
and indemnify DSI and hold DSI harmless from and against any and all
claims, actions and suits, whether in contract or in tort, and from
and against any and all liabilities, losses, damages, costs, charges,
penalties, counsel fees, and other expenses of any nature (including,
without limitation, settlement costs) incurred by DSI as a result of
performance of the Agreement except in the event of a judgment which
specifies that DSI acted with gross negligence or willful misconduct.
18. Filing for Release of Deposit by Preferred Registrant. Upon notice to
DSI by Preferred Registrant of the occurrence of a release condition
as defined in Section 21 and payment of the release request fee, DSI
shall notify Depositor by certified mail or commercial express mail
service with a copy of the notice from Preferred Registrant. If
Depositor provides contrary instruction within ten (1O) days of the
mailing of the notice to Depositor, DSI shall not deliver a copy of
the Deposit to Preferred Registrant.
19. Contrary Instruction. "Contrary Instruction" is the filing of an
instruction with DSI by Depositor stating that a Contrary Instruction
is in effect. Such Contrary Instruction means an officer of Depositor
warrants that a release condition has not occurred or has been cured.
DSI shall send a copy of the instruction by certified mail or
commercial express mail service to Preferred Registrant. DSI shall
notify both Depositor and Preferred Registrant that there is a dispute
to be resolved pursuant to Section 25. Upon receipt of Contrary
Instruction, DSI shall continue to store the Deposit pending Depositor
and Preferred Registrant joint instruction, resolution pursuant to
Section 25, order by a court of competent jurisdiction, or termination
by non-renewal of the Agreement.
20. Release of Deposit to Preferred Registrant. Pursuant to Section 18, if
DSI does not receive Contrary Instruction from Depositor, DSI is
authorized to release the Deposit, or if more than one Preferred
Registrant is registered to the Deposit, a copy of the Deposit,
5
<PAGE> 13
to the Preferred Registrant filing for release following receipt of
any fees due to DSI including Deposit copying and delivery fees.
21. Release Conditions of Deposit to Preferred Registrant.
Release conditions are:
a. Depositor ceases to do business, makes an assignment for the
benefit of creditors, becomes insolvent (as revealed by its
books and records or otherwise), is generally unable to pay
its debts as such debts become due, or commences, or has
commenced against it a case under any chapter of state or
federal bankruptcy laws; and Depositor fails to cure any such
event within 60 days after receiving notice from Preferred
Registrant; and
b. Preferred Registrant has paid all amounts due Depositor under
the Remote Agreement.
22. Grant of Use License. Subject to the terms and conditions of the
Agreement, Depositor hereby transfers and upon execution by DSI, DSI
hereby accepts a non-exclusive, nontransferable, royalty-free license
("Use License") for the unexpired term of the Remote Agreement subject
to Section 15 thereof which DSI will transfer to Preferred Registrant
upon controlled release of the Deposit as described in the Agreement.
The Use License will be solely for Preferred Registrant's internal
purposes in connection with support, maintenance, and operation of the
Software solely as set forth in the Remote Agreement and not for any
other purpose or person.
23. Use License Representation. Depositor represents and warrants to
Preferred Registrant and DSI that it has no knowledge of any
incumbrance or infringement of the Deposit, or that any claim has been
made that the Deposit infringes any patent, trade secret, copyright or
other proprietary right of any third party. Depositor warrants that it
has the full right, power, and ability to enter into and perform the
Agreement, to grant the foregoing Use License, and to permit the
Deposit to be placed with DSI.
24. Conditions Following Release. Following a release and subject to
payment to DSI of all outstanding fees, DSI shall transfer the Use
License to Preferred Registrant. Additionally Preferred Registrant
shall be required to maintain the confidentiality of the released
Deposit.
25. Disputes. In the event of a dispute, DSI shall so notify Depositor and
Preferred Registrant in writing. Upon agreement of the parties at the
time of a dispute, such dispute will be settled by arbitration in
accordance with the commercial rules of the American Arbitration
Association ("AAA"). Unless otherwise agreed to by Depositor and
Preferred Registrant, arbitration will take place in San Diego,
California, USA.
6
<PAGE> 14
26. Verification Rights. Depositor grants to Preferred Registrant the
option to verify the Deposit for accuracy, completeness and
sufficiency. Depositor agrees to permit DSI and at least one employee
of Preferred Registrant to be present at Depositor's facility to
verify, audit and inspect of the Deposit for the benefit of Preferred
Registrant. If DSI is present or is selected to perform the
verification, DSI will be paid according to DSI's then current
verification service hourly rates and any out of pocket expenses.
27. General. DSI may act in reliance upon any instruction, instrument, or
signature believed to be genuine and may assume that any employee
giving any written notice, request, advice or instruction in
connection with or relating to the Agreement has apparent authority
and has been duly authorized to do so. DSI may provide copies of the
Agreement or account history information to any employee of Depositor
or Preferred Registrant upon their request. For purposes of
termination or replacement, Deposit Material shall be returned only to
Depositor's Designated Contact, unless otherwise instructed by
Depositor's Designated Contact.
DSI is not responsible for failure to fulfill its obligations under the
Agreement due to causes beyond DSI's control.
The Agreement is to be governed by and construed in accordance with
the laws of the State of California.
The Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof, and supersedes all previous
communications, representations, understandings, and agreements,
either oral or written, between the parties. The Agreement may be
amended only in a writing signed by the parties.
If any provision of the Agreement is held by any court to be invalid
or unenforceable, that provision will be severed from the Agreement
and any remaining provisions will continue in full force.
28. Title to Media. Subject to the terms of the Agreement, title to the
media, upon which the proprietary data is written or stored, is and
shall be irrevocably vested in DSI. Notwithstanding the foregoing,
Depositor will retain ownership of the proprietary data contained on
the media including all copyright, trade secret, patent or other
intellectual property ownership rights subsisting in such proprietary
data.
29. Termination of Rights. The Use License as described above will
terminate in the event that the Agreement is terminated without the
Use License transferring to Preferred Registrant.
30. Fees. Fees are due upon receipt of signed contract, receipt of Deposit
Material, or when service is requested, whichever is earliest. If
invoiced fees are not paid within sixty (60) days of the date of the
invoice, DSI may terminate the Agreement. If the payment is not
7
<PAGE> 15
timely received by DSI, DSI shall have the right to accrue and collect
interest at the rate of one and one-half percent per month (18% per
annum) from the date of the invoice for all late payments.
Renewal fees will be due in full upon the receipt of invoice unless
otherwise specified by the invoice. In the event that renewal fees are
not received thirty (30) days prior to the Expiration Date, DSI shall
so notify Depositor and Preferred Registrant. If the renewal fees are
not received by the Expiration Date, DSI may terminate the Agreement
without further notice and without liability of DSI to Depositor or
Preferred Registrant.
DSI shall not be required to process any request for service unless
the payment for such request shall be made or provided for in a manner
satisfactory to DSI.
All service fees and renewal fees will be those specified in DSI's Fee
and Services Schedule in effect at the time of renewal or request for
service, except as otherwise agreed. For any increase in DSI's
standard fees, DSI shall notify Depositor and Preferred Registrant at
least ninety (90) days prior to the renewal of the Agreement. For any
service not listed on the Fee and Services Schedule, DSI shall provide
a quote prior to rendering such service.
Fees invoiced by DSI are the responsibility of the Preferred
Registrant and as such all invoices in accordance with this Agreement
are to be sent to the Preferred Registrant.
8
<PAGE> 16
On behalf of the Investment Companies
and respective Portfolios and Classes
set forth in Schedule A attached
hereto as may be amended from
time to time.
<TABLE>
<S> <C>
By: FIRST DATA INVESTOR SERVICES
--------------------------------- GROUP, INC.
Name:
------------------------------- By:
Title: ---------------------------------
------------------------------ Name:
-------------------------------
Title:
------------------------------
DATA SECURITIES
INTERNATIONAL, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
</TABLE>
<PAGE> 17
SCHEDULE A
LIST OF FUNDS
AIM EQUITY FUNDS, INC.
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
AIM Blue Chip Fund Class A and B Shares
AIM Capital Development Fund Class A and B Shares
AIM Charter Fund Class A and B Shares
AIM Weingarten Fund Class A and B Shares
AIM Aggressive Growth Fund Class A Shares
AIM Constellation Fund Class A Shares
</TABLE>
AIM FUNDS GROUP
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
AIM Balanced Fund Class A and Class B Shares
AIM Global Utilities Fund Class A and Class B Shares
AIM Growth Fund Class A and Class B Shares
AIM High Yield Fund Class A and Class B Shares
AIM Income Fund Class A and Class B Shares
AIM Intermediate Government Fund Class A and Class B Shares
AIM Municipal Bond Fund Class A and Class B Shares
AIM Value Fund Class A and Class B Shares
AIM Money Market Fund Class A, Class B and AIM Cash Reserve Shares
</TABLE>
AIM INTERNATIONAL FUNDS, INC.
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
AIM International Equity Fund Class A and Class B Shares
AIM Global Aggressive Growth Fund Class A and Class B Shares
AIM Global Growth Fund Class A and Class B Shares
AIM Global Income Fund Class A and Class B Shares
</TABLE>
AIM INVESTMENT SECURITIES FUNDS
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
Limited Maturity Treasury Portfolio AIM Limited Maturity Treasury Shares
</TABLE>
AIM TAX-EXEMPT FUNDS, INC.
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
AIM Tax-Exempt Cash Fund n/a
AIM Tax-Exempt Bond Fund of Connecticut n/a
Intermediate Portfolio AIM Tax-Free Intermediate Shares
</TABLE>
<PAGE> 18
EXHIBIT A
DESIGNATED CONTACT
Account Number: __________
<TABLE>
<S> <C>
NOTICES, DEPOSIT MATERIAL RETURNS AND INVOICES TO DEPOSITOR SHOULD BE ADDRESSED TO:
COMMUNICATION, INCLUDING DELINQUENCIES TO
DEPOSITOR SHOULD BE ADDRESSED TO: ------------------------------------------------
[Company Name/Address] ------------------------------------------------
- ----------------------------------------
------------------------------------------------
- ----------------------------------------
------------------------------------------------
- ----------------------------------------
Invoice Contact:
- ---------------------------------------- --------------------------------
Designated Contact:
---------------------
Telephone:
------------------------------
Facsimile:
------------------------------
State of Incorporation:
-----------------
NOTICES AND COMMUNICATION, INCLUDING INVOICES TO PREFERRED REGISTRANT SHOULD BE
DELINQUENCIES TO PREFERRED REGISTRANT ADDRESSED TO:
SHOULD BE ADDRESSED TO:
-----------------------------------------------
First Data Investor Services Group, Inc.
4400 Computer Drive -----------------------------------------------
Westborough, MA 01581
-----------------------------------------------
-----------------------------------------------
Designated Contact: Invoice Contact:
--------------------- -------------------------------
Telephone:
------------------------------
Facsimile:
------------------------------
Requests from Depositor or Preferred Registrant INVOICE INQUIRIES AND FEE REMITTANCES TO DSI
Contact should be given Contact or authorized SHOULD BE ADDRESSED TO:
employee Registrant.
DSI
CONTRACTS, DEPOSIT MATERIAL AND NOTICES TO DSI Attn: Accounts Receivable
SHOULD BE ADDRESSED TO:
DSI
Attn: Contract Administration
Telephone:
-------------------------------------
Facsimile:
-------------------------------------
Telephone:
------------------------------
Facsimile:
------------------------------
Date:
-----------------------------------
</TABLE>
<PAGE> 19
EXHIBIT B
DESCRIPTION OF DEPOSIT MATERIAL
Deposit Account Number:
--------------------------------------------------------
Depositor Company Name:
--------------------------------------------------------
DEPOSIT TYPE:
Initial Supplemental Replacement
- ------ ------ ------
If Replacement: Destroy Deposit Return Deposit
------ ------
ENVIRONMENT:
Host System CPU/OS:
------------------------------------------------------------
Version:
-----------------------------------------------------------------------
Backup:
------------------------------------------------------------------------
Source System CPU/OS:
----------------------------------------------------------
Version:
-----------------------------------------------------------------------
Compiler:
----------------------------------------------------------------------
Special Instructions:
----------------------------------------------------------
DEPOSIT MATERIAL:
Exhibit B Name: Version:
----------------- ------------------------------------
<TABLE>
<CAPTION>
Item Label Description Media Quantity
<S> <C> <C>
</TABLE>
<TABLE>
<S> <C>
For Depositor, I certify that the above For DSI, I received the above described
described Deposit Material was sent to DSI: Deposit Material subject to the terms on
the reverse side of this Exhibit:
By: By:
--------------------------------------- ---------------------------------------
Print Name: Print Name:
------------------------------- -------------------------------
Date: Date of Acceptance:
------------------------------------- -----------------------
ISE: EXHIBIT B#:
--------- ---------------
</TABLE>
<PAGE> 20
SCHEDULE C
FEE SCHEDULE
I. SHAREHOLDER ACCOUNT FEES. The Fund shall pay the following fees:
("Shareholder Account Fees"):
For the period beginning on the date of this Agreement, and continuing through
January 31, 2000, the Fund shall pay FDISG an annualized fee for shareholder
accounts open during any monthly period ("Open Account Fee") as follows:
<TABLE>
<CAPTION>
Account Volume Fee
<S> <C>
1-1.5 million $3.60/shareholder account
Exceeding 1.5 million $2.25/shareholder account
</TABLE>
The Fund also shall pay FDISG an annualized fee of $1.80 per shareholder
account that is closed during any monthly period ("Closed Account Fee") (The
Open Account Fees and Closed Account Fees hereafter collectively referred to as
"Shareholder Account Fees"). The Shareholder Account Fees shall be billed by
FDISG monthly in arrears on a prorated basis of 1/12 of the annualized fee for
all such accounts.
FDISG will provide a credit to the Shareholder Account Fees of one million
dollars in the years 1998 and 1999. The credit shall be applied as a reduction
of $83,333.33 on each monthly fee bill in 1998 and 1999.
In addition, on January 1 of the years 1998, 1999, and 2000 the Shareholder
Account fees may be increased by FDISG in an amount equal to the lesser of (i)
the cumulative percentage increase in the Consumer Price Index for all Urban
Consumers (CPI-U) U.S. City Average, All Items (unadjusted - (1982-84 + 100),
published by the U.S. Department of Labor, or (ii) seven percent (7%) of the
Shareholder Account Fees charged by FDISG to the Fund for the preceding twelve
(12) month period.
In return for the Shareholder Account Fees, FDISG agrees to provide the
following to the Fund:
o Remote Access to FDISG's FSR System
o License for 512 IMPRESS Plus software installations valued at 2.5
million dollars. Includes six weeks of technical and user training
(train-the-trainer).
o License for up to 10 copies of FDISG's ACE+ (Automate Control
Environment) software as further defined in Schedule H
o Dedicated Programming Support equivalent to I Systems Manager, 4
Programmers, and 2 Business Systems Analysts
o Implementation of a Separate FSR processing cycle by September 15,
1997, as more fully described in the attached Exhibit 3 of this
Schedule C.
o Implementation of the core TA system functionality identified in
Exhibit 1 of this Schedule C.
<PAGE> 21
o Implementation of IWT functionality as identified in Exhibit 2 of this
Schedule C
o Continued use of FDISG's Price/Rate Transmission (PRAT) application.
The PRAT Application will accept prices and dividend rates from the
Fund Accounting Department of the Fund electronically and post them to
the FDISG Pricing System. The PRAT application will run interconnected
via Local Area Network hardware and software.
II. DEDICATED PROGRAMMING SUPPORT
FDISG and the Fund will jointly determine the level of dedicated system
resources required to meet the Fund's enhancement priorities. FDISG agrees to
use reasonable efforts to make dedicated programming support available for all
projects required by the Fund. The amount of the resources required and the
projects to be worked on shall be determined jointly based upon joint periodic
review of project requirements; however, the Fund will decide the priorities
which will be assigned to each project and will determine what projects the
dedicated resources are to work on. All enhancements, improvements,
modifications or new features added to the FDISG System shall be, and shall
remain, the confidential, exclusive property of, and proprietary to, FDISG. The
parties agree to use best efforts to ensure that all enhancements to FDISG's
System, whether made by the Dedicated Team or otherwise, shall be made in a
manner that will not adversely effect the operational efficiency or
functionality of the FDISG System. Request for software changes may be
initiated by those representatives of the Fund identified in Exhibit 4 of this
Schedule C. The Fund will use its best efforts to notify FDISG in writing of
requests for software changes within 72 hours of an initial verbal request.
FDISG reserves the right to stop work on a request for which written
specifications have not been received.
a. SUPPORT PROVIDED TO THE FUND PERFORMED IN GROUPS OTHER
THAN THE DEDICATED PROGRAMMING TEAM
1. Coding to correct deficiencies in the system, unless such
deficiencies are included in item (II)(b)(9) below in which
event the Fund will be charged for such services. A system
deficiency is defined as a system process which does not
operate according to the design of the computer application or
system specifications. To correct system deficiencies, FDISG
will, at its own expense, expend whatever resources are
necessary to analyze the deficiency and apply an appropriate
remedy, in the form of corrected application code as
expeditiously as possible. An alternate process, in the form
of a functional work around, may be a suitable substitute for
the actual system fix, if the level of effort to develop the
system fix is deemed to be impractical or the elapsed time to
develop and apply the fix extends beyond the reasonable time
needed. For deficiencies identified by the Fund, the use of a
functional work around as an alternate process shall be
mutually agreed upon by the parties.
FDISG will evaluate all reported referrals, to validate
deficiency status or reclassify as a system enhancement, based
on the above definition.
2. Simple Maintenance determined to be core processing.
<PAGE> 22
3. FDISG generated (i.e., internal) requests to extend system
functionality and ensure industry competitiveness.
4. Enhancements required to comply with regulatory changes;
provided, however, FDISG will make such changes to the extent
that they are technically and commercially practical and are
within the scope of the software functions, capabilities and
database. FDISG agrees to use good faith in determining
whether such changes are technically and commercially
reasonable and agrees to negotiate with the Fund in good faith
to resolve any such issues.
b. EXAMPLES OF ACTIVITY TO BE PROVIDED TO THE FUND WHICH WILL
BE PERFORMED BY THE DEDICATED PROGRAMMING TEAM:
1. Customized form output (i.e., statements, confirmation
statements, commission statements).
2. Customized reports.
3. Addition of new features (enhancements) requested by the Fund.
4. Addition of existing features not used by the Fund.
5. Addition of new funds to the fund group.
6. Customized year-end processing.
7. Conversions from other systems to FSR subsequent to initial
funds being live.
8. Clean-up/Recovery project resulting from Fund error or causes
beyond the reasonable control of either party.
9. System "fixes" - coding to correct errors attributable to
code developed and currently maintained by the dedicated
teams.
10. Customization of existing functions specific to the Fund
11. Program documentation as requested by the Fund.
Software Exclusivity. The Fund may choose to have exclusive use of
enhancement software developed by its dedicated programming staff. Such
exclusivity would extend for a period of nine (9) months from the date
the enhancement is placed into the production libraries. Software
exclusivity would be waived if the Fund accepts either of the
following conditions:
a) If prior to implementation, FDISG or other FDISG clients agree
to share in the expense of the enhancements.
b) At any time during the 9 months following implementation,
FDISG or other FDISG clients agree to share the expense for
the enhancements.
Access and Capability. The Funds' dedicated programmers will have
access and capability to update any part of the System. However,
depending on the skill set of the programmers, as well as the scope of
the requested enhancement, it may be in the best interest of both the
Fund and FDISG to utilize non-dedicated programmers to address
<PAGE> 23
certain enhancements. In addition, because many programs are shared by
multiple clients, some enhancements may require approval from those
clients. These enhancements should be handled on an item by item
basis.
III. ADDITIONAL FEES
a. If the Fund chooses to use resources in addition to the
Dedicated Programming Team to accomplish work as outlined in
Section II.b, the following rates will apply:
<TABLE>
<CAPTION>
Annual Hourly
------ ------
<S> <C> <C>
Programmer $100,000 $135/hr
Business Systems Analyst $ 90,000 $100/hr
Acceptance Tester $ 85,000 $ 90/hr
</TABLE>
These rates apply to development and customization on all
software covered under this agreement (i.e. core TA system,
IMPRESS Plus, ACE+).
b. IMPRESS Plus Maintenance and Support Fees - The Fund will be
billed a monthly fee of $64,000 (fee based on $1500 per
workstation per year for 512 workstation license). Billing to
commence on the earlier of a) first production usage of
IMPRESS Plus software or b) August 1, 1997. Maintenance and
Support Fees include:
o All third party software maintenance charges from
software licensed in Exhibit 1 of Schedule G
o Full IMPRESS Plus applications support (bug fixes,
application assistance, etc.)
o Remote Dial-in IMPRESS Plus application support (if
needed)
o Subsequent interim and major releases for all
licensed IMPRESS Plus products
o 7x24 Help Desk Support for IMPRESS Plus applications
o Full support through First Data for third party
applications licensed in Exhibit 1 of Schedule G
o Participation in IMPRESS Plus User Group
c. IMPRESS Plus Installation Fees - Billable to the Fund at
$135/hr. (Estimate for 512 IMPRESS Plus workstations is 1100
hours). Installation includes:
o IMPRESS Plus application installation
o IMPRESS Plus third party software installation
o Network Design Assistance
o Hardware Configuration Assistance
o Workflow analysis
<PAGE> 24
o Project Management
o Post Installation Support
d. On each anniversary date of this Agreement, FDISG may adjust
the hourly and annual rates to reflect salary increases
and/or to maintain competitive rates in attracting qualified
personnel. Such annual increase will not exceed seven percent
(7%).
e. IMPRESS Plus Maintenance and Support and EMPRESS Plus
Installation Fees do not include the following:
o Hardware
o Network and Server Software not listed in Exhibit 1
of Schedule G
o Customization or application integration
o Support for IMPRESS Plus applications customized or
built by the Fund (see Section 3 of Exhibit 3 of
Schedule G)
o Installation, Integration and On-going Support of
hardware, network, and software components not
included in Schedule G
o Travel Expenses for install and support staff for
on-site visits (billed separately per Schedule D)
o Application Source Code
f. IMPRESS Plus Maintenance and Support and IMPRESS Plus
Installation Fees for Separate Test or Training System.
Maintenance and Support Fees - The Fund will be billed a
monthly fee of $2,666.66 (based on $1000 per workstation per
year with a minimum 32 workstation license). Billing to
commence on first production usage of IMPRESS Plus software in
the Training or Test environment. Maintenance and Support
includes items listed in Section III.b above.
Installation Fees - Billable to the Fund at $135/hr. (Estimate
for 32 IMPRESS Plus workstations is 200 hours). Installation
includes items listed in Section III.c above.
<PAGE> 25
g. Fees for IMPRESS Plus workstations in excess of 512:
<TABLE>
<CAPTION>
o Number of workstations ordered One-time License Fee
<S> <C>
32 $1300/workstation
64 $1000/workstation
128 waived
256 waived
</TABLE>
o Maintenance and Support - $1500 per workstation per
year; billable on first production usage of IMPRESS
Plus software; includes items listed in Section III.b
above
o Installation Fees - Billable to the Fund at $135/hr;
includes items listed in Section III.c above
The Fund agrees to pay a minimum of 18 months Maintenance and
Support for each workstation in excess of 512.
<PAGE> 26
Exhibit 1 of Schedule C
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRTY REFERRAL DESCRIPTION APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC'97
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LOI SYSTEMMATIC Specs
1 26610 DEFAULT/RECALCULATION PROBLEM Received
- ------------------------------------------------------------------------------------------------------------------------------------
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
*Recalc does not include all
purchases applied to the LOI.*
Dealer comm credit not posted in
recalc.* No adjustment code to
adjust underwriter. * Trades
outside LOI period included in
recalc.* No ability to turn off
systematic recalc.
====================================================================================================================================
====================================================================================================================================
PRODUCE CHECKS ON NT2 ACCOUNTS Specs
2 19164 WITH DIRECT REDEMPTIONS Received
- ------------------------------------------------------------------------------------------------------------------------------------
XXXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
Checks should be produced for
direct reds on NT2 accounts.
Transactions post to history, yet
no checks are produced. Update
DRDM0750 to allow.
====================================================================================================================================
====================================================================================================================================
3 25276 WIRE ORDER PROCESSING PROBLEM Specs
Received
- ------------------------------------------------------------------------------------------------------------------------------------
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
Wire order cancel/replacements
(OPR/OPC) do not update master
controls if not double Qc'd. If not
double Qc'd both trades appear
as new purchase orders.
====================================================================================================================================
====================================================================================================================================
Specs
4 24262 CERTIFICATE REPORT MISSING DATA Received
- ------------------------------------------------------------------------------------------------------------------------------------
XXXXXXXXXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
PFSR135D-R12 does not include
the work of several days in 1996.
Unable to reconcile certificate
issues without adhocs to identify
missing data.
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 27
Exhibit 1 of Schedule C
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRTY REFERRAL DESCRIPTION APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC'97
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NSCC REPORT PNSC802D - Specs
INCORRECT COMMISSIONS ON Received
5 26768 SPLIT REPS
- ------------------------------------------------------------------------------------------------------------------------------------
XXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
This report overestimates the
commission paid to split reps.
NSCC regulation requires
settlement by this report,
resulting in overpayments.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
NSCC REJECT REPORT PNSCSPSD- Specs
R01 - MULTI PAGE REJECT RECEIVED
6 26769 DELETIONS AND TRUNCATIONS
- ------------------------------------------------------------------------------------------------------------------------------------
XXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
NSCC rejects for a dealer that
run for more than one page are
dropping accounts, resulting in
inconsistancies from one page to
the next. Also truncation pro-
blems with Settlement Value,
Commission Amount and Fund Owes
Dealer amount.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
ONLINE EDIT PREVENTING USE OF Specs
7 26772 CDSC EXEMPT OPTION 3. Received
- ------------------------------------------------------------------------------------------------------------------------------------
XXXXXXXXXXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
Exempt option 3 grosses up
CDSC on SWiPs, ensuring
consistent dollar amount
swips. For funds allowing
CDSC-free SWIPs, edit pre-
venting a shareholder
redeeming an amount
greater than 12% annually
from having a SWIP with a set
dollar amount.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 28
Exhibit 1 of Schedule C
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRTY REFERRAL DESCRIPTION APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC'97
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LOIMNT DELETING Specs
BROKER CLIENT Received
8 23849 NUMBER
- ------------------------------------------------------------------------------------------------------------------------------------
XXXXXXXXXXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
Systematic completion
of an LOI removes the
Broker Client Number
form the account in
error. Absence of the
BRCN causes problems
for the dealer.
Maintenance journals
are reviewed to
identify these accounts
and re-add the BRCN.
====================================================================================================================================
====================================================================================================================================
NET INDICATOR NOT Specs
CARRYING TO QC SCREEN Received
9 26155 AND NO MISMATCH WARNING
- ------------------------------------------------------------------------------------------------------------------------------------
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
When entering a wire
order redemption as a
"net" amount trade, the
net indicator is not
carried forward in the
QC process, and does not
provide a mismatch
warning. The trade then
processes as "gross",
the default.
====================================================================================================================================
====================================================================================================================================
ASSIGNMENT OF CLOSED Specs
11 26770 ACCOUNTS ON QA RECORD Received
- ------------------------------------------------------------------------------------------------------------------------------------
XXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
If a QA record is
manually created and
the master account is
not designated, FSR
assigns the first
account entered. If
this account is
closed, a consolidated
statement will not
print. Results in
additional phone calls
andduplicate statement
requests.
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 29
Exhibit 1 of Schedule C
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRTY REFERRAL DESCRIPTION APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC'97
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REASSIGNMENT OF MASTER ACCOUNT Specs
12 26771 NUMBER Received
- ------------------------------------------------------------------------------------------------------------------------------------
XXXXXXXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
When a master account closes
AIM would like the master
account status to be reassigned
systematically to an open account
within the QA cluster. Currently
this is a time consuming manual
process.
====================================================================================================================================
====================================================================================================================================
Specs
13 26611 DIVIDEND CONTROL REPORT PROBLEMS Received
- ------------------------------------------------------------------------------------------------------------------------------------
XXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
The Dividend and Capital Gain
reports do not match the
summary reports.
====================================================================================================================================
====================================================================================================================================
DUPLICATE STATEMENTS BY DBR NOT Specs
14 26612 AVAILABLE Received
- ------------------------------------------------------------------------------------------------------------------------------------
XXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
AFS would like the ability to
request duplicate statements by
dealer, dealer/branch,
dealer/branch/rep. Current
functionality is by fund/account.
====================================================================================================================================
====================================================================================================================================
PAC'S NOT RUNNING ON CAPITAL Specs
16 26154 DEVELOPMENT ACCOUNTS Received
- ------------------------------------------------------------------------------------------------------------------------------------
XXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
Accounts opened via merger
subscription with converted PAC
information, when the PAC is
turned on, do not run. Deletion
and reestablishment of the PAC
data does not resolve the issue.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 30
Exhibit 1 of Schedule C
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRTY REFERRAL DESCRIPTION APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC'97
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FUNDSERV REDEMPTION SHOWS
INCORRECT SHARE AMOUNT ON Specs
17 25763 HISTORY Received
- ------------------------------------------------------------------------------------------------------------------------------------
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
Several examples of FundSERV
reds where the less than the
full amount of shares appear
redeemed in the line of
history, but the account is
left with a zero balance. The
correct amount is paid through
the NSCC. Control balancing
problems result.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 31
EXHIBIT 2 OF SCHEDULE C
IWT FUNCTIONALITY
<TABLE>
<CAPTION>
- ---------------------------- ----------------------------
NEW ACCOUNT FINANCIALS
- ---------------------------- ----------------------------
<S> <C>
CASHIERING REPORT
- ---------------------------- ----------------------------
ACCOUNT OPTIONS EXCEPTION WAIVER
- ---------------------------- ----------------------------
AUTO EXCHANGE ENHANCED QC
- ---------------------------- ----------------------------
BANK ADDRESS
- ---------------------------- ----------------------------
AIP FINANCIAL QC
- ---------------------------- ----------------------------
BANK WIRE IMBALANCE REPORT
- ---------------------------- ----------------------------
BENEFICIARY INTERNAL ASSET MOVE
- ---------------------------- ----------------------------
CHECKWRITING EXCHANGE
- ---------------------------- ----------------------------
DIVIDENDS/CAPGAIN TRANSFER
- ---------------------------- ----------------------------
SWP PURCHASES
- ---------------------------- ----------------------------
TELEPHONE RED REDEMPTIONS
- ---------------------------- ----------------------------
- ---------------------------- ----------------------------
ACCOUNT SEARCH
- ---------------------------- ----------------------------
ACCOUNT SETUP
- ---------------------------- ----------------------------
- ---------------------------- ----------------------------
DEALER
- ---------------------------- ----------------------------
DEALER OFFICE REP LIST
- ---------------------------- ----------------------------
DEALER ALPHA SEARCH
- ---------------------------- ----------------------------
- ---------------------------- ----------------------------
FINANCIAL INQUIRY
- ---------------------------- ----------------------------
- ---------------------------- ----------------------------
GROUP MASTER ADD
- ---------------------------- ----------------------------
LOI/ROA
- ---------------------------- ----------------------------
ACCOUNT LINK/UNLINK
- ---------------------------- ----------------------------
IWT ACCOUNT LIST
- ---------------------------- ----------------------------
PROCESSED ITEM LIST
- ---------------------------- ----------------------------
</TABLE>
<PAGE> 32
EXHIBIT 3 OF SCHEDULE C
AIM SEPARATE CYCLE OVERVIEW
This project removes AIM from all FSR regions, files, jobstreams, control
cards, etc. and establishes them with their own. It will allow AIM to have more
control over their processing and removes any unexpected complications caused
by dependency on the activities of other management companies.
VOLUME
o 1700+ Jobstreams (JCL, Procs, and Control Cards) to evaluate
o Approximately 70% of these will qualify for processing
(create new AIM and modify FSR)
o * Files to convert
o * GDGs
o * additional Tapes/Cartridges
o * additional DASD required
o * additional Tape Mounts
* These figures are currently being researched.
AFFECTED AREAS/DEPARTMENTS
o AIM Client Services - John Corey
o Atest - Kathy McNeil, Steve Carlson
o BOSS Application - Tom Farnsworth (B)
o Capacity Planning - Ron Larue
o Corporate Actions - Joe Viens
o DASD - John Dryer, Janet Rose (B)
o Database Administration (DBA) for On-line - Steve Powers (B)
o DCX - Linda Messore, Ann Stadtherr
o ESG - Connie Ciulla, Arthur Roy
o Express Delivery - Don Morgan
o FSR - Tom Woislow, Bill VonHandorf, Bill Quigley, Bob Reilly,
Ray Bennison
o NSCC - Carl Damelio
o Print Mail - Helene Grunes (B)
o Tape Operations - Don Chappell
o SCE - Ed Oelerich, Ellen Rhode
o Tax/CBA - Ed Boyle
o Transmissions - Frank Pitzi
Because of the large volume of work to be done and the number of departments
involved we are developing a "phased in" development and implementation
approach. This will cause the least impact to both our client and our own
internal departments. It will require tight project management and dedicated
point people both from AIM and our own departments. Each phase will migrate up
through test, acceptance and production.
<PAGE> 33
PHASE 1 - START-UP FILES
The foundation of this approach is to create six basic files with an AIM
high-level qualifier on a daily basis from the FSR system which can be used by
jobs which read them but not update them (see Phase 2). They would be deleted
at the beginning of the next day's cycle and recreated by the FSR cycle. These
files are:
P03AIM.PRIV.MASTER.DATE
P03AIM.PRIV.BATCH.DATE
P03AIM.PRIV.MASTER.FUND
P03AIM.PRIV.BATCH.FUND
P03AIM.PRIV.TRANS.ACCEPT1
P03AIM.PRIV.TRANS.DIVIDEND
The first four files would be copied from FSR files to AIM files in a new
temporary AIM job which would run daily.
The last two files, trans.accept1 and trans.dividend, currently exist with
different names in FSR. Job PFSR13DD (FSR/FED WIRE) now creates
P03FSR.TEMP.XMITOUT.ACCEPT1.AIM which contains all accept records for AIM. Job
PFSR13ED (FSR/FED WIRE) now creates P03FSR.TEMP.XMITOUT.DIV.AIM which contains
all dividend records for AIM. These files are input to AIM transmission jobs
(PFSRXCGD and PFSRXCLD) and the FSR/POST BACKUPS job (PFSR71HD).
We would rename P03FSR.PRIV.TRANS.ACCEPT1 and P03FSR.PRIV.TRANS.DIVIDEND to
P03AIM.PRIV.TRANS.ACCEPT1 and P03AIM.PRIV.TRANS.DIVIDEND in jobs PFSR13DD and
PFSR13ED. We would rename the transmission jobs to PAIMxxxx modify them
replacing FSR references with AIM, set up the appropriate schedule and move
them up the regions. We would place an override in PFSR71HD which would now
reference the PO3AIM file for backup. Once tested and QA'd by us and AIM we
would replace the FSR transmission jobs with the new AIM jobs.
RESULT OF PHASE 1
We now have three production jobs running in the AIM region and we have set up
the 6 basic AIM files which will be the basis for Phase 2.
<PAGE> 34
PHASE 2 - REPORTS, TRANSMISSIONS, AND AIM-ONLY JOBS
This phase involves converting jobs which do not update any of the master files.
They may read them and create temporary files but updating will wait for phase
3. Phase 2 jobstreams will include mainly report and transmission jobs as well
as any AIM-only jobs. We will be adding new schedule entries (CA-7) for AIM and
modifying existing FSR schedules where needed paying special attention to
triggers, requirements and dependencies. We will add new Express Delivery
entries for AIM reports and delete the AIM entries from the FSR system.
The actual migration of reports and transmission files from the FSR cycle to
the AIM cycle will be on a specific schedule. As we introduce reports to the
AIM cycle they will be available in SAR from both FSR and AIM cycles for a week
to allow AIM to review them. They will then be turned off in SAR for FSR. We
will provide AIM with a report schedule each week to aid this process.
Transmission files will be tested using record counts and selective file
compares. AIM-only jobs will also parallel for a week where feasible.
An example of a Phase 2 job is PFSR143D (FSR/AUTOEX). This job reads the batch
fund file, the batch date file and the trans.accept1 file to produce reports.
All these files are available in the AIM region.
Phase 2 work to be done described in a programmer's template includes (but is
not limited to):
Copy and rename the JCL jobs.
Modify procs and/or control cards if necessary for the test/acpt/prod
regions.
Verify that JCL, procs and control cards follow our current standards.
Create high-level overrides for FSR read-only files.
Change Express Delivery for AIM output and set up the FSR RID entry to
be deleted in n days.
Schedule the new AIM jobs with the same requirements and dependencies
as the FSR jobs but using the appropriate high level qualifier. This
requires tight control on the status of all jobs.
Change the schedules of any jobs which are dependent upon the FSR job
to be dependent upon the new AIM job. Note: this will not be the case
with all AIM jobs.
Move it up the regions testing at appropriate points.
Review the output (First Data and AIM).
After a week inhibit AIM output from FSR jobs from going to SAR. Only
AIM output from AIM jobs will be available in SAR.
The key to the success of this phase is an aggressive implementation schedule
and active participation by AIM representatives in checking and validating the
output.
RESULT OF PHASE 2
We now have report-only jobs (not associated with the actual updating of
files), most of the transmission jobs and all AIM-only jobs which are not
associated with updating files in AIM production. All converted reports and
files have been signed off by AIM. These AIM activities are also being
processed in FSR. We have gone as far as possible without updating files.
<PAGE> 35
PHASE 3 - ANCILLARY FILES AND SYSTEMS
This phase includes updating ancillary files and their associated jobstreams.
Examples of this type may include Bluesky, history, cert or check files, etc.
These files are not mainstream and tend to be localized in how they are
updated. In order to qualify for Phase 3 the Management Company must be the
high order sort key field.
There are two approaches we will use depending upon the main file's on-line
considerations. The first approach involves converting the main file once along
with all associated jobs and the other involves splitting out AIM from FSR at
the start of the cycle, updating it in AIM jobs and merging it back in FSR at
the end. Either approach will involve multiple jobs per master file.
For example, The Bluesky File is only used by 3 jobs: PFSRS07D which creates
the batch file, PFSR190D which updates the file and does an AIM-only extract,
and PFSR194D which does reports. In this case, we would split the FSR Bluesky
File into AIM-only and all other. The FSR Bluesky subsystem would then be
cloned for AIM and the result would be two separate Bluesky subsystems. Online
would access the appropriate Bluesky file.
Other subsystems may be too routed in our core to fully separate out and would
be better served breaking out AIM at the beginning of its cycle, updating in
AIM-only jobs and remerging it at the end of the cycle. Any special jobs used
for splitting out files or merging them after update will have to be backed out
in Phase 4.
All activities described in Phase 2 apply here as well.
RESULT OF PHASE 3
We have now isolated and converted any subsystems not bound to core processing.
Most AIM reports and transmissions are being produced in the AIM region. We are
updating some master files and have done everything possible surrounding the
core without touching it. We are ready for Phase 4.
<PAGE> 36
PHASE 4 - THE CORE
This phase deals with updates to our core master files, our functional
processes, converting large volume files (ShareA and its splits, history, lots,
global, etc.) and includes all jobstreams that have not yet been converted.
Additionally, it includes backing out any special split or merge jobs as well
as special overrides introduced in earlier phases. This will be the largest
phase. On-line will now access all AIM-only files.
Many of the activities done in the previous phases will be performed here as
well. Because so many programs interact with the core modules there is no easy
way to break this activity up. As always we will need our AIM partners to help
in the QA activities for this hefty stage.
It is possible to combine Phases 3 and 4 if it were felt to be desirable.
However, it is our intention to have all peripheral completed before attacking
the core so there will be no unnecessary distractions. Additionally, for
development contention reasons, we would like to turn these modules over as
expeditiously as possible.
All AIM-related activities, programs, control cards, overrides, splits, merges,
etc. will be removed from all FSR jobs.
RESULT OF PHASE 4
All AIM processing is now contained in its own region and runs under its own
schedule. On-line accesses AIM-only files. FSR no longer has any AIM
processing relationship with the exception of any files which are to be merged
from both regions for transmission or system reasons.
<PAGE> 37
EXHIBIT 4 of SCHEDULE C
AUTHORIZED PERSONS REQUESTING SYSTEM MODIFICATIONS
---------------------------------------------------
John Caldwell
President, A I M Fund Services, Inc.
---------------------------------------------------
Joseph Charpentier
Assistant Vice President, A I M Fund Services, Inc.
---------------------------------------------------
Tony D. Green
Senior Vice President, A I M Fund Services, Inc.
---------------------------------------------------
Jean Miller, Director of Applications
Information Technology Services
A I M Advisors, Inc.
<PAGE> 38
SCHEDULE D
OUT-OF-POCKET EXPENSES
The Fund shall reimburse FDISG monthly for applicable out-of-pocket expenses,
including, but not limited to the following items:
o Microfiche/microfilm production
o Magnetic media tapes and freight
o Telephone and telecommunication costs, including all lease,
maintenance and line costs
o NSCC transaction charges at $.15/per financial transaction,
$.10/per same day trade confirmations
o Shipping, Certified and Overnight mail and insurance
o Year-End form production and mailings
o Terminals, communication lines, printers and other equipment
and any expenses incurred in connection with such terminals
and lines
o Duplicating services, as pre-approved by the Fund
o Courier services
o Due Diligence Mailings
o Rendering fees as billed
o Overtime, as pre-approved by the Fund
o Temporary staff, as pre-approved by the Fund
o Travel and related expenses, as pre-approved by the Fund
o System training, as pre-approved by the Fund
o Record retention, retrieval and destruction costs, including,
but not limited to exit fees charged by third party record
keeping vendors
o Third party audit review
o All conversion costs: including System start up costs, but
excluding costs associated with conversions between FDISG
systems
o Such other miscellaneous expenses reasonably incurred by FDISG
in performing its duties and responsibilities under this
Agreement
<PAGE> 39
SCHEDULE F
PERFORMANCE STANDARDS
I STANDARDS FOR RESOLUTION OF SYSTEM DEFICIENCIES
"SYSTEM DEFICIENCY" - A system process which does not operate according to the
design of the computer application or system specifications, and is not a
result of any act or failure to act by the Fund.
1. FIRE CALL - A System Deficiency with at least one of the following
characteristics:
1. Potential or real financial exposure in excess of $100,000, or
2. Causes the Fund to be out of compliance with a major
regulatory requirement, or
3. Causes incorrect transaction processing and/or shareholder
confirmations with no reasonable manual workaround available
either at the Fund or in FDISG's systems
FDISG Response: Analysis and resolution within 36 hours or 2 nightly
processing cycles
2. CRITICAL DEFICIENCY - A System Deficiency with at least one of the
following characteristics:
o Potential or real financial exposure estimated from
$25,000-$100,000 or,
o Manual workaround requires substantial manual effort and
carries a high potential for error
FDISG Response: Impact Analysis within 3 business days of initial
notification; Determination of problem cause within 5 business days of
initial notification; Problem resolution within an average of 30
business days of initial notification
3. NON-CRITICAL DEFICIENCY - All other System Deficiencies
FDISG Response: Impact Analysis within 3 business days of initial
notification; Determination of problem cause within an average of 15
business days of initial notification; Problem resolution and target
dates to be determined on an item-by-item basis jointly by the Fund
and FDISG.
<PAGE> 40
II STANDARDS FOR ON-LINE SYSTEMS AVAILABILITY AND RESPONSE TIME
These standards shall apply on business days of the Funds.
o On-line systems availability between 7:00 a.m. and 7:00 p.m
Central Time ("CT") - 99% of hours available measured monthly.
o Average response time (7:00 a.m. to 7:00 p.m. CT) of 3 seconds
or less, measured end-to-end, in response to the system
employed by A I M Fund Services, Inc. as of September 1, 1994
- 99% measured monthly.
III STANDARDS FOR DELIVERY OF SYSTEM REPORTS
o CRITICAL REPORTS - The following report bundles in queue and
ready to begin transmission no later than 7:00 a.m. CT each
business day - a cumulative of two late bundles permitted per
month:
EFSR047H
EFSR601H
Changes to critical report bundles must be jointly approved by
an FDISG Client Service Officer and an authorized requestor of
the Fund as listed in Exhibit 4 of Schedule C.
o All other nightly report bundles in queue and ready to begin
transmission no later than 7:00 a.m. CT each business day -
95% measured monthly.
<PAGE> 41
IV STANDARDS FOR DELIVERY OF FILE TRANSMISSIONS
o CRITICAL FILES - The following jobs in queue and ready to
begin transmission no later than 4:30 CT each business day of
the Fund - a cumulative of two late files permitted per month:
<TABLE>
<CAPTION>
JOB NAME FREQUENCY APPLICATION
-------- --------- -----------
<S> <C> <C>
PFSRXCAD Daily Cap Stock File
PFSRXCYD Daily DISC Cap Stock File
PFSRXCTD Daily DISC ACH File
PFSRXCVD Daily DISC NSCC Green Sheets File
</TABLE>
o The following jobs in queue and ready to begin transmission no
later than 4:30 CT each business day of the Fund - 95%
measured monthly
<TABLE>
<CAPTION>
JOB NAME FREQUENCY APPLICATION
-------- --------- -----------
<S> <C> <C>
PFSRXCGD Daily Acceptance File
PFSRXCKD Daily Dealer File
PFSRXCHD Daily Order File
PFSRXCID Daily ShareA Master File
PFSRXCJD Daily Fund File
PFSRXCMD Daily Lot History File
PFSRXCND Daily Lot Maintenance File
PFSRXCLD Periodic. Dividend Activity
</TABLE>
The standards will not apply on business days with the
following activity: Processing of Year-end Dividend and
Capital Gain Activity, Annual Trustee Fee Payment; Year-end
File Initialization.
V STANDARDS FOR THE FUND
All inbound transmissions (i.e. SIAC, various third parties) and fund prices in
receipt by FDISG by 8:00 p.m. CT
VI RIGHT TO AUDIT
The Fund shall have the option, on an annual basis, to audit the reports used
to measure the standards listed in this Schedule F. Notice of an audit will be
given 14 days in advance, and the audit will not last more than one day.
<PAGE> 42
VII PENALTIES/INCENTIVES
FDISG agrees to achieve the performance levels specified in Schedule F,
Sections II, III, and IV, and semiannually (as of each June 30th and December
31st) to adjust the monthly Account Fee Invoice to reflect any
penalties/incentives as outlined below. Penalties for a given business day will
be applied only if the Standards of the Fund in Section V are achieved.
ON-LINE SYSTEMS AVAILABILITY - MONTHLY
For each one-tenth of 1% under 99%, the monthly Account Fees will be reduced by
the same percentage. The monthly maximum percentage penalty reduction will be
3% of the monthly bill. For each one-tenth of 1% in excess of 99% up to a
maximum of 1%, the monthly Account Fees will be increased by the same
percentage.
ON-LINE SYSTEMS AVAILABILITY - DAILY
If systems availability on any given business day is less than 80%, the monthly
account Fees will be reduced by the percentage of systems availability below
80% for that day times 1/30 of the monthly Account Fees.
REPORT AVAILABILITY - CRITICAL REPORTS
Monthly Account Fees will be reduced by $250.00 for each late instance greater
than the allowable error rate, up to a maximum of $500.00 per day. For each
month within the allowable error rate, monthly Account Fees shall be increased
by $1,000.
FILE TRANSMISSIONS - CRITICAL FILES
Monthly Account Fees will be reduced by $500.00 for each late instance greater
than the allowable error rate with a maximum penalty of $10,000 per month. For
each month within the allowable error rate, monthly Account Fees shall be
increased by $1,000.
The Performance Standards and related penalties set forth in this Schedule F
shall not apply in the event of any occurrence defined in Section 8(g) of the
Agreement.
<PAGE> 43
SCHEDULE G
IMPRESS PLUS SOFTWARE AND SUPPORT TERMS
ARTICLE 1 - SYSTEM, SUPPORT AND IMPLEMENTATION
1.1 Software and Support. FDISG shall provide or has previously provided
to the Fund and the Fund shall acquire from FDISG the right to use the computer
software programs set forth in Exhibit 1 of this Schedule G (the "Software"),
for the fees indicated in Schedule C of Amendment Number 3 to the Agreement.
Software includes related user manuals and reference guides (collectively,
"DOCUMENTATION"). One copy of the Documentation shall be provided to the Fund
at no additional cost. FDISG shall provide only the machine readable object
version of the Software and not source code. Additional terms and conditions
concerning the Software are set forth in Exhibits 1 of Schedule G ("EXHIBIT 1")
and Exhibit 1.1 of Schedule G ("EXHIBIT 1.1") (collectively, the "SOFTWARE
EXHIBITS"). Subject to the terms and conditions set forth in this Schedule G,
FDISG grants to the Fund and the Fund accepts from FDISG the non-exclusive,
non-transferable license to use the Software during the term of the Agreement
("LICENSE"). Some software components ("THIRD PARTY SOFTWARE") required to be
used with the Software were developed by a third party ("THIRD PARTY VENDOR").
Third Party Software is licensed to the Fund only pursuant to: (a) shrink
wrapped or other agreements between the Third Party Vendor and the Fund and (b)
the specifically indicated terms and conditions in this Schedule G. The
Software Exhibits shall indicate which Third Party Software the Fund is
required to obtain and license from FDISG and which Third Party Software the
Fund shall be solely responsible to obtain and license. As part of the
Software, FDISG shall provide the Fund with the interfaces set forth in Exhibit
1, between the Software and Third Party Software ("INTERFACES"). FDISG shall
provide the software support services ("SOFTWARE SUPPORT") so designated in
Exhibit 3 of Schedule G ("EXHIBIT 3"). Software Support shall include a
License to error corrections, minor enhancements and interim upgrades to the
Software which are made generally available to FDISG client's of the Software
under Software Support, but shall not include a License to substantial added
functionality, new interfaces, new architecture, new platforms or other major
software development efforts, as determined solely by FDISG.
1.2 Ownership. FDISG or its licensors shall retain tide to and ownership
of the Software, copies, derivative works, inventions, discoveries, patentable
or copyrightable matter, concepts, expertise, techniques, patents, copyrights,
trade secrets and other related legal rights ("PROPRIETARY INFORMATION"). FDISG
reserves all rights in the Proprietary Information not expressly granted to the
Fund in this Schedule G. Upon FDISG's reasonable request, the Fund shall inform
FDISG in writing of the quantity and location of any Software.
1.3 Equipment, System Implementation and Access. Fund is responsible for
acquiring, installing and maintaining the data processing and related equipment
("EQUIPMENT") set forth in Exhibit 2.1 of Schedule G with respect to production
equipment and Exhibit 2.2 of Schedule G with respect to Test/Training equipment
(collectively, ("EXHIBIT 2"). Additional terms and conditions concerning the
Equipment are set forth in Exhibit 2. The Equipment identified in Exhibit 2
represents the minimum equipment configuration required to properly operate the
Software. FDISG disclaims responsibility for the performance of the Software in
the event that the Fund utilizes equipment different than that which is set
forth in Exhibit 2. FDISG and the Fund shall (a) within a reasonable time after
the Effective Date, agree upon the tasks required to implement the Software,
Third Party Software and Equipment ("SYSTEM") and the party responsible and
time frames for each task ("SCOPE OF WORK"); (b) perform their respective
assigned tasks according to the Scope of Work; and (c) if not the party
assigned to a task, cooperate with the responsible party. To the extent the
Scope of Work is incomplete, FDISG shall follow its reasonable and customary
practices. Upon prior notice by FDISG to the Fund, the Fund shall give
reasonable access to the System to FDISG, FDISG's employees. affiliates,
representatives, agents, contractors, licensors and suppliers ("FDISG'S
AGENTS") who are providing services under the Agreement or auditing adherence
to the Agreement.
1.4 Use of Software. Fund may use the Software during the term of this
Agreement only on the Equipment and only to process the Fund's data for
internal business purposes (which shall not, for purposes of this Agreement,
include use by Fund to provide services to its customers on a service bureau
basis) and solely in connection with the Fund's use of the FDISG System and
only at the locations identified in the Agreement. If the Equipment is
inoperative due to malfunction, the license grant shall, upon written notice to
FDISG, be temporarily extended to authorize the Fund to use the Software on any
other equipment approved in writing by FDISG until the Equipment is returned to
operable condition. FDISG, in its reasonable discretion, may suspend any
Software Support while the Software is being used on such other Equipment. No
right is granted for use of the Software by any third party or by the Fund to
process for any third party, or for any other purpose whatsoever, except as
expressly provided in this paragraph. Except as otherwise specifically stated
herein, the Fund shall not modify, re-engineer, decompile or reverse engineer
the Software or otherwise attempt to obtain any source code without FDISG's
prior written consent.
<PAGE> 44
1.5 Software Installation and Acceptance. FDISG shall advise the Fund that
the Software as listed in Exhibit 1 is installed and functioning on the
Equipment ("Software Installation Date") so that implementation and training
activities can proceed. The Fund shall be deemed to have accepted the Software
sixty (60) days after Software Installation Date or sixty (60) days after the
Fund's first use of any Software component to process live production data
("SOFTWARE ACCEPTANCE DATE").
1.6 Copies of Software. The Fund may not copy the software except for
backup and archival purposes only, and the Fund shall include on all copies of
the Software all copyright and other proprietary notices or legends included on
the Software. The provisions of this Paragraph do not apply to Fund data files
in machine-readable form.
1.7 No-Export. The Software shall not be shipped or used by the Fund
outside the United States. The Fund shall comply with all applicable export and
re-export restrictions and regulations of the U.S. Department of Commerce or
other U.S. agency or authority. The Software shall not be transferred to a
prohibited country or otherwise in violation of any such restrictions or
regulations.
1.8 Termination. Terms and conditions of this Schedule G which require
their performance after the termination of the Agreement, including but not
limited to the License and Software use restrictions, limitations of liability,
indemnification, and confidentiality obligations, shall survive and be
enforceable despite the termination of the Agreement.
ARTICLE 2 - WARRANTIES AND REPRESENTATIONS
2.1 Software Warranties and Remedies. For the term of the Agreement, FDISG
warrants ("PERFORMANCE WARRANTY") that the Software shall perform on the
Equipment substantially in accordance with the Documentation and shall enable
the Funds to meet the requirements set forth in Section 240.17a-4 of the
Securities Exchange Act of 1934, except for Directly Obtained Third Party
Software as set forth in Section 2.2 below. The timely correction of errors
and deficiencies in the Software pursuant to Software Support shall be Fund's
sole and exclusive remedy for the Performance Warranty. FDISG warrants ("RIGHTS
WARRANTY") it has the right to license the Software in accordance with the
Agreement. Provided the Fund gives FDISG timely written notice, reasonable
assistance, including assistance from the Fund's employees, agents, independent
contractors and affiliates (collectively, "FUND'S AGENTS"), and sole authority
to defend or settle the action, then FDISG shall do the following
("INFRINGEMENT INDEMNIFICATION"): (a) defend or settle, at its expense, any
action brought against the Fund or the Fund's Agents to the extent the action is
based on a claim that the Software infringes a duly issued United States'
patent or copyright or violates a third party's proprietary trade secrets or
other similar intellectual property rights ("INFRINGEMENT"); and (b) pay
damages and costs finally awarded against the Fund or the Fund's Agents
directly attributable to such claim. FDISG shall have no Infringement
Indemnification obligation if the alleged Infringement is based upon the Fund's
use of the Software with equipment or software not furnished or approved by
FDISG or if such claim arises from FDISG's compliance with the Fund's designs,
or from the Fund's modifications of the Software. The Infringement
Indemnification states FDISG's entire liability for Infringement and shall be
the Fund's sole and exclusive remedy for the Rights Warranty.
2.2 Directly Obtained Third Party Software Warranties. All warranties for
the Directly Obtained Third Party Software identified Section 2.2 of Exhibit 1,
if any, are specifically set forth in the applicable agreements supplied by the
Third Party Vendors of such products.
2.3 Exclusion of Warranties. THE WARRANTIES SET FORTH IN PARAGRAPH 2.1
ABOVE AS TO THE SOFTWARE AND IN PARAGRAPH 2.2 ABOVE AS TO THIRD PARTY SOFTWARE
ARE IN LIEU OF ALL OTHER WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, ARISING
OUT OF OR RELATED TO THIS SCHEDULE G. FDISG SPECIFICALLY DISCLAIMS ALL OTHER
WARRANTIES, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY,
NONINFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE.
2.4 Fund Responsibility. The System is an information system only,
designed to assist the Fund and the Fund's Agents in performing their
professional activities and is not intended to replace the professional skill
and judgment of the Fund's Agents. Fund shall be solely responsible for: (a)
acts or omissions of the Fund's Agents in entering data into the System,
including its accuracy and adequacy; (b) checking the correctness and accuracy
of the System output and data; and (c) any use of or reliance upon the System
output by the Fund's Agents. Except for the Infringement Indemnification and as
limited by applicable law, the Fund shall indemnify, defend and hold FDISG and
FDISG's Agents harmless from any losses, costs, damages, and liabilities,
including without limitation, reasonable attorneys' fees and court costs,
relating to any claim by any third party arising from or related to the Fund's
and the Fund's Agents' use of the System or System output.
ARTICLE 3 - MISCELLANEOUS
<PAGE> 45
3.1 Confidentiality Obligations. Each party shall keep confidential any
information relating to the other party's business which is clearly designated
or described in writing to be confidential ("CONFIDENTIAL INFORMATION"). Each
party shall keep and instruct its employees and agents to keep such information
confidential by using at least the same care and discretion as used with that
party's own confidential information. Information shall not be subject to such
confidentiality obligations if it is: (a) in the public domain, (b) known to a
party prior to the time of disclosure by the other party, (c) lawfully and
rightfully disclosed to a party by a third party on a non-confidential basis,
(d) developed by a party without reference to Confidential Information or (e)
required to be disclosed by law. If either party, its employees or agents
breaches or threatens to breach the obligations relating to use of the
Confidential Information, the other party may obtain injunctive relief, in
addition to its other remedies, inadequate monetary damages and irreparable
harm being acknowledged.
3.2 Confidential and Privileged Information. The Proprietary Information,
other FDISG software and related information, and the Agreement are
Confidential Information of FDISG and FDISG's Agents. Absent FDISG's written
permission, Fund shall not duplicate FDISG's Confidential Information. Fund
accepts full responsibility for complying with all laws, rules and regulations
concerning use and disclosure of privileged data regarding any information
placed or stored in the System or output from the System.
<PAGE> 46
EXHIBIT 1 OF SCHEDULE G
SOFTWARE
1. FDISG Software.
1.1 FDISG Software includes the following IMPRESS Plus products which are
further described in Exhibit 1.1 ("Specifications"):
IMPRESS Plus Workflow/Image Release 5.3
IMPRESS Plus Intelligent Workstations (IWT) Release 5.3 for FSR
IMPRESS Plus Customer Service System Release 5.3
1.2 Interfaces. Except as agreed in writing, FDISG shall not be required
to modify the Software or the Interfaces to accommodate changes made by the
Fund's vendor to its portion of the interface. If the Fund's vendor needs
information about the Software, then the vendor must first execute a
nondisclosure agreement in form and content reasonably acceptable to FDISG.
FDISG shall not be liable for any delay or degradation to the Software or
Equipment attributable to the Fund's use of Interfaces.
1.3 Customization. The listed products are licensed for IMPRESS Plus use
and customization only. Use of these tools to develop or customize non-IMPRESS
Plus applications is not permitted without the express written authorization of
FDISG.
2. Third Party Software.
2.1 FDISG Provided Third Party Software. The following Third Party
Software is licensed to the Fund directly by FDISG subject to the terms of the
Agreement:
2.1.1 BancTec Software. The following Third Party Software is licensed
directly to the Fund by FDISG subject to the mandatory BancTec ("BancTec")
terms and conditions set forth in Attachment 1 of this Exhibit 1 of Schedule G
("Attachment 1"), attached and incorporated by reference. To the extent that
the terms of Attachment 1 conflict with or differ from the other terms and
conditions in the Agreement, the terms of Attachment 1 shall prevail with
respect to the following BancTec Software ("BancTec Software"):
Informix Multi-User with 512 maximum users
XDP Storage Manager Multi-User with 512 maximum users
FloWare Multi-User with 512 maximum users
Application Designer Single-User with 512 maximum users
2.1.2 Pegasystems Software. The following Third Party Software is licensed
directly to the Fund by FDISG subject to the mandatory Pegasystems
("Pegasystems") terms and conditions set forth in Attachment 2 of this Exhibit
1 of Schedule G ("Attachment 2"), attached and incorporated by reference. To
the extent that the terms of Attachment 2 conflict with or differ from the
other terms and conditions in the Agreement, the terms of Attachment 2 shall
prevail with respect to the following Pegasystems Software ("Pegasystems
Software"):
Product Name Version Function
PegaSHARES RES 6.2 Workflow Engine
PegaENVIRONMENT ENV 4.2 Operating Shell
PegaPRISM Prism 5.1 Image Viewer
PegaStorage Manager Stor 2.1 Image Librarian
PegaREACH Real.0 Desktop Graphical Interface
2.2 Directly Obtained Third Party Software. The following Third Party,
Software is separately licensed by the Third Party Vendor directly to the Fund
subject to the respective terms and conditions of any "shrink-wrapped" or
<PAGE> 47
other agreements between the Third Party Vendor and the Fund. The Third Party
Software in the Required Column must be obtained by the Fund. The Third Party
Software in the Optional column is helpful but not required unless the
indicated features are being used. The Fund accepts the provisions of such
agreements, including the warranty provisions, if any, and agrees to comply
with the terms set forth in such agreements:
<TABLE>
<CAPTION>
Required: Optional:
<S> <C>
- - Microsoft DOS 6.2 or higher - ALCOM LanFax Redirector V2.15gl or greater
- - Microsoft Windows 95 or NT 4.0 (required if using fax)
- - Microsoft Office 95 or better - HiJaak PRO 2.0 or greater for Windows
- - Microsoft NT Server 3.5 (required if using fax)
- - Microsoft NTSQL Database 4.x and client - Word for Windows 6.Oc or greater (required if
Licenses using fax)
- - Microsoft TCP/IP Stack - Quarterdeck QEMM 7.X or greater (required if
- - Novell NetWare 3.11 or greater using fax)
- - SNA Server 3.0 or higher - CGS Computer Associates, Inc. Scanlib software
- - UNIX for selected Image Server platform (required for Ricoh scanners)
- - UNIX ESQL/C Compiler for selected - Powersoft PowerViewer (required for adhoc
UNIX platform reports)
- - MDI Gateway for DB2 by - 3270 Windows emulation package
MicroDecisionware Inc., A Sybase client (usually Rumba for Windows by WaUData)
- - Sybase Open Client NetLibrary for the
selected TCP/IP stack
</TABLE>
<PAGE> 48
ATTACHMENT 1 OF EXHIBIT 1 OF SCHEDULE G
TERMS AND CONDITIONS
BANCTEC
1. Each BancTec Software Package listed in Exhibit 1 of Schedule G
("Program") which is identified as "Multi-User Program" is licensed for
installation on a single network server computer which is supplied by BancTec,
FDISG, or a third party, and which is electronically linked with one or more
workstations having access to the Program. If Section 2.1.1 of Exhibit 1 of
Schedule G ("Exhibit 1") designates a maximum number of users authorized to
simultaneously access the Multi-User Program, no access will be permitted in
excess of such maximum number. In all other cases, Multi-User Program is
authorized to be accessed by all workstations which are configured to
communicate with that network server computer.
2. Each Program listed in Exhibit 1 identified as "Single-User Software"
is licensed for installation and use on a single computer.
3. Each Program listed in Exhibit 1 identified as an "Unlimited User
Program" is licensed for use by Client after ordering a copy of the Program.
Once ordered, the Fund may make unlimited copies of such Programs at no
additional charge.
4. Each Program listed in Exhibit 1 identified as a "Device Program" is
licensed for use solely to facilitate the operation of the corresponding
equipment device. If a Device Program is used for more than one device, the
license must be upgraded in accordance with Exhibit 1.
5. Each Program listed in Exhibit 1 identified as a "Development-User
Program" is licensed for installation and use on a single computer for
development and testing purposes. The license for Development-User Programs
also includes a license for production use on a single computer.
6. Each Program listed in Exhibit 1 identified as a "Production-User
Program" consists of necessary runtime modules and associated link libraries
for inclusion with custom software applications. Production-User Programs are
not licensed for use in the development of custom software applications and may
be either Multi-User or Single-User Programs.
7. Only a nontransferable, nonexclusive, perpetual license to use the
Programs and related BancTec documentation for its own internal use (including,
without limitation, providing processing services to third parties in a service
bureau or facilities management environment) is granted to the Fund.
8. BancTec or its vendors retain all title to the Programs, and all
copies thereof, and no title to the Programs, or any intellectual property in
the Programs, is being transferred; provided, however, nothing contained herein
shall give BancTec or its vendors any right, title or interest in the Software.
9. The Programs shall not be copied, except as specifically authorized
under an Exhibit to this Agreement and except for backup or archival purposes.
All such copies shall contain all copyright and other proprietary notices or
legends of BancTec or its vendors contained in the Programs delivered under
this Agreement.
10. The Programs shall not be modified, reverse assembled or decompiled by
the Fund. No attempt shall be made by the Fund to derive source code from the
Programs.
11. The Programs will not be shipped or used by FDISG or the Fund to
Africa or the Middle East. All applicable export and re-export restrictions and
regulations of the U.S. Department of Commerce or other U.S. agency or
<PAGE> 49
authority shall be complied with. The Programs shall not be transferred to a
prohibited country or otherwise in violation of any such restrictions or
regulations.
12. Each Program is copyrighted and contains proprietary and confidential
trade secret information of BancTec and its vendors. Each sublicensee of the
Programs shall protect the confidentiality of the Programs with at least the
same standard of care used to protect the Fund's own similar confidential
information.
13. BancTec and its vendors are each a direct and intended beneficiary of
the sublicenses granted for the Programs and may enforce such sublicenses
directly against sublicenses of the Programs.
14. Neither BancTec nor its vendors shall be liable to the Fund for any
general, special, direct, indirect, consequential, incidental, or other damages
arising out of the sublicense of the Programs.
15. The license granted to the Fund of the Programs may be terminated,
either immediately or after a notice period not exceeding thirty (30) days,
upon violation by the Fund of any of the terms or conditions of the Agreement,
including but not limited to Attachment 1.
16. Upon termination of the license grant to the Fund to use the Program
or the Agreement, the Fund shall return all copies of the Programs to FDISG.
<PAGE> 50
ATTACHMENT 2 OF EXHIBIT 1 OF SCHEDULE G
PEGASYSTEMS TERMS AND CONDITIONS
In addition to the terms of the Agreement, the following terms shall apply with
respect to the Pegasystems Software:
1. The Fund is prohibited from assigning, timesharing, renting, or
hypothecating any of the Pegasystems Software, without prior written approval
of Pegasystems.
2. The Fund is prohibited from passing or transferring any right, title,
or interest to the Pegasystems Software to any third party.
3. The Fund is prohibit from publicizing or disseminating any results of
any benchmark or other testing of the Pegasystems Software.
4. To the fullest extent permitted by applicable law, (i) Pegasystems
shall have no liability to the Fund for damages and claims, whether direct,
indirect, incidental, consequential, or punitive, and all attorneys' fees and
costs, arising from the Fund's use of the Pegasystems Software, and (ii) the
Fund shall have no rights to assert claims for damages against Pegasystems,
including claims against Pegasystems as a third party beneficiary of this
agreement.
5. Pegasystems, Inc. is a third party beneficiary of this agreement to
the extent permitted by applicable law.
<PAGE> 51
IMPRESSive Technology, IMPRESSive Results
EXHIBIT 1.1 OF SCHEDULE G
SPECIFICATIONS
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
I. PRODUCT OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . Page 1
II. PRODUCT BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . Page 3
III. TECHNICAL OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . Page 5
IV. HIGH LEVEL OVERVIEW OF IMPRESS Plus FUNCTIONALITY . . . . . . . Page 6
A. Workflow Management
B. Image Processing
C. Intelligent Workstation Processing
D. Customer Service System
</TABLE>
This item is the property of First Data Investor Services Group (First Data) of
Boston, Massachusetts, and contains confidential and trade secret information.
This item may not be transferred from the custody or control of First Data
except as authorized by, and then only by way of loan for limited purposes. It
must be returned to First Data upon request and, in all events, upon completion
of the purpose of the loan. Neither this item nor the information it contains
may be used or disclosed to persons not having a need for such use or
disclosure consistent with the purpose of the loan, without the prior written
consent of First Data.
Copyright First Data Investor Services Group
1994, 1995, 1996
ALL RIGHTS RESERVED
This media contains unpublished, confidential, and proprietary information of
First Data Investor Services Group. No disclosure or use of any portion of
these materials may be made without the express written consent of First Data
Investor Services Group.
<PAGE> 52
IMPRESSive Technology, IMPRESSive Results
I. PRODUCT OVERVIEW
IMPRESS Plus is First Data's workstation product. Designed to be a
cost-effective customer service and workflow management solution, it
takes an integrated approach to transfer agent service and processing
applications. IMPRESS Plus uses an open, three-tiered, client/server
architecture that provides both the flexibility and scalability to
address client's customization and growth needs.
IMPRESS Plus's valuable benefits include:
o Extensive management tools and employee empowerment via
intelligent workstation technologies.
o A lower cost of processing delivery through workflow routing
and document imaging.
o Efficient customer service through reduced research time,
automated inquiry tracking and correspondence tracking.
o State-of-the-art three-tiered client/server architecture
backed by relational databases and open systems.
o Client configurable screens, dialogue scripts, and workflow
rules for those components which use the Pegaysystems
technology.
o Automated correspondence generation.
IMPRESS Plus consists of these major components:
1.) A SOPHISTICATED MANAGEMENT WORKFLOW TOOL that contributes to
streamlining the flow of information on an enterprise-wide
basis. Automated workflow processes are systematically created
and the user's process is automatically documented at the same
time. Product users can continuously examine and redesign
their current processes, managing them interactively, focusing
on improving organizational productivity and quality.
2.) AN IMAGE PROCESSING SYSTEM that has the ability to scan
incoming documents, store them digitally and automatically
route them to the appropriate processing department thereby
eliminating paper from the workflow. This system also allows
for long term storage of documents and document retrieval.
Users can modify workflow and business rules on site.
3.) AN INTELLIGENT WORKSTATION APPLICATION (IWT) that improves
data entry speed and service quality by using graphical user
interface tools that seamlessly connect the user's desktop to
First Data's transfer agent processing systems, office
automation tools, correspondence/service tracking and
policy/procedure access systems.
4.) A CUSTOMER SERVICE SYSTEM that automates and enhances the
correspondence and customer servicing areas in mutual fund
operations. Customer Service staff can log all activity, such
as phone calls, letters, transactions, etc., while interacting
with customers. The system enables the service representative
to perform transactions over the phone, create "electronic
forms" consisting of instructions for other processors, and
dynamically sends work items to other staff electronically.
The Customer Service System is designed to enhance the quality
and efficiency of the service provided to customers through
the use of state-of-the-art client/server technology.
<PAGE> 53
IMPRESSive Technology, IMPRESSive Results
II. PRODUCT BENEFITS
o Allows clients to process transactions and customer
correspondence quickly and efficiently.
o Allows clients to be at the leading edge of technology to
maintain competitiveness and to effectively deliver quality
service.
o IMPRESS Plus enables the organization to:
- enhance service responsiveness and quality
- streamline workflow and improve document control by
eliminating paper
- increase employee productivity and participation
- have access to real-time production statistics
- enhance organization cohesion and effectiveness
- reduce manual tasks
- increase accuracy by using intelligent rules-based
applications
- reduce processing costs
- Tie Customer Service Reps to sales
o The IMPRESS Plus workflow tools allow business/operational
workflows to be set up. Automated workflow processes are
created and the user's process is automatically documented at
the same time. Product users can continuously examine and
redesign their business processes and manage them
interactively, focusing on improving organizational
productivity and quality.
o IMPRESS Plus is a scaleable and flexible solution that allows
the user to choose an enterprise-wide or a departmental
solution. It allows the client to determine an implementation
strategy that meets their strategic plans and goals.
o The IMPRESS Plus product platform allows the user to build
upon and utilize future First Data services such as
information delivery of shareholder/investor data, sales and
marketing data and customer service processing.
o IMPRESS Plus is modular to support increasing volumes,
increasing numbers of users and future advances in component
technologies. This allows for functional as well as
enterprise-wide solution.
o The IMPRESS Plus product's UNIX and NT-based platform allows
for the flexibility and growth needed to market position and
grow in the '90s to meet the demands of the mutual fund
industry.
o IMPRESS Plus is developed to run in an open systems
environment, so that the application has the ability to
incorporate diverse hardware choices, such as servers,
scanners and printers.
Additional benefits that can be provided through customization of
certain products include:
o Ability for AIM Funds operations associates to customize
interfaces, rules, scripts, etc. based on predefined "levels"
of operators. Levels may range from entire organization right
down to the individual CSR.
o Creation of an Integrated Service Backbone within the AIM
organization designed to allow consistent processing of
service items, documents, correspondence, etc. regardless of
where they originated. (Internet, scan mail, fax, phone,
etc.)
o Optional ability to link VRU to the desktop via CTI and
related technologies for more efficiency and quality in
servicing.
<PAGE> 54
IMPRESSIVE TECHNOLOGY, IMPRESSIVE RESULTS
o Ability for AIM Funds operations associates to change workflow rules,
scripts, menus, screens, etc. associated with the front end servicing
applications as they see fit to effectively run their business efficiently
and with highest regard to quality.
o Ability for AIM Funds to introduce intelligent, 'point of contact'
scripting for service associates in the front end selling process.
Through the customized rules capability, AIM Funds can set up random
sales, campaigns, or promotions. In addition, IMPRESS Plus can be told
when to prompt CSR's that selected promotions apply to the customer at
hand based on data points in the customer's profile, recent activity, or
the like.
<PAGE> 55
IMPRESSIVE TECHNOLOGY, IMPRESSIVE RESULTS
III. TECHNICAL OVERVIEW
First Data's combined Customer Service, Workflow, Image and
Intelligent Workstation (IWT) technologies enable users to display the
digitized image of a shareholder form on the workstation along with
other service, data entry and office automation applications. This
allows a user to enter information directly from the image without
having to look away from the screen or handle paper. IMPRESS Plus
will have access to First Data's transfer agent processing system,
office automation tools, and correspondence tracking and
policy/procedure access systems. First Data has developed the
workflow and image capabilities of the system to meet the needs of the
financial industry.
The Customer Service and Intelligent Workstation applications improve
data entry speed and quality by using graphical user interface tools
and LAN/WAN topologies to seamlessly connect the users desktop to the
mainframe servers. These tools and technologies will significantly
off-load transactions and query processing from the mainframe by
putting these capabilities on the desktops and empowering the
end-user.
IMPRESS Plus is designed to run in an open systems environment. It has
the ability to incorporate various workstation platforms due to a
common set of access routines and open communication architecture.
IMPRESS Plus supports high-performance networking architectures
including Novell's SPX/IPX as well as the UNIX TCP/IP standard. SNA
connectivity is supported for LU6.2, 3270, and 5250 communications.
The application supports Microsoft Windows 3.11, Windows 95, and NT
client workstations, multiple UNIX server back-end platforms, and the
latest client/server database technologies offered by the INFORMIX and
Microsoft database systems.
IMPRESS Plus contains a state-of-the-art integration API (application
programming interface) that allows other applications, including
customer-specific applications, to be seamlessly integrated into
IMPRESS Plus.
The Customer Service and IWT applications have been designed with an
object-based architecture that allows one common application to
support First Data's multiple back-end transfer agent systems. They
are designed around First Data's newly defined and implemented
corporate data model. This model represents the future data source
for First Data's common transfer agent application. This object-based
architecture allows for a high level of client customization and
integration.
<PAGE> 56
IMPRESSIVE TECHNOLOGY, IMPRESSIVE RESULTS
IV. HIGH LEVEL OVERVIEW OF IMPRESS PLUS FUNCTIONALITY
WORKFLOW MANAGEMENT FUNCTIONALITY OVERVIEW
WORKFLOW DYNAMIC WORKFLOW DESIGN AND MONITORING
MANAGEMENT
IMPRESS Plus provides a set of client/server based tools that
allow designers and authorized system users to build workflow
rules to be implemented on the work floor. These rules can be
built and implemented, then changed as required by trained
administrators.
GENERIC WORKFLOW AVAILABLE FOR ALL TRANSACTIONS
IMPRESS Plus offers a generic wordflow that can be used for
any transaction type that is designated in an operation.
Liquidations, correspondence, new accounts, etc. are just some
examples of transactions that can be processed through this
generic workflow. Should the workflow need to be customized or
altered, it can be.
WORK FLOW MONITORING
IMPRESS Plus provides the following work flow monitoring
activities in a real time mode:
o Allow users with the proper security access to
monitor the status of workflow activities or entire
work flow maps
o Monitor work-in-process items via a graphical display
which produces bar graphs in a variety of
presentation formats
o Monitor multiple statistics simultaneously on a
graphical display.
PRIORITIZATION OF WORK
IMPRESS Plus allows the setting of a default priority of items
during workflow design, and, in addition, dynamically during
work in process. During work in process, an item's priority
is based on its transaction type, its default or subsequently
manually altered priority setting, as well as its age in the
activity queue.
<PAGE> 57
IMPRESSIVE TECHNOLOGY, IMPRESSIVE RESULTS
WORKFLOW MANUAL ROUTING OF ITEMS
MANAGEMENT
(CONTINUED) IMPRESS Plus allows items to be manually routed to
workflow map destinations, or, in some cases, to
specific end users by those users with authorization
to do so.
AUTOMATIC ROUTING OF WORK
IMPRESS Plus routes work items to the next
destination on a pre-defined set of workflow rules.
These rules can be overridden by the user when
necessary.
ITEM COPY ROUTING
IMPRESS Plus allows users to make "copies" of items
within the workflow and route them to other workflow
activities. This is commonly used when an individual
processing the work determines that an item must be
forwarded to another processing department or review
the steps because it is actually two or more
transactions.
ENHANCED QUALITY CONTROL
IMPRESS Plus allows for random or pre-determined QC,
statistical QC, or other more intelligent or
selective QC means.
ENHANCED QUALITY ASSURANCE
IMPRESS Plus allows for random or pre-determined QA,
statistical QA, or other more intelligent or
selective QA means.
<PAGE> 58
IMPRESSIVE TECHNOLOGY, IMPRESSIVE RESULTS
IMAGE FUNCTIONALITY OVERVIEW
IMAGE DOCUMENT SCAN, STORE, ROUTE, AND RETRIEVE
PROCESSING
IMPRESS Plus captures, through scanning, electronic
images OF documents, stores these electronic images
on magnetic disk, and subsequently allows for
retrieval of the electronic images. IMPRESS Plus
allows images to be accessed for image quality review
and provides for the rescanning of images determined
to be of unacceptable quality. Following the
completion of scanning and any image quality review,
items are automatically routed to subsequent
activities, based on a predefined set of workflow
rules.
ELECTRONIC DOCUMENT IMAGE PRESENTATION AND
MANIPULATION
IMPRESS Plus allows images to be viewed on image-
enabled workstations. Multi-page documents can be
scrolled through, and selected portions of an image
can be magnified.
IMAGE CROSS-REFERENCE TO PHYSICAL DOCUMENT LOCATION
TRACKING
AND RETRIEVAL IMPRESS Plus is designed so that the image database
stores the location of the physical document for each
document image. This location - known as a storage
box - is entered into the system while scanning
documents.
INDEXING OF IMAGES
IMPRESS Plus automatically assigns a unique indexing
number to each document that is created through
scanning. The unique indexing number consists of a
system-generated number that can subsequently be used
to cross-reference an item to a mainframe transfer
agent system. In addition, IMPRESS Plus allows for
the alternate indexing of documents by other user-
entered fields such as fund/account.
SOURCE KEY GENERATION AND DISPLAY
Each transaction type processed within IMPRESS Plus
receives a unique identifier that can be used to link
an item to the First Data transfer agent system.
This key may also be used for document retrieval.
IMAGE SCANNING, INDEXING, AND STORAGE OF DOCUMENTS
TRACKING PROCESSED PRIOR TO IMAGE WORKFLOW
AND RETRIEVAL
(CONTINUED) Through the IMPRESS Plus merge facility, users can
scan documents processed prior to the installation of
IMPRESS Plus. The merge facility allows you to
associate documents with existing, already scanned
and indexed documents, making them available for
future inquiry using IMPRESS Plus.
IMAGE ARCHIVAL AND SUBSEQUENT RETRIEVAL FROM OPTICAL
STORAGE
IMPRESS Plus provides storage and backup functions
for data objects, is designed to handle media
management, and communicates with the database
management system. IMPRESS Plus supports archival of
items to magnetic or selected WORM (Write Once
<PAGE> 59
IMPRESSIVE TECHNOLOGY, IMPRESSIVE RESULTS
Read Many) optical media. Archival from magnetic to
optical media criteria are set during installation
time.
PRINTING OF IMAGES
IMPRESS Plus allows you to print copies of document
images at LAN-based printers equipped with the
appropriate print server components.
REAL-TIME ADMINISTRATION TOOLS
IMPRESS Plus offers an administration function that
allows authorized users to add and maintain user
profiles, funds, transaction types, locations, and
other client site-specific data. This tool also
allows authorized users to change courier status,
determine the status of work that may have been
affected by an environmental mishap, and perform
other administrative tasks.
DOCUMENT/ACTIVITY HISTORY AND AUTOMATIC UPDATE
IMPRESS Plus automatically records and stores
document/activity history statistics on audit trail
logs during workflow activities, and produces
standard reports for such items as:
o Workflow activity type
o Date/time/user of each activity
o Beginning/ending date/time of each activity
o Last update user/date/time
ADMINISTRATIVE IMPRESS Plus allows much of this activity history to
FUNCTIONS be viewed on-line in various portions of the
(CONTINUED) application.
PRODUCTIVITY REPORTING AND QUALITY/TIMELINESS
REPORTING
IMPRESS Plus logs document/activity history
statistics to produce standard productivity reports
that can be run at the client's request.
ADHOC REPORTING
IMPRESS Plus provides a suite of standard reports
that can be customized. A client can also create
their own additional reports.
QUALITY CONTROL PROCESSING
IMPRESS Plus currently allows for processing
activities to be reviewed for quality by routing them
to a Quality Control queue. Authorized users can
then QC work items. Future IMPRESS Plus releases
will include various rule-based options for selective
quality control. IMPRESS Plus prevents users from
quality control checking their own work.
ACCESS SECURITY
IMPRESS Plus image processing provides security
access in the form of user logons and user profiles.
Users must have a user ID to access the system and
are further constrained by their user profile. The
client assigns user IDs for staff to access the
system and specifies the parameters of each user
profile. These profiles limit users to performing
<PAGE> 60
IMPRESSIVE TECHNOLOGY, IMPRESSIVE RESULTS
only those specific activities for which they have
been given permission (e.g. processing, scan, etc.).
It is recommended that the logon IDs match the user's
logon ID from the First Data transfer agent system.
VALUE-ADDED SHAREHOLDER ACCOUNTING SYSTEM ACCESS
FUNCTIONALITY
IMPRESS Plus allows workstation access to First
Data's transfer agent recordkeeping system. 3270
terminal emulation is accomplished through a
Windows-based software application. Keyboard mapping
is limited to the technical capabilities of the
emulation software and/or hardware.
DYNAMIC DATA EXCHANGE (DDE) FUNCTIONALITY
IMPRESS Plus will allow for Dynamic Data Exchange at
selected points in application modules when necessary
to transfer data between processes. An example would
be the passing of a source key stored on a transfer
agent system history line to the imaging inquiry
screen for a customer service operator.
ON-LINE HELP FOR USERS
IMPRESS Plus offers a comprehensive on-line help
system that follows Microsoft Windows help system
conventions. It is designed to serve both new users
learning how to use the system and more experienced
users who may occasionally need assistance or
additional information.
SYSTEM ADMINISTRATION PROCEDURES
IMPRESS Plus System Administration is made easier for
designated IMPRESS Plus technical support staff due
to the IMPRESS Plus Systems Administration and
Procedures manual and related documentation.
<PAGE> 61
IMPRESSIVE TECHNOLOGY, IMPRESSIVE RESULTS
INTELLIGENT WORKSTATION PROCESSING
(IWT) FUNCTIONALITY OVERVIEW
INTELLIGENT IWT is designed with a graphic interface ("GUI")
WORKSTATION which will provide an intelligent real-time interface
PROCESSING to the First Data transfer agent system for the
(IWT) following transaction activity:
NEW ACCOUNT SETUP
The IWT new account setup application is designed to
provide a MS/Windows graphic interface ("GUI") to
allow an intelligent real-time interface to the First
Data transfer agent system. New account setup
functionality includes:
o new account setup entry
o dealer/rep list
o TIN list for shareholder list
o systematic city and state population based on
entry of a 5 digit zip code
o dividend/cap gain addresses
o beneficiary addresses
o statement addresses
o ABA lookup and validation
o fund list
o wire and ACH bank addresses
Financial Transactions
The IWT financial transaction entry application is
designed to provide a MS/Windows graphic interface
("GUI") to allow an intelligent real-time interface
to the First Data transfer agent system. Financial
transaction entry functionality includes:
o telephone redemptions
o telephone exchange
o exchange processing
o transfer processing
o redemption processing
o subscription processing
Group
o linking and linking of accts by ROA, confirm,
L01, plan
<PAGE> 62
IMPRESSIVE TECHNOLOGY, IMPRESSIVE RESULTS
CUSTOMER SERVICE & ENHANCED INQUIRY SYSTEMS
FUNCTIONALITY OVERVIEW
CUSTOMER The Customer Service System is a client/server based,
SERVICE graphical user interface (GUI) system designed to
SYSTEM provide an intelligent real-time application to
enable clients to improve the quality of the service
provided to both shareholders and broker dealers.
This system provides functionality in the following
areas:
CONTACT TRACKING AND MANAGEMENT
A key feature of the Customer Service System will be
the ability to track and report on all interaction
with an end customer, be it a shareholder or
broker/dealer. Designed for ease of use by a
customer service representative, this system will
allow for the logging of telephone calls and
correspondence, the creation and updating of service
items, the processing and resolution of customer
issues to insure customer satisfaction at the end of
any contact. In addition, via reason codes and aging
information, management is empowered with the use of
statistical and trending reports regarding contact
made with their customer base .
CORRESPONDENCE GENERATION AND TRACKING
The Customer Service System is closely integrated to
word processing to allow for the automatic generation
of outgoing correspondence related to service items.
A service representative can choose from customized
pre-defined letters to generate high quality customer
correspondence.
TELEPHONE TRADING
Authorized customer service system users will be able
to perform transactions while on the telephone with
customers by invoking simplified graphical data entry
screens. In addition, customer service
representatives can create electronic forms
consisting of processing instructions for other
departments and dynamically send route these work
items via the workflow manager.
CUSTOMER ENHANCED INQUIRY
SERVICE
SYSTEM The Enhanced Inquiry windows provide enriched and
(Continued) user-friendly replacements for legacy transfer agent
inquiry screens. Examples of the inquiry functions
are search for customer information by name, account
number and social security number, account
information, financial transaction history, service
history, and correspondence history.
<PAGE> 63
EXHIBIT 2.1 OF SCHEDULE G
EQUIPMENT
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
IMPRESS IMAGE PRODUCTION HARDWARE AND SYSTEMS SOFTWARE
- ---------------------------------------------------------------------------------------------------------
PRODUCT Description QTY
<S> <C> <C> <C> <C>
486/66 DX, 200 MB HG, 16 MB RAM, Network Intface
Card, VGA Monitor, Windows 3.1, Novell LWP 5.0,
Print Servers Parallel Cable for printer 10
- ---------------------------------------------------------------------------------------------------------
HP IV+ / 5 Laser Printer with 6 MB Ram, Jet Direct for
Printers other printing can be installed 10
- ---------------------------------------------------------------------------------------------------------
P100 or greater, 540 MB HG, 16 MB RAM, Network
Interface Card, Cornerstone DP120 Mono, Image
Accel2 PCI, Adaptec 1542cp SCSI Card, SCSI Cable,
Scan Server Terminator. 5
- ---------------------------------------------------------------------------------------------------------
Ricoh IS-520 SCSI with Ink Jet Endorser. SCSI
Mid Speed Scanner Version 5
- ---------------------------------------------------------------------------------------------------------
Sun SPARCstation 5 Model 170, 17" Color Display,
48MB RAM, 2X2.1 GB Int disks, 4mm Tape, 3.5"
Floppy Drive, CD-ROM, Solaris 2.5.1, Solarais
Answerbooks, 1 @ X1053A, Solaris 2.5.1 SDK Kit,
Kodak Scan Server Solaris 2.5.1 Motif ToolKit, SUN Professional C 4.0 3
- ---------------------------------------------------------------------------------------------------------
High Speed Scanner Kodak 923D Scanners 3
- ---------------------------------------------------------------------------------------------------------
Sun ULTRAserver 6000, 12 250MHZ CPU's, 17" Color
Display, 1.2GB RAM, 2x9 GB Int disks, DG Clariion 42
Gb Raid 5 disk array, 4mm Tape, CD-ROM, Solaris
2.5.1. Answerbooks, 35/7OGb DLT Tape Changer, 1 @
1053A, 1 @ X1052A, 2 @ X1062, Fast
Image Server Ethernet/FDDI/ATM 1
- ---------------------------------------------------------------------------------------------------------
CYGNET 1802 with (3) Philips LD6100 Optical Drives,
Jukebox Optical SCSI Cable, RS-232 Null Modem Cable 1
- ---------------------------------------------------------------------------------------------------------
P100 or greater, 540 MB HG, 32 MB RAM, Network
Interface Adapter, 15" SVGA Monitor, Resolution of at
least 1024 x 768, Windows 3.1, Hiijack Pro for
Fax Controller PC Windows, Microsoft Word 6.X 1
- ---------------------------------------------------------------------------------------------------------
Tower Style P90 or greater, 2 GB HG, 32 MB RAM,
Network interface adapter, 14" VGA Monitor, (4)
Gamalink CP4/LSI Fax Cards (4) Lines per card,
FAX Server** QEMM 8.X, Allcom LANFAX 2.15gl/2.2gl 1
- ---------------------------------------------------------------------------------------------------------
Existing File Server with at least 500 MB of disk space
Novell File Servers available 2 or 3
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
**The fax server will require analog modem lines a max of 16 lines would
- ---------------------------------------------------------------------------------------------------------
be required for the hardware listed above.
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
UPS OnLine UPS Equipment (SUN, Optical) (10 KVA) 1
- ---------------------------------------------------------------------------------------------------------
UPS OnLine UPS Equipment (SUN) (1.4 KVA) 3
- ---------------------------------------------------------------------------------------------------------
UPS OnLine UPS Equipment (FAX HW) (1 KVA) 2
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 64
EXHIBIT 2.1 OF SCHEDULE G
EQUIPMENT
<TABLE>
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
28.8 K Modem, lines, and cables (SUN for remote
Remote Link suppor) 1
- ---------------------------------------------------------------------------------------------------------
Equipment to maintain a routed or switched network
environment with no more that 25-30 clients per
Network Hardware network segment.
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Pentium 90 or greater with 24-32MB ram. Display
should optimally support Image resolutions of
1600X1280 but other resolutions can be supported for
Workstations casual use. (1280X1024) 400
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Software required on all workstations
- ---------------------------------------------------------------------------------------------------------
Windows 95, Windows NT
- ---------------------------------------------------------------------------------------------------------
Microsoft Word 6.X or Greater
- ---------------------------------------------------------------------------------------------------------
Microsoft TCP/IP Stack
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 65
EXHIBIT 2.2 OF SCHEDULE G
EQUIPMENT
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
IMPRESS Test/Training Hardware and Systems Software
- -------------------------------------------------------------------------------------------------------
PRODUCT DESCRIPTION QTY
<S> <C> <C> <C> <C>
486/66 DX, 200 MB HG, 16 MB RAM, Network Intface
Card, VGA Monitor, Windows 3.1, Novell LWP 5.0,
Print Server Parallel Cable for printer 1
- -------------------------------------------------------------------------------------------------------
HP IV+/5 Laser Printer with 6 MB Ram, Jet Direct for
Printer other printing can be installed 1
- -------------------------------------------------------------------------------------------------------
P100 or greater, 540 MB HG, 16 MB RAM, Network
Interface Card, Cornerstone DP 120 Mono, Image
Accel2 PCI, Adaptec 1542cp SCSI Card, SCSI Cable
Scan Server Terminator 1
- -------------------------------------------------------------------------------------------------------
Ricoh IS-420 SCSI with Ink Jet Endorser, SCSI
Low Speed Scanner Version 1
- -------------------------------------------------------------------------------------------------------
Sun ULTRAserver 1, 250MHZ CPU, 17" Color Display,
128MB RAM, 2X2.1 GB Int disks, SUN 4GB External
Disk Pack, (2) 4mm Tape Drives, CD-ROM, Solaris
Image Server 2.5.1, Answerbooks, 1 @ 1053A, 1 @ X1052A. 1
- -------------------------------------------------------------------------------------------------------
Phillips LD6100 Optical Drive Differential, SCSI Cable
Standalone Optical SCSI Differential Terminator. 1
- -------------------------------------------------------------------------------------------------------
P100 or greater, 540 MB HG, 32 MB RAM, Network
Interface Adapter, 15" SVGA Monitor, Resolution of at
least 1024 X 768, Windows 3.1, Hijack Pro for
Fax Controller PC Windows, Microsoft Word 6.X 1
- -------------------------------------------------------------------------------------------------------
Tower Style P90 or greater, 1 GB HG, 32 MB RAM,
Network interface adapter, 14" VGA Monitor, (1)
Gamalink CP4/LSI Fax Cards (4) Lines per card,
FAX Server** QEMM 8.X, Allcom LANFAX 2.15gl/2.2gl 1
- -------------------------------------------------------------------------------------------------------
Existing File Server with at least 500 MB of disk space
Novell File Servers available 1
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
** THE FAX SERVER WILL REQUIRE ANALOG MODEM LINES A MAX OF 4 LINES WOULD BE
REQUIRED FOR THE HARDWARE LISTED ABOVE.
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
UPS OnLine UPS Equipment (FAX) (1 KVA) 1
- -------------------------------------------------------------------------------------------------------
UPS OnLine UPS Equipment (SUN, Optical) (3 KVA) 1
- -------------------------------------------------------------------------------------------------------
28.8 K Modem, lines, and cables (SUN for remote
Remote Link suppor) 1
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
Pentium 90 or greater with 24-32 MBram. Display
should optimally support image resolutions of
1600X1280 but other resolutions can be supported for
Workstations casual use. (128X1024) 10
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
Software required on all workstations
- -------------------------------------------------------------------------------------------------------
Windows 95, Windows NT
- -------------------------------------------------------------------------------------------------------
Microsoft Word 6.X or Greater
- -------------------------------------------------------------------------------------------------------
Microsoft TCP/IP Stack
- -------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 66
EXHIBIT 3 OF SCHEDULE G
MAINTENANCE AND SUPPORT TERMS
These terms are based on an IMPRESS User network environment of up to 512 Users
and the associated server(s), as described in Exhibits 1 and 2 of this Schedule
G.
1. Software Support.FDISG shall provide the following Software support
services ("Software Support"):
1.1. FDISG shall provide the Fund with full System Administration Guide(s)
for FDISG Software.
1.2. FDISG will have a Response Center (help desk) to provide 24 hours a
day, 7 days a week to designated client contacts.
1.3. FDISG shall use reasonable efforts to resolve all Software failures
through; (a) remote support to the Fund's information systems staff ("Fund's
Staff"); (b) coordination of Third Party Vendor support (on-site or remotely);
(c) coordination of other subcontractors' actions; or (d) direct on-site
support by FDISG personnel.
1.4. FDISG shall investigate errors in the Software reported by the Fund
which prevent substantial compliance with the then current Documentation and to
initiate the corrective action, if any, which FDISG considers reasonable and
appropriate, including but not limited to temporary fixes, patches and
corrective releases to FDISG's clients generally. Notwithstanding the
foregoing, if reported errors result from or arise out of. (i) malfunctions of
equipment other than the Equipment, (ii) improper Fund operator procedure or
misuse of the system by the Fund, (iii) modifications or changes made to the
system without FDISG's prior written approval, (iv) causes beyond the
reasonable control of either party, or (v) user developed features such as
those users may develop with form generators, ad hoc report writers and user
customized screens, then FDISG shall have no responsibility for investigating
the error or making the correction, except as the parties may otherwise agree
to in writing. The Fund shall pay FDISG's then current time and materials
charges plus reasonable travel and out-of-pocket expenses incurred in
investigating and attempting to correct any such errors.
1.5. FDISG shall from time to time provide bug fixes, error corrections,
maintenance, minor enhancements, upgrades and updates to the Software which are
generally made available by FDISG to its similar customers as part of Software
Support ("Updates"). The cost of the Updates is included in the fees and other
charges identified in Schedule C of the Agreement, if the updates are supplied
to the Fund using FDISG's standard update facility. FDISG installation
assistance for the new Updates may be required and, is billable to the Fund as
an Additional Service. During the term of the Agreement, FDISG will use
reasonable efforts to provide the Fund with not less than thirty (30) days
prior written notice of FDISG's intent issue a new update of Software. The
Fund shall implement an Update within ninety (90) days of receipt. Any support
by FDISG of any prior release of the Software after such ninety (90) day period
shall be at FDISG's sole discretion and as an Additional Service.
1.6. Software Support, the License, and the Software shall not include any
modification to the Software which contains any substantial added functionality
(including any significant new interface features), as determined solely by
FDISG or any new architecture or any significant modification of the Software
which contains any substantial added or different functionality, whether or not
such new functionality is coupled with any change in software architecture or
hardware platform ("New Products"). New Products shall be provided and
licensed to the Fund as an Additional Service.
1.7. FDISG may decline to support the Software if (i) the Software or
Equipment was added to or changed without FDISG's prior approval; (ii) the Fund
does not perform the Software Support; or (iii) FDISG determines that such
support would adversely affect the Scope of Work.
1.8 Software Support for the FDISG Software shall conform to the standards
set forth in Section I of Schedule F.
2. The Fund's Maintenance and Support Responsibilities. The Fund's facility
will have all of the required security, space, electrical power source,
communications lines, heating, ventilation and cooling, and other physical
<PAGE> 67
requirements reasonably necessary for the installation and proper operation of
the Equipment. The Fund's users will first direct all questions and problem to
the Fund's Staff for proper call tracking and problem resolution. The Fund's
Staff will coordinate all facility issues at the site and will serve as primary
contact for FDISG when planning installs, upgrades and other equipment changes.
The Fund's Staff shall:
2.1. Identify designated client contacts, one for Operations and one
technical systems administrator, to function as single points of contact for
discussion, review and resolution of problems with FDISG.
2.2. Perform initial problem determination and symptom documentation.
2.3. Be responsible for all system hardware and network hardware components
and shrink-wrap software from a maintenance, support and problem resolution
standpoint.
2.4. Provide (a) data back-up and recovery, (b) preventive maintenance,
and (c) perform server administration tasks as described in the Systems
Administration Guide(s) and Third Party Software documentation.
2.5. Maintain all network and trouble-log documentation required by FDISG
or by third-party vendors. FDISG shall be allowed to review such documentation
if necessary to resolve support issues.
2.6. Be available during normal business hours and reachable for support 24
hours a day, 7 days a week, as required. The Fund shall maintain the
appropriate staff level to adequately perform the maintenance support functions
specified. This staff should have experience in network administration,
troubleshooting, Microsoft Windows, workstation memory management, and UNIX and
NT systems administration.
2.7. Consult with FDISG before performing any work that may affect the
Software or performance of the System, including installation, upgrading, or
unplanned maintenance affecting Equipment
2.8. The fund is responsible for maintenance and support of customized code
unless contracted with FDISG.
3. Support of Customized Code. (Code changed by Fund or FDISG on a customized
basis)
3.1 Software Revisions. At times, FDISG will provide software updates to
components (third party or FDISG software) to either enhance the product or
address quality deficiencies. FDISG is responsible for notifying the Fund of
these updates, and what changes have been made. The Fund is responsible for
installing the updates and modifying any code which they have customized to
accommodate these enhancements. Assistance can be provided by FDISG at stated
billable rates.
3.2 Support of Modified Code. FDISG will provide application, technical
and workflow support for modified code only on a time and materials basis.
FDISG may request the replacement of the modified code with the original code
in order to assist in the determination of the problem source.
3.3 Mainframe Resource Utilization. If customized code requires greater
FDISG mainframe CICS, DASD, or CPU resources than the base FDISG delivered
IMPRESS Plus solution, FDISG reserves the right to charge the Fund for this
usage. If there is concern that excessive resource utilization could impair
the mainframe system, FDISG reserves the right to disallow this modified code
from executing on the mainframe. The Fund is advised to consult with FDISG in
order to determine if planned customization may negatively impact mainframe
resources.
4. Roles and Responsibilities.
4.1 FDISG shall not be responsible for the support of any Directly
Obtained Third Party Software or any other third party products. The Fund is
responsible for network connectivity, Operating Systems, gateways, and other
third party products. FDISG is not responsible for hardware not listed in
Exhibit 2 of Schedule G or software not listed in Sections 1, 2.1.1, or 2.1.2
of Exhibit 1 of Schedule G, unless specifically covered in a separate
agreement.
4.2 Additional support tasks may be provided on a time and material basis.
This may include workflow analysis, customization, network design, third party
product installation and additional training.
<PAGE> 68
SCHEDULE H
ACE + SOFTWARE AND SUPPORT TERMS
ARTICLE 1 - SYSTEM, SUPPORT AND IMPLEMENTATION
1.1 Software and Support. FDISG shall provide or has previously provided
to the Fund and the Fund shall acquire from FDISG the right to use the computer
software programs set forth in Exhibit 1 of this Schedule H (the "SOFTWARE"),
for the fees indicated in Schedule C of Amendment Number 3 to the Agreement.
Software includes related user manuals and reference guides (collectively,
"DOCUMENTATION"). One copy of the Documentation shall be provided to the Fund
at no additional cost. FDISG shall provide only the machine readable object
version of the Software and not source code. Additional terms and conditions
concerning the Software are set forth in Exhibit 1 of Schedule H ("Exhibit 1").
Subject to the terms and conditions set forth in this Schedule H, FDISG grants
to the Fund and the Fund accepts from FDISG the non-exclusive, non-transferable
license to use the Software during the term of the Agreement ("LICENSE"). Some
software components ("THIRD PARTY SOFTWARE") required to be used with the
Software were developed by a third party ("THIRD PARTY VENDOR"). Third Party
Software is licensed to the Fund only pursuant to shrink wrapped or other
agreements between the Third Party Vendor and the Fund directly. Exhibit 1
shall indicate the Third Party Software that the Fund is responsible to obtain
and license. FDISG shall provide the Fund with all error corrections, minor
enhancements and interim upgrades to the Software which are made generally
available to FDISG client's of the Software ("SOFTWARE SUPPORT"), but shall not
provide a License to any substantial added functionality, new interfaces, new
architecture, new platforms or other major software development efforts, as
determined solely by FDISG.
1.2 Ownership. FDISG or its licensor shall retain title to and ownership
of the Software, copies, derivative works, inventions, discoveries, patentable
or copyrightable matter, concepts, expertise, techniques, patents, copyrights,
trade secrets and other related legal rights ("PROPRIETARY INFORMATION").
FDISG reserves all rights in the Proprietary Information not expressly granted
to the Fund in this Schedule H. Upon FDISG's request, the Fund shall inform
FDISG in writing of the quantity and location of any Software.
1.3 Equipment, System Implementation and Access. Fund is responsible for
acquiring, installing and maintaining the data processing and related equipment
("EQUIPMENT") also set forth in Exhibit 1 of Schedule H. Additional terms and
conditions concerning the Equipment are also set forth in Exhibit 1. The
Equipment identified in Exhibit 1 represents the minimum equipment requirements
to run the Software. FDISG disclaims responsibility for the performance of the
Software in the event that the Fund utilizes equipment different than that
which is set forth in Exhibit 1. FDISG and the Fund shall (a) within a
reasonable time after the Effective Date, agree upon the tasks required to
implement the Software, Third Party Software and Equipment ("SYSTEM") and the
party responsible and time frames for each task ("SCOPE OF WORK"); (b) perform
their respective assigned tasks according to the Scope of Work; and (c) if not
the party assigned to a task, cooperate with the responsible party. To the
extent the Scope of Work is incomplete, FDISG shall follow its reasonable and
customary practices. Upon prior notice by FDISG to the Fund, the Fund shall
give reasonable access to the System to FDISG, FDISG's employees, affiliates,
representatives, agents, contractors, licensors and suppliers ("FDISG'S
AGENTS") who are providing services under the Agreement or auditing adherence
to the Agreement.
1.4 Use of Software. Fund may use the Software during the term of this
Agreement only on the Equipment and only to process the Fund's data for
internal business purposes (which shall not, for purposes of this Agreement,
include use by Fund to provide services to its customers on a service bureau
basis) in connection with the Fund's use of the FDISG System and only at the
locations identified in the Agreement. If the Equipment is inoperative due to
malfunction, the license grant shall, upon written notice to FDISG, be
temporarily extended to authorize the Fund to use the Software on any other
equipment approved in writing by FDISG until the Equipment is returned to
operable condition. FDISG, in its reasonable discretion, may suspend any
Software Support while the Software is being used on such other Equipment. No
right is granted for use of the Software by any third party or by the Fund to
process for any third party, or for any other purpose whatsoever, except as
expressly provided in this paragraph..
1.5 Software Installation and Acceptance. FDISG shall advise the Fund
that the Software as listed in Exhibit 1 is installed and functioning on the
Equipment ("Software Installation Date") so that implementation and training
activities can proceed. The Fund shall be deemed to have accepted the Software
thirty (30) days after Software Installation Date or thirty (30) days after the
Fund's first use of Software to process live production data ("SOFTWARE
ACCEPTANCE DATE").
1.6 Copies of Software. The Fund may not copy the software except for
backup and archival purposes only, and the Fund shall include on all copies of
the Software all copyright and other proprietary notices or legends included on
the Software. The provisions of this Paragraph do not apply to Fund data files
in machine-readable form.
<PAGE> 69
1.7 No-Export. The Software shall not be shipped or used by the fund
outside the United States. The Fund shall comply with all applicable export
and re-export restrictions and regulations of the U.S. Department of Commerce
or other U.S. agency or authority. The Software shall not be transferred to a
prohibited country or otherwise in violation of any such restrictions or
regulations.
1.8 Termination. Terms and conditions of this Schedule H which require
their performance after the termination of the Agreement, including but not
limited to the License and Software use restrictions, limitations of liability,
indemnification, and confidentiality obligations, shall survive and be
enforceable despite the termination of the Agreement.
ARTICLE 2 - WARRANTIES AND REPRESENTATIONS
2.1 Software. For the term of the Agreement, FDISG warrants ("Performance
Warranty") that the Software shall perform on the Equipment substantially in
accordance with the Documentation, except for Third Party Software as set forth
in Paragraph 2.2 below. The timely correction of errors and deficiencies in
the Software shall be Fund's sole and exclusive remedy for the Performance
Warranty. FDISG warrants ("Rights Warranty") it has the right to license the
Software in accordance with the Agreement. Provided the Fund gives FDISG
timely written notice, reasonable assistance, including assistance from the
Fund's employees, agents, independent contractors and affiliates (collectively,
"Fund's Agents"), and sole authority to defend or settle the action, then FDISG
shall do the following ("Infringement Indemnification"): (a) defend or settle,
at its expense, any action brought against the Fund or the Fund's Agents to the
extent the action is based on a claim that the Software infringes a duly issued
United States' patent or copyright or violates a third party's proprietary
trade secrets or other similar intellectual property rights ("Infringement");
and (b) pay damages and costs finally awarded against the Fund or the Fund's
Agents directly attributable to such claim. FDISG shall have no Infringement
Indemnification obligation if the alleged Infringement is based upon the Fund's
use of the Software with equipment or software not furnished or approved by
FDISG or if such claim arises from FDISG's compliance with the Fund's designs,
or from the Fund's modifications of the Software. The Infringement
Indemnification states FDISG's entire liability for Infringement and shall be
the Fund's sole and exclusive remedy for the Rights Warranty.
2.2 Third Party Warranties. All warranties for the Third Party Software,
if any, are specifically set forth in the Software Exhibits, Exhibit 1 or in
the applicable agreements supplied by the Third Party Vendors. Subject to the
terms of the Exhibit 1 and to the extent permitted by FDISG's suppliers, FDISG
conveys to Fund all Third Party Software warranties made by the Third Party
Vendors.
2.3 Exclusion of Warranties. THE WARRANTIES SET FORTH IN PARAGRAPH 2.1
ABOVE AS TO THE SOFTWARE AND IN PARAGRAPH 2.2 ABOVE AS TO THIRD PARTY SOFTWARE
ARE IN LIEU OF ALL OTHER WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, ARISING
OUT OF OR RELATED TO THIS SCHEDULE G. FDISG SPECIFICALLY DISCLAIMS ALL OTHER
WARRANTIES, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY,
NON-INFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE.
2.4 Fund Responsibility. The System is an information system only,
designed to assist the Fund and the Fund's Agents in performing their
professional activities and is not intended to replace the professional skill
and judgment of the Fund's Agents. Fund shall be solely responsible for: (a)
acts or omissions of the Fund's Agents in entering data into the System,
including its accuracy and adequacy; (b) checking the correctness and accuracy
of the System output and data; and (c) any use of or reliance upon the System
output by the Fund's Agents. Except for the Infringement Indemnification and
as limited by applicable law, the Fund shall indemnify, defend and hold FDISG
and FDISG's Agents harmless from any losses, costs, damages, and liabilities,
including without limitation, reasonable attorneys' fees and court costs,
relating to any claim by any third party arising from or related to the Fund's
and the Fund's Agents' use of the System or System output.
ARTICLE 3 - MISCELLANEOUS
3.1 Confidentiality Obligations. Each party shall keep confidential any
information relating to the other party's business which is clearly designated
or described in writing to be confidential ("Confidential Information"). Each
party shall keep and instruct its employees and agents to keep such information
confidential by using at least the same care and discretion as used with that
party's own confidential information. Information shall not be subject to such
confidentiality obligations if it is: (a) in the public domain, (b) known to a
party, prior to the time of disclosure by the other party, (c) lawfully and
rightfully disclosed to a party by a third party on a non-confidential basis,
(d) developed by a party without reference to Confidential Information or (e)
required to be disclosed by law. If either party, its employees or agents
breaches or threatens to breach the obligations relating to use of the
Confidential
<PAGE> 70
Information, the other party may obtain injunctive relief, in addition to its
other remedies, inadequate monetary damages and irreparable harm being
acknowledged.
3.2 Confidential and Privileged Information. The Proprietary Information,
other FDISG software and related information, and the Agreement are
Confidential Information of FDISG and FDISG's Agents. Absent FDISG's written
permission, Fund shall not duplicate FDISG's Confidential Information. Fund
accepts full responsibility for complying with all laws, rules and regulations
concerning use and disclosure of privileged data regarding any information
placed or stored in the System or output from the System. Fund shall not
modify or reverse engineer the Software without FDISG's prior written consent.
<PAGE> 71
EXHIBIT 1 OF SCHEDULE H
SOFTWARE/HARDWARE
1. FDISG Software.
1.1 FDISG Software includes the following products:
ACE +
2. Third Party Software.
2.1 Directly Obtained Third-Party Software. The following Third Party
Software are separately licensed by the Third Party Vendor directly to the Fund
subject to the respective terms and conditions of "shrink-wrapped" or other
agreements between the Third Party Vendor and the Fund. The Third Party
Software in the Required Column must be obtained by the Fund. The Third Party
Software in the Optional column is helpful but not required unless the
indicated features are being used. The Fund accepts the provisions of such
agreements, including the warranty provisions, if any, and agrees to comply
with the terms set forth in such agreements:
<TABLE>
<CAPTION>
Required Optional
-------- --------
<S> <C>
Windows 3.1 Reachout PC Link (for external FDISG Support of ACE +)
DOS 3.3 or higher
</TABLE>
3. Hardware.
3.1 It is recommended that ACE + run on a PC Network (LAN) to fully use its
database features. The network should have at least 200 Mb of available disk
space. ACE + will also run on an individual local (hard) drive. PC
specifications are:
o 2 or more IBM PC Compatible 486/66 (486/33 minimum) Mhz (or
Pentium) with 16 Mb Ram (8 Mb minimum)
o 500 Mb Local (hard) drives (for backup only)
o External Fax/Modems (9600 baud or greater)(for PC faxing or
Reachout only)
o HP Laserjet 4 w/ Windows Drivers
3.2 PC/Mainframe Connection: ACE + data is based on mainframe ASCII files.
These files must be transmitted from the mainframe to LAN or PC. This can be
accomplished various ways. FDISG uses a mainframe to Gateway and BARR/SNA
transmission.
<PAGE> 72
SCHEDULE I
DISASTER RECOVERY SUMMARY
OVERVIEW
First Data's data center is a free standing building that is self sufficient
with back-up water supply, fuel storage, and diesel generator backup. The
building is protected with 24 hour on site guard protection as well as security
camera coverage throughout the property. Access is by picture ID only and all
doors are protected with card key access. Additionally, all systems are
protected by ACF2 Security. Security is audited on a regular basis.
Additionally, First Data maintains a reliable, tested disaster recovery system.
A tape backup system is set up on a daily rotation schedule with a full backup
of all data. The backup jobs run automatically every night and all tapes are
sent off-site on a daily basis to a physically secured facility. A business
resumption site has been established in our Providence facility. This Hot Site
is fully equipped with equipment, wiring and supplies in the case of a disaster
or business recovery.
A disaster is defined as any unforeseen business interruption or outage that
renders the data center or telecommunications network inoperable or
inaccessible for an undetermined amount of time suspending normal processing.
First Data's Disaster Recovery Plan provides us with the required procedures
and resource references to execute a full recovery of the data center and
associated critical processing.
This Plan addresses:
o Computer and communications equipment
o Programs, data and documentation
o Building and environmental concerns
o Fire detection and building evacuation
o Personnel, and
o Client Liaisons.
Due to contractual requirements, the data center must provide on-line
accessibility and processing availability within 24 hours of a declared
disaster. Total "downtime" is not to exceed 48 hours.
All outages that affect any client are considered priority one and all
available resources will be utilized to resolve outages, failures or slowdowns.
APPROACH
In a disaster situation, numerous issues and tasks must be addressed
immediately. To ensure all get equal attention, "teams" have been developed.
These teams are comprised of experienced First Data personnel responsible to
execute specific assigned functions critical to the overall recovery. Each team
will activate their procedures concurrently to affect a full system recovery at
the hot site. Some of the teams will act as support teams providing
<PAGE> 73
financial, administrative, and logistical coordination. The remaining recovery
teams will address more specific data and telecommunications issues.
o Support Teams
Financial/Administrative Support
Human Resources/Corporate Communications
Applications Team
Client Liaison Team
o Recovery Teams
Management Teams
Systems Software
Data Center Operations
Vendor
Telecommunications Team
Production Control
Facilities/Hardware
Each team will be headed by a team leader and a designated alternate. If, for
any reason, the team leader is unavailable, the alternate will assume
responsibility for the team notification and progress reporting to the team
management.
Dial backup capabilities, diverse routing of communications circuits and
triangulation present the best options for insuring continued system access in
the event of a communications failure. First Data can demonstrate each of these
capabilities at the client's request.
TESTING SUMMARY
First Data/FDT has contracted with Comdisco to provide hotsite disaster
recovery and backup services. First Data's overall goal is to establish network
connectivity for on-line and transmission capability, restore the application
and recover forward to a point in time and then re-process a batch cycle.
Using Comdisco's site at North Bergen, the First Data Technology (FDT)
operating system will be recovered while testing FDISG recoverability for all
network and application platforms.
The recovery will take place remotely with FDT, using the Business Recovery
Facilities (BRF) in Denver, and Westboro staff working out of the new BRF
in Tewksbury, MA. Comdisco will have staff at both BRFs, as well as North
Bergen, to assist whenever needed.
Tests are conducted annually. The test runs for 48 contiguous hours. Multiple
shifts will be required for FDT, FDISG, and Comdisco staff. Specific staff
requirements will be determined as the scope of the test becomes more clearly
defined.
The systems recovery portion of the test will take place at the Comdisco site in
New Jersey utilizing an IBM ES9000 with related peripherals. All the equipment
used in testing is
<PAGE> 74
compatible with the FDT hardware located in Denver. All tape mounts will be
handled by Comdisco staff in New Jersey, and the telecommunications testing
will be staffed by FDT with Comdisco assisting in New Jersey.
FDISG Test Objectives
o Test recoverability from both of Comdisco's new Business Recovery
Facilities
o Test transmission and network connectivity with clients
o Check and verify tape volumes stored offsite
o Benchmark the restore time for all (500) DASD volumes
o Ship all tapes from Denver to New Jersey
o Document (CDRS/FDISG) connectivity procedures
o Recover all applications to previous business cycle
<PAGE> 1
EXHIBIT 9(a)(6)
EXHIBIT 1
LIST OF FUNDS
AIM ADVISOR FUNDS, INC.
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
AIM Advisor Cash Management Fund Class A and Class C Shares
AIM Advisor Flex Fund Class A and Class C Shares
AIM Advisor Income Fund Class A and Class C Shares
AIM Advisor International Value Fund Class A and Class C Shares
AIM Advisor Large Cap Value Fund Class A and Class C Shares
AIM Advisor MultiFlex Fund Class A and Class C Shares
AIM Advisor Real Estate Fund Class A and Class C Shares
</TABLE>
AIM EQUITY FUNDS, INC.
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
AIM Blue Chip Fund Class A, Class B and Class C Shares
AIM Capital Development Fund Class A, Class B and Class C Shares
AIM Charter Fund Class A, Class B and Class C Shares
AIM Weingarten Fund Class A, Class B and Class C Shares
AIM Aggressive Growth Fund Class A Shares
AIM Constellation Fund Class A and Class C Shares
</TABLE>
AIM FUNDS GROUP
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
AIM Balanced Fund Class A, Class B and Class C Shares
AIM Global Utilities Fund Class A, Class B and Class C Shares
AIM Growth Fund Class A, Class B and Class C Shares
AIM High Yield Fund Class A, Class B and Class C Shares
AIM Income Fund Class A, Class B and Class C Shares
AIM Intermediate Government Fund Class A, Class B and Class C Shares
AIM Municipal Bond Fund Class A, Class B and Class C Shares
AIM Value Fund Class A, Class B and Class C Shares
AIM Money Market Fund Class A, Class B, Class C and AIM Cash
Reserve Shares
</TABLE>
AIM INTERNATIONAL FUNDS, INC.
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
AIM International Equity Fund Class A, Class B and Class C Shares
AIM Global Aggressive Growth Fund Class A, Class B and Class C Shares
AIM Global Growth Fund Class A, Class B and Class C Shares
AIM Global Income Fund Class A, Class B and Class C Shares
AIM Asian Growth Fund Class A, Class B and Class C Shares
AIM European Development Fund Class A, Class B and Class C Shares
</TABLE>
<PAGE> 2
AIM INVESTMENT SECURITIES FUNDS
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
Limited Maturity Treasury Portfolio AIM Limited Maturity Treasury Shares
</TABLE>
AIM TAX-EXEMPT FUNDS, INC.
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
AIM Tax-Exempt Cash Fund Class A Shares
AIM Tax-Exempt Bond Fund
Of Connecticut Class A Shares
Intermediate Portfolio AIM Tax-Free Intermediate Shares -
Class A
</TABLE>
On behalf of the Funds and respective Portfolios and Classes as set forth in
this Exhibit 1, which may be amended from time to time.
By: /s/ ROBERT H. GRAHAM
Title: President
FIRST DATA INVESTOR SERVICES GROUP, INC.
By: /s/ LEONARD A. WEISS
Title: EVP AND CFO
Effective as of August 4, 1997.
<PAGE> 1
EXHIBIT 9(a)(7)
EXHIBIT 2
PREFERRED REGISTRATION
TECHNOLOGY ESCROW AGREEMENT
Account Number 0609111-00002-0109001
Recitals
This Preferred Registration Technology Escrow Agreement including any
Exhibits ("Agreement") is effective this 10th day of September 1997, by and
among Data Securities International, Inc. ("DSI"), a Delaware corporation, First
Data Investor Services Group, Inc. ("Depositor"), and each registered investment
company listed on the attached Schedule A hereof ("Preferred Registrant").
WHEREAS, Depositor has entered into a certain Remote Access and
Related Services Agreement dated December 23, 1994, as amended by Amendment
Number 3 dated as of February 1, 1997 (the "Remote Agreement") with the
Preferred Registrant which pursuant thereto certain proprietary software, as
described in Section 12(i) of the Remote Agreement, in object-code form and
other materials of Depositor have been licensed to Preferred Registrant (the
"Software");
WHEREAS, Depositor and Preferred Registrant desire the Agreement to be
supplementary to said contract pursuant to 11 United States Code Section
365(n);
WHEREAS, availability of or access to the source code and other
proprietary data related to the Software is critical to Preferred Registrant in
the conduct of its business;
WHEREAS, Depositor has deposited or will deposit with DSI such source
code and other proprietary data to provide for retention, administration and
controlled access for Preferred Registration under conditions specified herein;
NOW THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in consideration of the promises, mutual
covenants and conditions contained herein, the parties hereto agree as follows:
1. Deposit Account. Following the delivery of the executed Agreement, DSI
shall open a deposit account ("Deposit Account") for Depositor. The
opening of the Deposit Account means that DSI shall establish an account
ledger in the name of Depositor, assign a deposit account number
("Deposit Account Number"), calendar renewal notices to be sent to
Depositor as provided in Section 30, and request the initial deposit
("Initial Deposit") from Depositor. Depositor has an obligation to make
the Initial Deposit. In the event that Depositor has not made the
Initial Deposit within sixty (60) days of the execution of this
1
<PAGE> 2
Agreement, DSI shall request the initial Deposit from Depositor and
notify Preferred Registrant that such Initial Deposit has not been
received.
2. Preferred Registration Account. Following the execution and delivery of
the Agreement, DSI shall open a registration account ("Registration
Account") for Preferred Registrant. The opening of the Registration
Account means that DSI shall establish under the Deposit Account an
account ledger with a unique registration number ("Registration Number")
in the name of Preferred Registrant, calendar renewal notices to be sent
to Preferred Registrant as provided in Section 30, and request the
Initial Deposit from Depositor. DSI shall notify Preferred Registrant
upon receipt of Initial Deposit.
3. Term of Agreement. The Agreement will commence on the effective date
and continue through January 31, 2000, unless terminated earlier as
provided in the Agreement. The Agreement may be extended for one (1)
year terms.
4. Exhibit A, Notices and Communications. Notices and invoices to
Depositor, Preferred Registrant or DSI should be sent to the parties at
the addresses identified in the Exhibit A.
Documents, payment of fees, deposits of material, and any written
communication should be sent to the DSI offices as identified in the
Exhibit A.
Depositor and Preferred Registrant agree to each name their respective
designated contact ("Designated Contact") to receive notices from DSI
and to act on their behalf in the performance of their obligations as
set forth in the Agreement. Depositor and Preferred Registrant agree to
notify DSI immediately in the event of a change of their Designated
Contact in the manner stipulated in Exhibit A.
5. Exhibit B and Deposit Material. Depositor will submit proprietary data
and related material ("Deposit Material") to DSI for retention and
administration in the Deposit Account.
The Deposit Material will be submitted together with a completed
document called a "Description of Deposit Material", hereinafter
referred to as Exhibit B. Each Exhibit B should be signed by Depositor
prior to submission to DSI and will be signed by DSI upon completion of
the Deposit Material inspection.
Depositor represents and warrants that it lawfully possesses all Deposit
Material, can transfer Deposit Material to DSI and has the authority to
store Deposit Material in accordance with the terms of the Agreement.
6. Deposit Material Inspection. Upon receipt of an Exhibit B and Deposit
Material, DSI will be responsible only for reasonably matching the
labeling of the materials to the item descriptions listed on the Exhibit
B and validating the count of the materials to the quantity listed on
the Exhibit B. DSI will not be responsible for any other claims made by
2
<PAGE> 3
the Depositor on the Exhibit B. Acceptance will occur when DSI concludes
that the Deposit Material Inspection is complete. Upon acceptance DSI
will sign the Exhibit B and assign it the next Exhibit B number. DSI
shall issue a copy of the Exhibit B to Depositor and Preferred
Registrant within ten (10) days of acceptance.
7. Initial Deposit. The Initial Deposit will consist of all material
initially supplied by Depositor to DSI.
8. Deposit Changes. Depositor may desire or may be obligated to update the
Deposit Account with supplemental or replacement Deposit Material of
technology releases.
Supplemental Deposit ("Supplemental") is Deposit Material which is to be
added to the Deposit Account.
Replacement Deposit ("Replacement") is Deposit Material which will
replace existing Deposit Material as identified by any one or more
Exhibit B(s) in the Deposit Account. Replaced Deposit Material will be
destroyed or returned to Depositor.
9. Deposit. The existing deposit ("Deposit") means all Exhibit B(s) and
their associated Deposit Material currently in DSI's possession.
Destroyed or returned Deposit Material is not part of the Deposit;
however, DSI shall keep records of the destruction or return of Deposit
Material.
10. Replacement Option. Within ten (10) days of receipt of Replacement from
Depositor, DSI will send a letter to Preferred Registrant stating that
Depositor requests to replace existing Deposit Material, and DSI will
include a copy of the new Exhibit B(s) listing the new Deposit Material.
Preferred Registrant has twenty (20) days from the mailing of such
letter by DSI to instruct DSI to retain the existing Deposit Material
held by DSI, and if so instructed, DSI will change the Replacement to a
Supplemental. Conversion to Supplemental may cause an additional
storage unit fee as specified by DSI's Fee and Services Schedule.
If Preferred Registrant does not instruct DSI to retain the existing
Deposit Material, DSI shall permit such Deposit Material to be replaced
with the Replacement. Within ten (10) days of acceptance of the
Replacement by DSI, DSI shall issue a copy of the executed Exhibit B(s)
to Depositor and Preferred Registrant. DSI will either destroy or
return to Depositor all Deposit Material replaced by the Replacement.
11. Storage Unit. DSI will store the Deposit in defined units of space,
called storage units. The cost of the first storage unit will be
included in the annual Deposit Account fee.
12. Deposit Obligations of Confidentiality. DSI agrees to establish a locked
receptacle in which it shall place the Deposit and shall put the
receptacle under the administration of
3
<PAGE> 4
one or more of its officers, selected by DSI, whose identity shall be
available to Depositor at all times. DSI shall exercise a
professional level of care in carrying out the terms of the Agreement.
DSI acknowledges Depositor's assertion that the Deposit shall contain
proprietary data and that DSI has an obligation to preserve and
protect the confidentiality of the Deposit.
Except as provided for in the Agreement, DSI agrees that it shall not
divulge, disclose, make available to third parties, or make any use
whatsoever of the Deposit.
13. Audit Rights. DSI agrees to keep records of the activities undertaken
and materials prepared pursuant to the Agreement. DSI may issue to
Depositor and Preferred Registrant an annual report profiling the
Deposit Account. Such annual report will identify the Depositor,
Preferred Registrant, the current Designated Contacts, selected
special services, and the Exhibit B history, which includes Deposit
Material acceptance and destruction or return dates.
Upon reasonable notice, during normal business hours and during the
term of the Agreement, Depositor or Preferred Registrant will be
entitled to inspect the records of DSI pertaining to the Agreement,
and accompanied by an employee of DSI, inspect the physical status and
condition of the Deposit. The Deposit may not be changed during the
audit.
14. Renewal Period of Agreement. Upon payment of the initial fee or
renewal fee, the Agreement will be in full force and will have an
initial period of at least one (1) year unless otherwise specified.
The Agreement may be renewed for additional periods upon receipt by
DSI of the specified renewal fees prior to the last day of the period
("Expiration Date"). DSI may extend the period of the Agreement to
cover the processing of any outstanding instruction made during any
period of the Agreement.
Preferred Registrant has the right to pay renewal fees and other
related fees. In the event Preferred Registrant pays the renewal fees
and Depositor is of the opinion that any necessary condition for
renewal is not met, Depositor may so notify DSI and Preferred
Registrant in writing. The resulting dispute will be resolved
pursuant to the dispute resolution process defined in Section 25.
15. Expiration. If the Agreement is not renewed, or is otherwise
terminated, all duties and obligations of DSI to Depositor and
Preferred Registrant will terminate. If Depositor requests the return
of the Deposit, DSI shall return the Deposit to Depositor only after
any outstanding invoices and the Deposit return fee are paid. If the
fees are not received by the Expiration Date of the Agreement, DSI, at
its option, may destroy the Deposit.
16. Certification by Depositor. Depositor represents to Preferred
Registrant that:
4
<PAGE> 5
a. The Deposit delivered to DSI consists of the following: source
code deposited on computer magnetic media; all necessary and
available information, proprietary information, and technical
documentation which will enable a reasonably skilled
programmer of Preferred Registrant to create, maintain and/or
enhance the Software without the aid of Depositor or any other
person or reference to any other materials; maintenance tools
(test programs and program specifications); proprietary or
third party system utilities (compiler and assembler
descriptions); description of the system/program generation;
descriptions and locations of programs not owned by Depositor
but required for use and/or support; and names of key
developers for the technology on Depositor's staff.
b. The Deposit will be defined in the Exhibit B(s).
These representations shall be deemed to be made continuously
throughout the term of the Agreement.
17. Indemnification. Depositor and Preferred Registrant agree to defend
and indemnify DSI and hold DSI harmless from and against any and all
claims, actions and suits, whether in contract or in tort, and from
and against any and all liabilities, losses, damages, costs, charges,
penalties, counsel fees, and other expenses of any nature (including,
without limitation, settlement costs) incurred by DSI as a result of
performance of the Agreement except in the event of a judgment which
specifies that DSI acted with gross negligence or willful misconduct.
18. Filing for Release of Deposit by Preferred Registrant. Upon notice to
DSI by Preferred Registrant of the occurrence of a release condition
as defined in Section 21 and payment of the release request fee, DSI
shall notify Depositor by certified mail or commercial express mail
service with a copy of the notice from Preferred Registrant. If
Depositor provides contrary instruction within ten (1O) days of the
mailing of the notice to Depositor, DSI shall not deliver a copy of
the Deposit to Preferred Registrant.
19. Contrary Instruction. "Contrary Instruction" is the filing of an
instruction with DSI by Depositor stating that a Contrary Instruction
is in effect. Such Contrary Instruction means an officer of Depositor
warrants that a release condition has not occurred or has been cured.
DSI shall send a copy of the instruction by certified mail or
commercial express mail service to Preferred Registrant. DSI shall
notify both Depositor and Preferred Registrant that there is a dispute
to be resolved pursuant to Section 25. Upon receipt of Contrary
Instruction, DSI shall continue to store the Deposit pending Depositor
and Preferred Registrant joint instruction, resolution pursuant to
Section 25, order by a court of competent jurisdiction, or termination
by non-renewal of the Agreement.
20. Release of Deposit to Preferred Registrant. Pursuant to Section 18, if
DSI does not receive Contrary Instruction from Depositor, DSI is
authorized to release the Deposit, or if more than one Preferred
Registrant is registered to the Deposit, a copy of the Deposit,
5
<PAGE> 6
to the Preferred Registrant filing for release following receipt of
any fees due to DSI including Deposit copying and delivery fees.
21. Release Conditions of Deposit to Preferred Registrant.
Release conditions are:
a. Depositor ceases to do business, makes an assignment for the
benefit of creditors, becomes insolvent (as revealed by its
books and records or otherwise), is generally unable to pay
its debts as such debts become due, or commences, or has
commenced against it a case under any chapter of state or
federal bankruptcy laws; and Depositor fails to cure any such
event within 60 days after receiving notice from Preferred
Registrant; and
b. Preferred Registrant has paid all amounts due Depositor under
the Remote Agreement.
22. Grant of Use License. Subject to the terms and conditions of the
Agreement, Depositor hereby transfers and upon execution by DSI, DSI
hereby accepts a non-exclusive, nontransferable, royalty-free license
("Use License") for the unexpired term of the Remote Agreement subject
to Section 15 thereof which DSI will transfer to Preferred Registrant
upon controlled release of the Deposit as described in the Agreement.
The Use License will be solely for Preferred Registrant's internal
purposes in connection with support, maintenance, and operation of the
Software solely as set forth in the Remote Agreement and not for any
other purpose or person.
23. Use License Representation. Depositor represents and warrants to
Preferred Registrant and DSI that it has no knowledge of any
incumbrance or infringement of the Deposit, or that any claim has been
made that the Deposit infringes any patent, trade secret, copyright or
other proprietary right of any third party. Depositor warrants that it
has the full right, power, and ability to enter into and perform the
Agreement, to grant the foregoing Use License, and to permit the
Deposit to be placed with DSI.
24. Conditions Following Release. Following a release and subject to
payment to DSI of all outstanding fees, DSI shall transfer the Use
License to Preferred Registrant. Additionally Preferred Registrant
shall be required to maintain the confidentiality of the released
Deposit.
25. Disputes. In the event of a dispute, DSI shall so notify Depositor and
Preferred Registrant in writing. Upon agreement of the parties at the
time of a dispute, such dispute will be settled by arbitration in
accordance with the commercial rules of the American Arbitration
Association ("AAA"). Unless otherwise agreed to by Depositor and
Preferred Registrant, arbitration will take place in San Diego,
California, USA.
6
<PAGE> 7
26. Verification Rights. Depositor grants to Preferred Registrant the
option to verify the Deposit for accuracy, completeness and
sufficiency. Depositor agrees to permit DSI and at least one employee
of Preferred Registrant to be present at Depositor's facility to
verify, audit and inspect of the Deposit for the benefit of Preferred
Registrant. If DSI is present or is selected to perform the
verification, DSI will be paid according to DSI's then current
verification service hourly rates and any out of pocket expenses.
27. General. DSI may act in reliance upon any instruction, instrument, or
signature believed to be genuine and may assume that any employee
giving any written notice, request, advice or instruction in
connection with or relating to the Agreement has apparent authority
and has been duly authorized to do so. DSI may provide copies of the
Agreement or account history information to any employee of Depositor
or Preferred Registrant upon their request. For purposes of
termination or replacement, Deposit Material shall be returned only to
Depositor's Designated Contact, unless otherwise instructed by
Depositor's Designated Contact.
DSI is not responsible for failure to fulfill its obligations under the
Agreement due to causes beyond DSI's control.
The Agreement is to be governed by and construed in accordance with
the laws of the State of California.
The Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof, and supersedes all previous
communications, representations, understandings, and agreements,
either oral or written, between the parties. The Agreement may be
amended only in a writing signed by the parties.
If any provision of the Agreement is held by any court to be invalid
or unenforceable, that provision will be severed from the Agreement
and any remaining provisions will continue in full force.
28. Title to Media. Subject to the terms of the Agreement, title to the
media, upon which the proprietary data is written or stored, is and
shall be irrevocably vested in DSI. Notwithstanding the foregoing,
Depositor will retain ownership of the proprietary data contained on
the media including all copyright, trade secret, patent or other
intellectual property ownership rights subsisting in such proprietary
data.
29. Termination of Rights. The Use License as described above will
terminate in the event that the Agreement is terminated without the
Use License transferring to Preferred Registrant.
30. Fees. Fees are due upon receipt of signed contract, receipt of Deposit
Material, or when service is requested, whichever is earliest. If
invoiced fees are not paid within sixty (60) days of the date of the
invoice, DSI may terminate the Agreement. If the payment is not
7
<PAGE> 8
timely received by DSI, DSI shall have the right to accrue and collect
interest at the rate of one and one-half percent per month (18% per
annum) from the date of the invoice for all late payments.
Renewal fees will be due in full upon the receipt of invoice unless
otherwise specified by the invoice. In the event that renewal fees are
not received thirty (30) days prior to the Expiration Date, DSI shall
so notify Depositor and Preferred Registrant. If the renewal fees are
not received by the Expiration Date, DSI may terminate the Agreement
without further notice and without liability of DSI to Depositor or
Preferred Registrant.
DSI shall not be required to process any request for service unless
the payment for such request shall be made or provided for in a manner
satisfactory to DSI.
All service fees and renewal fees will be those specified in DSI's Fee
and Services Schedule in effect at the time of renewal or request for
service, except as otherwise agreed. For any increase in DSI's
standard fees, DSI shall notify Depositor and Preferred Registrant at
least ninety (90) days prior to the renewal of the Agreement. For any
service not listed on the Fee and Services Schedule, DSI shall provide
a quote prior to rendering such service.
Fees invoiced by DSI are the responsibility of the Preferred
Registrant and as such all invoices in accordance with this Agreement
are to be sent to the Preferred Registrant.
8
<PAGE> 9
On behalf of the Investment Companies
and respective Portfolios and Classes
set forth in Schedule A attached
hereto as may be amended from
time to time.
<TABLE>
<S> <C>
By:/s/ ROBERT H. GRAHAM FIRST DATA INVESTOR SERVICES
--------------------------------- GROUP, INC.
Name: Robert H. Graham
------------------------------- By:/s/ ILLEGIBLE
Title: President ---------------------------------
------------------------------ Name: ILLEGIBLE
-------------------------------
Title: Executive Vice President
------------------------------
DATA SECURITIES
INTERNATIONAL, INC.
By:/s/ CHRISTIE WOODWARD
---------------------------------
Name: Christie Woodward
-------------------------------
Title: Contract Administrator
------------------------------
</TABLE>
<PAGE> 10
SCHEDULE A
LIST OF FUNDS
AIM ADVISOR FUNDS, INC.
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
AIM Advisor Cash Management Fund Class A and Class C Shares
AIM Advisor Flex Fund Class A and Class C Shares
AIM Advisor Income Fund Class A and Class C Shares
AIM Advisor International Value Fund Class A and Class C Shares
AIM Advisor Large Cap Value Fund Class A and Class C Shares
AIM Advisor MultiFlex Fund Class A and Class C Shares
AIM Advisor Real Estate Fund Class A and Class C Shares
</TABLE>
AIM EQUITY FUNDS, INC.
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
AIM Blue Chip Fund Class A, Class B Shares and Class C Shares
AIM Capital Development Fund Class A, Class B Shares and Class C Shares
AIM Charter Fund Class A, Class B Shares and Class C Shares
AIM Weingarten Fund Class A, Class B Shares and Class C Shares
AIM Aggressive Growth Fund Class A Shares
AIM Constellation Fund Class A Shares and Class C Shares
</TABLE>
AIM FUNDS GROUP
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
AIM Balanced Fund Class A, Class B Shares and Class C Shares
AIM Global Utilities Fund Class A, Class B Shares and Class C Shares
AIM Growth Fund Class A, Class B Shares and Class C Shares
AIM High Yield Fund Class A, Class B Shares and Class C Shares
AIM Income Fund Class A, Class B Shares and Class C Shares
AIM Intermediate Government Fund Class A, Class B Shares and Class C Shares
AIM Municipal Bond Fund Class A, Class B Shares and Class C Shares
AIM Value Fund Class A, Class B Shares and Class C Shares
AIM Money Market Fund Class A, Class B, Class C and AIM Cash Reserve Shares
</TABLE>
AIM INTERNATIONAL FUNDS, INC.
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
AIM International Equity Fund Class A, Class B Shares and Class C Shares
AIM Global Aggressive Growth Fund Class A, Class B Shares and Class C Shares
AIM Global Growth Fund Class A, Class B Shares and Class C Shares
AIM Global Income Fund Class A, Class B Shares and Class C Shares
AIM Asian Growth Fund Class A, Class B Shares and Class C Shares
AIM European Development Fund Class A, Class B Shares and Class C Shares
</TABLE>
AIM INVESTMENT SECURITIES FUNDS
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
Limited Maturity Treasury Portfolio AIM Limited Maturity Treasury Shares
</TABLE>
AIM TAX-EXEMPT FUNDS, INC.
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
AIM Tax-Exempt Cash Fund Class A Shares
AIM Tax-Exempt Bond Fund of Connecticut Class A Shares
Intermediate Portfolio AIM Tax-Free Intermediate Shares- Class A
</TABLE>
<PAGE> 11
EXHIBIT A
DESIGNATED CONTACT
Account Number: 0609111-00002-01090011
<TABLE>
<S> <C>
NOTICES, DEPOSIT MATERIAL RETURNS AND INVOICES TO DEPOSITOR SHOULD BE ADDRESSED TO:
COMMUNICATION, INCLUDING DELINQUENCIES TO First Data Investor Services Group, Inc.
DEPOSITOR SHOULD BE ADDRESSED TO: ------------------------------------------------
4400 Computer Drive
First Data Investor Services Group, Inc. ------------------------------------------------
- ---------------------------------------- Westboro, MA 01581
4400 Computer Drive ------------------------------------------------
- ----------------------------------------
Westboro, MA 01581 ------------------------------------------------
- ----------------------------------------
Invoice Contact: Brendan Bowen
- ---------------------------------------- --------------------------------
Designated Contact: John Corey
---------------------
Telephone: (508)871-9601
------------------------------
Facsimile:
------------------------------
State of Incorporation: Massachusetts
-----------------
NOTICES AND COMMUNICATION, INCLUDING INVOICES TO PREFERRED REGISTRANT SHOULD BE
DELINQUENCIES TO PREFERRED REGISTRANT ADDRESSED TO:
SHOULD BE ADDRESSED TO: AIM Fund Services, Inc.
-----------------------------------------------
AIM Fund Services, Inc. Eleven Greenway Plaza
Eleven Greenway Plaza -----------------------------------------------
Houston, Texas 77046 Houston, Tx 77046
-----------------------------------------------
-----------------------------------------------
Designated Contact: Jack Caldwell Invoice Contact: Jack Caldwell
--------------------- -------------------------------
Telephone: (713)214-1633
------------------------------
Facsimile:
------------------------------
Requests from Depositor or Preferred Registrant INVOICE INQUIRIES AND FEE REMITTANCES TO DSI
Contact should be given Contact or authorized SHOULD BE ADDRESSED TO:
employee Registrant.
DSI
CONTRACTS, DEPOSIT MATERIAL AND NOTICES TO DSI Attn: Accounts Receivable
SHOULD BE ADDRESSED TO:
DSI
Attn: Contract Administration
Telephone:
-------------------------------------
Facsimile:
-------------------------------------
Telephone:
------------------------------
Facsimile:
------------------------------
Date:
-----------------------------------
</TABLE>
<PAGE> 12
EXHIBIT B
DESCRIPTION OF DEPOSIT MATERIAL
Deposit Account Number: 0609111-00002
--------------------------------------------------------
Depositor Company Name: First Data Investor Services Group
--------------------------------------------------------
DEPOSIT TYPE:
X Initial Supplemental Replacement
- ------ ------ ------
If Replacement: Destroy Deposit Return Deposit
------ ------
ENVIRONMENT:
Host System CPU/OS: MS Windows 3.11 or MS/Windows 95 OS on Intel X86 processor
based PC
------------------------------------------------------------
Version:
-----------------------------------------------------------------------
Backup:
------------------------------------------------------------------------
Source System CPU/OS: MS Windows 3.11 OS on Intel Pentium 133 MHz PC
----------------------------------------------------------
Version:
-----------------------------------------------------------------------
Compiler:Impress Imaging-Plexus AD v4.1, Informix ESQL v2.2, MS Visual C++v4.1
----------------------------------------------------------------------
Impress Clearinghouse & Toolbar-MS Visual C++ v4.1
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ACE Plus - MS Visual Basic 4.0, MS Access v2.0
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Special Instructions:
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DEPOSIT MATERIAL:
Exhibit B Name: Impress Imaging System Version: V5.2.06.01
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Impress Clearinghouse V5.2.02.01
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Impress Toolbar V5.2.01.01
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ACE Plus V2.05.07
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<TABLE>
<CAPTION>
Item Label Description Media Quantity
<S> <C> <C>
AIM Funds Source, CD 1
August 8, 1997
Case Arrived cracked DSI
</TABLE>
<TABLE>
<S> <C>
For Depositor, I certify that the above For DSI, I received the above described
described Deposit Material was sent to DSI: Deposit Material subject to the terms on
the reverse side of this Exhibit:
By:/s/ ILLEGIBLE By: /S/ CHRISTIE WOODWARD
--------------------------------------- ---------------------------------------
Print Name: ILLEGIBLE Print Name: CHRISTIE WOODWARD
------------------------------- -------------------------------
Date: 9-3-97 Date of Acceptance: 9-10-97
------------------------------------- -----------------------
</TABLE>
<PAGE> 13
EXHIBIT B
DESCRIPTION OF DEPOSIT MATERIAL
Deposit Account Number: 0609111-00002
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Depositor Company Name: First Data Investor Services Group
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DEPOSIT TYPE:
[X] Initial [ ] Supplemental [ ] Replacement
If Replacement: [ ] Destroy Deposit [ ] Return Deposit
ENVIRONMENT:
Host System CPU/OS: 3090/MVS
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Version:
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Backup:
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Source System CPU/OS: 3090/MVS
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Version:
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Compiler: Standard IBM Compiler
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Special Instructions:
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DEPOSIT MATERIAL:
Exhibit B Name: FSR Source Code-931761 Version:
---------------------------- --------------------------
FSR JCL-931384
Item Label Description Media Quantity
DSN-P03AIM.PRIV.VENDOR.SEA.CSSP Data Tape 1
ROD_PANLIB VOLSER-932154 DSI
DSN_P03AIMPRIV.VENDOR.SEQ.ESC Data Tape 1
ROW.TAPE VOLSER=932155
<TABLE>
<S> <C>
For Depositor, I certify that the above described For DSI, I received the above described Deposit
Deposit Material was sent to DSI: Material subject to the terms on the reverse side
of this Exhibit:
By: /s/ NOT LEGIBLE By: /s/ CHRISTIE WOODWARD
---------------------------------------------- ---------------------------------------------
Print Name: NOT LEGIBLE Print Name: CHRISTIE WOODWARD
-------------------------------------- -------------------------------------
Date: NOT LEGIBLE Date of Acceptance: NOT LEGIBLE
------------------------------------------- -----------------------------
</TABLE>
<PAGE> 1
EXHIBIT 9(b)
FUND ACCOUNTING AND PRICING AGENT AGREEMENT
This Fund Accounting and Pricing Agent Agreement (the "Agreement") is
made as of September 8, 1998, by and between AIM Investment Portfolios (the
"Company") and INVESCO (NY), INC. ("INVESCO (NY)").
WHEREAS, the Company is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company;
WHEREAS, the Company currently operates one mutual fund, which is
organized as a separate and distinct series consisting of shares of beneficial
interest (such existing fund and such funds as may hereafter be established
being referred to in this Agreement as the "Funds" and singly as a "Fund");
WHEREAS, the Company is part of a complex of investment companies that
are sub-advised and/or sub-administered by INVESCO (NY) and with which INVESCO
(NY) has entered into Fund Accounting and Pricing Agent Agreements (the "INVESCO
(NY) Funds");
WHEREAS, the Company desires to retain INVESCO (NY) to act as its
accounting and pricing agent, and INVESCO (NY) is willing to act in such
capacities.
NOW, THEREFORE, in consideration of the foregoing and the terms and
conditions hereinafter set forth, the Company and INVESCO (NY) hereby agree as
follows:
SECTION 1. APPOINTMENT. The Company hereby appoints INVESCO (NY)
to act as the accounting and pricing agent for each Fund for the period and on
the terms and conditions set forth in this Agreement. INVESCO (NY) hereby
accepts such appointment and agrees to render the services set forth for the
compensation herein provided.
SECTION 2. DEFINITIONS. As used in this Agreement and in addition
to the terms defined elsewhere herein, the following terms shall have the
meanings assigned to them in this Section:
(a) "Authorized Person" means any officer of the Company and
any other person, whether or not any such person is an officer or
employee of the Company, duly authorized by the Board of Trustees (the
"Board"), the President or any Vice President of the Fund to give Oral
and/or Written Instructions on behalf of the Company or any Fund.
(b) "Commission" means the Securities and Exchange Commission.
(c) "Custodian" means the custodian or custodians employed by
the Company to maintain custody of the Fund's assets.
<PAGE> 2
(d) "Governing Documents" means the Articles of Incorporation,
By-Laws and other applicable charter documents of the Company, all as
they may be amended from time to time.
(e) "Oral Instruction" means oral instructions actually
received by INVESCO (NY) from an Authorized Person or from a person
reasonably believed by INVESCO (NY) to be an Authorized Person,
provided that, any Oral Instruction shall be promptly confirmed by
Written Instructions.
(f) "Prospectus" means the current prospectus and statement of
additional information of a Fund, taken together.
(g) "Shares" means shares of beneficial interest of any of the
Funds.
(h) "Shareholder" means any owner of Shares.
(i) "Written Instructions" means written instructions
delivered by hand, mail, tested telegram or telex, cable or facsimile
sending device received by INVESCO (NY) and signed by an Authorized
Person.
SECTION 3. COMPLIANCE WITH LAWS, ETC. In performing its
responsibilities hereunder, INVESCO (NY) shall comply with all terms and
provisions of the Governing Documents, the Prospectus and all applicable state
and federal laws including, without limitation, the 1940 Act and the rules and
regulations promulgated by the Commission thereunder.
SECTION 4. SERVICES. In consideration of the compensation payable
hereunder and subject to the supervision and control of the Company's Boards,
INVESCO (NY) shall provide the following services to the Funds:
(a) PRICING AGENT. As pricing agent, INVESCO (NY) shall:
(1) Obtain security market quotes from services
approved by the investment manager of the Funds or, if such
quotes are unavailable, then obtain such prices from the
investment manager of the Funds or from such sources as the
investment manager may direct, and, in either case, calculate
the market value of the Funds' investments; and
(2) Value the assets of the Funds and compute the net
asset value per Share of the Funds at such dates and times and
in the manner specified in the then currently effective
Prospectus and transmit to the Funds' investment manager.
(b) ACCOUNTING AGENT. As fund accounting agent, INVESCO (NY)
shall:
- 2 -
<PAGE> 3
(1) Calculate the net income of each Fund;
(2) Calculate capital gains or losses for each Fund
from the sale or disposition of assets, if any;
(3) Maintain the general ledger and other accounts,
books and financial records of the Company, as required under
Section 31(a) of the 1940 Act and the rules promulgated by the
Commission thereunder in connection with the services provided
by INVESCO (NY);
(4) Perform the following functions on a daily basis:
(A) journalize each Fund's investment,
capital share and income and expense activities;
(B) reconcile cash and investment balances
of each Fund with the Custodian and provide the
Funds' investment manager with the beginning cash
balance available for investment purposes and update
the cash availability throughout the day as required
by the investment manager;
(C) verify investment buy/sell trade tickets
received from a Fund's investment manager and
transmit trades to a Fund's Custodian for proper
settlement;
(D) maintain individual ledgers for
investment securities;
(E) maintain historical tax lots for
investment securities;
(F) calculate various contractual expenses
(e.g., advisory and custody fees);
(G) post to and prepare the Funds' statement
of assets and liabilities and statement of
operations; and
(H) monitor expense accruals and notify an
Authorized Person of any proposed adjustments;
(5) Receive and act upon notices, Oral and Written
Instructions, certificates, instruments or other
communications from a Fund's shareholder servicing and
transfer agent;
(6) Assist in the preparation of financial statements
semiannually
- 3 -
<PAGE> 4
which will include the following items:
(A) schedule of investments;
(B) statement of assets and liabilities;
(C) statement of operations;
(D) changes in net assets;
(E) cash statement; and
(F) schedule of capital gains and losses;
(7) Prepare monthly security transaction listings;
(8) Prepare quarterly broker security transactions
summaries; and
(9) At the reasonable request of the Company, assist
in the preparation of various reports or other financial
documents required by federal, state and other appropriate
laws and regulations.
SECTION 5. COMPENSATION. As compensation for the services rendered
by INVESCO (NY) hereunder during the term of the Agreement, each Fund shall pay
to INVESCO (NY) monthly such fees as shall be agreed to from time to time by the
Company and INVESCO (NY), in writing and attached hereto as Schedule A. In
addition, as may be agreed to from time to time in writing by the Company and
INVESCO (NY), each Fund shall reimburse INVESCO (NY) for certain expenses that
it incurs in rendering services with respect to that Fund under this Agreement.
SECTION 6. RELIANCE BY INVESCO (NY) ON INSTRUCTIONS. Unless
otherwise provided in this Agreement, INVESCO (NY) shall act only upon Oral or
Written Instructions. INVESCO (NY) shall be entitled to rely upon any such
Instructions actually received by it under this Agreement. The Company agrees
that INVESCO (NY) shall incur no liability to the Company or any of the Funds in
acting upon Oral or Written Instructions given to INVESCO (NY) hereunder,
provided that, such Instructions reasonably appear to have been received from an
Authorized Person.
SECTION 7. COOPERATION WITH AGENTS OF THE COMPANY. INVESCO (NY)
shall cooperate with the Company's agents and employees, including, without
limitation, their independent accountants, and shall take all reasonable action
in the performance of its obligations under this Agreement to assure that all
necessary information is made available to such agents to the extent necessary
in the performance of their duties to the Company.
- 4 -
<PAGE> 5
SECTION 8. CONFIDENTIALITY. INVESCO (NY), on behalf of itself and
its employees, agrees to treat confidentially all records and other information
relating to the Company and the Funds except when requested to divulge such
information by duly constituted authorities provided that notification and prior
approval is obtained from the Company, which approval shall not be unreasonably
withheld and may not be withheld if INVESCO (NY), in its judgment, may be
subject to civil or criminal contempt proceedings for failure to comply.
SECTION 9. STANDARD OF CARE. In the performance of its
responsibilities hereunder, INVESCO (NY) shall exercise care and diligence in
the performance of its duties and act in good faith and use its best efforts to
ensure the accuracy and completeness of all services under this Agreement. In
performing services hereunder, INVESCO (NY):
(a) shall be under no duty to take any action on behalf of the
Company or the Funds except as specifically set forth herein or as may
be specifically agreed to by INVESCO (NY) in writing, and in computing
the net asset value per Share of a Fund, INVESCO (NY) may rely upon any
information furnished to it including, without limitation, information
(1) as to the accrual of liabilities of a Fund and as to liabilities of
a Fund not appearing on the books of account kept by INVESCO (NY), (2)
as to the existence, status and proper treatment of reserves, if any,
authorized by a Fund, (3) as to the sources of quotations to be used in
computing net asset value, (4) as to the fair value to be assigned to
any securities or other property for which price quotations are not
readily available and (5) as to the sources of information with respect
to "corporate actions" affecting portfolio securities of a Fund
(information as to "corporate actions" shall include information as to
dividends, distributions, interest payments, prepayments, stock splits,
stock dividends, rights offerings, conversions, exchanges,
recapitalizations, mergers, redemptions, calls, maturity dates and
similar actions, including ex-dividend and record dates and the amounts
and terms thereof);
(b) shall be responsible and liable for all losses, damages
and costs (including reasonable attorneys' fees) incurred by the
Company or any Fund which is due to or caused by INVESCO (NY)'s
negligence in the performance of its duties under this Agreement or for
INVESCO (NY)'s negligent failure to perform such duties as are
specifically assumed by INVESCO (NY) in this Agreement, provided that,
to the extend that duties, obligations and responsibilities are not
expressly set forth in this Agreement, INVESCO (NY) shall not be liable
for any act or omission that does not constitute willful misfeasance,
bad faith or negligence on the part of INVESCO (NY) or reckless
disregard by INVESCO (NY) of such duties, obligations and
responsibilities; and
(c) without limiting the generality of the foregoing, INVESCO
(NY) shall not, in connection with INVESCO (NY)'s duties under this
Agreement, be under any duty or obligation to inquire into and shall
not be liable for or in respect of:
(1) the validity or invalidity or authority or lack
of authority of any Oral or Written Instruction, notice or
other instrument which conforms
- 5 -
<PAGE> 6
to the applicable requirements of this Agreement, if any and
that INVESCO (NY) reasonably believes to be genuine; and
(2) delays or errors or loss of data occurring by
reason of circumstances beyond INVESCO (NY)'s control
including, without limitation, acts of civil or military
authorities, national emergencies, labor difficulties, fire,
mechanical breakdown, denial of access, earthquake, flood or
catastrophe, acts of God, insurrection, war, riots, or failure
of the mails, transportation, communication or power supply.
Notwithstanding any other provisions of this Agreement, the following provisions
shall apply with respect to INVESCO (NY)'s computation of a Fund's net asset
value: INVESCO (NY) shall be held to the exercise of reasonable care in
computing and determining net asset value as provided in Section 4(a), above,
but shall not be held accountable or liable for any losses, damages or expenses
of a Fund or any Shareholder or former Shareholder may incur arising from or
based upon errors or delays in the determination of such net asset value unless
such error or delay was due to INVESCO (NY)'s negligence or willful misfeasance
in the computation and determination of such net asset value. The parties hereto
acknowledge, however, that INVESCO (NY) causing an error or delay in the
determination of net asset value may, but does not in and of itself, constitute
negligence or willful misfeasance. In no event shall INVESCO (NY) be liable or
responsible to the Company or a Fund or any other party for any error or delay
which continued or was undetected after the date of an audit of the Company or
any Fund performed by the certified public accountants employed by the Company
if, in the exercise of reasonable care in accordance with generally accepted
accounting principles, such accountants should have become aware of such error
or delay in the course of performing such audit. INVESCO (NY)'s liability for
any such negligence or willful misfeasance which results in an error in
determination of such net asset value be limited to the direct out-of-pocket
loss a Fund and/or any Shareholder or former Shareholder shall actually incur.
Without limiting the generality of the foregoing, INVESCO (NY)
shall not be held accountable or liable to a Fund a Shareholder or former
Shareholder or any other person for any delays or losses, damages or expenses
any of them may suffer or incur resulting from (1) INVESCO (NY)'s failure to
receive timely and suitable notification concerning quotations, corporate
actions or similar matters relating to or affecting portfolio securities of a
Fund or (2) any errors in the computation of a net asset value based upon or
arising out of quotations or information as to corporate actions if received by
INVESCO (NY) from a source that INVESCO (NY) was authorized to rely upon.
Nevertheless, INVESCO (NY) will use its best judgment in determining whether to
verify through other sources any information that it has received as to
quotations or corporate actions if INVESCO (NY) has reason to believe that any
such information is incorrect.
SECTION 10. RECEIPT OF ADVICE. If INVESCO (NY) is in doubt as to
any action to be taken or omitted by it, INVESCO (NY) may request, and shall be
entitled to rely upon, directions and advice from the Company, including Oral or
Written Instructions where
- 6 -
<PAGE> 7
appropriate, or from counsel of its own choosing (who may also be counsel for
the Company or any Fund), with respect to any question of law. In case of
conflict between directions, advice or Oral and Written Instructions received by
INVESCO (NY) pursuant to this Section, INVESCO (NY) shall be entitled to rely on
and follow the advice received from counsel as described above. INVESCO (NY)
shall be protected in any action or in action that it takes in reliance on any
directions, advice or Oral or Written Instructions received pursuant to this
Section that INVESCO (NY), after the receipt of the same, in good faith believes
to be consistent with such directions, advice or Oral or Written Instructions,
as the case may be. Notwithstanding the foregoing, nothing in this Section shall
be construed as imposing on INVESCO (NY) any obligation to seek such directions,
advice or Oral or Written Instruction, or to act in accordance with them when
received, unless the same is a condition to INVESCO (NY)'s properly taking or
omitting to take such action under the terms of this Agreement.
SECTION 11. INDEMNIFICATION OF INVESCO (NY). The Company agrees to
indemnify and hold harmless INVESCO (NY) and its officers, Trustees, employees,
nominees and subcontractors, if any, from all taxes, charges, expenses,
assessments, claims and liabilities, including, without limitation, liabilities
arising under the 1940 Act, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the Commodities Exchange Act and
any state or foreign securities or blue sky laws, and expenses, including,
without limitation, reasonable attorneys' fees and disbursements, arising
directly or indirectly from any action or thing that INVESCO (NY) takes or omits
to take or do:
(a) at the request or on the direction of or in reliance upon
the advice of the Company;
(b) upon Oral or Written Instructions; or
(c) in the performance by INVESCO (NY) of its responsibilities
under this Agreement;
provided that, INVESCO (NY) shall not be indemnified against any liability to
the Company or the Funds, or any expenses incident thereto, arising out of
INVESCO (NY)'s own willful misfeasance, bad faith or negligence or reckless
disregard of its duties in connection with the performance of its duties and
obligations specifically described in this Agreement.
SECTION 12. INDEMNIFICATION OF THE COMPANY. INVESCO (NY) agrees to
indemnify and hold harmless the Company and its officers, trustees, Trustees and
employees, from all taxes, charges, expenses, assessments, claims and
liabilities, including, without limitation, liabilities arising under the 1940
Act, the Securities Act of 1933, as amended, the Securities Exchange Act of
1934, as amended, the Commodities Exchange Act and any state or foreign
securities or blue sky laws, and expenses, including, without limitation,
reasonable attorneys' fees and disbursements, arising directly or indirectly
from any action or omission of INVESCO (NY) that does not meet the standard of
care to which INVESCO (NY) is subject under Section 9, above.
- 7 -
<PAGE> 8
SECTION 13. LIMITATION OF LIABILITY OF SHAREHOLDERS AND TRUSTEES
OF THE COMPANY. It is expressly agreed that the obligations of the Company
hereunder shall not be binding upon any of the shareholders, directors,
Trustees, officers, nominees, agents or employees of the Company personally, but
shall only bind the assets and property of the applicable Funds, as provided in
the Governing Documents. The execution and delivery of this Agreement has been
authorized by the Board of the Company, and this Agreement has been executed and
delivered by an authorized officer of the Company acting as such, and neither
such authorization by the Board nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the assets and property
of the applicable Fund as provided in the Governing Documents.
SECTION 14. DURATION AND TERMINATION. This Agreement shall
continue with respect to the Company and each Fund until termination with
respect to the Company, or with respect to one or more Funds, is effected by the
Company or INVESCO (NY) upon sixty days' prior written notice to the other. In
the event of the "assignment" of this Agreement within the meaning of the 1940
Act, this Agreement shall terminate automatically.
SECTION 15. NOTICES. All notices and other communications
hereunder, including Written Instructions, shall be in writing or by confirming
telegram, cable, telex or facsimile sending device. Notices with respect to a
party shall be directed to such address as may from time to time be designated
by that party to the other.
SECTION 16. FURTHER ACTIONS. The Company and INVESCO (NY) agree to
perform such further acts and to execute such further documents as may be
necessary or appropriate to effect the purposes of this Agreement.
SECTION 17. AMENDMENTS. This Agreement, or any part thereof, may
be amended only by an instrument in writing signed by the Company and INVESCO
(NY).
SECTION 18. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.
SECTION 19. SHAREHOLDER LIABILITY. It is expressly agreed that the
obligations of the Company hereunder shall not be binding upon any of the
Trustees, Shareholders, nominees, officers, agents or employees of the Company
personally, but shall only bind the assets and property of the Funds, as
provided in the Company's Agreement and Declaration of Trust. The execution and
delivery of this Agreement has been authorized by the Trustees of the Company
and this Agreement has been executed and delivered by an authorized officer of
the Company acting as such; neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been made by any
of them individually or to impose any liability on any of them personally, but
shall bind only the assets
- 8 -
<PAGE> 9
and property of the Funds, as provided in the Company's Agreement and
Declaration of Trust.
SECTION 20. MISCELLANEOUS. This Agreement embodies the entire
agreement and understanding between the Company and INVESCO (NY) and supersedes
all prior agreements and understandings relating to the subject matter hereof,
provided that the Company and INVESCO (NY) may embody in one or more separate
documents their agreement or agreements with respect to such matters that this
Agreement provides may be later agreed to by and between the Company and INVESCO
(NY) from time to time. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement shall be governed by and construed in accordance with California law.
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the Company and INVESCO (NY) and their respective successors.
IN WITNESS WHEREOF, the Company and INVESCO (NY) have caused this
Agreement to be executed by their officers designated below as of this day,
month and year first above written.
AIM INVESTMENT PORTFOLIOS
By:
-------------------------------
Attest:
-------------------------------
INVESCO (NY), INC.
By:
-------------------------------
Attest:
-------------------------------
- 9 -
<PAGE> 10
SCHEDULE A
FUND ACCOUNTING AND PRICING AGENT FEES
The Fund shall pay a Fee to INVESCO (NY) determined as a percentage of the
Fund's net assets. The annualized rate at which the fee is paid (the Fee Rate)
and the Fee shall be calculated as set forth below:
o An Asset Multiplier is determined by multiplying .0003 times the first $5
billion in average net assets of the INVESCO (NY) Funds plus .0002 times
the net assets over $5 billion.
o The Fee Rate is determined by dividing the Asset Multiplier by the net
assets of the INVESCO (NY) Funds.
o The Monthly Fee is determined then by multiplying the average daily Fee
Rate by the number of days in the month and by the Fund's average daily net
assets then dividing by 365/or 366
Example: For Fund X having $100 million in average net assets during December
1997, in which the INVESCO (NY) Funds have average net assets of $8 billion:
Asset Multiplier = (.0003) ($5 billion) + (.0002) ($3 billion) = $2.1 million
Fee Rate = $2.1 million = .0002625
--------------
$8 billion
Monthly Fee = (31) (.0002625) ($100 million) = $2,229.45
-----
(365)
- 10 -
<PAGE> 1
EXHIBIT 9(c)(5)
A I M DISTRIBUTORS, INC.
SHAREHOLDER SERVICE AGREEMENT
(BROKERS FOR BANK TRUST DEPARTMENTS)
[LOGO APPEARS HERE]
A I M Distributors, Inc.
_________________________, 19_____
A I M Distributors, Inc.
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
Gentlemen:
We desire to enter into an Agreement with A I M Distributors, Inc. ("AIM
Distributors") as agent on behalf of the funds listed on Schedule A hereto,
which may be amended from time to time by AIM Distributors (the "Funds"), for
the servicing of our clients who are shareholders of, and the administration of
accounts in, the Funds. We understand that this Shareholder Service Agreement
(the "Agreement") has been adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (the "1940 Act") by each of the Funds, under a Distribution
Plan (the "Plan") adopted pursuant to said Rule, and is subject to applicable
rules of the National Association of Securities Dealers, Inc. ("NASD"). This
Agreement defines the services to be provided by us for which we are to receive
payments pursuant to the Plan. The Plan and the Agreement have been approved
by a majority of the directors or trustees of the applicable Fund, including a
majority of directors or trustees who are not interested persons of the
applicable Fund, and who have no direct or indirect financial interest in the
operation of the Plan or related agreements, by votes cast in person at a
meeting called for the purpose of voting on the Plan. Such approval included a
determination by the directors or trustees of the applicable Fund, in the
exercise of their reasonable business judgement and in light of their fiduciary
duties, that there is a reasonable likelihood that the Plan will benefit the
Fund and the holders of its Shares. The terms and conditions of this Agreement
shall be as follows:
1. To the extent that we provide continuing personal shareholder services
and administrative support services to our customers who may from time
to time own shares of the Funds of record or beneficially, including but
not limited to, forwarding sales literature, answering routine customer
inquiries regarding the Funds, assisting customers in changing dividend
options, account designations and addresses, and in enrolling into any
of several special investment plans offered in connection with the
purchase of the Funds' shares, assisting in the establishment and
maintenance of customer accounts and records and in the processing of
purchase and redemption transactions, investing dividends and capital
gains distributions automatically in shares of the Funds and providing
such other services as AIM Distributors or the customer may reasonably
request, you shall pay us a fee periodically. We represent that we
shall accept fees hereunder only so long as we continue to provide such
personal shareholder services.
2. We agree to transmit to AIM Distributors in a timely manner, all
purchase orders and redemption requests of our clients and to forward to
each client all proxy statements, periodic
<PAGE> 2
Shareholder Service Agreement Page 2
(Brokers for Bank Trust Departments)
shareholder reports and other communications received from AIM
Distributors by us relating to shares of the Funds owned by our clients.
AIM Distributors, on behalf of the Funds, agrees to pay all
out-of-pocket expenses actually incurred by us in connection with the
transfer by us of such proxy statements and reports to our clients as
required under applicable laws or regulations.
3. We agree to transfer to AIM Distributors in a timely manner as set forth
in the applicable prospectus, federal funds in an amount equal to the
amount of all purchase orders placed by us and accepted by AIM
Distributors. In the event that AIM Distributors fails to receive such
federal funds on such date (other than through the fault of AIM
Distributors), we shall indemnify the applicable Fund and AIM
Distributors against any expense (including overdraft charges) incurred
by the applicable Fund and/or AIM Distributors as a result of the
failure to receive such federal funds.
4. We agree to make available upon AIM Distributors's request, such
information relating to our clients who are beneficial owners of Fund
shares and their transactions in such shares as may be required by
applicable laws and regulations or as may be reasonably requested by AIM
Distributors.
5. We agree to transfer record ownership of a client's Fund shares to the
client promptly upon the request of a client. In addition, record
ownership will be promptly transferred to the client in the event that
the person or entity ceases to be our client.
6. Neither we nor any of our employees or agents are authorized to make any
representation to our clients concerning the Funds except those
contained in the then current prospectuses applicable to the Funds,
copies of which will be supplied to us by AIM Distributors; and we shall
have no authority to act as agent for any Fund or AIM Distributors.
Neither a Fund, nor A I M Advisors, Inc. ("AIM") will be a party, nor
will they be represented as a party, to any agreement that we may enter
into with our clients and neither a Fund nor AIM shall participate,
directly or indirectly, in any compensation that we may receive from our
clients in connection with our acting on their behalf with respect to
this Agreement.
7. In consideration of the services and facilities described herein, we
shall receive a maximum annual service fee and asset-based sales charge,
payable monthly, as set forth on Schedule A hereto. We understand that
this Agreement and the payment of such service fees and asset-based
sales charge has been authorized and approved by the Board of Directors
or Trustees of the applicable Fund, and that the payment of fees
thereunder is subject to limitations imposed by the rules of the NASD.
8. AIM Distributors reserves the right, in its discretion and without
notice, to suspend the sale of any Fund or withdraw the sale of shares
of a Fund, or upon notice to us, to amend this Agreement. We agree that
any order to purchase shares of the Funds placed by us after notice of
any amendment to this Agreement has been sent to us shall constitute our
agreement to any such amendment.
9. All communications to AIM Distributors shall be duly given if mailed to
A I M Distributors, Inc., 11 Greenway Plaza, Suite 1919, Houston, Texas
77046-1173. Any notice to us shall be duly given if mailed to us at the
address specified by us in this
<PAGE> 3
Shareholder Service Agreement Page 3
(Brokers for Bank Trust Departments)
Agreement or to such other address as we shall have designated in
writing to AIM Distributors.
10. This Agreement may be terminated at any time by AIM Distributors on not
less than 60 days' written notice to us at our principal place of
business. We, on 60 days' written notice addressed to AIM Distributors
at its principal place of business, may terminate this Agreement. AIM
Distributors may also terminate this Agreement for cause on violation
by us of any of the provisions of this Agreement, said termination to
become effective on the date of mailing notice to us of such
termination. AIM Distributors's failure to terminate for any cause
shall not constitute a waiver of AIM Distributors's right to terminate
at a later date for any such cause. This Agreement may be terminated
with respect to any Fund at any time by the vote of a majority of the
directors or trustees of such Fund who are disinterested directors or by
a vote of a majority of the Fund's outstanding shares, on not less than
60 days' written notice to us at our principal place of business. This
Agreement will be terminated by any act which terminates the Selected
Dealer Agreement between us and AIM Distributors or a Fund's
Distribution Plan, and in any event, shall terminate automatically in
the event of its assignment by us, the term "assignment" for this
purpose having the meaning defined in Section 2(a)(4) of the 1940 Act.
11. We represent that our activities on behalf of our clients and pursuant
to this Agreement either (i) are not such as to require our registration
as a broker-dealer in the state(s) in which we engage in such
activities, or (ii) we are registered as a broker-dealer in the state(s)
in which we engage in such activities. We represent that we are
registered as a broker-dealer with the NASD if required under applicable
law.
12. This Agreement and all rights and obligations of the parties hereunder
shall be governed by and construed under the laws of the State of Texas.
This Agreement may be executed in counterparts, each of which shall be
deemed an original but all of which shall constitute the same
instrument. This Agreement shall not relieve us or AIM Distributors
from any obligations either may have under any other agreements between
us.
13. This Agreement shall become effective as of the date when it is executed
and dated by AIM Distributors.
<PAGE> 4
Shareholder Service Agreement Page 4
(Brokers for Bank Trust Departments)
The undersigned agrees to abide by the foregoing terms and conditions.
------------------------------------
(Firm Name)
------------------------------------
(Address)
------------------------------------
City/State/Zip/County
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
Dated:
-----------------------------
ACCEPTED:
A I M DISTRIBUTORS, INC.
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
Dated:
---------------------------
Please sign both copies and return to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
<PAGE> 5
Shareholder Service Agreement Page 5
(Brokers for Bank Trust Departments)
SCHEDULE A
<TABLE>
<CAPTION>
Funds Fees
----- ----
<S> <C>
AIM Advisor Funds, Inc.
AIM Advisor Flex Fund
AIM Advisor International Value Fund
AIM Advisor Large Cap Value Fund
AIM Advisor MultiFlex Fund
AIM Advisor Real Estate Fund
AIM Equity Funds, Inc.
AIM Blue Chip Fund
AIM Capital Development Fund
AIM Charter Fund (Retail Class)
AIM Constellation Fund (Retail Class)
AIM Weingarten Fund (Retail Class)
*AIM Aggressive Growth Fund
AIM Funds Group
AIM Balanced Fund
AIM Global Utilities Fund
AIM High Yield Fund
AIM Income Fund
AIM Intermediate Government Fund
AIM Money Market Fund
AIM Municipal Bond Fund
AIM Select Growth Fund
AIM Value Fund
AIM International Funds, Inc.
AIM Asian Growth Fund
AIM European Development Fund
AIM International Equity Fund
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Global Income Fund
AIM Investment Securities Funds
AIM Limited Maturity Treasury Fund
AIM Special Opportunities Funds
AIM Small Cap Opportunities Fund
AIM Tax-Exempt Funds, Inc.
AIM High Income Municipal Fund
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut
</TABLE>
__________________________________
* Shares of AIM Aggressive Growth Fund may only be sold to current
shareholders who maintain open accounts in AIM Aggressive Growth Fund.
<PAGE> 6
Shareholder Service Agreement Page 6
(Brokers for Bank Trust Departments)
THE FOLLOWING FUNDS ARE ADDED AS OF THE CLOSE OF BUSINESS MAY 29, 1998:
<TABLE>
<CAPTION>
Funds Fees
----- ----
<S> <C>
AIM Basic Value Fund
AIM Developing Markets Fund
AIM Dollar Fund
AIM Emerging Markets Fund
AIM Emerging Markets Debt Fund
AIM Europe Growth Fund
AIM Global Consumer Products and Services Fund
AIM Global Financial Services Fund
AIM Global Government Income Fund
AIM Global Growth and Income Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Telecommunications Fund
AIM Global Trends Fund
AIM International Growth Fund
AIM Japan Growth Fund
AIM Latin American Growth Fund
AIM Mid Cap Equity Fund
AIM New Pacific Growth Fund
AIM Small Cap Growth Fund
AIM Strategic Income Fund
AIM Worldwide Growth Fund
</TABLE>
<PAGE> 7
A I M DISTRIBUTORS, INC.
[AIM Logo] SHAREHOLDER SERVICE AGREEMENT
(BANK TRUST DEPARTMENTS)
A I M Distributors, Inc.
_________________________, 19_____
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
Gentlemen:
We desire to enter into an Agreement with A I M Distributors, Inc. ("AIM
Distributors") as agent on behalf of the funds listed on Schedule A hereto (the
"Funds"), for the servicing of our clients who are shareholders of, and the
administration of accounts in, the Funds. We understand that this Shareholder
Service Agreement (the "Agreement") has been adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940 (the "1940 Act") by each of the Funds,
under a Distribution Plan (the "Plan") adopted pursuant to said Rule, and is
subject to applicable rules of the National Association of Securities Dealers,
Inc. ("NASD"). This Agreement defines the services to be provided by us for
which we are to receive payments pursuant to the Plan. The Plan and the
Agreement have been approved by a majority of the directors or trustees of the
applicable Fund, including a majority of directors or trustees who are not
interested persons of the applicable Fund, and who have no direct or indirect
financial interest in the operation of the Plan or related agreements, by votes
cast in person at a meeting called for the purpose of voting on the Plan. Such
approval included a determination by the directors or trustees of the
applicable Fund, in the exercise of their reasonable business judgement and in
light of their fiduciary duties, that there is a reasonable likelihood that the
Plan will benefit the Fund and the holders of its Shares. The terms and
conditions of this Agreement shall be as follows:
1. To the extent that we provide continuing personal shareholder services
and administrative support services to our customers who may from time
to time own shares of the Funds of record or beneficially, including but
not limited to, forwarding sales literature, answering routine customer
inquiries regarding the Funds, assisting customers in changing dividend
options, account designations and addresses, and in enrolling into any
of several special investment plans offered in connection with the
purchase of the Funds' shares, assisting in the establishment and
maintenance of customer accounts and records and in the processing of
purchase and redemption transactions, investing dividends and capital
gains distributions automatically in shares of the Funds and providing
such other services as AIM Distributors or the customer may reasonably
request, you shall pay us a fee periodically. We represent that we
shall accept fees hereunder only so long as we continue to provide such
personal shareholder services.
2. We agree to transmit to AIM Distributors in a timely manner, all
purchase orders and redemption requests of our clients and to forward to
each client all proxy statements, periodic shareholder reports and other
communications received from AIM Distributors by us relating
<PAGE> 8
Shareholder Service Agreement Page 2
(Bank Trust Departments)
to shares of the Funds owned by our clients. AIM Distributors, on
behalf of the Funds, agrees to pay all out-of-pocket expenses actually
incurred by us in connection with the transfer by us of such proxy
statements and reports to our clients as required under applicable laws
or regulations.
3. We agree to make available upon AIM Distributors's request, such
information relating to our clients who are beneficial owners of Fund
shares and their transactions in such shares as may be required by
applicable laws and regulations or as may be reasonably requested by AIM
Distributors.
4. We agree to transfer record ownership of a client's Fund shares to the
client promptly upon the request of a client. In addition, record
ownership will be promptly transferred to the client in the event that
the person or entity ceases to be our client.
5. Neither we nor any of our employees or agents are authorized to make any
representation to our clients concerning the Funds except those
contained in the then current prospectuses applicable to the Funds,
copies of which will be supplied to us by AIM Distributors; and we shall
have no authority to act as agent for any Fund or AIM Distributors.
Neither a Fund, nor A I M Advisors, Inc. ("AIM") will be a party, nor
will they be represented as a party, to any agreement that we may enter
into with our clients and neither a Fund nor AIM shall participate,
directly or indirectly, in any compensation that we may receive from our
clients in connection with our acting on their behalf with respect to
this Agreement.
6. In consideration of the services and facilities described herein, we
shall receive a maximum annual service fee and asset-based sales charge,
payable monthly, as set forth on Schedule A hereto. We understand that
this Agreement and the payment of such service fees and asset-based
sales charge has been authorized and approved by the Board of Directors
or Trustees of the applicable Fund, and that the payment of fees
thereunder is subject to limitations imposed by the rules of the NASD.
7. AIM Distributors reserves the right, in its discretion and without
notice, to suspend the sale of any Fund or withdraw the sale of shares
of a Fund, or upon notice to us, to amend this Agreement. We agree that
any order to purchase shares of the Funds placed by us after notice of
any amendment to this Agreement has been sent to us shall constitute our
agreement to any such amendment.
8. All communications to AIM Distributors shall be duly given if mailed to
A I M Distributors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas
77046-1173. Any notice to us shall be duly given if mailed to us at the
address specified by us in this Agreement or to such other address as we
shall have designated in writing to AIM Distributors.
9. This Agreement may be terminated at any time by AIM Distributors on not
less than 60 days' written notice to us at our principal place of
business. We, on 60 days' written notice addressed to AIM Distributors
at its principal place of business, may terminate this Agreement. AIM
Distributors may also terminate this Agreement for cause on violation by
us of any of the provisions of this Agreement, said termination to
become effective on the date of mailing notice to us of such
termination. AIM Distributors's failure to terminate for any cause
shall not constitute a waiver of AIM Distributors's right to terminate
at a later date for
<PAGE> 9
Shareholder Service Agreement Page 3
(Bank Trust Departments)
any such cause. This Agreement may be terminated with respect to any
Fund at any time by the vote of a majority of the directors or trustees
of such Fund who are disinterested directors or by a vote of a majority
of the Fund's outstanding shares, on not less than 60 days' written
notice to us at our principal place of business. This Agreement will be
terminated by any act which terminates the Agreement for Purchase of
Shares of The AIM Family of Funds(R) between us and AIM Distributors or
a Fund's Distribution Plan, and in any event, it shall terminate
automatically in the event of its assignment by us, the term
"assignment" for this purpose having the meaning defined in Section
2(a)(4) of the 1940 Act.
10. We represent that our activities on behalf of our clients and pursuant
to this Agreement either (i) are not such as to require our registration
as a broker-dealer in the state(s) in which we engage in such
activities, or (ii) we are registered as a broker-dealer in the state(s)
in which we engage in such activities. We represent that we are
registered as a broker-dealer with the NASD if required under applicable
law.
11. This Agreement and the Agreement for Purchase of Shares of The AIM
Family of Funds(R) through Bank Trust Departments constitute the entire
agreement between us and AIM Distributors and supersede all prior oral
or written agreements between the parties hereto. This Agreement may be
executed in counterparts, each of which shall be deemed an original but
all of which shall constitute the same instrument.
12. This Agreement and all rights and obligations of the parties hereunder
shall be governed by and construed under the laws of the State of Texas.
13. This Agreement shall become effective as of the date when it is executed
and dated by AIM Distributors.
<PAGE> 10
Shareholder Service Agreement Page 4
(Bank Trust Departments)
The undersigned agrees to abide by the foregoing terms and conditions.
-----------------------------------
(Firm Name)
-----------------------------------
(Address)
-----------------------------------
City/State/Zip/County
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
Dated:
----------------------------
ACCEPTED:
A I M DISTRIBUTORS, INC.
By:
------------------------
Name:
------------------------
Title:
------------------------
Dated:
------------------------
Please sign both copies and return to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
<PAGE> 11
Shareholder Service Agreement Page 5
(Bank Trust Departments)
SCHEDULE A
<TABLE>
<CAPTION>
Funds Fees
----- ----
<S> <C>
AIM Advisor Funds, Inc.
AIM Advisor Flex Fund
AIM Advisor International Value Fund
AIM Advisor Large Cap Value Fund
AIM Advisor MultiFlex Fund
AIM Advisor Real Estate Fund
AIM Equity Funds, Inc.
AIM Blue Chip Fund
AIM Capital Development Fund
AIM Charter Fund (Retail Class)
AIM Constellation Fund (Retail Class)
AIM Weingarten Fund (Retail Class)
AIM Aggressive Growth Fund *
AIM Funds Group
AIM Balanced Fund
AIM Global Utilities Fund
AIM High Yield Fund
AIM Income Fund
AIM Intermediate Government Fund
AIM Money Market Fund
AIM Municipal Bond Fund
AIM Select Growth Fund
AIM Value Fund
AIM International Funds, Inc.
AIM Asian Growth Fund
AIM European Development Fund
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Global Income Fund
AIM International Equity Fund
AIM Investment Securities Funds
AIM Limited Maturity Treasury Fund
AIM Special Opportunities Funds
AIM Small Cap Opportunities Fund
AIM Tax-Exempt Funds, Inc.
AIM High Income Municipal Fund
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut
</TABLE>
__________________________________
* Shares of AIM Aggressive Growth Fund may only be sold to current
shareholders who maintain open accounts in AIM Aggressive Growth Fund.
<PAGE> 12
Shareholder Service Agreement Page 6
(Bank Trust Departments)
THE FOLLOWING FUNDS ARE ADDED AS OF THE CLOSE OF BUSINESS MAY 29, 1998:
<TABLE>
<CAPTION>
Funds Fees
----- ----
<S> <C>
AIM Basic Value Fund
AIM Developing Markets Fund
AIM Dollar Fund
AIM Emerging Markets Fund
AIM Emerging Markets Debt Fund
AIM Europe Growth Fund
AIM Global Consumer Products and Services Fund
AIM Global Financial Services Fund
AIM Global Government Income Fund
AIM Global Growth and Income Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Telecommunications Fund
AIM Global Trends Fund
AIM International Growth Fund
AIM Japan Growth Fund
AIM Latin American Growth Fund
AIM Mid Cap Equity Fund
AIM New Pacific Growth Fund
AIM Small Cap Growth Fund
AIM Strategic Income Fund
AIM Worldwide Growth Fund
</TABLE>
<PAGE> 1
EXHIBIT 10(a)
August 24, 1998
AIM Investment Portfolios
50 California Street, 27th Floor
San Francisco, California 94111
Ladies and Gentlemen:
You have requested our opinion, as counsel to AIM Investment Portfolios
("Trust"), as to certain matters regarding the issuance of Shares of Trust. (As
used in this letter, the term "Shares" means the Class A, Class B, and Advisor
Class shares of beneficial interest in AIM Dollar Fund, the only series of
Trust.)
As such counsel, we have examined certified or other copies, believed
by us to be genuine, of Trust's Agreement and Declaration of Trust dated as of
May 7, 1998 ("Agreement"), and Bylaws and such other documents relating to its
organization and operation as we have deemed relevant to our opinion, as set
forth herein. Our opinion is limited to the laws and facts in existence on the
date hereof, and it is further limited to the laws (other than the conflict of
law rules) of the State of Delaware that in our experience are normally
applicable to the issuance of shares of beneficial interest by business trusts
and to the Securities Act of 1933 ("1933 Act"), the Investment Company Act of
1940 ("1940 Act") and the regulations of the Securities and Exchange Commission
("SEC") thereunder. With respect to matters governed by the laws of the State
of Delaware (excluding the securities laws thereof), we have relied solely on
the opinion of Potter Anderson & Corroon, LLP, Delaware counsel to Trust, an
executed copy of which is appended hereto as Exhibit A.
Based on the foregoing, we are of the opinion that Trust has been duly
organized as a business trust under the laws of the State of Delaware and is
validly existing thereunder; that the issuance of the Shares has been duly
authorized by Trust; and that, when sold in accordance with the terms
contemplated by Trust's registration statement on Form N-1A (File No. 2-74549)
("Registration Statement"), including receipt by Trust of full payment for the
Shares and compliance with the 1933 Act and the 1940 Act, the Shares will have
been legally issued, fully paid, and non-assessable.
We note, however, that Trust is an entity of the type commonly known
as a "Delaware business trust." The Delaware Business Trust Act, 12 Del. C. ss.
3801 et seq. ("Delaware Act"), provides that shareholders of a Delaware
business trust are entitled to the same limitation of personal liability
extended to stockholders of a Delaware corporation. Thus, under Delaware
<PAGE> 2
AIM Investment Portfolios
August 24, 1998
Page 2
law, shareholders will not be personally liable for the obligations of Trust.
This limitation of liability may not be absolute, however, as it is possible
that a non-Delaware court would not uphold this provision of the Delaware Act.
Consistent with the Delaware Act, the Agreement includes an express
disclaimer of shareholder liability for the debts, liabilities, obligations, and
expenses incurred by, contracted for, or otherwise existing with respect to
Trust or any Portfolio (as defined in the Agreement) (or class) thereof. The
Agreement also requires that every note, bond, contract, or other undertaking
issued by or on behalf of Trust or its trustees relating to Trust or to any
Portfolio include a recitation limiting the obligation represented thereby to
Trust and its assets or to one or more Portfolios and the assets belonging
thereto (but provides that the omission of such a recitation shall not operate
to bind any shareholder or trustee of Trust). Furthermore, the Agreement states
that the debts, liabilities, obligations, and expenses incurred by, contracted
for, or otherwise existing with respect to a particular Portfolio shall be
enforceable against the assets of such Portfolio only, and not against the
assets of Trust generally or the assets belonging to any other Portfolio.
Finally, the Agreement further provides (1) for indemnification from the assets
belonging to the applicable Portfolio (or allocable to the applicable class) for
all loss and expense of any shareholder held personally liable for the
obligations of Trust or any Portfolio (or class) by virtue of ownership of
Shares of Trust or such Portfolio (or class), and (2) for Trust, on behalf of
the affected Portfolio (or class), to assume the defense of any claim against
the shareholder for any act or obligation of that Portfolio (or class). Thus,
the risk of a shareholder's incurring financial loss because of shareholder
liability is limited to circumstances in which (a) a court refused to apply
Delaware law or otherwise failed to give full effect to the Agreement or
contractual provisions limiting shareholder liability and (b) Trust was unable
to meet its obligations.
We hereby consent to this opinion accompanying Post-Effective
Amendment No. 27 to the Registration Statement when it is filed with the SEC
and to the reference to our firm in the prospectuses that are being filed as
part of such amendment.
Very truly yours,
KIRKPATRICK & LOCKHART LLP
By: /s/ R. DARRELL MOUNTS
R. Darrell Mounts
<PAGE> 1
EXHIBIT 10(b)
[POTTER ANDERSON & CORROON LLP LETTERHEAD]
August 24, 1998
To Each of the Addresses Listed
on Schedule I Attached Hereto
Re: AIM Investment Portfolios
Ladies and Gentlemen:
We have acted as special Delaware counsel for AIM Investment
Portfolios, a Delaware business trust (the "Trust"), in connection with the
proposed issuance of shares (collectively, the "Shares") of Class A, Class B,
and Advisor Class (collectively, the "Classes") of AIM Dollar Fund (the
"Portfolio") as designated on Schedule A to that certain Agreement and
Declaration of Trust dated as of May 7, 1998, entered into among William J.
Guilfoyle, C. Derek Anderson, Frank S. Bayley, Arthur C. Patterson, and Ruth H.
Quigley, as Trustees, and any future Shareholders of the Trust (the
"Declaration"). Initially capitalized terms used herein and not otherwise
defined are used herein as defined in the Declaration.
For purposes of giving the opinions hereinafter set forth, we
have examined only the following documents and have conducted no independent
factual investigation of our own:
1. The Certificate of Trust for the Trust, dated as of May 7,
1998, as filed in the Office of the Secretary of State of the State of Delaware
(the "Secretary of State") on May 7, 1998;
2. The Declaration;
3. The By-laws of the Trust;
4. Resolutions of the Trustees (the "Conversion Resolutions")
approving that certain plan of conversion and termination (the "Plan of
Conversion") by and between the Trust and G.T. Investment Portfolios, Inc., now
known as AIM Investment Portfolios, Inc. (the "Company");
<PAGE> 2
5. The Plan of Conversion;
6. Resolutions of the Trustees (the "18f-3 Resolutions" and,
together with the Conversion Resolutions, the "Resolutions") adopting that
certain plan pursuant to Rule 18f-3 under the Investment Company Act of 1940
(the "18f-3 Plan");
7. A Certificate of Good Standing for the Trust, dated August
24, 1998, obtained from the Secretary of State; and
8. The registration statement on Form N-1A filed with the
Securities and Exchange Commission on or about August 24, 1998, pursuant to the
Securities Act of 1933, as amended, covering the Shares (the "Registration
Statement").
As to certain facts material to the opinions expressed
herein, we have relied upon the representations and warranties contained in the
documents examined by us.
Based upon the foregoing, and upon an examination of such
questions of law of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act.
2. The Portfolio has been duly created and is validly
existing as a series under Section 3804 of the Delaware Act.
3. The Declaration constitutes the legal, valid and binding
obligation of the Trustees, enforceable against the Trustees, in accordance
with its terms.
4. Subject to the other qualifications set forth herein
(including, without limitation, paragraph 5 below), the Shares have been duly
authorized and when (a) the actions referred to in the Plan of Conversion shall
have occurred, and (b) the Shares shall have been otherwise issued and sold in
accordance with the Declaration, the Resolutions, the Plan of Conversion, the
18f-3 Plan, and the By-laws, such Shares will be validly issued, fully paid,
and non-assessable undivided beneficial interests in the assets of the
Portfolio.
5. When and if the actions referred to in paragraph 4 have
occurred, the holders of the Shares as beneficial owners of the Shares will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware, except that such holders of Shares may be obligated
to provide indemnity and/or security in connection with the issuance of
replacement certificates for lost or destroyed certificates, if any,
representing such Shares, if such holders request certificates in accordance
with the By-laws and such certificates are lost.
<PAGE> 3
In addition to the assumptions and qualifications set forth
above, all of the foregoing opinions contained herein are subject to the
following assumptions, qualifications, limitations and exceptions:
a. The foregoing opinions are limited to the laws of
the State of Delaware presently in effect, excluding the securities laws
thereof. We have not considered and express no opinion on the laws of any other
jurisdiction, including, without limitation, federal laws and rules and
regulations relating thereto.
b. We have assumed the due execution and delivery by
each party listed as a party to the Plan of Conversion. We have further assumed
the due authorization by the Company of the Plan of Conversion. We have assumed
further that the Company has the full corporate power, authority, and legal
right to execute, deliver and perform the Plan of Conversion. We also have
assumed that the Company is a corporation validly existing and in good standing
under the laws of its jurisdiction of organization. We have also assumed that
the Plan of Conversion does not result in the breach of the terms of, and does
not contravene the Company's constituent documents, any contractual restriction
binding on any party to the Plan of Conversion, or any law, rule or regulation
applicable to such parties (exclusive of the Trust, but only to the extent of
any Delaware law, rule or regulation). In addition, we have assumed the legal
capacity of any natural persons who are parties to any of the documents
examined by us.
c. The foregoing opinion regarding the
enforceability of the Declaration is subject to (i) applicable bankruptcy,
insolvency, moratorium, fraudulent conveyance, fraudulent transfer and similar
laws relating to or affecting creditors rights generally including, without
limitation, the Delaware Uniform Fraudulent Conveyance Act, the provisions of
the United States Bankruptcy Code and the Delaware insolvency statutes, (ii)
principles of equity including, without limitation, concepts of materiality,
good faith, fair dealing, conscionability and reasonableness (regardless of
whether such enforceability is considered in a proceeding in equity or at law),
(iii) applicable law relating to fiduciary duties, and (iv) public policy
limitations with respect to exculpation, contribution and indemnity provisions.
d. We have assumed that all signatures on documents
examined by us are genuine, that all documents submitted to us as originals
are authentic and that all documents submitted to us as copies conform with
the originals.
e. We have assumed that the Declaration, the
By-laws, the Plan of Conversion, the Resolutions and the 18f-3 Plan,
collectively, constitute the entire agreement with respect to the subject
matter thereof, including (i) with respect to the creation, dissolution and
winding up of the Trust and the Portfolio, (ii) the terms applicable to the
Shares, and (iii) the power and authority of the Trustees.
f. We have assumed that to the extent any additional
rights and/or preferences are stated in the 18f-3 Plan, such additional rights
and/or preferences (x) are enforceable in accordance with their terms, and (y)
do not conflict with the Certificate of Trust, the Declaration, the By-laws,
the Plan of Conversion, or any statute, rule or regulation applicable to the
Trust or the Portfolio.
<PAGE> 4
g. We have assumed that the Plan of Conversion is
the legal, valid and binding obligation of the parties thereto, enforceable
against such parties in accordance with its terms.
h. We have assumed that no event set forth in
Section 9.3(a) of the Declaration has occurred with respect to the Trust or
the Portfolio.
i. Notwithstanding any provision in the Declaration
to the contrary, we note that upon the occurrence of an event set forth in
Section 9.3(a) thereof, with respect to the Trust or the Portfolio, as the case
may be, the Trust or the Portfolio, as applicable, cannot make any payments or
distributions to the Shareholders thereof until their respective creditors'
claims are either paid in full or reasonable provision for payment thereof has
been made.
j. With respect to the enforceability of any
provision of the Declaration wherein the parties provide for the appointment of
a liquidator, we note that upon the application of any beneficial owner, the
Delaware Court of Chancery has the power, upon cause shown, to wind up the
affairs of a Delaware business trust or series thereof and in connection
therewith to appoint a liquidating trustee other than the one agreed to by the
beneficial owners thereof.
k. We have assumed that none of the By-laws, the
Resolutions, the Plan of Conversion, or the 18f-3 Plan has been amended,
modified, or revoked in any manner from the date of its adoption, and that each
of the By-laws, the Resolutions, the Plan of Conversion, and the 18f-3 Plan
remains in full force and effect on the date hereof.
l. We have assumed that the Trust maintains separate
and distinct records for the Portfolio and that the Trust and the Trustees hold
and account for the assets belonging to the Portfolio separately from the other
assets of the Trust generally, if any.
m. We note that we do not assume responsibility for
the contents of the Registration Statement.
This opinion is rendered solely for your benefit in
connection with the matters set forth herein and, without our prior written
consent, may not be furnished (except that it may be furnished to any federal,
state or local regulatory agencies or regulators having appropriate
jurisdiction and entitled to such disclosure) or quoted to, or relied upon by,
any other person or entity for any purpose. Kirkpatrick & Lockhart LLP may rely
on this opinion with respect to the matters set forth herein in connection with
its opinion being delivered on even date herewith.
We consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement. In giving
the foregoing consent, we do not thereby admit that we come within the category
of Persons whose consent is required under Section 7 of the Securities Act of
1933, as amended, or the rules and regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
/s/ POTTER ANDERSON
& CORROON LLP
<PAGE> 5
Schedule I
AIM Investment Portfolios
50 California Street
27th Floor
San Francisco, California 94111
AIM Investment Portfolios, Inc.
50 California Street
27th Floor
San Francisco, California 94111
<PAGE> 1
EXHIBIT 11
[PRICEWATERHOUSECOOPERS LLP LETTERHEAD]
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of AIM Investment Portfolios, Inc. (formerly,
G.T. Investment Portfolios, Inc.):
We hereby consent to the inclusion of our report dated February 17, 1998
on our audit of the financial statements and financial highlights of AIM Dollar
Fund (formerly, GT Dollar Fund) as of December 31, 1997 in the Statement of
Additional Information with respect to the Post-Effective Amendment to the
Registration Statement on Form N-1A under the Securities Act of 1933, as
amended, of AIM Investment Portfolios, Inc. We further consent to the reference
to our Firm under the caption "Financial Highlights" in the Prospectus and
"Independent Accountants" in the Statement of Additional Information.
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
August 25, 1998
<PAGE> 1
EXHIBIT 18
MULTIPLE CLASS PLAN
OF
AIM INVESTMENT FUNDS
AIM INVESTMENT PORTFOLIOS
AIM GROWTH SERIES
AIM SERIES TRUST
1. This Multiple Class Plan ("Plan") adopted in accordance with Rule 18f-3
under the Act shall govern the terms and conditions under which the Funds
may issue separate Classes of Shares representing interests in one or more
Portfolios of each Fund.
2. Definitions. As used herein, the terms set forth below shall have the
meanings ascribed to them below.
a. Act - Investment Company Act of 1940, as amended.
b. Advisor Class Shares - shall mean those Shares of a Fund designated as
Advisor Class Shares in the Fund's organizing documents.
c. CDSC - contingent deferred sales charge.
d. CDSC Period - the period of years following acquisition of Shares during
which such Shares may be assessed a CDSC upon redemption.
e. Class - a class of Shares of a Fund representing an interest in a
Portfolio.
f. Class A Shares - shall mean those Shares designated as Class A Shares in
the Fund's organizing documents, as well as those Shares deemed to be
Class A Shares for purposes of this Plan.
g. Class B Shares - shall mean those Shares designated as Class B Shares in
the Fund's organizing documents.
h. Class C Shares - shall mean those Shares designated as Class C Shares in
the Fund's organizing documents, as well as those Shares deemed to be
Class C Shares for purposes of this Plan. Class C Shares may not be
available for each Fund.
i. Directors - the directors or trustees of a Fund.
j. Distribution Expenses - expenses incurred in activities which are
primarily intended to result in the distribution and sale of Shares as
defined in a Plan of Distribution and/or agreements relating thereto.
<PAGE> 2
k. Distribution Fee - a fee paid by a Fund to the Distributor to compensate
the Distributor for Distribution Expenses.
l. Distributor - A I M Distributors, Inc. or Fund Management Company, as
applicable.
m. Fund - each of AIM Investment Funds, AIM Investment Portfolios, AIM
Growth Series, and AIM Series Trust.
n. Plan of Distribution - any plan adopted under Rule 12b-1 under the Act
with respect to payment of a Distribution Fee.
o. Portfolio - a series of the Shares of a Fund constituting a separate
investment portfolio of the Fund.
p. Service Fee - a fee paid to financial intermediaries for the ongoing
provision of personal services to Fund shareholders and/or the
maintenance of shareholder accounts.
q. Share - a share of common stock or of beneficial interest in a Fund, as
applicable.
3. Allocation of Income and Expenses.
a. Distribution and Service Fees - Each Class shall bear directly any and
all Distribution Fees and/or Service Fees payable by such Class pursuant
to a Plan of Distribution adopted by the Fund with respect to such Class.
b. Allocation of Other Expenses - Each Class shall bear proportionately all
other expenses incurred by a Fund based on the relative net assets
attributable to each such Class.
c. Allocation of Income, Gains, and Losses - Except to the extent provided
in the following sentence, each Portfolio will allocate income and
realized and unrealized capital gains and losses to a Class based on the
relative net assets of each Class. Notwithstanding the foregoing, each
Portfolio that declares dividends on a daily basis will allocate income
on the basis of settled shares.
d. Waiver and Reimbursement of Expenses - A Portfolio's adviser,
underwriter, or any other provider of services to the Portfolio may
waive or reimburse the expenses of a particular Class or Classes.
4. Distribution and Servicing Arrangements. The distribution and servicing
arrangements identified below will apply for the following Classes offered
by a Fund with respect to a Portfolio. The provisions of the Fund's
prospectus describing the distribution and servicing arrangements in detail
are incorporated herein by this reference.
a. Class A Shares. Class A Shares shall be offered at net asset value plus a
front-end sales charge as approved from time to time by the Directors and
set forth in the Fund's
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<PAGE> 3
prospectus, which may be reduced or eliminated for certain money market
fund shares, for larger purchases, under a combined purchase privilege,
under a right of accumulation, under a letter of intent or for certain
categories of purchasers as permitted by Rule 22(d) of the Act and as set
forth in the Fund's prospectus. Class A Shares that are not subject to a
front-end sales charge as a result of the foregoing shall be subject to a
CDSC for the CDSC Period set forth in Section 5(a) of this Plan if so
provided in the Fund's prospectus. The offering price of Shares subject
to a front-end sales charge shall be computed in accordance with Rule
22c-1 and Section 22(d) of the Act and the rules and regulations
thereunder. Class A Shares shall be subject to ongoing Service Fees
and/or Distribution Fees approved from time to time by the Directors and
set forth in the Fund's prospectus.
b. Class B Shares. Class B Shares shall be (i) offered at net asset value,
(ii) subject to a CDSC for the CDSC Period set forth in Section 5(b),
(iii) subject to ongoing Service Fees and Distribution Fees approved from
time to time by the Directors and set forth in the Fund's prospectus, and
(iv) to the extent provided for in the Fund's prospectus, converted to
Class A Shares eight years from the end of the calendar month in which
the shareholder's order to purchase was accepted as set forth in the
Fund's prospectus, except that Class B Shares of AIM Series Trust which
were acquired prior to June 1, 1998 shall convert to Class A Shares as of
the close of business on the last business day of the month in which the
seventh anniversary of the initial issuance of such Class B Shares
occurs.
c. Class C Shares. Class C Shares shall be (i) offered at net asset value,
(ii) subject to a CDSC for the CDSC Period set forth in Section 5(c), and
(iii) subject to ongoing service Fees and Distribution Fees approved from
time to time by the Directors and set forth in the Fund's prospectus.
d. Advisor Class Shares. Advisor Class Shares shall be (i) offered at net
asset value and (ii) offered only to certain categories of investors as
approved from time to time by the Trustees and as set forth in the Fund's
prospectus.
5. CDSC. A CDSC shall be imposed upon redemptions of Class A Shares that do not
incur a front-end sales charge and of Class B Shares and Class C Shares as
follows:
a. Class A Shares. The CDSC Period for Class A Shares shall be the period
set forth in the Fund's prospectus. The CDSC Rate shall be as set forth
in the Fund's prospectus, the relevant portions of which are incorporated
herein by this reference. No CDSC shall be imposed on Class A Shares
unless so provided in a Fund's prospectus.
b. Class B Shares. The CDSC Period for the Class B Shares shall be six
years. The CDSC Rate for the Class B Shares shall be as set forth in the
Fund's prospectus, the relevant portions of which are incorporated herein
by this reference.
3
<PAGE> 4
c. Class C Shares. The CDSC Period for the Class C Shares shall be one year.
The CDSC Rate for the Class C Shares shall be as set forth in the Fund's
prospectus, the relevant portions of which are incorporated herein by
reference.
d. Method of Calculation. The CDSC shall be assessed on an amount equal to
the lesser of the then current market value or the cost of the Shares
being redeemed. No CDSC shall be imposed on increases in the net asset
value of the Shares being redeemed above the initial purchase price. No
CDSC shall be assessed on Shares derived from reinvestment of dividends
or capital gains distributions. The order in which Shares are to be
redeemed when not all of such Shares would be subject to a CDSC shall be
determined by the Distributor in accordance with the provisions of Rule
6c-10 under the Act.
e. Waiver. The Distributor may in its discretion waive a CDSC otherwise due
upon the redemption of Shares and disclosed in the Fund's prospectus or
statement of additional information and, for the Class A Shares, as
allowed under Rule 6c-10 under the Act.
6. Exchange Privileges. Exchanges of Shares shall be permitted as follows:
a. Class A Shares may be exchanged for Class A Shares of such other mutual
funds as are disclosed in the Fund's prospectus, subject to such terms
and limitations as disclosed in the Fund's prospectus and statement of
additional information.
b. Class B Shares may be exchanged for Class B Shares of such other mutual
funds as are disclosed in the Fund's prospectus, subject to such terms
and limitations as disclosed in the Fund's prospectus and statement of
additional information.
c. Class C Shares may be exchanged for Class C Shares of such other mutual
funds as are disclosed in the Fund's prospectus, subject to such terms
and limitations as disclosed in the Fund's prospectus and statement of
additional information.
d. Advisor Class Shares may be exchanged for Advisor Class Shares of such
other mutual funds as are disclosed in the Fund's prospectus, subject to
such terms and limitations as disclosed in the Fund's prospectus and
statement of additional information.
e. Depending upon the Portfolio from which and into which an exchange is
being made and when the shares were purchased, shares being acquired in
an exchange may be acquired at their offering price, at their net asset
value or by paying the difference in sales charges, as disclosed in the
Fund's prospectus and statement of additional information.
f. CDSC Computation. The CDSC payable upon redemption of Class A Shares,
Class B Shares, and Class C Shares subject to a CDSC shall be computed in
the manner described in the Fund's prospectus.
7. Service and Distribution Fees. The Service Fee and Distribution Fee
applicable to any Class shall be those set forth in the Fund's prospectus,
relevant portions of which are incorporated
4
<PAGE> 5
herein by this reference. All other terms and conditions with respect to
Service Fees and Distribution Fees shall be governed by the Plan of
Distribution adopted by the Fund with respect to such fees and Rule 12b-1
under the Act.
8. Conversion of Class B Shares.
a. Shares Received upon Reinvestment of Dividends and Distributions - Shares
purchased through the reinvestment of dividends and distributions paid on
Shares subject to conversion shall be treated as if held in a separate
sub-account. Each time any Shares in a shareholder's account (other than
Shares held in the sub-account) convert to Class A Shares, a
proportionate number of Shares held in the sub-account shall also convert
to Class A Shares.
b. Conversions on Basis of Relative Net Asset Value - All conversions shall
be effected on the basis of the relative net asset values of the two
Classes without the imposition of any sales load or other charge.
c. Amendments to Plan of Distribution for Class A Shares - If any amendment
is proposed to the Plan of Distribution under which Service Fees and
Distribution Fees are paid with respect to Class A Shares of a Fund that
would increase materially the amount to be borne by those Class A Shares,
then no Class B Shares shall convert into Class A Shares of that Fund
until the holders of Class B Shares of that Fund have also approved the
proposed amendment. If the holders of such Class B Shares do not approve
the proposed amendment, the Directors of the Fund and the Distributor
shall take such action as is necessary to ensure that the Class voting
against the amendment shall convert into another Class identical in all
material respects to Class A Shares of the Fund as constituted prior to
the amendment.
9. This Plan shall not take effect until a majority of the Directors of a Fund,
including a majority of the Directors who are not interested persons of the
Fund, shall find that the Plan, as proposed and including the expense
allocations, is in the best interests of each Class individually and the
Fund as a whole.
10. This Plan may not be amended to materially change the provisions of this
Plan unless such amendment is approved in the manner specified in Section 9
above.
5
