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[AIM LOGO APPEARS HERE]
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SUMMIT
INVESTORS
PLANS
Prospectus
February 27, 1997
as revised April 15, 1997
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PROSPECTUS
FEBRUARY 27, 1997
SUMMIT INVESTORS PLANS
Summit Investors Plans (the "Plans") for the accumulation of shares of AIM
Summit Fund, Inc. (the "Fund") is offered by A I M Distributors, Inc., the
sponsor and principal underwriter("AIM Distributors" or "Sponsor"). A Plan calls
for fixed monthly investments for 15 years (180 investments), with the investor
(the "Planholder") having the option to make additional monthly investments for
up to a total of 25 years (300 investments). The front-end load (the "Creation
and Sales Charge") on 15 year Plans range from 8.50% on $9,000 Plans ($50.00 per
month) to 1.00% on $1,080,000 Plans ($6,000 per month) and from 9.61% to 1.01%
of the net amount invested, respectively. Total deductions (Creation and Sales
Charges and custodian fees) range from 13.00% (on $9,000 Plans) to 1.04% (on
$1,080,000 Plans) of the net amount invested.
Investments under a Plan are applied, after authorized deductions, to the
purchase of Fund shares at net asset value. These shares should be considered a
long-term investment and are not suitable for investors seeking quick profits or
who might be unable to complete a Plan. Since a major portion of the entire
Creation and Sales Charge is deducted from the first year's payment, withdrawal
or termination of an investment in the early years of a Plan will probably
result in a loss. For example, on a $9,000 Plan ($50 per month) deductions
amount to 11.50% of the investments made if the Plan is completed. However, even
after the application of the refund privilege described on pages 11 and 12,
total deductions would amount to 18% of total investments if the Plan were
terminated at any time between two months and 18 months. Moreover, if the Plan
were continued for 19 months, total deductions would amount to 36.62% of total
payments; they would amount to 30.77% if the Plan were continued for two years.
A detailed description of all deductions appears on pages 4 and 5.
The value of the Fund's shares is subject to fluctuations in the values of
the securities in the Fund's portfolio. A Plan calls for monthly investments at
regular intervals regardless of the price level of Fund shares. Investors should
therefore consider their financial ability to continue a Plan. A Plan offers no
assurance against loss in a declining market. Terminating a Plan at a time when
the value of the Fund shares then held is less than their cost will result in a
loss. Prepayment of all or part of the first year's investments in a Plan
increases the possible loss in the event of early termination.
SHARES OF THE FUND ARE OFFERED TO THE GENERAL PUBLIC ONLY THROUGH SUMMIT
INVESTORS PLANS. Shares of certain other mutual funds managed or advised by the
Fund's investment advisor, which might be considered to have investment
objectives similar in many respects to those of the Fund, may be acquired by
direct purchase at sales charges not exceeding 5.50% of the public offering
price per share without incurring custodian fees or penalties for early
termination.
AN INVESTOR HAS THE RIGHT TO A 45 DAY REFUND OF HIS INVESTMENT, AS WELL AS
CERTAIN OTHER LIMITED REFUND RIGHTS FOR CERTAIN PERIODS OF TIME AND UNDER THE
CONDITIONS DESCRIBED IN MORE DETAIL UNDER THE HEADING "CANCELLATION AND REFUND
RIGHTS" ON PAGE 12.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT
PROSPECTUS OF AIM SUMMIT FUND, INC.
Investors should read and retain this Prospectus for future reference.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Introduction................................................ 3
Allocation of Investments and Deductions.................... 4
Total 25 Year Allocations of Investments and Deductions When
Extended Investment Option is Used........................ 5
A Typical $50 Monthly Investment Plan....................... 6
How To Start a Summit Investors Plan........................ 7
Rights and Privileges of Planholders........................ 7
Reinvestment of Income Dividends and Capital Gains
Distributions......................................... 7
Rights of Accumulation................................. 7
Federal Income Tax Withholding......................... 8
Voting Rights.......................................... 8
Statements, Reports and Notices........................ 9
Retirement Plans....................................... 9
Pre-Authorized Check Investment Program................ 9
Transfer or Assignment................................. 9
Acceleration of Investments............................ 10
Changing the Face Amount of a Plan..................... 10
Extended Investment Option............................. 10
Systematic Withdrawal Program.......................... 11
Cancellation and Refund Rights......................... 12
Partial Withdrawal or Partial Liquidation Without
Termination........................................... 12
Complete Withdrawal or Termination..................... 14
Plan Reinstatement Privilege........................... 15
Continuation of Custodianship.......................... 16
Custodian and Sponsor Charges............................... 16
Taxes....................................................... 18
Substitution of Shares...................................... 19
Termination of a Plan....................................... 20
The Custodian............................................... 21
The Sponsor................................................. 22
General..................................................... 24
Illustration of a Hypothetical Plan......................... 25
Financial Statements........................................ 26
AIM Summit Fund, Inc. Prospectus............................ A-1
</TABLE>
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NO SALESMAN, DEALER OR OTHER PERSON IS AUTHORIZED BY THE SPONSOR OR AIM
SUMMIT FUND, INC. TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION OTHER THAN
THOSE CONTAINED IN THIS PROSPECTUS OR IN THE PROSPECTUS OF AIM SUMMIT FUND, INC.
OR IN ANY OTHER PRINTED OR WRITTEN MATERIAL AUTHORIZED BY THE SPONSOR OR AIM
SUMMIT FUND, INC., AND NO PERSON SHOULD RELY UPON ANY INFORMATION NOT CONTAINED
IN THESE MATERIALS.
2
<PAGE> 4
INTRODUCTION
Many people recognize the desirability of accumulating an investment
portfolio through a planned long-range investment program, but find it difficult
to save the necessary money to make periodic stock purchases. Summit Investors
Plans is designed to provide an effective and convenient method for investors to
create an investment fund for future capital or income needs by systematically
investing a modest sum each month in shares of a mutual fund.
Every Plan represents an agreement between State Street Bank and Trust
Company ("State Street Bank" or the "Custodian") and the Planholder under which
investments (after deduction of the sales charge and custodian fees) are used to
purchase shares of AIM Summit Fund, Inc. (the "Fund") at their net asset value.
Investments made through a Plan will not result in direct ownership of Fund
shares; rather the Plan will represent an interest in a trust which will have
direct ownership of the Fund shares. Planholders will have a beneficial interest
in the underlying shares of the Fund. PLAN CERTIFICATES, ISSUED UNDER PRIOR
PROSPECTUSES, ARE NO LONGER PROVIDED. ALL PLANS ESTABLISHED ON OR AFTER MARCH 1,
1995 ARE GOVERNED SOLELY BY THE RULES, RIGHTS, PRIVILEGES AND BENEFITS SET FORTH
IN THIS PROSPECTUS. IT IS THEREFORE IMPORTANT THAT YOU RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE. All Plans established prior to March 1, 1995 are governed
by the rules, rights, privileges and benefits set forth in the applicable Plan
Certificate.
The value of the shares of the Fund is subject to fluctuation due to
changes in the values of the securities in the Fund's portfolio. A Plan calls
for monthly investments at regular intervals regardless of the value of the
Fund's shares.
As indicated by the accompanying Prospectus of the Fund, the Fund is an
open-end, diversified investment company whose objective is capital growth.
Although the Fund may purchase income-producing securities, income will
generally not be a consideration in the selection of securities for the Fund's
portfolio. Ownership of Fund shares through a Plan provides an investor with
several advantages:
(1) Diversification -- By pooling the money invested by many
investors, the Fund will be able to reduce (but not eliminate) risk by
diversifying its holdings among many securities in order to minimize the
portfolio impact of any single investment.
(2) Economics of Size -- Purchases and sales of securities often
entail disproportionately large unit costs on small transactions. The size
and volume of the Fund's portfolio transactions should enable it to effect
such transactions at better net unit prices than an individual could
achieve.
(3) Professional Management -- Ownership of many securities requires
the full-time skill and attention of professional managers.
The Plans contain a Creation and Sales Charge equal to as much as 50% of
the first 12 investments and lesser amounts of subsequent investments. In
addition to the Creation and Sales Charge, Planholders must pay custodian fees
and incidental service fees to the Custodian and service charges to the Sponsor.
See "Custodian and Sponsor Charges."
For Plans established after May 1, 1993, a Plan may be terminated by the
Custodian or Sponsor if the Planholder fails to make investments under his Plan
for a period of 6 months. For Plans established prior to May 1, 1993, a Plan may
be terminated by the Custodian or Sponsor if the Planholder fails to make
investments under his Plan for a period of 12 months. Both types of Plans may be
terminated if Fund shares are not available and a substitution is not made. See
"Termination of a Plan" at page 20.
3
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ALLOCATION OF INVESTMENTS AND DEDUCTIONS
15 YEAR PLANS
<TABLE>
<CAPTION>
CREATION AND SALES CHARGES
------------------------------------------------ CUSTODIAN FEE
MONTHLY PER PER % OF -------------------
INVEST- TOTAL INVEST- INVEST- TOTAL PER TOTAL
MENT INVEST- MENT MENT INVEST- INVEST- DEDUCTIONS
UNIT MENTS 1 THRU 12 13 THRU 180 TOTAL MENTS MENT TOTAL(A) (A)(B)
------- ------- --------- ----------- ----- ------- ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 50.00 $ 9,000.00 $ 25.00 $ 2.77 $ 765.36 8.50% $1.50 $270.00 $ 1,035.36
75.00 13,500.00 37.50 4.15 1,147.20 8.50 1.50 270.00 1,417.20
100.00 18,000.00 50.00 5.00 1,440.00 8.00 1.50 270.00 1,710.00
125.00 22,500.00 62.50 6.25 1,800.00 8.00 1.50 270.00 2,070.00
150.00 27,000.00 75.00 5.89 1,889.52 7.00 1.50 270.00 2,159.52
166.66 29,998.80 83.33 6.54 2,098.68 7.00 1.50 270.00 2,368.68
200.00 36,000.00 100.00 7.86 2,520.48 7.00 1.50 270.00 2,790.48
250.00 45,000.00 125.00 9.82 3,149.76 7.00 1.50 270.00 3,419.76
300.00 54,000.00 150.00 5.36 2,700.48 5.00 1.50 270.00 2,970.48
350.00 63,000.00 175.00 5.31 2,992.08 4.75 1.50 270.00 3,262.08
400.00 72,000.00 200.00 5.00 3,240.00 4.50 1.50 270.00 3,510.00
500.00 90,000.00 225.00 5.36 3,600.48 4.00 1.50 270.00 3,870.48
600.00 108,000.00 260.00 6.62 4,232.16 3.92 1.50 270.00 4,502.16
750.00 135,000.00 300.00 8.70 5,061.60 3.75 1.50 270.00 5,331.60
1,000.00 180,000.00 350.00 12.50 6,300.00 3.50 1.50 270.00 6,570.00
1,500.00 270,000.00 375.00 13.39 6,749.52 2.50 1.50 270.00 7,019.52
3,000.00 540,000.00 450.00 16.07 8,099.76 1.50 1.50 270.00 8,369.76
6,000.00 1,080,000.00 600.00 21.43 10,800.24 1.00 1.50 270.00 11,070.24
<CAPTION>
% OF TOTAL
DEDUCTIONS
-------------------
NET TO NET
MONTHLY INVEST- TO INVEST-
INVEST- MENT TOTAL MENT
MENT IN FUND INVEST- IN FUND
UNIT SHARES(C) MENTS SHARES
------- ------------- ------- -------
<S> <C> <C> <C>
$ 50.00 $ 7,964.64 11.50% 13.00%
75.00 12,082.80 10.50 11.73
100.00 16,290.00 9.50 10.50
125.00 20,430.00 9.20 10.13
150.00 24,840.48 8.00 8.70
166.66 27,630.12 7.90 8.57
200.00 33,209.52 7.75 8.40
250.00 41,580.24 7.60 8.22
300.00 51,029.52 5.50 5.82
350.00 59,737.92 5.18 5.46
400.00 68,490.00 4.88 5.12
500.00 86,129.52 4.30 4.49
600.00 103,497.84 4.17 4.35
750.00 129,668.40 3.95 4.11
1,000.00 173,430.00 3.65 3.79
1,500.00 262,980.48 2.60 2.67
3,000.00 531,630.24 1.55 1.57
6,000.00 1,068,927.76 1.03 1.04
</TABLE>
NOTES:
<TABLE>
<S> <C>
(A) Does not include an annual $12 Custodian Fee (for completed
Plans or for incomplete, inactive Plans only), payable to
the Custodian first from dividends and distributions and
then, if necessary, from principal.
(B) Does not include a Service Charge, not to exceed $10 per
year, payable first from dividends and distributions and
then, if necessary, from principal, to cover certain
administrative expenses actually incurred. The amount of
such charge will be determined annually by pro-rating the
Plans' administrative costs over the total number of Plan
accounts. The Service Charge on Plans established prior to
June 1, 1983 shall be as specified in the Plan Certificate.
(C) Dividends and distributions received on Fund shares during
the periods shown above have not been included or reflected
in any way in the amounts shown in the table. Amounts
available for dividends and distributions take into account
expenses of the Fund.
</TABLE>
4
<PAGE> 6
TOTAL 25 YEAR ALLOCATIONS OF INVESTMENTS AND DEDUCTIONS WHEN
EXTENDED INVESTMENT OPTION IS USED
(Please see page 10 for a description of the Extended Investment Option.)
<TABLE>
<CAPTION>
CREATION
AND SALES % OF TOTAL DEDUCTIONS
CHARGES NET --------------------------------
MONTHLY CREATION AS % CUSTODIAN TOTAL INVESTMENT TO TO NET
INVESTMENT TOTAL AND SALES OF TOTAL FEE DEDUCTIONS IN FUND TOTAL INVESTMENT IN
UNIT INVESTMENTS CHARGES INVESTMENTS (A)(B) (A)(B) SHARES(C) INVESTMENTS FUND SHARES
- ---------- ------------ --------- ----------- ------ ---------- ------------ ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 50.00 $ 15,000.00 $1,097.76 7.32% $450.00 $1,547.76 $ 13,452.24 10.32% 11.51%
75.00 22,500.00 1,645.20 7.31 450.00 2,095.20 20,404.80 9.30 10.27
100.00 30,000.00 2,040.00 6.80 450.00 2,490.00 27,510.00 8.30 9.10
125.00 37,500.00 2,550.00 6.80 450.00 3,000.00 34,500.00 8.00 8.70
150.00 45,000.00 2,596.32 5.77 450.00 3,046.32 41,753.68 6.80 7.26
166.66 49,998.00 2,883.48 5.77 450.00 3,333.48 46,664.52 6.67 7.14
200.00 60,000.00 3,463.68 5.77 450.00 3,913.68 56,086.32 6.52 6.98
250.00 75,000.00 4,328.16 5.77 450.00 4,778.16 70,221.84 6.37 6.80
300.00 90,000.00 3,343.68 3.72 450.00 3,793.68 86,206.32 4.22 4.40
350.00 105,000.00 3,629.28 3.46 450.00 4,079.28 100,920.72 3.89 4.04
400.00 120,000.00 3,840.00 3.20 450.00 4,290.00 115,710.00 3.58 3.71
500.00 150,000.00 4,243.68 2.83 450.00 4,693.68 145,306.32 3.13 3.23
600.00 180,000.00 5,026.56 2.79 450.00 5,476.56 174,523.44 3.04 3.14
750.00 225,000.00 6,105.60 2.71 450.00 6,555.60 218,444.40 2.91 3.00
1,000.00 300,000.00 7,800.00 2.60 450.00 8,250.00 291,750.00 2.75 2.83
1,500.00 450,000.00 5,356.32 1.86 450.00 8,806.32 441,193.68 1.96 2.00
3,000.00 900,000.00 10,028.16 1.11 450.00 10,478.16 889,521.84 1.16 1.18
6,000.00 1,800,000.00 13,371.84 0.74 450.00 13,821.84 1,786,178.16 0.77 0.77
</TABLE>
NOTES:
<TABLE>
<S> <C>
(A) Does not include an annual $12 Custodian Fee (for completed
Plans or for incomplete, inactive Plans only), payable to
the Custodian first from dividends and distributions and
then, if necessary, from principal.
(B) Does not include a Service Charge, not to exceed $10 per
year, payable first from dividends and distributions and
then, if necessary, from principal, to cover certain
administrative expenses actually incurred. The amount of
such charge will be determined annually by pro-rating the
Plan's administrative costs over the total number of Plan
accounts. The Service Charge on Plans established prior to
June 1, 1983 shall be as specified in the Plan Certificate.
(C) Dividends and distributions received on Fund shares during
the periods shown above have not been included or reflected
in any way in the amounts shown in the table. Amounts
available for dividends and distributions take into account
expenses of the Fund.
</TABLE>
5
<PAGE> 7
A TYPICAL $50 MONTHLY INVESTMENT PLAN
(ASSUMING THAT ALL INVESTMENTS ARE MADE IN ACCORDANCE WITH THE TERMS OF THE
PLAN)
<TABLE>
<CAPTION>
AT THE END OF
6 MONTHS
(6 INVESTMENTS)
----------------------------
% OF TOTAL % OF TOTAL
AMOUNT INVESTMENTS AMOUNT INVESTMENTS
<S> <C> <C> <C> <C>
15 YEARS (180 INVESTMENTS)
Total Investments................... $ 9,000.00 100.00% $ 300.00 100.00%
Deduct:
Creation and Sales Charge....... 765.36 8.50 150.00 50.00
Custodian Fee................... 270.00 3.00 9.00 3.00
Total Deductions(A)............. 1,035.36 11.50 159.00 53.00
Net Amount Invested Under Plan...... 7,964.64 88.50 141.00 47.00
25 YEARS (300 INVESTMENTS)
Total Investments (B)............... $ 15,000.00 100.00% $ 300.00 100.00%
Deduct:
Creation and Sales Charges...... 1,097.76 7.32 150.00 50.00
Custodian Fee................... 450.00 3.00 9.00 3.00
Total Deductions(A)............. 1,547.76 10.32 159.00 53.00
Net Amount Invested Under Plan...... 13,452.24 89.68 141.00 47.00
<CAPTION>
AT THE END OF AT THE END OF
1 YEAR 2 YEARS
(12 INVESTMENTS) (24 INVESTMENTS)
---------------------------- -------------------------------
% OF TOTAL % OF TOTAL
AMOUNT INVESTMENTS AMOUNT INVESTMENTS
<S> <C> <C> <C> <C>
15 YEARS (180 INVESTMENTS)
Total Investments................... $ 600.00 100.00% $ 1,200.00 100.00%
Deduct:
Creation and Sales Charge....... 300.00 50.00 333.24 27.77
Custodian Fee................... 18.00 3.00 36.00 3.00
Total Deductions(A)............. 318.00 53.00 369.24 30.77
Net Amount Invested Under Plan...... 282.00 47.00 830.76 69.23
25 YEARS (300 INVESTMENTS)
Total Investments (B)............... $ 600.00 100.00% $ 1,200.00 100.00%
Deduct:
Creation and Sales Charges...... 300.00 50.00 333.24 27.77
Custodian Fee................... 18.00 3.00 36.00 3.00
Total Deductions(A)............. 318.00 53.00 369.24 30.77
Net Amount Invested Under Plan...... 282.00 47.00 830.76 69.23
</TABLE>
NOTES:
(A) Does not include a Service Charge, not to exceed $10 per year, payable
first from dividends and distributions and then, if necessary, from
principal, to cover certain administrative expenses actually incurred. The
amount of such charge will be determined annually by pro-rating the Plan's
administrative costs over the total number of Plan accounts. The Service
Charge on Plans established prior to June 1, 1983 shall be as specified in
the Plan.
(B) The 25-year investment schedule reflects the charges applicable to a
15-year Plan which is continued under the Extended Investment Option. The
Custodian Fee may be increased as set forth on Page 11.
Dividends and distributions received on Fund shares during the periods
shown above have not been included or reflected in any way in the amounts shown
in the table. Amounts available for dividends and distributions take into
account expenses of the Fund.
After the first twelve payments, the Creation and Sales Charge deducted
from any investment will not exceed 5.86% of the net investment in Fund shares
(before deduction of Custodian Fee).
The amounts shown are also subject to an additional Custodian Charge of
$2.50 (plus transfer taxes, if any) if the Plan is terminated prior to
completion of all Plan investments.
6
<PAGE> 8
HOW TO START A SUMMIT INVESTORS PLAN
To start a Plan, an investor must complete an application and mail it to
AIM Distributors, together with a check, in the amount of the initial monthly
investment unit, payable to State Street Bank and Trust Company, Custodian.
After the application has been accepted by AIM Distributors, the investor will
be issued a Plan and receive a statement showing the number of whole and
fractional Fund shares purchased for the investor's account. The investor will
then send regular monthly investments, made payable to the Custodian, directly
to the Custodian's administrative service agent, Boston Financial Data Services,
Inc. ("BFDS"), P.O. Box 8300, Boston, Massachusetts 02266-8300. Investments,
after applicable deductions, will be applied toward the purchase of Fund shares
at their net asset value.
RIGHTS AND PRIVILEGES OF PLANHOLDERS
All Plans are registered in the name of the Planholder at the time of
issuance and constitute an individual agreement among the Planholder, the
Sponsor and the Custodian. No agent or other person has the authority to modify,
alter or otherwise change the terms of the Plan, or to bind the Sponsor, BFDS,
the Custodian or the issuer of the Fund shares by any statement, written or
oral, not contained in this Prospectus. Under the terms of the Plan, Planholders
enjoy certain rights, privileges and options which are described as follows:
1. REINVESTMENT OF INCOME DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
Unless otherwise directed by the Planholder, all income dividends and
capital gains distributions, in whatever form received and after applicable
deductions, are automatically used to purchase additional Fund shares at net
asset value. No sales charge is made on any such reinvestment. The Planholder
may instruct BFDS by written notice, received at least seven days prior to the
record date of an income dividend or capital gains distribution, to remit the
net amount of such dividend or distribution to the Planholder. These
instructions may be changed at any time. Dividends and distributions for
qualified retirement plans, including IRAs, must be reinvested.
Dividends and distributions paid by the Fund are reportable by Planholders
for income tax purposes regardless of whether they are invested in additional
Fund shares or paid in cash. (Qualified retirement plans, including Individual
Retirement Accounts ("IRAs"), may be entitled to defer taxes until some later
date.)
2. RIGHTS OF ACCUMULATION
The face amounts of two or more Plans purchased at one time by "any person"
may be combined to take advantage of the lower Creation and Sales Charges
available on larger sized investments. The term "any person" includes an
individual, his or her spouse and children under the age of 21, and a trustee or
other fiduciary of a single trust estate or a single fiduciary account
(including a pension, profit-sharing or other employee benefit trust created
pursuant to a plan qualified under Section 401 of the Internal Revenue Code)
even though more than one beneficiary is involved. The term "any person" shall
not include a group of individuals whose funds are combined, directly or
indirectly, for the purchase of redeemable securities of a registered investment
company whether jointly or through a trustee, agent, custodian or other
representative for such a group of individuals.
7
<PAGE> 9
To qualify for the reduced Creation and Sales Charges, all of the
applications for the Plans involved must be submitted at the same time together
with a letter from the Planholder (or his dealer) requesting that the face
amounts of such Plans be aggregated for the purpose of determining the
applicable Creation and Sales Charges. In the event investments under one or
more of such Plans are discontinued, the remaining Creation and Sales Charges
will be changed to reflect the charges applicable to the Plans that remain in
effect.
When purchasing any new Plan(s), "any person" (as defined above) may
qualify for a reduced Creation and Sales Charge by combining the face amount of
any existing Plan(s) on which investments are current with the face amount of
the new purchase. When increasing the face amount of any existing Plan(s) on
which investments are current, "any person" (as defined above) may qualify for a
reduced Creation and Sales Charge applicable to the value of the changed Plan.
For rights of accumulation, a Plan is considered to be current if: (a) it has
been completed and not redeemed; (b) it has not been completed but has at least
as many investments recorded as there are months elapsed since establishment or
since being increased, or investments are current; or (c) it is a qualified
retirement plan, including an IRA. The reduced Creation and Sales Charges apply
to payments made after the Sponsor has been notified of the eligibility of such
Plans for reduced Creation and Sales Charges and has received the information
necessary to confirm such eligibility. In the case of existing IRA Plans at the
$166.66 per month level, the reduced Creation and Sales Charges will apply to
payments made on both the existing Plan and the new Plan.
3. FEDERAL INCOME TAX WITHHOLDING
As an additional service, BFDS may withhold 28% of any income dividend or
capital gains distribution by the Fund and send that amount to the Internal
Revenue Service as a credit against the Planholder's tax liability, if any. The
amount withheld may or may not be equal to the additional taxes the Planholder
may owe due to the dividend or distribution. The withholding service, however,
is only available to Planholders if distributions are reinvested in full. If the
Planholder elects to authorize this withholding, the number of Fund shares
purchased with the remainder of the income dividend or capital gains
distribution will be less than would have otherwise been the case.
This service is available with respect to all Plans except qualified
retirement plans, including IRAs. This option can be initiated upon written
request to BFDS; and, once initiated, remains in effect until BFDS is notified
in writing to terminate the withholding.
4. VOTING RIGHTS
Planholders will receive a notice and related proxy statement for each
meeting of the Fund's shareholders. The Custodian will vote the shares held in a
Planholder's account as instructed by the Planholder on the voting instructions
card which will accompany the notice and proxy statement. If the voting
instructions card is validly executed and returned without specification of a
choice, the shares will be voted in favor of the proposals of the Fund's
management. The Custodian will vote shares for which no valid voting
instructions have been received in the same proportion as it votes shares for
which it has received instructions. Planholders may attend any such meetings,
and if a Planholder desires to vote in person the shares held in the
Planholder's account, the Planholder may make a written request to the Custodian
prior to the meeting for a proxy which will permit the shares to be voted in
person.
8
<PAGE> 10
5. STATEMENTS, REPORTS AND NOTICES
BFDS will mail to each Planholder a statement for each investment stating
the price per Fund share purchased after applicable deductions and the total
number of Fund shares held for the Planholder's account. A notice of the next
investment due is also included. Planholders will also receive at least annually
a current Fund prospectus and audited financial statements of the Fund,
including a complete list of all securities held in the Fund's portfolio, and
copies of all other reports sent by the Fund to its shareholders. Planholders
will also be sent notices of all income dividends and capital gains
distributions made with respect to Fund shares, together with tax reporting
information relating to such dividends and distributions. Any notices, reports
or documents required or authorized to be given or sent to a Planholder under
this Prospectus will be conclusively deemed to have been given or sent upon
mailing to the Planholder's address of record, and the date of such mailing
shall be deemed the date of the giving of such notice.
6. RETIREMENT PLANS
A Plan may be used by individuals who wish to establish tax-deferred
qualified retirement plans such as IRAs, IRA-SEPs, Profit Sharing Plans and
Money Purchase Plans. Detailed information concerning such plans is available
from the Sponsor. The information sets forth the additional service fees charged
for such retirement plans. The annual maintenance fee charged by the Custodian
for plans offered by the Sponsor is $10.00. In addition, IRA rollover or
transfer contributions can be accepted into a Plan from qualified individuals.
7. PRE-AUTHORIZED CHECK INVESTMENT PROGRAM
If a Planholder wishes to have investments in his Plan made automatically
without having to write a check each month, the Planholder may request that
investments be made by means of pre-authorized checks. Under this program, each
month BFDS will draft the Planholder's bank account in the amount of the monthly
payment. The proceeds of the draft (less applicable Creation and Sales Charges
and other applicable fees and charges) will be invested in the Planholder's
account.
To initiate a Pre-Authorized Check Investment Program, the Planholder
should complete the Pre-Authorized Check Form and send it along with a voided
blank check to BFDS. The Planholder may terminate a Pre-Authorized Check
Investment Program at any time by written notice to BFDS at least five days
prior to the date of the next scheduled draft.
8. TRANSFER OR ASSIGNMENT
To secure a loan, a Planholder may assign his right, title and interest in
a Plan to a bank or other lending institution. (Qualified retirement plans,
including IRAs, are required by federal tax law to be non-assignable.) The bank
or other lending institution, however, will not be entitled to exercise the
right of partial withdrawal or partial liquidation. During the term of the
assignment, the Planholder will be entitled to all dividends and distributions
on Fund shares. In addition, a Planholder may:
(a) transfer his right, title and interest to another person whose
only right shall be the privilege of complete withdrawal from the Plan; or
(b) transfer his right, title and interest to another person, trustee
or custodian acceptable to the Sponsor, who has made application to the
Sponsor for a similar Plan.
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A charge of $2.50 is made for each such transaction plus transfer taxes,
where applicable.
The Custodian will, at the request of the assignee, record an assignment
until such time as the assignee notifies BFDS that the assignment has been
released. No such assignment will be binding on the Custodian until it is
recorded. Until the Custodian and the Sponsor have permitted such assignment to
be recorded, they may treat the Planholder as the sole and absolute owner of the
Plan and the related Fund shares.
9. ACCELERATION OF INVESTMENTS
A Planholder may complete a Plan ahead of schedule by making investments in
advance of scheduled dates, but the Planholder may normally not make more than
24 investments in any one calendar year (including the current investment). In
addition to these investments made in advance of their scheduled dates, a
Planholder may make an additional 24 investments during the life of a Plan.
Advance investments do not change the normal sequence of the dates for scheduled
Plan investments; i.e., a Plan does not become "delinquent" in its investments
until all advance investments have been credited for the month in which
investments would have normally been made or applied. There is no reduction in
the Creation and Sales Charges for any advance investments. On multiple
investments, however, the Custodian's fee cannot exceed $5.00. See "Custodian
Fees."
The Sponsor may waive the limitation on advance investments for (a) Plans
established in connection with qualified retirement plans, including IRAs, (b)
the completion in a single investment of a Plan by the estate or joint owner of
a deceased Planholder, or, (c) the investment in a Plan that is in arrears so
that such Plan may become current.
10. CHANGING THE FACE AMOUNT OF A PLAN
A Planholder may increase the amount of a Plan at any time. In addition,
prior to making the sixth investment under a Plan, the Planholder may decrease
the amount of a Plan by as much as 50% of the face amount. Requests for changes
in the face amount of a Plan should be sent to AIM Distributors and should be
accompanied by a completed Plan application for the new face amount. The new
Plan must be in one of the denominations listed on page 4. An increase in a Plan
amount does not create new cancellation and refund rights that are created when
a new Plan is issued. The Creation and Sales Charges already paid on the
existing Plan will be recomputed and applied as a credit to the Creation and
Sales Charges due on the new Plan at the time that it is established. Any
additional Creation and Sales Charges due on the new Plan will be obtained from
a liquidation of Fund shares. A charge of $2.50 will be made by the Custodian
for any change in a Plan denomination; charges will also be made by the
Custodian for any applicable transfer taxes. For a period of six months
following a face change increase, the Planholder may decrease the increased Plan
to a smaller plan size, but not smaller than the original Plan prior to the
increase. Investments already made will be credited to the new Plan.
11. EXTENDED INVESTMENT OPTION
Planholders may continue making monthly investments pursuant to the
Extended Investment Option after completing all scheduled investments under a
Plan. Investments under this option are subject to the same deductions as
applied to the last scheduled investment (except that the
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<PAGE> 12
Custodian reserves the right to increase the Custodian Fee applicable during
this period to the rate then being charged for new Plans of the same
denomination, provided, however, that such new rate shall not be more than 75%
higher than the Custodian Fees detailed in this Prospectus). A Planholder may
stop all future investments under this option by notifying BFDS in writing,
after which no additional investments will be permitted and the Plan will be
deemed completed. If under this option a Planholder fails to make regularly
scheduled investments for six consecutive months after being credited for any
advance investments made under the option, he forfeits the right to make
additional investments, and for Plans established after May 1, 1993 the Plan may
be terminated by the Sponsor or the Custodian. For Plans established prior to
May 1, 1993, failure to make regularly scheduled investments for 12 consecutive
months may result in termination of the Plan. The Sponsor and Custodian will not
require termination of an Extended Investment Option until the 300th payment
under a Plan has been made even if such payment is more than 25 years from the
issuance date.
When the Extended Investment Option expires either through failure to make
required monthly investments or upon written notice of termination to BFDS or
for any other reason, the Custodian has the right to increase its fee to the
rate currently being charged for new Plans of the same denomination. In no case,
however, will this new rate be more than 75% higher than the current annual rate
of the Custodian Fees.
12. SYSTEMATIC WITHDRAWAL PROGRAM
When all regularly scheduled investments are completed, a Planholder may
elect to establish a Systematic Withdrawal Program. Planholders holding Plans in
IRAs, Keogh plans, or other retirement plans may elect to establish a Systematic
Withdrawal Program by notifying the Sponsor that the Planholder does not intend
to make any further Plan payments. Under this program, the Planholder can elect
to receive monthly or quarterly checks in any amount of $50 or more. To provide
funds for these payments, the Custodian, as agent for the Planholder, will on
the first business day of each month or quarter redeem shares held in the
Planholder's account at the net asset value of the Fund in effect at the time of
each such redemption. The Planholder may change the amount of payments made to
him under a Systematic Withdrawal Program or discontinue a Systematic Withdrawal
Program at any time.
While a Systematic Withdrawal Program is in effect, the Planholder may not
elect to receive dividends and distributions, in cash, on Fund shares held in
his account. A Planholder may not simultaneously maintain an uncompleted Plan
and a Systematic Withdrawal Program.
Payments received by a Planholder under a Systematic Withdrawal Program are
treated as derived from a taxable transaction. Since such payments are funded by
the redemption of shares of the Fund, they will be treated for tax purposes as a
sale or exchange of a capital asset, resulting in the recognition of a capital
gain or loss, rather than as ordinary income.
A charge of $1.00 per check will be made for each payment under a
Systematic Withdrawal Program. This charge is collected by redeeming the
necessary fractional shares. For any payment made ten years after the issuance
of a Plan, the charge may be increased to the amount specified in the then
current Prospectus. However, this charge may not exceed $1.75. The Sponsor
reserves the right (upon 90 days' notice to Planholders) to discontinue offering
Systematic Withdrawal Programs.
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<PAGE> 13
13. CANCELLATION AND REFUND RIGHTS
Planholders have certain rights of cancellation. Within 60 days after
issuance of the Plan, the Sponsor will send to the Planholder a notice regarding
his cancellation rights. If the Planholder elects to cancel his Plan, a written
request must be submitted to BFDS so that it is received within 45 days after
the mailing of that notice. The Planholder will receive a cash refund equal to
the sum of (1) the total current net asset value of the Fund shares credited to
his Plan account on the date that the cancellation request is received by BFDS
and (2) an amount equal to the difference between the total investments made
under the Plan and the net amount invested in Fund shares.
In addition, a Planholder may submit a written request to BFDS at any time
within an 18-month period beginning on the date of the issuance of the Plan and
receive from the Sponsor a cash payment equal to the sum of (1) the total
current net asset value of the Fund shares credited to the account on the date
of redemption and (2) an amount by which the Creation and Sales Charges deducted
from the Planholder's total investments exceed 15% of the investments made up to
the date of redemption. Custodian Fees and Service Charges are not subject to
refund.
In order to receive the above refunds, the Planholder's request should be
sent in writing, with the signature guaranteed, as required by the Custodian, to
Boston Financial Data Services, Inc., P.O. Box 8300, Boston, Massachusetts
02266-8300.
For Plans established after May 1, 1993, the Sponsor will send the
Planholder a written notice of the 18-month right of cancellation if either of
the following occurs: (a) if during the first 15 months after the date of
issuance of the Plan, the Planholder has missed three investments or more; or
(b) if following the first 15 months after the date of issuance of the Plan (but
prior to 18 months after such date), the Planholder has missed one investment or
more. In the event the Sponsor has previously sent a notice in connection with
event (a) above, a second notice will not be sent even if additional investments
are missed. These notices will inform Planholders of their Plan cancellation
rights as set forth above, and also will include the value of the account and
the amount the Planholder would be entitled to receive upon cancellation, as of
the date of the notice.
For Plans established prior to May 1, 1993, the Sponsor will send the
Planholder a notice within 30 days following the expiration of 15 months after
the date of the issuance of the Plan Certificate if the Planholder has missed
three investments or more. The Sponsor will also send the Planholder a notice
(described above) if he has missed one investment or more after the expiration
of the 15 month period but prior to the expiration of the 18 month period. These
notices will inform the Planholder of his rights of cancellation as set forth
above, of the value of his account at the time the notice is sent and of the
amount to which he is entitled if he chooses to redeem his Plan.
14. PARTIAL WITHDRAWAL OR PARTIAL LIQUIDATION WITHOUT TERMINATION
If a Planholder wishes to withdraw part of his investment in his Plan
without terminating his Plan, he may do so either by written instruction to the
Custodian or, beginning on or about May 1, 1997, by calling BFDS at (617)
328-5000, subject to the restrictions specified below.
If a Planholder wishes to receive cash instead of Fund shares, he may
direct the Custodian, acting as his agent, to withdraw and then redeem
(liquidate) part of his shares and remit the net proceeds to him, again subject
to the restrictions specified below. When a partial liquidation has been
effected through the redemption of Fund shares by the Custodian, the Planholder
may, but is
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<PAGE> 14
not required to, restore the value of his Plan by remitting to BFDS an amount
equal to the cash withdrawal, which amount will be used to purchase Fund shares
for his account at the next determined net asset value of the Fund shares. This
restoration cannot be made earlier than 90 days (45 days for Individual
Retirement Accounts) following a partial liquidation. All reinvestments must be
at least 25% of the amount withdrawn or $2,000, whichever is less. There may be
federal income tax consequences upon a partial liquidation of Fund shares;
restoration of a partial liquidation of IRA shares must be made within 60 days
in order to avoid tax consequences, including early withdrawal penalties. See
"Taxes." A Planholder may, however, make a partial withdrawal and reinvestment
in a manner which complies with the Internal Revenue Code rules relating to IRA
rollovers.
The partial liquidation and restoration privilege is intended to facilitate
the temporary use for emergency purposes of funds invested in a Plan. The
Sponsor reserves the right to limit a Planholder to exercising the partial
liquidation and restoration privilege once during the period of a calendar year,
although the Sponsor currently does not enforce this limit. The Sponsor reserves
the right to impose such additional restrictions as, in its judgment, are
necessary to conform to the requirements of Section 26 of the National
Association of Securities Dealers' Conduct Rules.
A partial withdrawal or liquidation will only be allowed if the Planholder
has owned his Plan for at least 45 days. The number of Fund shares involved
cannot exceed 90% of the shares in his account and the amount involved must be
at least $100. A charge of $2.50 will be made by the Custodian for each partial
withdrawal, liquidation or restoration, and the Planholder will be liable for
any transfer taxes that may be required. Restorations of amounts withdrawn by a
Planholder as a partial liquidation should be clearly identified as such, in
order to distinguish them from additional payments. A partial withdrawal or
liquidation will not affect the total number of Plan investments, the period in
which such investments are to be made, or the unpaid balance of Plan investments
under the Plan.
Beginning on or about May 1, 1997, Planholders may also request partial
withdrawals or partial liquidations by telephone by calling BFDS at (617)
328-5000. If a Planholder does not wish to allow withdrawals by telephone by any
person in his account, he should decline that option on the account application.
The telephone withdrawal or liquidation feature can be used only if: (a) the
proceeds are made payable to the Planholder of record and mailed to the address
of record; (b) there has been no change of address of record on the account
within the preceding 30 days; (c) the person requesting the withdrawal can
provide proper identification information; and (d) the proceeds of the
withdrawal do not exceed $50,000. The Cancellation and Refund Rights set forth
on page 12 of this Prospectus may not be exercised by telephone.
Shares held in retirement plans (such as IRA and IRA/SEP) or 403(b) plans
are not eligible for the telephone withdrawal option. AIM Distributors has made
arrangements with certain dealers to accept telephone instructions for the
withdrawal of shares. AIM Distributors reserves the right to impose conditions
on these dealers, including the condition that they enter into agreements (which
contain additional conditions with respect to the withdrawal of shares) with AIM
Distributors. The Fund, AIM Distributors, the Custodian, and BFDS will not be
liable for any loss, expense or cost arising out of any telephone withdrawal
request effected in accordance with the authorization set forth at that item of
the account application if they reasonably believe such request to be genuine,
but may in certain cases be liable for losses due to unauthorized or fraudulent
transactions if they do not follow reasonable procedures for verification of
telephone transactions. Such reasonable
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<PAGE> 15
procedures may include recording of telephone transactions, requests for
confirmation of the Planholder's Social Security Number and current address, and
mailings of confirmations promptly after the transaction.
Shares withdrawn by telephone are redeemed at their net asset value next
determined after a request for withdrawal in proper form (including signature
guarantees and other documentation, if applicable) is received by BFDS. Orders
for the withdrawal of shares received in proper form prior to the New York Stock
Exchange ("NYSE") close on any business day of the Fund will be confirmed at the
price determined as of the close of that day. Any resulting loss from the
dealer's failure to submit a request for withdrawal within the prescribed time
frame will be borne by that dealer. Telephone withdrawal requests must be made
by NYSE close on any business day of the Fund and will be confirmed at the price
determined as of the close of that day. No telephone withdrawal request will be
accepted which specifies a particular date for withdrawal or which specify any
special conditions.
See "Complete Withdrawal or Termination" below for information concerning
the method of providing written instructions to the Custodian to effect a
partial withdrawal or liquidation and the circumstances under which the
redemption of shares may be delayed.
15. COMPLETE WITHDRAWAL OR TERMINATION
A Planholder may terminate his Plan at any time upon written request to
BFDS. In terminating his Plan he may request the Custodian to deliver to him in
certificate form the Fund shares he has accumulated (properly registered in his
name) or he may direct the Custodian, as his agent, to withdraw his shares,
redeem (liquidate) them and send him the proceeds. A charge of $2.50 will be
made by the Custodian for a complete withdrawal, and the Planholder will be
liable for any transfer taxes that may be required. If the Planholder directs
the delivery of his Fund shares, sufficient shares will be redeemed to pay
authorized deductions and transfer taxes and leave no fractional shares, with
any net balance to be paid in cash. The redemption of Fund shares is a taxable
event. See "Taxes."
Instructions in writing for both partial or full liquidation of Fund shares
held in a Plan must be in the form of a letter signed by the Planholder with the
signature guaranteed, as required by the Custodian. A signature guarantee is
designed to protect the Planholder, the Plan, the Sponsor and the Custodian.
Acceptable guarantors are banks, broker-dealers, savings and loan associations,
credit unions, national securities exchanges and any other "eligible guarantor
institution" as defined in rules adopted by the United States Securities and
Exchange Commission (the "SEC"). A notary public is not an acceptable guarantor.
It is the present policy of the Sponsor not to require signature guarantees for
liquidation requests of under $50,000 unless the proceeds are to be paid to a
person other than the record owner or are to be sent to an address other than
the one of record. Upon notice to the Planholder, this policy may be changed.
Currently, in addition to these requirements, if a Planholder has invested in
the Plan to establish an IRA, he should include the following information along
with his written request for either partial or full liquidation of Fund shares:
(a) a statement as to whether or not he has attained age 59-1/2; (b) a statement
as to whether or not he is legally disabled; (c) a statement as to whether or
not he elects to have federal income tax withheld from the proceeds of the
liquidation; and (d) his Social Security number along with the following
statement: "I certify under penalties of perjury that the Social Security number
provided is correct and that I am not subject to backup withholding either
because I am exempt from backup
14
<PAGE> 16
withholding, I have not been notified by the Internal Revenue Service that I am
subject to backup withholding, or the Internal Revenue Service has notified me
that I am no longer subject to backup withholding." If a Planholder has been
notified by the Internal Revenue Service that he is currently subject to backup
withholding, then the preceding statement should be modified accordingly. Even
if he elects not to have federal income tax withheld, he is liable for federal
income tax on the taxable portion of the liquidation. He may also be subject to
tax penalties under the estimated tax payment rules if his payments of estimated
tax and withholding, if any, are not adequate. All documents must be in proper
order before any liquidation can be executed. Liquidation requests should be
sent to BFDS. The redemption price will be the net asset value of Fund shares
next determined after such documents in proper order have been received by AIM
Distributors or BFDS.
Except as set forth below, the Planholder will be sent the proceeds of a
partial or complete liquidation within seven days after receipt by BFDS of all
necessary documents in proper order. However, BFDS will not mail redemption
proceeds to the Planholder until checks received for any shares purchased by the
Planholder have cleared. The payment period may be extended if the Custodian's
right to redeem shares of the Fund has been suspended or restricted because: (a)
trading on the NYSE is restricted, as determined by the applicable rules and
regulations of the SEC; (b) the NYSE is closed for other than customary weekend
and holiday closings; (c) the SEC has by order permitted such suspension; or (d)
an emergency as determined by the SEC exists making disposition of portfolio
securities or the valuation of the net assets of the Fund not reasonably
practicable.
16. PLAN REINSTATEMENT PRIVILEGE
A Planholder may, within 60 days after he has completely terminated his
Plan as described in paragraph 15 above, by written request to BFDS, reinstate
his Plan without any sales charge, subject to certain restrictions:
A. By including with the request an amount equal to but not less than
10% of the redemption proceeds, if no refunded sales charges were provided
in the termination.
B. By including with the request the full amount of all refunded sales
charges, plus an amount equal to but not less than 10% of the shares
redeemed, if the termination was done under the privileges described in
paragraph 13, page 12.
A Planholder may not reinstate a terminated plan if he has ever exercised
the privilege previously. If the Plan Reinstatement Privilege is exercised,
neither the total number of monthly investments to be made nor the unpaid
balance of monthly Plan investments under the Plan will be affected.
The complete termination of a Plan will normally result in the realization
of gain or loss for federal income tax purposes depending upon the Planholder's
basis for his terminated Plan. Any gain will be recognized and subject to the
applicable capital gains tax; however, if a loss were realized, reinstatement of
the Plan could effect a "wash sale," in which event the loss will not be
recognized for tax purposes. The amount of the non-recognized loss will however,
be added to the cost of the reinstated Plan to determine the Planholder's basis
for tax purposes.
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<PAGE> 17
In addition to the Plan Reinstatement Privilege described above, the
Sponsor may from time to time permit Planholders who have previously terminated
their Plans to establish new Plans on the following terms:
1. The Planholder must open the new Plan with an investment equal to
or less than the amount of the redemption proceeds received upon
liquidation of the former Plan. No Creation and Sales Charges or Custodian
fees will be subtracted from the initial investment.
2. The number of the next payment due on the new Plan will be the
number of the next payment due on the former Plan at the time it was
terminated.
3. Creation and Sales Charges on the new Plan will be the Creation and
Sales Charges that would currently be applicable to the former Plan.
The ability to establish such new Plans will not be generally available,
but will be available only during such limited time periods as may be specified
by the Sponsor from time to time.
17. CONTINUATION OF CUSTODIANSHIP
If, after the Planholder has completed his Plan investments, the Planholder
does not elect a complete or partial withdrawal of his investment in his Plan or
termination of his Plan, then the Custodian will retain custody of the Fund
shares (provided there is no substitution of Fund shares, as discussed below)
and will continue to perform all of its services until after the 300th payment
under the Plan has been made. The Planholder may, however, elect to continue the
Custodianship after the 300th payment under the Plan, subject to the right of
the Sponsor or Custodian to terminate the Plan.
CUSTODIAN AND SPONSOR CHARGES
CREATION AND SALES CHARGES
The Sponsor receives the Creation and Sales Charges as compensation for its
services and costs in creating the Plans and arranging for their administration,
for making the Fund shares available to Planholders at their net asset value and
for all selling expenses and commissions with respect to the Plans. These
charges are deducted from each investment and are larger on the first year's
investments than on subsequent investments. For example, on a $50 per month
Plan, $25.00 is deducted from each of the first 12 investments during the first
year. After the first year, the charge drops to $2.77 per investment.
During the fiscal years ended October 31, 1996, 1995 and 1994, total
investments made by all Planholders amounted to $118,046,016, $110,113,722 and
$114,796,966, respectively. The amount of Creation and Sales Charges deducted
from these investments was $7,099,870, $5,419,794 and $7,193,650, respectively,
of which amount $542,980, $420,623 and $529,672, respectively, was retained by
the Sponsor and $6,556,890, $4,999,171 and $6,663,978, respectively, was paid to
investment dealers who participated in the sale of Plans.
Plans may be purchased directly from the Sponsor and investments may be
made thereunder without deduction of Creation and Sales Charges by directors,
officers and full-time employees of the Fund and the Sponsor and its affiliates.
The Sponsor foregoes the Creation and Sales Charges
16
<PAGE> 18
on Plans purchased by such persons because any expenses incurred by it in
connection with such purchases are expected to be minimal.
CUSTODIAN FEES AND SERVICE CHARGES
For its services under a Plan, the Custodian deducts $1.50 per investment
as a service fee. This fee is deducted from Plan investments prior to the
purchase of Fund shares. The Custodian's fee charged at any one time may not
exceed $5.00. Thus, if a Planholder submits four or more investments at one
time, the aggregate Custodian Fee deducted from all such investments will be
$5.00.
After the completion of all Plan investments, or, if investments have been
made in advance, after the expiration of 15 years from the date of the Plan
(provided the Planholder has not exercised the Extended Investment Option), the
Custodian receives for its services an annual fee of $12.00. The Custodian also
deducts this fee on Plans on which no investment has been made for a 12-month
period. This fee will normally be deducted from the first combined income
dividend and capital gains distribution in each year, but the Custodian is
authorized to collect these fees from the proceeds of the sale of Fund shares
held for the Planholder's account, if necessary.
The aggregate amount of Custodian Fees deducted by the Custodian with
respect to all Plans during the fiscal year ended October 31, 1996 was
$1,449,807.
Each year the Custodian will deduct from each Planholder's account an
amount necessary to reimburse actual expenses (such as postage, forms and
envelopes) incurred by the Sponsor during the previous year in performing
certain administrative duties, but in no event will this deduction exceed $10.00
per year. These duties include the mailing to Planholders of required periodic
reports, dividend statements and tax notices; the arranging for periodic audits
of the Custodian's records by independent certified public accountants; and the
preparation and filing of federal and state reports essential to the continuance
of the Custodianship. This amount is payable from income dividends and capital
gains distributions, but if these dividends and distributions are insufficient,
the amount is collectible by the Custodian from the proceeds of the sale of Fund
shares held for the Planholder's account. The amount of the Service Charge will
be determined annually by pro-rating the Plans' administrative costs over the
total number of Plan accounts. The Service Charge on Plans established prior to
June 1, 1983 shall be as specified in the Plan Certificate.
The aggregate annual charges and deductions for maintenance and other
expenses assessed to Planholders for the fiscal years ended October 31, 1996,
1995 and 1994, stated as a percentage of total distributions (includes dividends
and capital gains) from Fund shares for such period or years, were 0.61%, 1.20%
and 0.92%, respectively. Distributions, if any, are normally declared in
December of each year. The aggregate annual charges and deductions for
maintenance and other expenses assessed to Planholders for the fiscal year of
the Sponsor ended December 31, 1996 was $462,687.
INCIDENTAL SERVICE FEES
A Custodian charge of $2.50, in addition to the amount of any applicable
transfer taxes, is made in the case of each transfer of title, each change in a
Plan denomination, each partial or complete liquidation, each restoration, each
declaration of trust (other than one filed concurrently with the application for
the Plan), each recording of an assignment, each reissuance of a Plan, and each
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<PAGE> 19
termination of a Plan prior to completion. A charge of $1.00 is made for each
payment under a Systematic Withdrawal Program, and a charge of $3.00 per account
per year is made for the preparation of a complete transcript of a Planholder's
account. A charge of $5.00 is made for any check or pre-authorized check which
is not honored by the bank on which it is drawn. The incidental service fees
described above will be paid by the Sponsor. Although it has no current
intention of doing so, the Sponsor reserves the right to reimpose these fees at
some future date.
Except as specifically provided in this Prospectus, there will be no
deductions, charges, or fees of any kind on Plan payments, Fund shares held for
the Planholder's account, or dividends or distributions paid by the Fund.
TAXES
Under the Internal Revenue Code of 1986, as amended (the "Code"), each
Planholder is deemed for federal income tax purposes to be the owner of the
underlying Fund shares accumulated in his account. Dividends and distributions
on such shares paid to the Planholder used to pay the Custodian Fee or Service
Charge or reinvested in additional Fund shares are taxable to the Planholder.
See "Dividends, Distributions and Tax Matters" in the accompanying Fund
prospectus for a discussion of the tax treatment of such dividends and
distributions. As soon as practicable after the close of each calendar year, the
Planholder will be advised of the amount and nature of the ordinary income
dividends and capital gains distributions received on his behalf during such
year.
The Creation and Sales Charges deducted from a Planholder's investments in
the Plan are not deductible for tax purposes by the Planholder, but are included
in the Planholder's tax basis for the Fund shares in his account. The Custodian
Fee and Service Charge paid by a Planholder (whether as a deduction from the
Planholder's investments in the Plan or as a deduction from the distributions
made on the Fund shares in the Planholder's account) are deductible for tax
purposes by the Planholder only if he itemizes deductions and then only to the
extent that the Custodian Fee and Service Charge, together with the Planholder's
other miscellaneous itemized deductions, exceed 2% of the Planholder's adjusted
gross income. Further, certain itemized deductions of the Planholder (including
any portion of miscellaneous itemized deductions which exceeds the 2% floor,
state and local income and property taxes, home mortgage interest, and
charitable contributions) will be reduced (but not by more than 80% thereof) by
3% of the Planholder's adjusted gross income in excess of $117,950 (for tax
years beginning in 1996 and as annually adjusted for inflation). This amount is
calculated differently for married persons filing separate income tax returns.
Under provisions of the Code, the Custodian may be required to withhold
from dividends and liquidations 31% of all amounts otherwise payable to
Planholders who have not provided the Custodian with a correct certified social
security number or tax identification number or those who have been notified by
the Internal Revenue Service that they are subject to "backup withholding"
because of underreporting of reportable payments. The amounts withheld will be
credited against the Planholder's federal income tax liability, and, if
withholding results in an overpayment of taxes, a refund may be obtained from
the Internal Revenue Service.
Neither the Custodian, BFDS, nor the Sponsor bears any taxes arising from
the custody of the Fund shares or the operations of the Custodianship under the
Plans. The Custodian, BFDS, and the Sponsor are authorized to incur any expenses
deemed necessary or appropriate in connection with any claim or possible claim
for taxes against the Custodianship or the accounts of Planholders. The
18
<PAGE> 20
Sponsor or the Custodian may, in its discretion, deduct charges against the
account of the Planholder on a pro rata basis (determined by reference to the
total number of Fund shares affected) in order to pay or set up reserves for
such claims and related expenses.
SUBSTITUTION OF SHARES
Shares of the Fund have been the underlying investment for the Plans since
their inception. The Sponsor may substitute shares of another investment medium
as the underlying investment if it deems such action to be in the best interests
of the Planholders. Such substituted investment shall be generally comparable in
character and quality to the Fund's shares, and shall be registered with the SEC
under the Securities Act of 1933, as amended. Before any substitution can be
effected, the Sponsor must:
(a) Obtain an order from the SEC approving such substitution under the
provisions of Section 26(b) of the Investment Company Act of 1940, as
amended (the "1940 Act");
(b) Give written notice of the proposed substitution to the Custodian;
(c) Give written notice of the proposed substitution to each
Planholder, giving a reasonable description of the substituted fund shares,
with the advice that, unless the Planholder responds within 30 days of the
date of mailing of such notice, the Planholder will be considered to have
agreed to bear his pro rata share of expenses and taxes in connection with
the substitution. The pro rata share of expenses and taxes are payable from
any income dividends and any capital gains distributions, but if such
dividends and distributions are insufficient, the pro rata share of
expenses and taxes are collectable by the Custodian from the proceeds of
the sale of Fund shares held for the Planholder's account; and
(d) Provide the Custodian with a signed certificate stating that such
notice has been given to the Planholders.
If no response is received within the 30-day notice period, the Custodian
shall purchase shares of the substituted fund with subsequent investments
received from the Planholder and any dividends and distributions which may be
reinvested for his account. If shares of the substituted fund are also to be
substituted for the shares already held, the Sponsor must arrange for the
Custodian to be furnished, without payment of a sales charge of any kind, with
shares of the substituted fund having an aggregate value equal to the value of
shares of the Fund for which they are to be exchanged.
If Fund shares are not available for purchase for a period of 90 days or
longer, and the Sponsor fails to substitute other shares, the Custodian may, but
is not required to, select another underlying investment. If the Custodian
selects a substitute investment, it shall first obtain an order from the SEC
approving such substitution as specified above and then shall notify the
Planholder, and if, within 30 days after mailing such notice, the Planholder
gives his written approval of the substitution and agrees to bear his pro rata
share of actual expenses, including any tax liability sustained by the
Custodian, the Custodian may thereafter purchase such substituted shares. The
Planholder's failure to give such written approval within the 30-day period
shall give the Custodian authority to terminate his Plan.
19
<PAGE> 21
If Fund shares are not available for purchase for a period of 90 days or
longer, and neither the Sponsor nor the Custodian substitutes other shares, the
Custodian shall have the authority, without further action on its part, to
terminate the Plans.
TERMINATION OF A PLAN
A Plan will normally remain in existence until the Planholder has made 300
investment units into the Plan. Neither the Sponsor nor the Custodian can
terminate a Plan established after May 1, 1993 sooner unless the Planholder has
failed to make investments under his Plan for a period of 6 consecutive months
(12 consecutive months for Plans established prior to May 1, 1993) from the
scheduled due date of the last investment made (including any investments made
in advance of their scheduled due dates). For example, the post-May 1, 1993 Plan
of a Planholder who has made all investments due under his Plan through June
30th of a given year (regardless of when such investments were made) and who
makes no further investments, may not be terminated prior to December 31st of
that same year. Any scheduled investment made prior to the termination of a Plan
extends the due dates of all future investments for a period equal to the period
during which no investments were made. Accordingly, a Planholder need only make
one investment during each 6-month period (or 12-month period for Plans
established prior to May 1, 1993) to prevent his Plan from being terminated.
A Plan may also be terminated prior to the accumulation of 300 investment
units if shares of the Fund are not available and a substitution is not made.
After 300 investment units have been made, or on the happening of any of the
other events justifying termination, the Sponsor or the Custodian has the right
to terminate a Plan 60 days after mailing written notice of the termination to
the Planholder.
On termination, the Custodian, acting as the Planholder's agent, must
withdraw the shares from the Custodianship and, as the Planholder's agent, may
surrender for liquidation all of the Fund shares credited to the account of the
Planholder, or sufficient Fund shares to pay all authorized deductions and leave
no fractional shares. Any adjustment in Creation and Sales Charges or other
charges occasioned by virtue of the termination by the Planholder through the
exercise of one of the refund privileges will be made at the same time. The
shares and/or cash, after payment of all authorized deductions, will be held by
the Custodian as agent for the Planholder for delivery to the Planholder upon
instruction by the Planholder. No interest will be paid on any cash balances
held. If a response is not received within 60 days after mailing the notice of
termination to the Planholder, the Custodian, in its discretion, may mail the
shares, and its check payable to the former Planholder, to the last known
address of record of the Planholder, and the Planholder will be deemed to have
no further rights under the Plan. In all events, terminated Plans will not be
resold. Undeliverable shares and funds will be held by the Custodian in trust
for the account of the Planholder to whom they belong, subject to the abandoned
property laws of The Commonwealth of Massachusetts.
20
<PAGE> 22
THE CUSTODIAN
State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02101, acts as Custodian for the Plans pursuant to a custodian
agreement, dated September 24, 1982, as amended and restated on June 1, 1983,
as amended and restated on May 1, 1996 (the "Custodian Agreement") with respect
to Plans issued on or after such date. The Custodian is a corporation organized
under the laws of the State of Massachusetts. The Internal Revenue Service
Employer Identification Number of the Custodian is 04-1867445. The Custodian
also acts as custodian and transfer agent for the Fund.
The duties of the Custodian under the Custodian Agreement include the
receipt of all investments from Planholders and income dividends and capital
gain distributions on Fund shares, the processing of all authorized deductions
therefrom and the purchase and retention of Fund shares for the Planholders'
accounts. The Custodian also effects partial or complete liquidations of Plans
in connection with withdrawals or terminations and the various other functions
heretofore discussed.
The Custodian receives and holds in trust without interest all cash and
Fund shares held by a Plan until completion and/or termination of the Plan. BFDS
keeps a complete record of each Planholder's account and mails receipts for each
Planholder's investments showing the number of shares held for the Planholder's
account, notices (including distribution notices and tax statements), reports to
shareholders, prospectuses and proxy material. The Custodian causes periodic
audits to be taken of the records maintained by it relating to the Plans, unless
such audits are arranged for by the Sponsor, and prepares and files tax returns
and other reports required by law. The Custodian has assumed only those
responsibilities specifically imposed on it under its Custodian Agreement with
the Sponsor. The Custodian has no responsibility for the choice of the
underlying investment, for the investment policies and practices of the
management of the Fund, for the acts or omissions of the Sponsor, for compliance
by the Sponsor with the laws of the United States, any state or other
jurisdiction relating to the sale, registration or qualification of securities,
or for compliance by the Sponsor with any rules, regulations or orders of any
regulatory agencies or commissions, for the validity of written designations of
beneficiaries executed by Planholders, or for signatures guaranteed by persons
other than banks or members of national securities exchanges.
The Custodian is authorized to commingle only those payments, dividends and
certificates of Fund shares which are held for or received from the various
Planholders of Plans which are subject to this Prospectus. The Custodian is also
authorized to cause all Plan certificates issued prior to March 1, 1995 to be
registered in its name or in the name of its nominees. While the custodian does
not assert a lien in general terms on the property held by it, the authorization
conferred on the Custodian to make the various deductions heretofore discussed,
and in certain cases to sell Fund shares, may be considered authorization to the
Custodian to create liens upon the property held by it.
The Custodian Agreement cannot be amended to affect the rights and
privileges of any Planholder without his written consent.
Under certain circumstances as provided in the Custodian Agreement, the
Sponsor or the Custodian has the right to terminate the services of the
Custodian. However, no such termination or resignation may be made as to the
Plans then in force unless all Fund shares have been liquidated and the proceeds
distributed to the Planholders, or unless a successor custodian has been
designated and has accepted the custodianship. Any successor custodian must be a
bank or trust
21
<PAGE> 23
company having at all times aggregate capital, surplus and undivided profits in
excess of $1,000,000. Notice of such a change will be sent to Planholders, but
their consent is not required.
THE SPONSOR
A I M Distributors, Inc., (11 Greenway Plaza, Houston, Texas, 77046) the
Sponsor and principal underwriter of the Plans offered by this Prospectus, was
incorporated under the laws of the State of Delaware on November 18, 1976. It is
a wholly-owned subsidiary of A I M Advisors, Inc. and a member of the National
Association of Securities Dealers, Inc. The Sponsor's directors and principal
officers are listed below. The Internal Revenue Service Employer Identification
Number of A I M Distributors, Inc. is 74-1894784.
Charles T. Bauer is Director, Chairman and Chief Executive Officer, A I M
Management Group Inc.; Chairman of the Board of Directors, A I M Advisors, Inc.,
A I M Capital Management, Inc., A I M Distributors, Inc., A I M Fund Services,
Inc., A I M Institutional Fund Services, Inc. and Fund Management Company.
Michael J. Cemo is Director and President, A I M Distributors, Inc.;
Director and Senior Vice President, A I M Management Group Inc.; and Director,
A I M Fund Services, Inc.
Robert H. Graham is Director, President and Chief Operating 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., A I M Institutional Fund Services, Inc. and
Fund Management Company.
Gary T. Crum is Director and President, A I M Capital Management, Inc.;
Director and Senior Vice President, A I M Management Group Inc., A I M Advisors,
Inc.; and Director, A I M Distributors, Inc.
W. Gary Littlepage is Director and Senior Vice President, A I M
Distributors, Inc., and Vice President, A I M Management Group Inc.
James L. Salners is Director and Senior Vice President, A I M Distributors,
Inc.
John Caldwell is Senior Vice President, A I M Distributors, Inc., A I M
Management Group Inc.; Director and President, A I M Fund Services, Inc.; and
Director and Vice President, A I M Institutional Fund Services, Inc.
Gordon J. Sprague is Senior Vice President, A I M Distributors, Inc.
Michael C. Vessels is Senior Vice President, A I M Distributors, Inc.
Marilyn M. Miller is First Vice President, A I M Distributors, Inc.
Carol F. Relihan is Senior Vice President, General Counsel and Secretary,
A I M Advisors, Inc.; Vice President, General Counsel and Secretary, A I M
Management Group Inc.; Vice President and General Counsel, Fund Management
Company; and Vice President, A I M Capital Management, Inc., A I M Distributors,
Inc., A I M Fund Services, Inc. and A I M Institutional Fund Services, Inc.
John J. Arthur is Senior Vice President and Treasurer, A I M Advisors,
Inc.; Vice President and Treasurer, A I M Management Group Inc., A I M Capital
Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc., A I M
Institutional Fund Services, Inc. and Fund Management Company.
22
<PAGE> 24
Melville B. Cox is 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
Institutional Fund Services, Inc. and Fund Management Company.
Ofelia M. Mayo is General Counsel, Vice President and Assistant Secretary,
A I M Distributors, Inc.; and Assistant General Counsel and Assistant Secretary,
A I M Advisors, Inc., A I M Capital Management, Inc., A I M Fund Services, Inc.,
A I M Institutional Fund Services, Inc., and Fund Management Company.
Charles R. Dewey is Vice President, A I M Distributors, Inc.
Sidney M. Dilgren is Vice President, A I M Distributors, Inc. and A I M
Fund Services, Inc.
William H. Kleh is Director and Senior Vice President, A I M Advisors,
Inc.; Director and Vice President, A I M Capital Management, Inc.; Director,
Fund Management Company; Senior Vice President, A I M Management Group Inc.; and
Vice President, A I M Distributors, Inc.
Mary K. Coleman is Vice President, A I M Distributors, Inc.
Kamala C. Sachidanandan is Vice President, A I M Distributors, Inc.
Frank V. Serebrin is Vice President, A I M Distributors, Inc.
B. J. Thompson is Vice President, A I M Distributors, Inc.
Robert D. Van Sant Sr. is Vice President, A I M Distributors, Inc.
Mr. Bauer and Mr. Graham are directors of, and Messrs. Bauer, Graham, Kleh,
Arthur and Ms. Relihan are officers of, some or all of the investment companies
advised or managed by A I M Advisors, Inc. ("AIM"). As of January 31, 1997, Mr.
Bauer owned of record .004% of the Plans, which represented beneficial ownership
of 4,609.94 shares of the Fund and Mr. Graham owned of record .02% of the Plans,
which represented beneficial ownership of 22,976.92 shares of the Fund.
Directors of the Sponsor do not receive any compensation for their services.
Officers and employees of the Sponsor receive no compensation from the Sponsor,
but are compensated by A I M Management Group Inc. ("AIM Management"). All
officers and employees of the Sponsor are currently covered by a fidelity bond
in the amount of $25,000,000. AIM, a wholly-owned subsidiary of AIM Management,
acts as investment advisor of the Fund and receives a fee from the Fund for its
services.
The Sponsor is the principal underwriter of the Fund and of the following
other open-end investment companies advised or managed by AIM: AIM Equity Funds,
Inc., AIM Funds Group, AIM International Funds, AIM Investment Securities Funds
(Limited Maturity Treasury Portfolio-AIM Limited Maturity Treasury Shares), AIM
Summit Fund, Inc., AIM Tax-Exempt Funds, Inc., AIM Variable Insurance Funds,
Inc., and Summit Investors Plans. AIM serves as investment advisor to each of
such investment companies. For information concerning these investment companies
and AIM Management, AIM and A I M Capital Management, Inc., and the investment
management and investment advisory fees received by AIM from the Fund, see
"Management of the Fund -- The Investment Advisor" in the attached prospectus of
the Fund.
23
<PAGE> 25
GENERAL
The Plans are organized under and are governed by the laws of The
Commonwealth of Massachusetts, except that the laws of the State of New York
govern the substantive legal rights of Planholders holding Plans issued prior to
June 1, 1983. The Plans are considered to be a unit investment trust under the
1940 Act and are so registered with the SEC. Such registration does not imply
supervision of management or investment practices or policies by the SEC.
Since the Custodian Agreement does not provide for the amendment of
outstanding Plans, no changes will be made in the terms or conditions of Plans
once they have been issued; therefore, the consent of Planholders to changes in
Plans issued thereafter is not required. The Sponsor will give the Planholders
notice of any changes in any indenture or agreement relating to the Plans and
affecting them or in the identity of the Sponsor or Custodian, but such changes
do not require their consent.
The Plans are distributed by authorized investment brokers and mutual fund
dealers who are members of the National Association of Securities Dealers, Inc.,
and who have executed dealer agreements with the Sponsor. Commissions of up to
93% of the total Creation and Sales Charges will be paid to such authorized
investment brokers and mutual fund dealers. These dealers and investment brokers
are independent contractors. Nothing herein or in other literature and
confirmations issued by the Sponsor or the Custodian, including the words
"representative" or "commission," shall constitute any dealer or investment
broker, a partner, employee or agent of the Sponsor or the Custodian. Neither
the Sponsor nor the Custodian shall be liable for any acts or obligations of any
such dealer or investment broker. Dealers who receive 90% or more of the
Creation and Sales Charges applicable to Plan payments may be deemed to be
underwriters under the Securities Act of 1933 and may, therefore, be subject to
certain liabilities imposed upon underwriters by such Act. In the event the
broker or dealer of record designated for a Plan is changed after the
establishment of the Plan, such change will appear on the Sponsor's records;
however, payment of commissions on future investments by the Planholder will
continue to be made to the original broker or dealer of record notwithstanding
such change.
Summit Investors Plans are presently offered in all states.
This Prospectus omits certain of the information contained in the
registration statement on file with the SEC. Copies of the registration
statement, including items omitted herein, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
24
<PAGE> 26
ILLUSTRATION OF A HYPOTHETICAL $50 MONTHLY
SUMMIT INVESTORS PLAN
FOR INVESTMENT IN SHARES OF AIM SUMMIT FUND, INC.
This table shows results of an assumed investment of $50 per month (the
minimum monthly investment Plan) for the period from the beginning of Summit
Investors Plans, November 1, 1982, to December 31, 1996. The results assume the
reinvestment of capital gains distributions and income dividends in additional
shares of AIM Summit Fund, Inc.
The results shown in this table should not be considered as a
representation of the dividend income or capital gain or loss in a Plan today. A
Plan cannot assure a profit or protect against depreciation in declining
markets. Common stock prices fluctuate widely over time.
<TABLE>
<CAPTION>
DEDUCTIONS(c) CUMULATIVE
----------------------- NET NET
YEAR DIVIDENDS CREATION AMOUNT AMOUNT
ENDED MONTHLY INVESTMENTS FROM NET TOTAL AND INVESTED INVESTED IN CAPITAL
12/31 ----------------------- INVESTMENT CUMULATIVE SALES CUSTODIAN IN FUND FUND GAINS
(a) ANNUALLY CUMULATIVE INCOME COST(b) CHARGES FEE(d) SHARES SHARES REINVESTED
----- -------- ---------- ---------- ---------- -------- --------- -------- ----------- ----------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1982
(2 mos.) $100.00 $ 100.00 $ -- $ 100.00 $ 50.00 $ 3.00 $ 47.00 $ 47.00 $ --
1983 600.00 700.00 -- 700.00 255.54 18.00 326.46 373.46 --
1984 600.00 1,300.00 1.75 1,301.75 33.24 18.00 550.51 923.97 .62
1985 600.00 1,900.00 6.91 1,908.66 33.24 18.00 555.67 1,479.64 2.76
1986 600.00 2,500.00 36.47 2,545.13 33.24 18.00 585.23 2,064.87 200.48
1987 600.00 3,100.00 53.22 3,198.35 33.24 18.00 601.98 2,666.85 254.88
1988 600.00 3,700.00 81.11 3,879.46 33.24 18.00 629.87 3,296.72 --
1989 600.00 4,300.00 318.37 4,797.83 33.24 18.00 867.13 4,163.85 229.36
1990 600.00 4,900.00 128.25 5,526.08 33.24 18.00 677.01 4,840.86 119.97
1991 600.00 5,500.00 339.23 6,465.31 33.24 18.00 887.99 5,728.85 368.73
1992 600.00 6,100.00 107.51 7,172.82 33.24 18.00 656.27 6,385.12 839.09
1993 600.00 6,700.00 114.24 7,887.06 33.24 18.00 663.00 7,048.12 769.61
1994 600.00 7,300.00 135.18 8,622.24 33.24 18.00 683.94 7,732.06 520.43
1995 600.00 7,900.00 428.92 9,651.16 33.24 18.00 977.68 8,709.74 865.23
1996 600.00 8,500.00 52.57 10,303.73 33.24 18.00 601.33 9,311.07 1,925.38
------- ------- ---------
$737.66 $255.00 $6,096.54
<CAPTION>
YEAR
ENDED TOTAL VALUE OF
12/31 SHARES ACCUMULATED
(a) OWNED(e) SHARES(f)
----- -------- -----------
<C> <C> <C>
1982
(2 mos.) 9.428 $ 46.48
1983 68.444 370.97
1984 180.052 905.68
1985 277.847 1,803.23
1986 390.732 2,610.09
1987 515.282 2,937.11
1988 613.217 4,028.84
1989 755.981 5,889.09
1990 860.497 6,505.36
1991 992.132 10,010.61
1992 1,147.268 11,059.66
1993 1,294.014 12,551.94
1994 1,426.949 12,742.66
1995 1,597.970 17,849.33
1996 1,810.440 21,996.85
</TABLE>
NOTES:
(a) The fiscal year end of Summit Investors Plans and the Fund for each year
after 1992 was changed from December 31 to October 31. All data reflect
calendar years ended December 31.
(b) Reflects the total amount of monthly investments plus the cumulative
amount of income dividends reinvested.
(c) The total deductions for the first 12 months of the hypothetical Plan
equal $318.00 or 53% of total investments. If all of the investments of a
15-year Plan were made monthly, total deductions would be $1,035.36 or
11.5% of the total investment.
(d) Does not include a Service Charge, not to exceed $10 per year, payable
first from dividends and distributions and then, if necessary, from
principal, to cover certain administrative expenses actually incurred.
The amount of such charge will be determined annually by pro-rating the
Plans' administrative costs over the total number of Plan accounts. The
Service Charge on Plans established prior to June 1, 1983 shall be as
specified in the Plan Certificate.
(e) Assumes that monthly investments were made on the first business day of
each month.
(f) Based on the Fund's year-end net asset value.
No adjustments have been made for any income taxes payable by investors on
reinvested capital gains distributions and reinvested dividends.
25
<PAGE> 27
INDEPENDENT AUDITORS' REPORT
The Board of Directors of
A I M Distributors, Inc. and Planholders
of Summit Investors Plans:
We have audited the accompanying statement of assets and liabilities of Summit
Investors Plans as of October 31, 1996, and the related statement of operations
for the year then ended and the statement of changes in net assets for each of
the years in the three-year period then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements 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 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 held as trust property as of October 31, 1996 by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Summit Investors Plans as of
October 31, 1996, and the results of its operations for the year then ended, and
the changes in its net assets for each of the years in the three-year period
then ended in conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Houston, Texas
January 17, 1997
26
<PAGE> 28
SUMMIT INVESTORS PLANS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1996
<TABLE>
<S> <C>
ASSETS:
AIM Summit Fund, Inc. shares, at value
(Plans' investment $893,384,270)....................... $1,256,343,722
Cash...................................................... 99,457
Due from AIM Summit Fund, Inc. ........................... 738
------------
Total assets........................................... 1,256,443,917
------------
LIABILITIES:
Creation and Sales Charges payable........................ 98,014
Custodian charges payable................................. 2,181
------------
Total liabilities...................................... 100,195
------------
NET ASSETS (Equivalent to $12.99 per share based on
96,716,222 shares of capital stock owned on
outstanding plans)........................................ $1,256,343,722
============
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1996
<TABLE>
<S> <C>
Investment income:
Dividends received on shares of AIM Summit Fund, Inc...... $ 76,194,541
Expenses.................................................... (462,687)
------------
Net investment income....................................... 75,731,854
------------
Realized and unrealized gain on investments:
Net realized gain on plan liquidations.................... 16,544,971
Unrealized appreciation of investments.................... 74,678,750
------------
Net increase in net assets resulting from operations........ $166,955,575
============
</TABLE>
See Notes to Financial Statements.
27
<PAGE> 29
SUMMIT INVESTORS PLANS
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED OCTOBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
---------------------------- ---------------------------- ---------------------------
AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
-------------- ----------- -------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at
beginning of period..... $1,047,129,847 86,254,518 $ 763,448,692 78,062,238 $704,307,938 67,333,455
Planholders investments:
Additions from
Planholder
Payments.............. 118,046,146 110,113,722 114,796,966
Less:
Creation and Sales
Charges............ 7,099,870 5,419,794 7,193,650
Custodian charges..... 1,449,807 1,411,202 1,456,849
-------------- -------------- ------------
Amount invested in
AIM Summit Fund, Inc.
shares................ 109,496,469 9,095,143 103,282,726 10,198,859 106,146,467 11,007,439
Net investment
income reinvested:
Net investment income... 75,731,854 37,939,132 49,829,720
Less: Amount paid
in cash............... 524,986 312,419 311,622
-------------- -------------- ------------
75,206,868 6,912,775 37,626,713 4,314,990 49,518,098 5,126,097
Net realized gain on plan
liquidations............ 16,544,971 10,347,903 6,235,277
Unrealized market
appreciation
(depreciation) of
investments............. 74,678,750 197,465,112 (50,525,944)
Planholder liquidations... (66,713,183) (5,546,214) (65,041,299) (6,321,569) (52,233,144) (5,404,753)
-------------- ---------- -------------- ---------- ------------ ----------
Net asset value at end of
period.................. $1,256,343,722 96,716,222 $1,047,129,847 86,254,518 $763,448,692 78,062,238
============== ========== ============== ========== ============ ==========
</TABLE>
See Notes to Financial Statements.
28
<PAGE> 30
SUMMIT INVESTORS PLANS
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1996
NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES
Summit Investors Plans is a unit investment trust registered under the
Investment Company Act of 1940 with the Securities and Exchange Commission. The
following significant accounting policies are in conformity with generally
accepted accounting principles for unit investment trusts.
A. Security Valuation:
The investment, which consists exclusively of shares of AIM Summit Fund,
Inc., is valued at the net asset value of AIM Summit Fund, Inc. shares on
October 31, 1996.
B. Federal Income Taxes:
No provision is made for Federal income taxes as all income dividends
and capital gain distributions received by Planholders are treated as if
received directly from the underlying Fund.
C. Transaction Dates:
Share transactions are recorded on a trade date basis. Dividend income
and capital gain distributions are recorded on the ex-dividend date.
NOTE 2 -- PLANHOLDERS' COST OF AIM SUMMIT FUND, INC. AND VALUE OF PLANS
OUTSTANDING
The investment in AIM Summit Fund, Inc. is carried at identified cost,
which represents the amount available for investment (including reinvested
dividends of net investment income and realized gains) in such shares after
deduction of sales charges and custodian fees, if applicable, and unrealized
market appreciation. The net value of Plans outstanding is as follows:
PLANS OUTSTANDING
OCTOBER 31, 1996
<TABLE>
<S> <C>
Total payments made by Planholders on Plans outstanding
(net of liquidations)..................................... $ 702,141,652
Net investment income dividends reinvested.................. 304,617,497
--------------
Total............................................. 1,006,759,149
Less:
Creation and Sales Charges................................ 101,297,794
Custodian charges......................................... 12,077,085
--------------
Net investment in AIM Summit Fund, Inc. shares (identified
cost)..................................................... 893,384,270
Unrealized market appreciation of investments............... 362,959,452
--------------
Value of Plans outstanding.................................. $1,256,343,722
==============
</TABLE>
29
<PAGE> 31
INDEPENDENT AUDITORS' REPORT
The Board of Directors
A I M Distributors, Inc.:
We have audited the accompanying balance sheet of A I M Distributors, Inc. (the
Company) as of December 31, 1996, and the related statement of operations,
changes in stockholder's equity and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit 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 are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of A I M Distributors, Inc. as of
December 31, 1996, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
February 14, 1997
30
<PAGE> 32
THE FINANCIAL STATEMENTS SHOWN ON THIS AND THE FOLLOWING PAGES ARE THE SPONSOR'S
AND NOT THOSE OF SUMMIT INVESTORS PLANS. THEY ARE INCLUDED IN THE PROSPECTUS FOR
THE PURPOSE OF INFORMING INVESTORS AS TO THE FINANCIAL RESPONSIBILITY OF THE
SPONSOR AND ITS ABILITY TO CARRY OUT ITS CONTRACTUAL OBLIGATIONS.
A I M DISTRIBUTORS, INC.
BALANCE SHEET
DECEMBER 31, 1996
<TABLE>
<S> <C> <C>
ASSETS
Money market fund accounts (affiliated registered investment
companies)............................................................. $3,171,766
Accounts receivable:
Due from dealers for sales of capital stock of affiliated
registered investment companies........................ 1,723,357
Due from affiliated registered investment companies....... 1,678,530
Other accounts receivable................................. 1,449,052 4,850,939
==========
Prepaid expenses......................................................... 334,888
Segregated trust account................................................. 679,519
Insurance deposit........................................................ 21,804
----------
$9,058,916
==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Due to affiliated registered investment companies for sales of
capital stock....................................................... $1,714,594
Due to dealers for redemptions from affiliated registered investment
companies........................................................... $ 309,987
Due to affiliated companies............................................ 1,662,941
Accounts payable and accrued expenses.................................. 704,002
Deferred income taxes payable.......................................... $ 45,619
----------
Total liabilities.............................................. 4,437,143
Stockholder's equity:
Common stock, $1 par value. Authorized 1,000 shares; 10
shares issued and outstanding.......................... $ 10
Additional paid-in capital................................ 1,378,990
Retained earnings......................................... 3,242,773
==========
Total stockholder's equity..................................... 4,621,773
----------
$9,058,916
==========
</TABLE>
See accompanying Notes to Financial Statements.
31
<PAGE> 33
A I M DISTRIBUTORS, INC.
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<S> <C> <C>
Income:
Underwriting income, net of dealers' commissions........................ $45,112,845
Marketing servicing fees................................................ 31,266,667
Distribution fees....................................................... 15,484,206
Sponsor fees on periodic payment investment plans,
net of commissions paid.............................................. 559,622
Investment income....................................................... 234,638
-----------
Total income.................................................... 92,657,978
-----------
Expenses:
Allocation from parent company............................ 73,373,920
Compensation allocation from parent company............... 1,831,458
Other operating expenses.................................. 12,497,719
Interest allocation from parent company................... 941,520
==========
Total expenses.................................................. 88,644,617
-----------
Income before income taxes...................................... 4,013,361
Income tax expense:
Current................................................... 1,701,997
Deferred.................................................. (382,399) 1,319,598
========== -----------
Net income...................................................... $ 2,693,763
===========
</TABLE>
A I M DISTRIBUTORS, INC.
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON PAID-IN RETAINED STOCKHOLDER'S
STOCK CAPITAL EARNINGS EQUITY
<S> <C> <C> <C> <C>
Balance at December 31, 1995.......... $10 $1,378,990 $4,400,517 $5,779,517
Net income............................ -- -- 2,693,763 2,693,763
Dividends paid........................ -- -- (3,851,507) (3,851,507)
--- ---------- ---------- ----------
Balance at December 31, 1996.......... $10 $1,378,990 $3,242,773 $4,621,773
=== ========== ========== ==========
</TABLE>
See accompanying Notes to Financial Statements.
32
<PAGE> 34
A I M DISTRIBUTORS, INC.
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<S> <C> <C>
Cash flows from operating activities:
Net income................................................ $2,693,763
Adjustments to reconcile net income to net cash provided
by operating activities:
Decrease in accounts receivable........................ $ 2,120,645
Decrease in income taxes refundable.................... 51,871
Decrease in prepaid expenses........................... 328,792
Increase in segregated trust account................... (241,441)
Increase in due to affiliated registered investment
companies for sales of capital stock................. 52,548
Decrease in due to dealers for redemptions from
affiliated registered investment companies........... (57,181)
Increase in due to affiliated companies................ 152,874
Increase in accounts payable and accrued expenses...... 593,002
Decrease in deferred income taxes payable.............. 382,399
===========
Total adjustments............................ 2,618,711
----------
Net cash provided by operating activities.... 5,312,474
----------
Cash flows used in financing activities -- dividends paid... (3,851,507)
----------
Net increase in cash and cash equivalents.... 1,460,967
Cash and cash equivalents at beginning of year......... 1,710,799
----------
Cash and cash equivalents at end of year............... 3,171,766
==========
</TABLE>
See accompanying Notes to Financial Statements.
33
<PAGE> 35
A I M DISTRIBUTORS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Presentation
A I M Distributors, Inc. (the "Company") is a wholly-owned subsidiary of
A I M Advisors, Inc. (the "Parent Company"). The Company acts as the principal
underwriter and distributor to affiliated registered investment companies. The
Company depends on its Parent Company for funding portions of its operations.
(b) Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid assets such as cash in banks and amounts in affiliated money
market funds to be cash equivalents.
(c) Securities Transactions
Securities transactions are recorded on a settlement date basis which is
normally the third business day following the trade date (settlement date basis
as compared to trade date basis has no material effect on the Company's
financial position or results of operations). The Company accounts for its
investments at fair market value or, if applicable, amortized cost.
(d) Segregated Trust Account
The segregated trust account represents a U.S. Government Agency discount
note on deposit in a segregated trust account as required by the Investment
Company Act of 1940. Such amount is determined in accordance with the
requirements of the Investment Company Act of 1940 to provide cash reserves for
refunds that may be required if investors in a unit investment trust exercise
their right to surrender or withdraw.
(e) Distribution Fees
The Company receives fees from affiliated registered investment companies
pursuant to 12b-1 plans (Investment Company Act of 1940) adopted by the
affiliated registered investment companies. Such fees are paid to the Company as
compensation for expenses incurred by the Company for the distribution of shares
of the registered investment companies. The fees are based on a specified annual
percentage of a fund's average daily net assets.
34
<PAGE> 36
A I M DISTRIBUTORS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(f) Allocations From Affiliated Companies
The Company is allocated expenses by an affiliated company based upon
estimates of time devoted to the operations of the Company by personnel of the
affiliated company and usage of shared facilities. The Company is also allocated
revenue from affiliated companies for services performed in marketing efforts
for affiliated registered investment companies sponsored by those companies.
(g) Federal Income Taxes
For federal income tax purposes, the Company's income is included in the
consolidated income tax return filed by A I M Management Group Inc., the parent
company of A I M Advisors, Inc. Deferred and current taxes are provided at the
statutory rate in effect during the year (35%) by the members of the
consolidated group based on the amount that the respective member would pay or
have refunded if it were to file a separate return. The primary components of
the net deferred tax liability at December 31, 1995 relate to prepaid expenses
and deferred state tax expense.
(2) NET CAPITAL REQUIREMENTS
In accordance with regulations of the Securities and Exchange Commission,
the Company must maintain minimum net capital and a ratio of aggregate
indebtedness to net capital, both as defined, that does not exceed 15 to 1. At
December 31, 1996, the Company had net capital of $2,033,269, which exceeded
required net capital of $195,608 by $1,837,661. The ratio of aggregate
indebtedness to net capital was 1.44 to 1 at December 31, 1996.
(3) SUBORDINATED DEBT
The Company had no subordinated debt at December 31, 1996 or at any time
during the year then ended.
35
