<PAGE> 1
As filed with the Securities and Exchange Commission on February 27, 1998
1933 Act Registration No. 2-76910
1940 Act Registration No. 811-3444
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 21 TO
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
A. Exact name of trust: SUMMIT INVESTORS PLANS
B. Name of depositor: A I M DISTRIBUTORS, INC.
C. Complete address of depositor's principal executive offices:
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
D. Name and address of agent for service:
Michael J. Cemo, President
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
with a copy to:
Stephen I. Winer, Esquire
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
Martha J. Hays, Esquire
Ballard Spahr Andrews & Ingersoll
1735 Market Street, 51st Floor
Philadelphia, Pennsylvania 19103-7599
It is proposed that this filing will become effective (check appropriate
box):
immediately upon filing pursuant to paragraph (b)
---
X on February 27, 1998 pursuant to paragraph (b)
---
60 days after filing pursuant to paragraph (a)(1)
---
on (date) pursuant to paragraph (a)(1) of rule 485
---
this post-effective amendment designates a new effective date
--- for a previously filed post-effective amendment.
(Continued on Next Page)
<PAGE> 2
E. Title and amount of securities being registered:
Summit Investors Plans, an indefinite amount of periodic payment
plans being registered.
F. Approximate date of proposed public offering:
February 27, 1998
<PAGE> 3
SUMMIT INVESTORS PLANS
Form S-6 Cross Reference Sheet
(as required by Rule 404)
<TABLE>
<CAPTION>
FORM N-8B-2 ITEM NUMBER PROSPECTUS CAPTION
----------------------- ------------------
<S> <C> <C>
1. (a) Name of Trust Cover Page
(b) Title of Each Class of Securities Cover Page
2. Name and Address of Depositor The Sponsor
3. Name and Address of Custodian The Custodian
4. Name and Address of Underwriter The Sponsor
5. State Laws Governing Organization General
6. (a) Date of Agreement Organizing Trust *
(b) Date of Custodian Agreement The Custodian
7. Name Change of Trust **
8. Fiscal year end of Trust **
9. Material Litigation *
10. General Information Concerning the Securities
of the Trust and the Rights of Holders
(a) Type of Security (registered Introduction
or bearer)
(b) Type of Security (cumulative Introduction
or distributive)
(c) Withdrawal or Redemption Rights and Privileges of Planholders - Complete
Rights of Security Holders Withdrawal or Termination
(d) Conversion, Transfer, Partial Rights and Privileges of Planholders - Partial
Redemption Rights of Security Withdrawal or Partial Liquidation without
Holders Termination
(e) Security Holders Rights Termination of a Plan; Rights and Privileges of
(lapses or defaults) Planholders - Plan Reinstatement Privilege
(f) Voting Rights Rights and Privileges of Planholders - Voting
Rights
(g) Security Holder Notification Substitution of Shares; General
(h) Security Holder Consent Substitution of Shares; General
</TABLE>
- ------------------
* Omitted from the prospectus in accordance with Instruction 3 of Form S-6
** Omitted from the prospectus in accordance with Instruction 1 of Form S-6
<PAGE> 4
<TABLE>
<CAPTION>
FORM N-8B-2 ITEM NUMBER PROSPECTUS CAPTION
----------------------- ------------------
<S> <C> <C>
(i) Other Principal Features of Rights and Privileges of Planholders
Securities
11. Securities Comprising the Trust Introduction
12. Information Concerning the Underlying
Investment
(a) Name of Company Introduction
(b) Name and Address of Depositor *
(c) Name and Address of Custodian The Custodian
(d) Name and Address of Underwriter The Sponsor
(e) Period of Underlying Securities Substitution of Shares
13. Information Concerning Loads, Fees,
Charges, and Expenses
(a) Nature, Amount, Persons Paid and Introduction; Allocation of Investments and
Services Performed Deductions - 15 Year Plans; Total 25 Year
Allocations of Investments and Deductions when
Extended Investment Option is Used; Custodian and
Sponsor Charges; The Custodian; The Sponsor
(b) Sales Load and Other Deductions from Introduction; Allocation of Investments and
Principal Deductions - 15 Year Plans; A Typical $50 Monthly
Investment Plan
(c) Sales Load as a Percentage of Net Introduction; Allocation of Investments and
Investments Deductions - 15 Year Plans
(d) Difference in Prices Custodian and Sponsor Charges
(e) Additional Charges The Sponsor
(f) Additional Profits *
(g) Charges as a Percentage Custodian and Sponsor Charges
of Distributions
(h) Life Insurance Accounts *
14. Issuance of Securities How to Start a Summit Investors Plan
15. Receipt of Payment How to Start a Summit Investors Plan; The Custodian
16. Purchase and Sale of Underlying Securities The Custodian
</TABLE>
- ----------------------
* Omitted from the prospectus in accordance with Instruction 3 of Form S-6
<PAGE> 5
<TABLE>
<CAPTION>
FORM N-8B-2 ITEM NUMBER PROSPECTUS CAPTION
----------------------- ------------------
<S> <C> <C>
17. Redemption of Securities
(a) Procedures for Withdrawal or Rights and Privileges of Planholders - Partial
Redemption by Security Holders Withdrawal or Partial Liquidation Without
Termination; Complete Withdrawal or Termination
(b) Names of Persons Authorized Rights and Privileges of Planholders - Partial
to Redeem or Repurchase Withdrawal or Partial Liquidation Without
Securities Termination; Complete Withdrawal or Termination;
Termination of a Plan
(c) Cancellation or Resale of Termination of a Plan
Securities
18. Distributions and Reinvestment
(a) - (b) Distribution Procedures Rights and Privileges of Planholders - Reinvestment
of Income Dividends and Capital Gains
Distributions; The Custodian
(c) Reserves or Special Funds *
(d) Distribution Schedule *
19. Records and Accounts Rights and Privileges of Planholders - Statements,
Reports and Notices; The Custodian
20. Indenture Provisions Regarding Depositor,
Trustee or Indenture Changes
(a) - (d) Custodianship The Custodian
(e) Removal of Depositor *
(f) Appointment of Successor Depositor *
21. Loans to Securityholders *
22. Limitations on Liability The Custodian
23. Bonding of Officers and Employees The Sponsor
24. Other Material Provisions *
25. Organization and Operations of Depositor The Sponsor
26. Fees to Depositor
(a) Fees to Depositor in Connection with The Sponsor
Duties concerning Securities of the
Trust
</TABLE>
- ------------------
* Omitted from the prospectus in accordance with Instruction 3 of Form S-6
<PAGE> 6
<TABLE>
<CAPTION>
FORM N-8B-2 ITEM NUMBER PROSPECTUS CAPTION
----------------------- ------------------
<S> <C> <C>
(b) Fees to Depositor from an The Sponsor
Underlying Investment Company,
Affiliated Person or its
Investment Advisor
27. Business of Depositor The Sponsor
28. Officials and Affiliated Persons of Depositor The Sponsor
29. Companies Owning Securities of Depositor The Sponsor
30. Controlling Persons *
31. Compensation of Directors and Officers of *
Depositor
32. Compensation of Directors *
33. Compensation to Employees *
34. Compensation to Other Persons *
35. State Where Securities Sold General
36. Suspension **
37. Denials of Registration *
38. Distribution
(a) Method of Distribution General
(b) Selling Agreement Terms *
(c) Dealer Agreement Terms General; Exhibit 1.A(3)(c)
39. Principal Underwriter The Sponsor
40. Fees to Principal Underwriter
(a) Fees to Principal Underwriter from The Sponsor
Sale of Securities of the Trust
(b) Fees to Principal Underwriter from The Sponsor
any Underlying Investment Company or
its Investment Adviser
41. Business of Principal Underwriter
(a) Other Investment Companies The Sponsor
(b) Branch Offices **
(c) Salesmen **
42. Officials of Principal Underwriter The Sponsor
</TABLE>
- ----------------
* Omitted from the prospectus in accordance with Instruction 3 of Form S-6
** Omitted from the prospectus in accordance with Instruction 1 of Form S-6
<PAGE> 7
<TABLE>
<CAPTION>
FORM N-8B-2 ITEM NUMBER PROSPECTUS CAPTION
----------------------- ------------------
<S> <C> <C>
43. Brokerage Commissions to Principal *
Underwriter
44. Offering Price of Acquisition Valuation of
Securities of the Trust
(a) Valuation See AIM Summit Fund, Inc. Prospectus
(b) Specimen Schedule See AIM Summit Fund, Inc. Prospectus
(c) Variation in Offering Price Custodian and Sponsor Charges - Creation and Sales
Charges
45. Suspensions of Redemption Rights *
46. Redemption Valuation of Securities of the See AIM Summit Fund, Inc. Prospectus
Trust
47. Purchase and Sale of Interests in Underlying Rights and Privileges of Planholders - Partial
Securities from and to Security Holders Withdrawal or Partial Liquidation Without
Termination; Complete Withdrawal or Termination;
The Custodian
48. General Information The Custodian
49. Fees Paid Custodian and Sponsor Charges
50. Liens on Assets The Custodian
51. Information Concerning Insurance of Holders *
of Securities
52. Policy of Registrant
(a) Procedures Substitution of Shares
(b) Detailed Information regarding the *
Elimination of Underlying Securities
(c) Policy regarding the Substitution Substitution of Shares
and Elimination of the Underlying
Securities
(d) Fundamental Policies *
53. Mutual Investment Company Taxes
54. Asset Values and Dividends *
55. Transcript of Hypothetical Periodic Payment Illustration of a Hypothetical $50 Monthly Summit
Plan Account Investors Plan for Investment in Shares of AIM
Summit Fund, Inc.
56. Certificates **
</TABLE>
- -----------------------
* Omitted from the prospectus in accordance with Instruction 3 of Form S-6
** Omitted from the prospectus in accordance with Instruction 1 of Form S-6
<PAGE> 8
<TABLE>
<CAPTION>
FORM N-8B-2 ITEM NUMBER PROSPECTUS CAPTION
----------------------- ------------------
<S> <C> <C>
57. Installation Payments **
58. Payment Types **
59. Financial Matters **
</TABLE>
- -----------------------
* Omitted from the prospectus in accordance with Instruction 3 of Form S-6
** Omitted from the prospectus in accordance with Instruction 1 of Form S-6
<PAGE> 9
[AIM LOGO APPEARS HERE]
================================================================================
SUMMIT
INVESTORS
PLANS
Prospectus
February 27, 1998
<PAGE> 10
PROSPECTUS
FEBRUARY 27, 1998
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 page 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, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRE SENTATION 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> 11
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............................. 11
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 $50 Monthly Summit Investors
Plan...................................................... 25
Financial Statements........................................ 26
AIM Summit Fund, Inc. Prospectus............................ A-1
</TABLE>
------------------------
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> 12
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
<PAGE> 13
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
INVEST- TO INVEST-
MENT TOTAL MENT
IN FUND INVEST- IN FUND
SHARES(C) MENTS SHARES
- ------------- ------- -------
<S> <C> <C>
$ 7,964.64 11.50% 13.00%
12,082.80 10.50 11.73
16,290.00 9.50 10.50
20,430.00 9.20 10.13
24,840.48 8.00 8.70
27,630.12 7.90 8.57
33,209.52 7.75 8.40
41,580.24 7.60 8.22
51,029.52 5.50 5.82
59,737.92 5.18 5.46
68,490.00 4.88 5.12
86,129.52 4.30 4.49
103,497.84 4.17 4.35
129,668.40 3.95 4.11
173,430.00 3.65 3.79
262,980.48 2.60 2.67
531,630.24 1.55 1.57
1,068,927.76 1.03 1.04
</TABLE>
NOTES:
<TABLE>
<C> <S>
(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> 14
TOTAL 25 YEAR ALLOCATIONS OF INVESTMENTS AND DEDUCTIONS WHEN
EXTENDED INVESTMENT OPTION IS USED
(Please see page 11 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>
<C> <S>
(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> 15
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> 16
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 unless the
Planholder is age 59 1/2 or older.
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
7
<PAGE> 17
whether jointly or through a trustee, agent, custodian or other representative
for such a group of individuals.
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 (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
8
<PAGE> 18
make a written request to the Custodian prior to the meeting for a proxy which
will permit the shares to be voted in person.
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. The $10.00 fee will be deducted from
plan shares unless it is paid in advance. In addition, IRA rollover or transfer
contributions can be accepted into a Plan from qualified individuals. However, a
tax-deferred qualified retirement plan may not be established by changing the
registration of an existing plan.
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:
9
<PAGE> 19
(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.
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.
10
<PAGE> 20
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 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
11
<PAGE> 21
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.
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, by calling BFDS at (617) 328-5000, subject to the restrictions
specified below.
12
<PAGE> 22
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 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.
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 or Complete Withdrawal or Termination on page
14 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
13
<PAGE> 23
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 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 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 $50,000 or less 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
14
<PAGE> 24
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
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
15
<PAGE> 25
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.
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, 1997, 1996 and 1995, total
investments made by all Planholders amounted to $123,758,764, $118,046,016 and
$110,113,722, respectively. The amount of Creation and Sales Charges deducted
from these investments was $7,565,209, $7,099,870 and $5,419,794, respectively,
of which amount $572,877, $542,980 and $420,623, respectively, was retained by
the Sponsor and $6,992,332, $6,556,890 and $4,999,171, respectively, was paid to
investment dealers who participated in the sale of Plans.
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<PAGE> 26
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 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, 1997 was
$1,513,872.
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, 1997,
1996 and 1995, stated as a percentage of total distributions (includes dividends
and capital gains) from Fund shares for such period or years were 0.40%, 0.61%
and 1.20%, 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, 1997 was $540,345.
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<PAGE> 27
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
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 $124,500 (for tax
years beginning in 1998 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
18
<PAGE> 28
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 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
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<PAGE> 29
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.
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.
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<PAGE> 30
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> 31
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. ("AIM"). AIM is a wholly owned
subsidiary of A I M Management Group Inc. ("AIM Management") the parent
corporation of AIM. AIM Management is a holding company engaged in the financial
services business and is an indirect wholly owned subsidiary of AMVESCAP PLC, a
publicly-traded holding company that, through its subsidiaries, engages in the
business of investment management on an international basis. AIM Distributors is
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 Chairman of the Board of Directors, A I M Management
Group Inc., A I M Advisors, Inc., A I M Capital Management, Inc., A I M
Distributors, Inc., A I M Fund Services, Inc. and Fund Management Company; and
Director and Vice Chairman, AMVESCAP PLC.
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 Executive Officer, A I M
Management Group Inc.; Director and President, A I M Advisors, Inc.; Director
and Senior Vice President, A I M Capital Management, Inc., A I M Distributors,
Inc., A I M Fund Services, Inc., and Fund Management Company; Director, AMVESCAP
PLC; Chairman of the Board of Directors and President, INVESCO Holdings Canada
Inc.; and Director, AIM Funds Group Canada Inc. and INVESCO G.F. Canada Inc.
Gary T. Crum is Director and President, A I M Capital Management, Inc.;
Director and Senior Vice President, A I M Management Group Inc. and A I M
Advisors, Inc.; and Director, A I M Distributors, Inc. and AMVESCAP PLC.
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 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.
Marilyn M. Miller is Senior Vice President, A I M Distributors, 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.
Carol F. Relihan is Director, Senior Vice President, General Counsel and
Secretary, A I M Advisors, Inc.; Vice President, General Counsel and Secretary,
A I M Management Group Inc.; Director, Vice President and General Counsel, Fund
Management Company; General Counsel and Vice President, A I M Fund Services,
Inc.; and Vice President, A I M Capital Management, Inc. and A I M Distributors,
Inc.
22
<PAGE> 32
John J. Arthur is Director, Senior Vice President and Treasurer, A I M
Advisors, Inc.; and Vice President and Treasurer, A I M Management Group Inc.,
A I M Capital Management, Inc., A I M Distributors, Inc., A I M Fund Services,
Inc., and Fund Management Company.
B. J. Thompson is First Vice President, A I M Distributors, Inc.
James R. Anderson is Vice President, A I M Distributors, Inc.
Mary K. Coleman is Vice President, A I M Distributors, Inc.
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
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 Senior
Vice President, A I M Fund Services, Inc.
Tony D. Green is Vice President, A I M Distributors, Inc.; and Senior Vice
President, A I M Fund Services, Inc.
William H. Kleh is Senior Vice President, A I M Advisors, Inc.; Senior Vice
President, A I M Management Group Inc.; and Vice President, A I M Distributors,
Inc. and A I M Capital Management, Inc.
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.
and Fund Management Company.
Terri L. Randsell 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.
Christopher T. Simutis is Vice President, A I M Distributors, Inc.
Robert D. Van Sant, Jr. is Vice President, A I M Distributors, Inc.
Gary K. Wendler 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 AIM. As of January 31, 1998, Mr. Bauer owned of record
.004% of the Plans, which represented beneficial ownership of 5,104.03 shares of
the Fund and Mr. Graham owned of record .02% of the Plans, which represented
beneficial ownership of 25,440.56 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 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.
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<PAGE> 33
The Sponsor is the principal underwriter of the Fund and of the following
other open-end investment companies advised or managed by AIM: AIM Advisor
Funds, Inc., AIM Equity Funds, Inc., AIM Funds Group, AIM International Funds,
AIM Investment Securities Funds (AIM Limited Maturity Treasury Fund), 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.
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> 34
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, 1997. 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
----- -------- ---------- ---------- ---------- -------- --------- -------- ----------- ----------
<S> <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
1997 600.00 9,100.00 564.43 11,468.16 33.24 18.00 1113.19 10,424.26 2,066.18
---- ------- --------- ------- ---------- ------- ------- -------- ---------- ---------
$770.90 $273.00 $8,162.72
<CAPTION>
TOTAL VALUE OF
SHARES ACCUMULATED
OWNED(e) SHARES(f)
-------- -----------
<S> <C>
9.428 $ 46.48
68.444 370.97
180.052 905.68
277.847 1,803.23
390.732 2,610.09
515.282 2,937.11
613.217 4,028.84
755.981 5,889.09
860.497 6,505.36
992.132 10,010.61
1,147.268 11,059.66
1,294.014 12,551.94
1,426.949 12,742.66
1,597.970 17,849.33
1,810.440 21,996.85
2,049.122 27,929.53
</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> 35
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, 1997, 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, 1997 by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Summit Investors Plans as of
October 31, 1997, 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.
/s/ KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
Houston, Texas
February 13, 1998
26
<PAGE> 36
SUMMIT INVESTORS PLANS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
AIM Summit Fund, Inc. shares, at value
(Plans' investment $1,059,954,697)..................... $1,642,717,284
Cash...................................................... 66,206
Due from AIM Summit Fund, Inc. ........................... 50
--------------
Total assets........................................... 1,642,783,540
--------------
LIABILITIES:
Creation and Sales Charges payable........................ 63,454
Custodian charges payable................................. 2,552
Payable to AIM Summit Fund, Inc........................... 250
--------------
Total liabilities...................................... 66,256
--------------
NET ASSETS (Equivalent to $15.15 per share based on
108,430,184
shares of capital stock owned on outstanding plans)....... $1,642,717,284
==============
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1997
<TABLE>
<S> <C>
Investment income:
Dividends received on shares of AIM Summit Fund, Inc...... $ 117,271,143
Expenses.................................................... (471,317)
--------------
Net investment income....................................... 116,799,826
--------------
Realized and unrealized gain on investments:
Net realized gain on plan liquidations.................... 26,492,781
Unrealized appreciation of investments.................... 219,803,135
--------------
Net increase in net assets resulting from operations........ $ 363,095,742
==============
</TABLE>
See Notes to Financial Statements.
27
<PAGE> 37
SUMMIT INVESTORS PLANS
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED OCTOBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
1997 1996 1995
---------------------------- --------------------------- ---------------------------
AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
-------------- ----------- -------------- ---------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning
of period................. $1,256,343,722 96,716,222 $1,047,129,847 86,254,518 $ 763,448,692 78,062,238
Planholders investments:
Additions from Planholder
Payments................ 123,758,764 118,046,146 110,113,722
Less:
Creation and Sales
Charges............... 7,565,209 7,099,870 5,419,794
Custodian charges....... 1,513,872 1,449,807 1,411,202
--------------
Amount invested in AIM
Summit Fund, Inc.
shares.................. 114,679,683 8,581,865 109,496,469 9,095,143 103,282,726 10,198,859
Net investment income
reinvested:
Net investment income..... 116,799,826 75,731,854 37,939,132
Less: Amount paid in
cash.................... 1,434,057 524,986 312,419
--------------
115,365,769 9,777,010 75,206,868 6,912,775 37,626,713 4,314,990
Net realized gain on plan
liquidations.............. 26,492,781 16,544,971 10,347,903
Unrealized market
appreciation of
investments............... 219,803,135 74,678,750 197,465,112
Planholder liquidations..... (89,967,806) (6,644,913) (66,713,183) (5,546,214) (65,041,299) (6,321,569)
-------------- ----------- -------------- ---------- -------------- ----------
Net asset value at end of
period.................... $1,642,717,284 108,430,184 $1,256,343,722 96,716,222 $1,047,129,847 86,254,518
============== =========== ============== ========== ============== ==========
</TABLE>
See Notes to Financial Statements.
28
<PAGE> 38
SUMMIT INVESTORS PLANS
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1997
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, 1997.
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, 1997
<TABLE>
<S> <C>
Total payments made by Planholders on Plans outstanding
(net of liquidations)..................................... $ 762,425,391
Net investment income dividends reinvested.................. 419,983,266
--------------
Total............................................. 1,182,408,657
Less:
Creation and Sales Charges................................ 108,863,003
Custodian charges......................................... 13,590,957
--------------
Net investment in AIM Summit Fund, Inc. shares (identified
cost)..................................................... 1,059,954,697
Unrealized market appreciation of investments............... 582,762,587
--------------
Value of Plans outstanding.................................. $1,642,717,284
==============
</TABLE>
29
<PAGE> 39
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of
A I M Distributors, Inc.:
We have audited the accompanying statement of financial condition of A I M
Distributors, Inc. (the Company) as of December 31, 1997, and the related
statements 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, 1997, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Houston, Texas
February 9, 1998
30
<PAGE> 40
A I M DISTRIBUTORS, INC.
STATEMENT OF FINANCIAL CONDITION
AS OF DECEMBER 31, 1997
<TABLE>
<S> <C> <C>
ASSETS
MONEY MARKET FUND ACCOUNTS, AFFILIATED REGISTERED INVESTMENT COMPANIES...
$ 6,384,196
ACCOUNTS RECEIVABLE:
Due from dealers for sales of capital stock of affiliated
registered investment companies........................ 935,134
Due from affiliated registered investment companies....... 2,129,684
Other accounts receivable................................. 1,082,338 4,147,156
==========
SEGREGATED TRUST ACCOUNT................................................. 846,400
INCOME TAXES............................................................. 349,448
OTHER ASSETS............................................................. 45,833
-----------
$11,773,033
===========
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES:
Due to affiliated registered investment companies for sales of
capital stock....................................................... $ 932,069
Due to dealers for redemptions from affiliated registered investment
companies........................................................... 418,990
Due to affiliated companies............................................ 3,451,252
Accounts payable and accrued expenses.................................. 111,163
-----------
Total liabilities.............................................. 4,913,474
STOCKHOLDER'S EQUITY:
Common stock, $1 par value, 1,000 shares authorized, 10
shares issued and outstanding.......................... $ 10
Additional paid-in capital................................ 1,378,990
Retained earnings......................................... 5,480,559
==========
Total stockholder's equity..................................... 6,859,559
-----------
$11,773,033
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
31
<PAGE> 41
A I M DISTRIBUTORS, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C> <C>
INCOME:
Underwriting income, net of dealers' commissions........................ $ 24,321,006
Marketing servicing fees................................................ 68,733,333
Distribution fees....................................................... 18,627,427
Sponsor fees on periodic payment investment plans,
net of commissions paid.............................................. 427,020
------------
Total operating income.......................................... 112,108,786
------------
EXPENSES:
Allocation from parent company............................ 99,253,238
Compensation allocation from parent company............... 2,177,731
==========
Total operating expenses........................................ 101,430,969
NET INTEREST EXPENSE...................................................... 294,756
------------
Income before income taxes...................................... 10,383,061
INCOME TAX EXPENSE (BENEFIT):
Current................................................... 3,778,551
Deferred.................................................. (144,479) 3,634,072
========== ------------
Net income...................................................... $ 6,748,989
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
32
<PAGE> 42
A I M DISTRIBUTORS, INC.
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON PAID-IN RETAINED STOCKHOLDER'S
STOCK CAPITAL EARNINGS EQUITY
<S> <C> <C> <C> <C>
BALANCE, December 31, 1996............ $10 $1,378,990 $3,242,772 $4,621,772
Net income............................ -- -- 6,748,989 6,748,989
Dividends paid...................... -- -- (4,511,202) (4,511,202)
--- --------- ---------- ----------
BALANCE, December 31, 1997............ $10 $1,378,990 $5,480,559 $6,859,559
=== ========= ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
33
<PAGE> 43
A I M DISTRIBUTORS, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................ $6,748,989
Adjustments to reconcile net income to net cash provided
by
operating activities:
Decrease in accounts receivable........................ $ 703,782
Increase in income taxes refundable.................... (395,067)
Decrease in other assets............................... 310,858
Increase in segregated trust account................... (166,881)
Decrease in amounts due to affiliated registered
investment companies for sales of capital stock...... (782,525)
Increase in due to dealers for redemptions from
affiliated registered investment companies........... 109,003
Increase in due to affiliated companies................ 1,788,311
Decrease in accounts payable and accrued expenses...... (592,838)
===========
Total adjustments............................ 974,643
----------
Net cash provided by operating activities.... 7,723,632
----------
CASH FLOWS FROM FINANCING ACTIVITIES -- dividends paid...... (4,511,202)
----------
Net cash used in financing activities........ (4,511,202)
NET INCREASE IN CASH AND CASH EQUIVALENTS................... 3,212,430
CASH AND CASH EQUIVALENTS, beginning of year................ 3,171,766
----------
CASH AND CASH EQUIVALENTS, end of year...................... $6,384,196
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
34
<PAGE> 44
A I M DISTRIBUTORS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Presentation
A I M Distributors, Inc. (the "Company"), is a wholly-owned subsidiary of A I M
Advisors, Inc. The Company acts as the principal underwriter and distributor to
affiliated registered investment companies.
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.
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.
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.
Underwrting Income
Underwriting income represents sales charges on sales of capital stock of
affiliated registered investment companies, net of commissions and concessions
paid to other dealers.
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.
35
<PAGE> 45
A I M DISTRIBUTORS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Transactions With 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.
The Company has entered into an agreement with its ultimate parent AIM
Management Group, Inc. (Management), whereby Management provides funding to the
company for payment of Class B share commissions. Management obtains the rights
to certain future revenues to be generated by the Class B shares under the
respective fund's 12b-1 plan provisions and contingent deferred sales charge
(CDSC) provisions for a purchase price equal to a percentage of the price at
which each Class B shares is sold. Such transactions occur daily and have been
accounted for as sale transactions. No gain or loss from this arrangement is
reflected in the Company's financial statements since the amount paid by
Management equals the commissions paid by the company relating to the sale of
Class B shares. Accordingly, amounts received from the respective funds under
the 12b-1 plan provisions and CDSC provisions are not recorded as revenue by the
Company as Management owns the rights to such fees.
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 percent) 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.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
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,
1997, the Company had net capital of $3,663,514, which exceeded required net
capital of $274,748 by $3,388,766. The ratio of aggregate indebtedness to net
capital was 1.12 to 1 at December 31, 1997.
36
<PAGE> 46
3. SUBORDINATED DEBT
The Company had no subordinated debt at December 31, 1997 or at any time during
the year then ended.
37
<PAGE> 47
[AIM LOGO APPEARS HERE]
================================================================================
SPONSOR
A I M DISTRIBUTORS, INC.
P.O. BOX 4264
HOUSTON, TEXAS 77210-4264
(800) 995-4246
CUSTODIAN
STATE STREET BANK AND TRUST COMPANY
225 FRANKLIN STREET
BOSTON, MASSACHUSETTS 02110
CUSTODIAN'S AGENT
BOSTON FINANCIAL DATA SERVICES, INC.
P.O. BOX 8300
BOSTON, MASSACHUSETTS 02266-8300
(617) 328-5000
AUDITORS
KPMG PEAT MARWICK LLP
700 LOUISIANA
HOUSTON, TEXAS 77002
<PAGE> 48
CONTENTS OF REGISTRATION STATEMENT
This Amendment to the Registration Statement comprises the following papers
and documents:
The facing sheet.
The Prospectus consisting of 35 pages.
Signatures.
Written consents of the following persons:
Arthur Andersen LLP
KPMG Peat Marwick LLP
The following exhibits:
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
1. A(1)(a) - Custodian Agreement between A I M Distributors,
Inc. and State Street Bank and Trust Company
was filed as an Exhibit to the Registrant's
Post-Effective Amendment No. 3 on Form S-6
filed on April 26, 1984.
A(1)(b) - Custodian Agreement, dated May 1, 1996, between
A I M Distributors, Inc. and State Street Bank
and Trust Company is filed electronically
herewith.
A(2) - None.
A(3)(a) - None.
A(3)(b) - Dealer's Agreement between A I M Distributors,
Inc. and United Services Planning Association,
Inc. was filed as an Exhibit to the
Registrant's Pre-Effective Amendment No. 1 on
Form S-6 filed on October 15, 1982, and was
filed electronically as an Exhibit with the
Registrant's Post-Effective Amendment No. 19
on February 27, 1996, and is incorporated by
reference herein.
A(3)(b)(ii) - Form of Dealer's Agreement between A I M
Distributors, Inc. and selected dealer is
filed electronically herewith.
A(3)(c)(i) - Summit Investors Plan Commission Schedule was
filed as an Exhibit to the Registrant's
Pre-Effective Amendment No. 1 on Form S-6
filed on October 15, 1982, and was filed
electronically as an Exhibit with the
Registrant's Post-Effective Amendment No. 19
on February 27, 1996, and is incorporated by
reference herein.
A(3)(c)(ii) - Summit Investors Plan Commission Schedule is
filed electronically herewith.
A(4) - None.
A(5)(a)(i) - Form of Summit Investors Plan Certificate was
filed as an Exhibit to the Registrant's
Post-Effective Amendment No. 3 on Form S-6
filed on April 26, 1984.
A(5)(a)(ii) - Amended Form of Summit Investors Plan Certificate
effective May 1, 1990, was filed as an Exhibit
to the Registrant's Post-Effective Amendment
No. 11 on Form S-6 filed on April 30, 1990.
</TABLE>
1
<PAGE> 49
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
A(5)(a)(iii) - Amended Form of Summit Investors Plan Certificate
effective June 11, 1993, was filed as an
Exhibit to the Registrant's Post-Effective
Amendment No. 16 on Form S-6 filed on December
29, 1993.
A(5)(a)(iv) - Amended Form of Summit Investors Plan Certificate
effective December 16, 1994, was filed as an
Exhibit to the Registrant's Post-Effective
No. 17 on Form S-6 filed on December 23, 1994.
A(6)(a) - Certificate of Incorporation, as amended, of the
A I M Distributors, Inc. was filed as an
Exhibit to the Registrant's Pre-Effective
Amendment No. 1 on Form S-6 filed on October
15, 1982, and was filed electronically as an
Exhibit with the Registrant's Post-Effective
Amendment No. 19 on February 27, 1996, and is
incorporated by reference herein.
A(6)(b)(i) - By-Laws of A I M Distributors, Inc. were filed
as an Exhibit to the Registrant's
Pre-Effective Amendment No. 1 on Form S-6
filed on October 15, 1982, and was filed
electronically as an Exhibit with the
Registrant's Post-Effective Amendment No. 19
on February 27, 1996, and is incorporated by
reference herein.
A(6)(b)(ii) - Amendment to the By-Laws of A I M Distributors,
Inc., dated September 26, 1991, was filed
electronically as an Exhibit with the
Registrant's Post-Effective Amendment No. 19
on February 27, 1996, and is incorporated by
reference herein.
A(6)(b)(iii) - Amendment to the By-Laws of A I M Distributors,
Inc., dated April 28, 1993, was filed
electronically as an Exhibit with the
Registrant's Post-Effective Amendment No. 19
on February 27, 1996, and is incorporated by
reference herein.
A(6)(b)(iv) - Amended and Restated By-Laws of AIM Distributors,
Inc., dated December 11, 1996 was filed
electronically as an Exhibit with the
Registrant's Post-Effective Amendment No. 20
on February 24, 1997, and is incorporated by
reference herein.
A(7) - None.
A(8)(a)(i) - Distribution Agreement between A I M Distributors,
Inc. and Registrant was filed as an Exhibit to
the Registrant's Pre-Effective Amendment No. 1
on Form S-6 filed on October 15, 1982.
A(8)(a)(ii) - Distribution Agreement between A I M Distributors,
Inc. and Registrant dated October 18, 1993,
was filed as an Exhibit to the Registrant's
Post-Effective Amendment No. 16 on Form S-6
filed on December 29, 1993 and was filed
electronically as an Exhibit with the
Registrant's Post-Effective Amendment No. 19
on February 27, 1996, and is incorporated by
reference herein.
</TABLE>
2
<PAGE> 50
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
A(9)(a)(i) - Forms of (i) Summit Investors Plans Individual
Retirement Account Application, and (ii)
Summit Custodian Agreement for Individual
Retirement Custodian Account were filed as
Exhibits to the Registrant's Post-Effective
Amendment No. 11 on Form S-6 filed on April
30, 1990.
A(9)(a)(ii) - Forms of (i) Summit Investors Plans Individual
Retirement Account Application and (ii) Summit
Custodian Agreement for Individual Retirement
Custodian Account were filed as Exhibits to
the Registrant's Post-Effective Amendment No.
16 on Form S-6 filed on December 29, 1993.
A(9)(a)(iii) - Forms of (i) Summit Investors Plans Individual
Retirement Account Application, and (ii)
Summit Custodian Agreement for Individual
Retirement Custodial Account were filed
electronically as Exhibits with the
Registrant's Post-Effective Amendment No. 19
on February 27, 1996, and are incorporated by
reference herein.
A(9)(a)(iv) - Form of Summit Investors Plans Roth IRA
Application is filed electronically herewith.
A(9)(b)(i) - Form of Combination Profit Sharing - Money Purchase
Plan and Trust was filed as an Exhibit to the
Registrant's Post-Effective Amendment No. 5 on
Form S-6 filed on April 28, 1986.
A(9)(b)(ii) - Form of Combination Profit Sharing - Money Purchase
Plan and Trust was filed electronically as an
Exhibit with the Registrant's Post-Effective
Amendment No. 19 on February 27, 1996, and is
incorporated by reference herein.
A(9)(c)(i) - Forms of (i) Simplified Employee Pension - Individual
Retirement Accounts Contribution Agreement and
(ii) Salary Reduction and Other Elective
Simplified Employee Pension - Individual
Retirement Accounts Contribution Agreement
were filed as Exhibits to the Registrant's
Post-Effective Amendment No. 16 on Form S-6
filed on December 29, 1993.
A(9)(c)(ii) - Forms of (i) Simplified Employee Pension - Individual
Retirement Accounts Contribution Agreement and
(ii) Salary Reduction and Other Elective
Simplified Employee Pension - Individual
Retirement Accounts Contribution Agreement
were filed electronically as Exhibits with the
Registrant's Post-Effective Amendment No. 19
on February 27, 1996, and are incorporated by
reference herein.
A(9)(d) - Form of Summit 403(b)(7) Custodial Agreement was
filed electronically as an Exhibit with the
Registrant's Post-Effective Amendment No. 19
on February 27, 1996, and is incorporated by
reference herein.
</TABLE>
3
<PAGE> 51
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
A(10)(a)(i) - Form of Summit Investors Plans Application was filed as an Exhibit to the Registrant's
Post-Effective Amendment No. 10 on Form S-6 filed on April 28, 1989.
A(10)(a)(ii) - Form of Summit Investors Plans Application was filed as an Exhibit to the Registrant's
Post-Effective Amendment No. 15 on Form S-6 filed on December 29, 1993.
A(10)(a)(iii) - Form of Summit Investors Plans Application was filed as an Exhibit to the
Registrant's Post-Effective Amendment No. 16 on Form S-6 filed on February 25, 1994 and was filed
electronically as an Exhibit with the Registrant's Post-Effective Amendment No. 19 on February 27,
1996, and is incorporated by reference herein.
2. - Opinion and Consent of Messrs. Spengler Carlson Gubar Brodsky & Frischling was filed as an Exhibit
to the Registrant's Post-Effective Amendment No. 2 on Form S-6 filed on May 13, 1983, and was filed
electronically as an Exhibit with the Registrant's Post-Effective Amendment No. 19 on February 27,
1996, and is incorporated by reference herein.
3. A - Omitted Financial Statements - None.
3. B(1) - Auditor's Consent of Arthur Andersen LLP is filed electronically herewith.
3. B(2) - Auditor's Consent of KPMG Peat Marwick LLP is filed electronically herewith.
4. - None.
5. (Exhibit 27) - Financial Data Schedule is filed electronically herewith.
</TABLE>
4
<PAGE> 52
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Sponsor of the Registrant certifies that the Registrant meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Amendment to
its Registration Statement to be signed on behalf of the Registrant by the
undersigned thereunto duly authorized, and its seal to be hereunto affixed and
attested, all in the City of Houston and State of Texas on the 27th day of
February, 1998.
REGISTRANT: SUMMIT INVESTORS PLANS
By: A I M DISTRIBUTORS, INC.
ATTEST: By: /s/ Michael J. Cemo
--------------------------------
Michael J. Cemo, President
/s/ Carol F. Relihan
- -----------------------------
Carol F. Relihan, Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
President and Director
/s/ Michael J. Cemo (Principal Executive Officer) February 27, 1998
- -----------------------------------
(Michael J. Cemo)
Chairman and
/s/ Charles T. Bauer Director February 27,1998
- -----------------------------------
(Charles T. Bauer)
/s/ Gary T. Crum Director February 27, 1998
- -----------------------------------
(Gary T. Crum)
/s/ Robert H. Graham Director February 27, 1998
- -----------------------------------
(Robert H. Graham)
/s/ W. Gary Littlepage Director February 27, 1998
- -----------------------------------
(W. Gary Littlepage)
Vice President and Treasurer
/s/ John J. Arthur (Principal Financial and February 27, 1998
- ----------------------------------- Accounting Officer)
(John J. Arthur)
</TABLE>
<PAGE> 53
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
1. A(1)(b) - Custodian Agreement, dated May 1, 1996, between
A I M Distributors, Inc. and State Street Bank and
Trust Company.
1. A(3)(b)(ii) - Form of Dealer Agreement between A I M Distributors, Inc.
and selected dealers
1. A(3)(c)(ii) - Summit Investors Plans Commission Schedule
1. A(9)(a)(iv) - Form of Summit Investors Plans Roth IRA Application.
3. B(1) - Auditor's Consent of Arthur Andersen LLP
3. B(2) - Auditor's Consent of KPMG Peat Marwick LLP.
5. (Exhibit 27) - Financial Data Schedule.
</TABLE>
<PAGE> 1
EXHIBIT 1.A(1)(b)
CUSTODIAN AGREEMENT
between
A I M DISTRIBUTORS, INC.
and
STATE STREET BANK AND TRUST COMPANY
May 1, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
<S><C> <C>
CUSTODIAN AGREEMENT
I. THE PLAN AND CUSTODIANSHIP
A. THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1. Nature of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Changes in the Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
B. CUSTODIANSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1. Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2. Qualification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3. Custodianship. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. Termination of Custodianship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
a. By Sponsor (Existing Plans and/or New Plans) . . . . . . . . . . . . . . . . . . . 4
b. By Custodian (Existing Plans and New Plans). . . . . . . . . . . . . . . . . . . . 4
c. Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
II. CUSTODIAN'S FUNCTIONS
A. PROCESSING OF PLANHOLDERS INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1. Initial Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2. Systematic Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3. Pre-Authorized Check Payments Program. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4. Automated Clearinghouse ("ACH") Payment Program. . . . . . . . . . . . . . . . . . . . . . 8
5. Reinvestment of Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6. Acceleration of Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7. Additional Investment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8. Change in Denomination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
9. Rights of Accumulation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
10. Plan Reinstatement Privilege. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
11. Individual Retirement Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
12. Federal Income Tax Withholding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
B. PROCESSING OF REFUNDS, SURRENDERS, WITHDRAWALS, LIQUIDATIONS, TRANSFERS, ASSIGNMENTS,
TERMINATIONS AND COMPLETIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1. General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2. Refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3. Eighteen-Month Surrender. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4. Partial Withdrawal and Liquidation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5. Systematic Withdrawal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6. Transfer or Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7. Termination of Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
a. Termination by Planholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
b. Termination by Sponsor or Custodian . . . . . . . . . . . . . . . . . . . . . . . . 24
c. Termination Under Other Circumstances . . . . . . . . . . . . . . . . . . . . . . . 26
8. Completion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
C. PURCHASE, SALE, MAINTENANCE, VOTING AND SUBSTITUTION OF FUND SHARES . . . . . . . . . . . . . . . . 28
1. Purchase and Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2. Maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3. Bank Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
</TABLE>
(i)
<PAGE> 3
<TABLE>
<CAPTION> Page No.
-------
<S> <C> <C>
4. Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5. Voting of Fund Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6. Substitution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
a. By Sponsor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
b. By Custodian. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
c. Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7. Furnishing of Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
D. DUTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
1. Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2. Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3. Administrative Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4. Limitations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5. Delegation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
E. FEES AND CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
1. Remuneration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2. Payments to Sponsor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
III. SPONSOR'S FUNCTIONS
A. ADMINISTRATION OF PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
1. General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2. Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3. Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4. Creation and Sales Charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5. Wrongful Retention Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
B. FURNISHING OF DOCUMENTS, FORMS AND INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
1. Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2. Tax Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3. Sponsor's Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4. Plan Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5. Distribution Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
C. SUBSTITUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
1. SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2. Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3. Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4. Planholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
IV. MISCELLANEOUS
A. ASSIGNMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
B. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
C. COMMUNICATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
D. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
E. INSPECTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
F. SCHEDULES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
G. AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
H. CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
</TABLE>
(ii)
<PAGE> 4
CUSTODIAN AGREEMENT
AGREEMENT made this 1st day of May, 1996 between A I M DISTRIBUTORS,
INC., a Delaware corporation with its principal office at Eleven Greenway
Plaza, Suite 1919, Houston, Texas (hereinafter called the "Sponsor") and STATE
STREET BANK AND TRUST COMPANY, a Massachusetts banking corporation having an
office at 225 Franklin Street, Boston, Massachusetts 02101 (hereinafter called
the "Custodian").
WITNESSETH
WHEREAS, the Sponsor and the Custodian have entered into a Custodian
Agreement dated as of June 1, 1983 (the "Prior Agreement");
WHEREAS, the Sponsor is engaged in the business of selling shares of
mutual funds and similar securities and presently wishes to continue the
services of the Custodian in connection with the administration of a plan for
the accumulation of shares of AIM Summit Fund, Inc. (the "Fund") which the
Sponsor sells and distributes for the benefit of Planholders (as defined
herein) of Summit Investors Plans (the "Plan");
WHEREAS, the Sponsor and the Custodian wish to amend and restate the
Custodian Agreement to take into account the elimination of Plan Certificates
under the Plan, changes in the Custodian's role in processing applications and
changes in the schedule of fees.
<PAGE> 5
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, the parties hereto agree as follows:
I. THE PLAN AND CUSTODIANSHIP
A. THE PLAN
1. Nature of the Plan. The Sponsor intends to offer one type of
Plan for the accumulation of shares of the Fund, or any other shares
substituted therefor, under the terms of the Plan (all such shares being
hereinafter called the "Fund Shares" and the issuer of such shares being
hereinafter called the "Fund," unless the context indicates otherwise).
Beneficial owners of Fund Shares under the Plan are hereinafter called
"Planholders".
2. Changes in the Plan. The Plan is subject to such changes in
form and content as the Sponsor may effect from time to time, with the approval
of the Custodian, which approval shall not unreasonably be withheld, but no
changes in the terms and conditions of any previously issued Plan which will
adversely affect any material right of a holder thereof may be made without
notice to, and consent of, the Planholder. The Sponsor or Custodian may
substitute other shares for Fund Shares on the conditions provided in
paragraphs II(C)(6) and III(C) below.
2
<PAGE> 6
B. CUSTODIANSHIP
1. Appointment. Effective as of the approval of this Agreement
by plan participants, Custodian hereby accepts appointment as custodian under
this Agreement with respect to Plans for which such approval has been obtained.
Custodian hereby agrees to continue to serve as custodian under and pursuant to
the terms of the Prior Agreement as such terms affect the substantive legal
rights of the plan participants for those plan participants who do not approve
this Agreement. A copy of the Prior Agreement is attached hereto and made a
part hereof.
2. Qualification. The Custodian and any successor custodian
shall be a bank having at all times an aggregate capital, surplus and undivided
profits in excess of $1,000,000. The Custodian certifies that it has now, and
agrees that so long as it acts as Custodian under any Plan it shall continue to
have, such qualifications.
3. Custodianship. The Custodian shall continue Custodianship
under the Plan on the terms and conditions set forth hereinafter and in the
prospectus of the Plan ("Prospectus"), so long as the Sponsor shall have
furnished to the Custodian, on a continuing basis:
a. Evidence satisfactory to the Custodian and its
counsel that the Sponsor has taken all necessary action to satisfy the
requirements of the Securities Act of 1933, as amended (the "1933 Act") and the
Investment Company Act of 1940, as amended (the "1940 Act") in connection with
the offer and
3
<PAGE> 7
issuance of the Plan; that the Sponsor is registered as a broker-dealer under
the Securities Exchange Act of 1934, as amended (the "1934 Act") and is a
member in good standing of the National Association of Securities Dealers, Inc.
(the "NASD"); that the Fund Shares are the subject of a currently effective
registration statement under the 1933 Act; and the Sponsor has complied with
all other Federal and State regulatory requirements respecting the offer and
issuance of the Plan.
b. A copy of the current Distribution Agreement between
the Sponsor and the Fund.
4. Termination of Custodianship
a. By Sponsor (Existing Plans and/or New Plans). The
Sponsor shall have the right, upon at least 90 days notice to the Custodian, to
substitute, as custodian, both under the Plan issued and still in force and/or
under any Plan issued thereafter, whether such Plans are otherwise identical
with that issued under this Agreement or not, any other bank having the
qualifications prescribed in paragraph I(B)(2) above.
b. By Custodian (Existing Plans and New Plans). The
Custodian shall have the right to resign as custodian under any existing Plan
at any time but only if either: (a) the Plan has been completely liquidated and
the proceeds of the liquidation distributed to the Planholders; or (b) a
successor custodian, meeting with the approval of the Sponsor (which approval
shall not be unreasonably withheld) and having the qualifications prescribed in
paragraph I(B)(2) above, has been designated and
4
<PAGE> 8
has accepted such custodianship. The Custodian shall have the right, upon at
least 90 days' notice to the Sponsor, to terminate its obligation to accept any
new Plan for custodianship hereunder. In addition, the obligation of the
Custodian to accept any new Plan for custodianship hereunder shall terminate if
the Sponsor: (1) fails to maintain an effective registration statement under
the 1933 Act covering the Plans; (2) fails to cause the requirements of the
1940 Act to remain satisfied in connection with the issuance of the Plans; (3)
has its membership in the NASD or its registration as a broker-dealer under the
1934 Act, cancelled or revoked or suspended for more than 120 days for any
cause involving failure on the part of an executive officer or director to
follow ethical standards or serious neglect of his duty to require
representatives to follow such standards; or (4) defaults in the performance of
any other duty, covenant or agreement contained in this Agreement and such
default shall remain unremedied for 30 days after written notice thereof shall
have been given to the Sponsor by the Custodian.
c. Records. In connection with any termination of
custodianship, the Custodian shall furnish such records and other information
as the Sponsor and any successor Custodian reasonably believe to be necessary
or appropriate to effect the termination.
5
<PAGE> 9
II. CUSTODIAN'S FUNCTIONS
A. PROCESSING OF PLANHOLDERS INVESTMENTS
1. Initial Payment. Upon receipt by the Custodian from the
dealer of the original application for a Plan, a check payable to the Custodian
representing the initial payment for a Plan, and a Designation of Beneficiary
form (if the Planholder has executed one), the Custodian shall:
a. Process the payment as provided in paragraph II(A)(2)
below;
b. Forward by first-class mail to the purchaser of the
Plan, or if requested by the purchaser to the dealer, such explanatory
information or communication to the Planholder as may be furnished by the
Sponsor, and forward to the purchaser by first-class mail any notice of the
right of refund or surrender, as provided in paragraphs II(B)(2), (3) and (4)
below.
2. Systematic Payment. Upon receipt by the Custodian of each
Planholder payment, the Custodian shall:
a. Stamp and record the date of its receipt of the
payment;
b. Forward for collection the payment check;
c. Deduct from the payment the amount, if any, of any
original issue, stock transfer or other taxes, if applicable, and apply the
appropriate amounts to the purchase of the necessary documentary stamps or to
payments to the proper taxing authorities;
6
<PAGE> 10
d. Deduct from the payment applicable fees of the
Sponsor and the Custodian as set forth in the attached schedules, and the
Prospectus, and credit such deductions to the Sponsor or the Custodian as the
case may be;
e. Apply the balance of the payment to the purchase of
Fund Shares as provided in paragraph II(C)(1) below;
f. Prepare and mail to the Planholder a confirmation of
purchase of Fund Shares in a form approved by the Sponsor, showing the Plan
account number, amount of the payment received, date of receipt, the amount and
nature of authorized deductions, the price paid per Fund Share, the number of
such Fund Shares purchased after the deductions, the total number of Fund
Shares then held by the Custodian for the Planholder, and the due date of the
Planholder's next payment. Confirmation of the purchase of Fund Shares shall
be mailed promptly by the Custodian to the Planholder, and to the Planholder's
dealer;
g. In the event that any check or other order for the
payment of money is returned unpaid for any reason, the Custodian shall, in the
absence of other instructions from the Sponsor, take such steps as may be
necessary to cancel promptly any shares purchased on the basis of such returned
check and shall cancel accumulated dividends for such account. The Custodian
shall notify the Planholder of the cancellation of the purchase and return the
check to the Planholder; and
7
<PAGE> 11
h. Any notices, if generated by Custodian automatically,
relating to missed payments by Planholders shall be collected and delivered to
the Sponsor on a monthly basis.
3. Pre-Authorized Check Payments Program. The Custodian and the
Sponsor agree that if a Planholder wishes to have payments on his Plans made
automatically without having to write a check each month, he may request that
payments be made by means of pre-authorized checks. Under this program, each
month the Custodian will draft the Planholder's bank account in the amount of
the monthly payment. The proceeds of the draft will be invested in the
Planholder's account.
To initiate a Pre-Authorized Check Payment Program, the Planholder
should complete the Pre-Authorized Check Form and send it along with a voided
blank check to the Custodian. The Planholder may terminate a Pre-Authorized
Check Payment Program at any time by written notice to the Custodian.
4. Automated Clearinghouse ("ACH") Payment Program. The
Custodian and the Sponsor agree that if a Planholder wishes to have payments on
his Plans made automatically by ACH each month, he may request that payments be
made by means of ACH. Under this program, each month the Custodian will debit
the Planholder's bank account in the amount of the monthly payment. The
proceeds of the ACH debit will be invested in the Planholder's account. To
initiate an ACH Payment Program, the Planholder should complete the
Pre-Authorized Check Form and send it to the
8
<PAGE> 12
Custodian. The Planholder may terminate an ACH Payment Program at any time by
written notice to the Custodian.
When the Custodian receives ACH credit and debit entries pursuant to
the rules of the National Automated Clearing House Association and the New
England Clearing House Association, the Custodian will act as an Originating
Depository Financial Institution and/or Receiving Depository Financial
Institution, as the case may be, with respect to such entries. Credits given
by the Custodian with respect to an ACH credit entry are provisional until the
Custodian receives final settlement from the Federal Reserve Bank. If the
Custodian does not receive such final settlement for such entry, the Sponsor
agrees that the Custodian shall receive a refund of the amount credited to the
Planholder in connection with such entry, and the Planholder making payment to
the Custodian via such entry shall not be deemed to have paid the amount of the
entry.
5. Reinvestment of Dividends. The Custodian shall reinvest all
dividends and capital gain distributions on the Fund Shares held by it as
Custodian for each Planholder, after deduction therefrom the applicable fees
set forth in the attached schedules, and/or specified in the Prospectus, and
any applicable taxes required by law to be withheld, in accordance with the
terms of the Prospectus, in Fund Shares on the dividend payment date, at the
net asset value, determined on that date, as provided in paragraph II(C)(1)
below, unless the Planholder has instructed the Custodian, in writing, at least
seven days prior
9
<PAGE> 13
to the record date, to pay to him the dividends or distributions in cash. The
Custodian agrees that such instructions may be made applicable to any single
dividend or distribution, or to all subsequent dividends or distributions, and
may be cancelled at any time. Any distribution in the form of additional Fund
shares shall be credited to the Planholder's account, and any distributions
other than in cash or in Fund shares shall be sold by the Custodian at such
prices as it may be able to realize therefor and the net proceeds applied to
the purchase of additional Fund shares for the Planholder's account.
Authorized deductions and charges shall be applied to the above transactions.
In the event that any dividends or distributions shall be payable at the option
of the Custodian or its nominee in either cash or stock or other property, the
Custodian shall elect, as to all Fund shares held by it or its nominee, to
receive such dividends or distributions in Fund shares unless otherwise
instructed by the Sponsor.
6. Acceleration of Payment. The Custodian and the Sponsor agree
that a Planholder may complete his Plan ahead of schedule by making one or more
payments in advance of their due dates in accordance with the following
restrictions: the Planholder normally may make no more than 24 payments within
any calendar year period, and the Planholder may make an additional 24 payments
during the life of a Plan. Acceleration payments shall be first applied to
satisfy the obligation of the Planholder to pay for his next succeeding payment
or payments. There is no
10
<PAGE> 14
reduction in the Creation and Sales charges for advance payments. Advance
payments do not accelerate in any way the due dates of unpaid payments; such
unpaid payments will be considered to be due on that date on which they would
have originally been required if all prior payments (whether or not in fact
made in advance) had been made when respectively due.
Upon receipt by the Custodian of an advance payment by any Planholder
permitted under this Plan, the Custodian shall:
a. Process the payment as provided in paragraph II(A)(2) above.
b. Apply the balance of the payment to the next succeeding
payment or payments in the order due under the Plan.
The Sponsor may waive the limitation on advance payments for Plans
established in connection with Individual Retirement Accounts.
7. Additional Investment. The Custodian and the Sponsor agree
that a Planholder who owns any completed Plan may make additional investments,
without completing a new Plan application, thereby activating the Extended
Investment Option, subject to the same deductions as applied to the
Planholder's last scheduled payment and subject to a custodian fee. The
Custodian may increase the Custodian fee applicable during this period to the
rate charged for new Plans of the same denomination at the time of the first
payment under the Extended Investment Option, but not more than 75% in excess
of the current annual rate of custodian fees as of the issue date of a
particular Plan.
11
<PAGE> 15
A Planholder who has elected the Extended Investment Option and has completed
his regularly scheduled payments may, upon written notice to the Custodian,
stop all future payments under the option, and thereafter he will not be
permitted to make additional payments and his plan will be deemed completed.
Failure of a Planholder, during the Extended Investment Option period, to make
any payment during any 6-month period (after any credit for any accelerated
payment) will result in the Planholder's forfeiture of his right to make any
investment under the Extended Investment Program and the Plan will be
considered to have been completed. All Extended Investment Options shall
terminate after the 300th payment made under the Plan.
8. Change in Denomination. The Custodian and the Sponsor agree
that a Planholder may change an existing Plan by providing the Custodian with a
completed Plan application for a new face amount. An increase in a Plan amount
shall 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 and the amount of any transfer taxes at the time
that it is established. Any additional Creation and Sales Charges due on the
new Plan and the amount of any transfer taxes will be obtained from a
liquidation of Fund shares. The Custodian will charge the fee set forth in
Schedule A for any change in a Plan denomination. For a period of six months
following a face change increase, the Planholder
12
<PAGE> 16
may decrease the increased Plan to a smaller plan size, but not smaller than
the original Plan prior to the increase. A Planholder may increase the amount
of his Plan at any time. A Planholder may decrease the amount of his Plan up
to a maximum of 50% of the face amount of the Plan, provided that such request
is made prior to the date of the Planholder's sixth payment.
9. Rights of Accumulation. The face amounts of two or more Plans
purchased at one time by "any person," as defined in the Prospectus under
"Rights of Accumulation," may be combined to take advantage of the lower
Creation and Sales Charges available on large purchases. To qualify for the
reduced Creation and Sales Charges, all of the applications for the Plans
involved must be submitted to the Custodian at the same time together with a
letter requesting that the face amounts of such Plans be cumulated for the
purpose of determining the applicable Creation and Sales Charge. In the event
payments on one or more of these Plans is discontinued, the remaining Creation
and Sales Charge will be changed to reflect the charges applicable to the Plan
that is still in effect.
The face amount of any Plans which have been completed (and not
liquidated) or on which payments are "current" (as defined in the Prospectus
under "Rights of Accumulation") may be aggregated with the face amount of a
Plan being purchased by any person to ascertain the Creation and Sales Charge
applicable to the Plan being purchased but not to reduce the custodial fees
applicable to each such Plan. To qualify for a reduced Creation and Sales
13
<PAGE> 17
Charge, the Custodian must be notified by the dealer or the purchaser at the
time of placing the order that the purchaser qualifies for the reduced Creation
and Sales Charges.
10. Plan Reinstatement Privilege. The Custodian and the Sponsor
agree that a Planholder may, within 60 days after he has terminated his Plan,
on written request to the Custodian, reinstate his Plan by including with the
request an amount equal to or less than the redemption proceeds, if no refunded
sales charges were provided in the termination, or by including with the
request the full amount of all refunded sales charges, plus an amount equal to
or less than the redemption proceeds, if the termination was done under the
privileges described in paragraph II(B)(2) or (3) below. Such reinstatement is
subject to the following restrictions: (1) a Planholder may not reinstate his
Plan if he has ever before exercised this Plan Reinstatement Privilege; and (2)
if the Plan Reinstatement Privilege is exercised, neither the total number of
monthly payments to be made nor the unpaid balance of monthly Plan payments
under the Plan will be affected.
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:
a. 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
14
<PAGE> 18
Creation and Sales Charges or Custodian fees will be subtracted from the
initial investment.
b. 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.
c. 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.
Upon receipt by the Custodian of appropriate notice from the
Planholder, the Custodian shall reinstate any Plan which has been terminated in
accordance with paragraphs II(B)(7)(a) or (b) below, subject to a reinstatement
fee set forth in the Prospectus, but without deduction for Sales Charges, so
long as the reinstatement is consistent with the terms of the Prospectus.
11. Individual Retirement Accounts. A Plan may be used by
qualified individuals who wish to establish an IRA.
12. Federal Income Tax Withholding. A Planholder who has elected
dividend and capital gain reinvestment may elect to have the Custodian 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
15
<PAGE> 19
to the additional taxes the Planholder may owe due to the dividend or
distribution. This service shall be available with respect to all Plans except
qualified retirement plans, including IRAs. This option shall be initiated
upon written request by the Planholder to the Custodian and, once initiated,
shall remain in effect until the Custodian is notified by the Planholder in
writing to terminate the withholding.
B. PROCESSING OF REFUNDS, SURRENDERS, WITHDRAWALS, LIQUIDATIONS,
TRANSFERS, ASSIGNMENTS, TERMINATIONS AND COMPLETIONS
1. General. Under the circumstances described below, the
Custodian shall liquidate Fund Shares in a Planholder's account as provided in
paragraph II(C)(1) below and pay the proceeds plus any additional amounts, if
any, to him within seven days thereof. The Custodian shall not suspend
redemption or postpone payment more than seven days after such date of receipt,
except during any period when: (a) trading on the New York Stock Exchange is
restricted or such exchange is closed for other than customary week-ends or
holidays; (b) the United States Securities and Exchange Commission (the "SEC")
has by order permitted such suspension; or (c) any emergency exists, as
determined by the SEC, making disposal of portfolio securities or valuation of
new assets of the Fund not reasonably practicable.
2. Refund. The Custodian and the Sponsor agree that a Planholder
shall have a right during a 45-day period to surrender his Plan and receive the
net asset value of the Fund Shares held in his account at the time, plus all
charges. The 45-day period
16
<PAGE> 20
shall run from the date on which the Planholder is mailed a notice of his
refund rights, a statements of charges to be deducted from his projected
payments, and a form for exercising his refund rights. This information shall
be mailed within 60 days after the issuance of the Plan. The refund right may
be exercised by submitting a completed refund right form or a written request
for cancellation to the Custodian within the 45-day period.
3. Eighteen-Month Surrender. The Custodian and the Sponsor agree
that a Planholder has a privilege for 18 months (or longer, if required by
state law) to surrender his Plan and receive the net asset value of the Fund
Shares held in his account at the time, plus the amount by which the Creation
and Sales Charges deducted from payments exceed 15% of the payments he has made
up to the date of the surrender of the Plan. Upon the written request by the
Planholder, the Custodian shall liquidate Fund Shares and pay the proceeds to
the Planholder who has exercised the foregoing privilege. Any excess amount
due the Planholder shall be paid directly by the Sponsor. The Planholder shall
not be entitled to be refunded any custodial fees previously paid. The
18-month period (or such longer period as required by state law) shall run from
the date on which the Plan is issued. The Planholder must request his refund
in writing, addressed to the Custodian.
The Custodian will send to the Planholder a notice within 30 days if
either of the following occurs: (a) if, following the
17
<PAGE> 21
expiration of 15 months after the date of the issuance of a Plan, the
Planholder has missed three payments 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 payment or more. In the event the
Sponsor has previously sent a notice in connection with (a) above, a second
notice will not be sent even if additional payments are missed. 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.
4. Partial Withdrawal and Liquidation. The Custodian and Sponsor
agree that a Planholder who has owned his Plan for at least 45 days may
withdraw or liquidate part of the Fund Shares held in his account without
terminating his Plan, subject to a Custodian fee set forth in the Prospectus
and to the following:
a. A Planholder may partially withdraw by directing the
Custodian to transfer to his name record ownership of part of the Fund Shares
held in his account. Following a partial withdrawal the Planholder may, at any
time prior to the termination of his Plan, redeposit the same number of Fund
Shares.
b. A Planholder may also partially liquidate by
directing the Custodian, as his agent, to sell or redeem part of the Fund
Shares held in his account and to forward the net proceeds to him. Following a
partial liquidation, the Planholder
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<PAGE> 22
may redeposit an amount equal to the net proceeds and have the Custodian
purchase Fund Shares at net asset value as provided in paragraph II(C)(1)
below. Cash must be redeposited for cash received on liquidation.
c. Exercise of the foregoing privileges is subject to
the following conditions:
(i) Requests for partial withdrawal or partial liquidation
must be delivered in writing to the Custodian. Request for partial withdrawal
or portfolio liquidation for amounts of $50,000 or higher must be in writing
with the Planholder's signature guaranteed by a member firm of the New York
Stock Exchange, a trust company, a national or state bank, a Provost Marshal at
the military installation where the Planholder is located, or any other
"eligible guarantor institution" as defined in rules adopted by the SEC
("Approved Guarantor").
(ii) Partial withdrawal or partial liquidation shall not be
permitted if it involves less than $100 of net proceeds of sale or more than
90% of the Fund Shares held in the Planholder's account.
(iii) The requests for partial withdrawal, partial
liquidation and restoration must be in accordance with the rulings or
interpretations of the NASD which require that requests meet good faith
business or personal needs of the Planholder. The Sponsor further reserves the
right to impose such additional restrictions as, in its judgment, are necessary
to conform to the requirements of Section 26 of the Rules of Fair
19
<PAGE> 23
Practice of the NASD. The Custodian has no duty to determine that such
rulings, interpretations or restrictions are in compliance with the
requirements of the NASD and may rely on the Sponsor.
(iv) The restoration of a partial liquidation may not be
effected earlier than 90 days following partial liquidation (45 days for IRAs).
Where a partial liquidation has been effected through the redemption of Fund
Shares by the Custodian, a Planholder may, but is not required to, remit to the
Custodian an amount equal to the cash withdrawal which will be used to purchase
Fund Shares for the account of the Planholder at the next determined net asset
value. Notwithstanding these provisions, a Planholder may make a partial
withdrawal and reinvestment of the account in a manner which complies with the
rules of the Internal Revenue Code regarding IRA rollovers. All reinvestments
must be at least 25% of the amount withdrawn or $2,000, whichever is less.
(v) The Custodian will charge the fee set forth in Schedule A
for each partial withdrawal, liquidation or restoration, and the Planholder
will be liable for any transfer taxes that may be required.
(vi) The Sponsor reserves the right to limit the exercise of
partial liquidations and restoration to once during a period of a year.
20
<PAGE> 24
5. Systematic Withdrawal. The Custodian and the Sponsor agree
that a Planholder may elect to establish a Systematic Withdrawal Program, after
the Planholder has completed all regularly scheduled payments (or in the case
of IRAs, Keogh plans or other retirement plans, if the Planholder has notified
the Sponsor or the Custodian that the Planholder does not intend to make any
further Plan payments). Under a Systematic Withdrawal Program, the Planholder
can elect to receive monthly or quarterly checks in any amount of $50.00 or
more. To provide funds for these payments, the Custodian, as agent for the
Planholder, will redeem shares held in the Planholder's account at the
net-asset value in effect at the time of each such redemption. The Planholder
may change the amount of payments 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 on Fund Shares held in his
account in cash. A Planholder may not simultaneously maintain an uncompleted
Plan and a Systematic Withdrawal Program.
The Custodian will charge the fee set forth in Schedule A for each
check relating to a withdrawal 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
21
<PAGE> 25
charge may not exceed $1.75. The Sponsor reserves the right (upon 90 days'
notice) to discontinue offering Systematic Withdrawal Programs.
6. Transfer or Assignment. The Custodian and the Sponsor agree
that a Planholder may, subject to the Custodian fee set forth in Schedule A
plus transfer taxes, if any, (a) transfer the interest in his Fund Shares to
another person, trustee or custodian acceptable to the Sponsor and the
Custodian who has made application to the Sponsor for a similar Plan; (b)
transfer his right, title and interest to another person whose only right shall
be to exercise the option of complete withdrawal; or (c) assign his right,
title and interest to a bank or other lending institution, provided that the
bank or other lending institution shall not be entitled to exercise the right
of partial withdrawal or partial liquidation, and that the Planholder shall
continue to be entitled to all dividends and distributions on his Fund shares.
In each case, documents satisfactory to the Sponsor and the Custodian must be
employed. If the Planholder makes an assignment to a bank or other lending
institution, the Custodian will, upon the written request of the assignee,
record such assignment until the assignee shall have notified the Custodian
that the assignment has been released, but no such assignment shall be binding
on the Custodian until such assignment is recorded. Until the Sponsor and the
Custodian have permitted such assignment or transfer to be effective, they may
treat the
22
<PAGE> 26
Planholder as the sole and absolute owner of the Plan and the Fund shares
applicable thereto.
7. Termination of Plans. The Custodian and Sponsor agree that
Plans may be terminated as follows:
a. Termination by Planholder. A Planholder may, at any
time up to the time of his death, terminate his Plan in accordance with the
provisions thereof by notifying the Custodian in writing. The Planholder must
instruct the Custodian in writing either to deliver the Fund Shares held in his
account to him or to sell his Fund Shares, as his agent, and pay him the net
proceeds. If the Planholder requests delivery of his Fund Shares, sufficient
shares shall be sold by the Custodian to pay authorized deductions (including a
Custodian fee as set forth in the Prospectus) and transfer taxes, leaving no
fractional shares, and the balance of Fund Shares shall be delivered to him.
Instructions for liquidation of Fund Shares must be in the form of a
letter signed by the Planholder. Liquidations of $50,000 or higher must be in
the form of a letter signed by an Planholder with the signature guaranteed by
an Approved Guarantor. The redemption price shall be the net asset value of
Fund Shares next determined after all necessary documents have been received.
The proceeds of a liquidation shall be sent to the Planholder within seven days
after receipt of all necessary documents by the Custodian. The Custodian
reserves the right to delay the mailing of redemption proceeds until checks
received for the shares purchased have cleared. The payment period may be
23
<PAGE> 27
extended if the Custodian's right to redeem shares of the Fund has been
suspended or restricted because (a) trading on the New York Stock Exchange is
restricted or such Exchange is closed for other than customary week-ends or
holidays; (b) the SEC has by order permitted such suspension; or (c) an
emergency exists, as determined by the SEC, making disposal of portfolio
securities or the valuation of the net assets of the Fund not reasonably
practicable. (A terminated Plan may be reinstated as provided in paragraph
II(A)(10) above).
b. Termination by Sponsor or Custodian. If a Planholder
fails to make any scheduled payment for six months after it becomes due under
the Plan, either the Sponsor or the Custodian may terminate the Plan on
60-days' written notice, and the Custodian may charge the fee set forth in the
Prospectus. The six months of default will not start until the Planholder has
been given full credit for a period equal to the amount of any prepayments he
may have made. (Any scheduled payment made and accepted prior to termination
extends the due dates of all future payments for a period equal to the period
during which no payments were made.) The written notice of termination shall
state that for a period of 60 days from the date of mailing of such notice, the
Planholder shall have the election to have the Custodian either (a) sell all
the Fund shares standing in the Planholder's account and make any authorized
deductions, including fees and expenses, or (b) sell sufficient Fund shares
standing in the Planholder's account to pay all authorized
24
<PAGE> 28
deductions, including fees and expenses, and leave no fractional shares.
However, if neither the Sponsor nor the Custodian receives the Planholder's
notice of election within 60 days from the date of the mailing of the aforesaid
notice of termination, the Custodian is authorized in its discretion to
exercise such election as agent for the Planholder. Upon receipt of a properly
documented letter of instruction from the Planholder, the Custodian will
transfer and deliver to the Planholder the Fund shares and/or their cash value
less authorized deductions, including fees and expenses. No interest will be
payable by the Custodian upon any cash held by it pending the surrender of the
Plan. The Custodian may, in its discretion, if the Planholder fails to
surrender the Plan during the period of 60 days after the sending of the
termination notice referred to above, fully discharge its obligations by
mailing to the Planholder at the appropriate address noted upon its records,
either its check for the cash value of all Fund Shares then standing to the
Planholder's credit, or by transferring to the Planholder record ownership of
all Fund Shares held in his account, and thereafter the Planholder's Plan shall
be deemed cancelled and the Planholder shall have no further rights thereunder.
Upon any such termination of a Plan, the Custodian shall furnish the Planholder
and the Sponsor with a statement showing all changes in his account since the
date of the last previous payment. In the event that the Fund Shares and/or
any cash balance are not
25
<PAGE> 29
delivered to the Planholder, the Custodian shall hold the same in trust
pursuant to applicable state law.
c. Termination Under Other Circumstances. The Plan
shall be terminated if Fund Shares cannot be purchased for more than 90 days,
and neither the Sponsor nor the Custodian substitutes another investment medium
as provided in paragraphs II(C)(6)(b) and III(C) below. If a Planholder fails
to agree to a substitution by the Custodian pursuant to paragraph II(C)(6)(b)
below, the Custodian may consider the plan terminated.
8. Completion. The Custodian and the Sponsor agree that a
Planholder who has completed his Plan has the following options for the
disposition of Fund Shares:
a. Have the Custodian hold the Fund Shares until after the 300th
payment has been made, during which period investments will be subject to such
deductions as the Custodian shall deem appropriate and neither the Custodian
nor the Sponsor may terminate the Custodianship except in accordance with the
terms of the Plan;
b. Elect to have the Fund Shares registered in his name;
c. Elect to have the Fund Shares redeemed and the cash proceeds
paid to him; or
d. Elect to have Fund Shares redeemed in accordance with the
systematic withdrawal program established in connection with the Plan on a
monthly or quarterly basis in amounts of $50.00 or more and have the cash
proceeds paid to him.
26
<PAGE> 30
After the completion of all Plan payments or, if payments have been
made in advance, after the expiration of fifteen (15) years from the date of
the Plan, the Custodian receives the annual fee set forth in Schedule A, in
lieu of the monthly charge specified in the attached schedules. This fee will
normally be deducted from the last combined income dividend and capital gains
distribution payments of each year, but may be collected from the proceeds of
the sale of Fund Shares held for the Planholder's account if necessary.
The Custodian and the Sponsor agree that no Plan may be terminated by
the Sponsor or the Custodian until after the 300th payment so long as the
Planholder continues to make his payments in accordance with the terms of his
Plan. The Planholder or his legal representative may elect to continue the
Custodianship from year to year subsequent to the 300th payment, subject to the
right of the Sponsor or the Custodian to terminate the Plan. In the event the
Planholder fails to exercise his privilege of complete withdrawal, the
Custodian in its discretion may, as agent for the Planholder, (a) sell all the
Fund Shares in the Planholder's account, and, after making any authorized
deductions, hold the balance of the proceeds for the Planholder's account, or
(b) sell sufficient Fund Shares in the Planholder's account to pay any
authorized deductions and leave no fractional shares. Upon surrender of the
Plan, the Custodian will transfer record ownership to the Planholder of his
full shares and will deliver to the Planholder any balance of cash, or, if all
Fund
27
<PAGE> 31
Shares have been sold, the Custodian will deliver to the Planholder the net
proceeds less deductions. No interest shall be payable upon any funds held by
the Custodian pending the surrender of the Plan. If no response is received
from the Planholder within 60 days after the sending of the termination notice,
the Custodian may, in its discretion, mail to the Planholder a check for all
cash standing to the Planholder's credit and transfer record ownership of such
Fund Shares, if any, to the Planholder, and the Planholder will be deemed to
have no further rights under the Plan. In the event a check cannot be
delivered, or the Fund Shares cannot be transferred, to the Planholder, the
Custodian shall hold them in trust pursuant to the applicable state abandoned
property laws.
C. PURCHASE, SALE, MAINTENANCE, VOTING AND SUBSTITUTION OF FUND SHARES
1. Purchase and Sales. Purchases and sales of Fund Shares by the
Custodian pursuant to this Agreement shall be made in accordance with
applicable law, the Prospectus, the Fund prospectus and the Sponsor's Agreement
with the Fund. Consistent with the foregoing, the Custodian shall enter a
gross purchase and sale order for all Fund Shares and fractions which pursuant
to the Plans it is required to purchase and sell on each business day prior to
the close of trading on the New York Stock Exchange. If the number of Fund
Shares to be bought and to be sold shall include a fractional share, the
Custodian shall purchase or sell the additional fractional share.
28
<PAGE> 32
2. Maintenance. The Custodian shall have possession of and shall
segregate and hold in trust, or shall hold in book share form, where
applicable, all securities in which the funds of the Planholders are invested,
all monies held for such investments, redemption and other special funds for
the Planholders, and all income and distributions upon, accretions to and
proceeds of such securities and funds, subject only to the deductions specified
herein or in the Prospectus until distribution thereof to the Planholders. The
Custodian also will effect partial or complete liquidation of Plans in
connection with withdrawals or terminations. The Custodian is authorized to
commingle payments, dividends and certificates for all Fund Shares held by it
hereunder and to cause all Fund certificates to be registered in its name or
the names of its nominees. Nothing herein shall be construed to allow the
Custodian to commingle the Fund Shares, funds, or securities with those of any
plans other than the Plans specifically covered herein. The Custodian shall
maintain a separate account for each Planholder showing the number of Fund
Shares (to three decimal places) and the amount of cash, if any, to the credit
of each account. The records of such account shall be maintained separate and
apart from the Custodian's corporate records.
The authorization conferred on the Custodian to make the various
deductions heretofore discussed, and in certain cases to sell Fund Shares,
shall be considered authorization to the Custodian to create liens upon the
property held by it.
29
<PAGE> 33
3. Bank Accounts. All monies deposited with or received by the
Custodian hereunder shall be held by the Custodian without interest as part of
the custodianship until required to be disbursed in accordance with the
provisions of this Agreement or the Plan. The Custodian shall open and maintain
a separate bank account in the banking department of the Custodian in the name
and for the benefit of the Plan, subject only to the draft order of the
Custodian or order of the Custodian acting pursuant to the terms of this
Agreement and shall hold in such bank accounts all monies received by the
Custodian from and for the account of the Plan.
4. Statements. The Custodian shall render on an agreed upon
basis to the Sponsor records showing, for each account in which transactions
were had during the week, the number of the account, the amount and date of the
payment received, the number of such payment, the deductions made and the
balance applied to the purchase of Fund Shares.
5. Voting of Fund Shares. The Custodian will provide notice to
Planholders of all Fund stockholder meetings, together with proxy statements.
The Custodian shall vote Fund Shares held under any Plans in accordance with
the Planholder's instructions contained in a voting instruction card provided
with the proxy statement. The Custodian shall vote the Fund Shares for which
no instructions have been received in the same proportion as Fund Shares for
which such instructions have been received from all Planholders under the
Plans. If the voting instructions card is
30
<PAGE> 34
validly executed and returned without specification of a choice, the shares
will be voted in favor of the proposals of the Fund's management.
If the Planholder desires to attend the Fund stockholder meeting and
vote shares held in his account in person, the Planholder must make a written
request to the Custodian for a proxy which will permit the shares to be voted
in person.
6. Substitution
a. By Sponsor. The Custodian and the Sponsor agree that
the Sponsor may effect substitution of Fund Shares as provided in paragraph
III(C) below.
b. By Custodian. If Fund Shares cannot be purchased by
the Custodian for more than 90 days, and the Sponsor fails to substitute
shares, the Custodian, may select another investment medium which it deems to
be comparable to the Fund Shares, subject to prior approval of the SEC. The
Custodian shall notify each Planholder in writing that the substitution will be
made if the Planholder, within 30 days, gives written approval to the Custodian
and agrees to bear his reasonable pro-rata share of the Custodian's related
expenses, including tax liability sustained by the Custodian. The Planholders
failure to give such written approval within the 30 day period shall give the
Custodian authority to terminate the Plan.
If the 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
31
<PAGE> 35
authority without further action on its part, to terminate the Plan.
c. Notice. The Custodian shall, within five days after
any substitution, deliver or mail to each Planholder a notice of substitution,
including an identification of the Fund Shares eliminated and the securities
substituted, and a specification of the shares of such Planholder affected by
the substitution.
7. Furnishing of Information. The Custodian shall furnish such
records and other information regarding the Plans and the Custodianship as the
Sponsor may reasonably believe necessary or appropriate for the administration
of the Plans, as provided in Part III below.
D. DUTIES
1. Records. It shall be the duty of the Custodian to keep
records showing the number and amount of payments made by the Planholder, the
date and amount of all dividends and distributions received by the Custodian on
Fund shares held for the account of the Planholder and all deductions made from
such investments, dividends and distributions, the number of Fund Shares
purchased with the net amount of all investments or reinvested dividends and
distributions, the number of Fund Shares sold or withdrawn, and the number of
Fund Shares which from time to time are held for the account of the Planholder
under this Plan.
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<PAGE> 36
2. Performance. The Custodian shall not cease to perform its
functions under this Plan or resign as Custodian hereunder unless the
securities or other property in which the funds of the Planholders are invested
have been completely liquidated and the proceeds of such liquidation
distributed to the Planholders, or a substitute Custodian has been designated
by either the Sponsor or the Custodian and has accepted such Custodianship, or
the Plan has been terminated as herein provided.
3. Administrative Services. The Custodian shall:
a. Mail to the Planholder a confirmation of Fund Shares
purchased, stating the purchase price per Fund Share, and number of Fund Shares
purchased after applicable deductions, and the total number of Fund Shares held
for his account together with a notice of the next payment due.
b. Obtain and mail to each Planholder prospectuses,
periodic reports of the issuer of Fund Shares as are required by law or
regulation and a complete list, compiled annually, of all securities held in
the Fund's portfolio unless such list is included in the prospectus or other
periodic report of the issuer of Fund Shares.
c. Obtain and mail to each Planholder such dividend
statement, tax notice and proxy soliciting material as are required by law or
regulation;
d. Cause periodic audits of the books of the Custodian
relating to the Custodianship of the Plans to be made at least annually by
independent certified public accountants
33
<PAGE> 37
selected by the Sponsor and reasonably satisfactory to the Custodian, and more
frequently, if required by law or regulation;
e. Prepare and file such reports and returns as are
required by law or regulation to permit the Custodianship to continue in
operation; and
f. Answer all inquiries from Planholders concerning
their Plan.
4. Limitations. The Custodian assumes no duties or obligations
not specifically assigned to the Custodian by the Prospectus and this Custodian
Agreement. Without limiting the generality of the foregoing, the Custodian
specifically does not assume the duties of investment ordinarily imposed upon a
trustee, and its only obligations shall be to perform its Custodianship duties
as specifically set forth in the Prospectus and in the Custodian Agreement and
the Custodian shall have no responsibility for the choice of investment, for
the investment policies of the investment company issuing the Fund Shares or
for any act or omission on the part of such investment company or on the part
of the Sponsor, and shall have no responsibility for the registration or
qualification of securities, or of any person or company (whether or not the
issuer of any such securities) under any Federal or state law or the law of any
other jurisdiction relating to the sale, registration or qualification of
securities, or under any rules, regulations or orders of any regulatory
agencies or commissions.
34
<PAGE> 38
5. Delegation. Any and all duties of the Custodian enumerated in
the foregoing provisions of this subparagraph II.D are hereby delegated to the
Sponsor until such time as the Custodian notifies the Sponsor that it is
terminating such delegation. The effect of such termination will be that the
Custodian will perform the foregoing duties, but the Sponsor will continue to
receive the delegated duty fee described in the Schedule attached hereto for
such performance. The Custodian will bill the Sponsor for all expenses
associated with the performance of the foregoing duties.
E. FEES AND CHARGES
1. Remuneration. As remuneration for the services to be
performed by the Custodian under this Agreement, the Custodian shall receive
the fees, charges, and reimbursements for expenses as set forth in the attached
Schedules, this Agreement and the Prospectus, and for all other expenses
incurred, whether or not otherwise enumerated, in connection with the
performance of its duties under this Agreement. The Custodian shall also be
reimbursed for all expenses incurred by it in connection with the performance
by the Sponsor of duties delegated to it by the Custodian. During the life of
the trust, the Custodian, if not otherwise remunerated, may charge against and
collect from the income of the trust, and from the corpus thereof if no income
is available, such fees, charges and reimbursements for such services and
expenses. However, no such charge or collection
35
<PAGE> 39
shall be made except for services theretofore performed or expenses theretofore
incurred.
2. Payments to Sponsor. No payment to the Sponsor, or to any
affiliated person or agent of the Sponsor, shall be allowed the Custodian as an
expense except for payment to the Sponsor of the delegated duty fee described
in the attached Schedule.
III. SPONSOR'S FUNCTIONS
A. ADMINISTRATION OF PLANS
1. General. The Sponsor agrees to perform the functions required
of it by the terms of this Agreement and the Prospectus.
2. Operations. The Sponsor shall use its best efforts to sell
and distribute Plans, maintain a competent trained selling staff, adequate
office facilities and management staff and keep complete up-to-date records.
3. Compliance. The Sponsor assumes full responsibility for the
preparation, contents and distribution of the Prospectus, for complying with
all applicable requirements of 1933 Act, and of the 1940 Act, and for the
preparation and filing of such other reports or documents as are required by
law or regulation, and covenants and agrees to take all action, and not to omit
any action, necessary to carry out such responsibilities.
4. Creation and Sales Charges. The Sponsor receives a Creation
and Sales Charge to compensate it for its services and costs in creating the
Plans and arranging for their administration, for making the Fund Shares
available to Planholders at net asset value and for all selling expenses and
36
<PAGE> 40
commissions with respect to the Plans. This charge is deducted from each
payment by a Planholder.
5. Wrongful Retention Insurance. The Sponsor may obtain
insurance to cover all claims of invalidity with regard to Planholders' written
beneficiary designation but such insurance shall include the Custodian
individually and in its fiduciary capacity as a named insured and all premiums
for such insurance shall be paid by the Sponsor.
B. FURNISHING OF DOCUMENTS, FORMS AND INFORMATION
The Sponsor shall furnish to the Custodian on a continuing basis:
1. Financial Statements. As soon as available, a copy of each
audit report and other financial statements relating to the custodianship of
the Plans.
2. Tax Returns. Not less than 20 days prior to the due date
thereof, all Federal income tax returns for the custodianship prepared in form
for execution and filing, together with advice concerning the proper allocation
of expenses and other items among the Planholders.
3. Sponsor's Agreement. Promptly after the execution thereof, a
copy of any amendment to the agreement between the Sponsor and the Fund and a
copy of any new agreement entered into in lieu thereof.
4. Plan Materials. Draft copies of all sales literature,
Prospectuses, printed matter and other material which contain any references to
the Custodian, except material which is merely
37
<PAGE> 41
circulated among or sent to employees, stockholders or representatives of the
Sponsor and correspondence in the ordinary course of business which refers in
accurate terms to the Custodian's functions under the Plans. The Sponsor
agrees that none of the documents specified in this clause shall be reproduced
in final form or distributed without the written approval (which will not be
unreasonably withheld) of the Custodian.
5. Distribution Reports. Not later than the time specified by
Treasury Regulations for advising Planholders of income and capital gains
distributions of regulated investment companies and within such time
requirements as may be specified by the SEC or other regulatory agency,
information necessary for reporting distributions to Planholders for income tax
purposes.
C. SUBSTITUTION
The Sponsor may effect a substitution of Fund Shares whenever it deems
such substitution to be in the best interest of the Planholders, subject to the
following:
1. SEC. The Sponsor shall receive prior approval by the SEC for
a substitution under the provisions of Section 26(b) of the 1940 Act.
2. Shares. The Sponsor may substitute for Fund Shares then held
and yet to be purchased or both. Substituted shares must be generally
comparable in character and quality to Fund Shares and must be registered under
the 1933 Act.
38
<PAGE> 42
3. Custodian. The Sponsor shall satisfy the Custodian that the
substitute shares may be purchased and redeemed on generally favorable terms,
arrange for the Custodian to acquire substitute shares having an aggregate
value at least equal to that of the Fund Shares replaced, and furnish to the
Custodian the documents described in paragraph III(B)(1)(c) above. The Sponsor
shall also provide the Custodian with a signed certificate stating that notice
of the proposed substitution has been given to each Planholder.
4. Planholders. The Sponsor shall notify each Planholder in
writing that, unless he surrenders his Plan within 30 days of the date of
mailing of such notice, he will be deemed to have authorized the substitution
and agreed to bear his pro-rata share of actual related expenses, if any.
IV. MISCELLANEOUS
A. ASSIGNMENT. This Agreement shall not be assigned by either of the
parties without the prior consent in writing of the other party, provided,
however, that the Custodian may, without further consent on the part of the
Sponsor, subcontract for the performance hereof with (a) Boston Financial Data
Services, Inc., a Massachusetts corporation ("BFDS"), which is duly registered
as a transfer agent pursuant to Section 17A(c)(2) of the 1934 Act ("Section
17A(c)(2)"); (b) National Financial Data Services, Inc., a subsidiary of BFDS
duly registered as a transfer agent pursuant to Section 17A(c)(2); or (c) a
BFDS affiliate; provided, however, that the Custodian shall be as fully liable
to the
39
<PAGE> 43
Sponsor for the acts and omissions of any subcontractor as it is for its own
acts and omissions.
B. INDEMNIFICATION. The Sponsor, its successors and assigns, shall at
all times fully indemnify, save and hold harmless the Custodian, its agents and
its successors from any and all liability and expense, including reasonable
attorneys fees, which may arise from the failure of the Sponsor to comply with
any law, rule, regulation or order of the United States, any State or any other
jurisdiction relating to the sale, registration or qualification of securities,
including Fund Shares and beneficial interests in the Plan, provided that no
claim against the Custodian or its agents which might be subject to the
foregoing indemnification provisions shall be confessed, settled or compromised
by the Custodian or its agents without the Custodian first having given seven
days notice in writing to the Sponsor of the material facts, and provided
further that the Sponsor shall have the right upon written demand delivered to
the Custodian within seven days following the date of such notice to contest or
defend such claim in the name of the Custodian by an attorney who will be
reasonably satisfactory to the Custodian.
The Sponsor, its successors and assigns, shall at all times promptly
reimburse the Custodian or its agents and its successors for any and all
reasonable expenses, including reasonable attorneys fees, incurred by the
Custodian from time to time in connection with its performance under this
Agreement.
40
<PAGE> 44
The Sponsor, its successors and assigns, shall at all times fully
indemnify, save and hold harmless the Custodian or its agents and its
successors from any and all liability and expense, including reasonable
attorneys fees, incurred where the Custodian or its agents have relied upon the
signature guarantee of Approved Guarantors.
The Custodian shall be entitled to act upon any written notice,
resolution, letter of transmittal, request, consent, order, certificate,
opinion, statement, plan assignment, designation or other document believed by
it to be genuine and to have been signed by the proper party or parties or by a
person or persons duly authorized to act on his or their behalf and to require
such proofs, including signature guarantees, as they may deem necessary or upon
any instructions, information data, records or documents provided to the
Custodian or its agents or subcontractors by machine readable input, telex,
tape, CRT data entry or other similar means authorized by the Sponsor and shall
not be held to have notice of any change of authority of any person, until
receipt of written notice thereof from the Sponsor. The Custodian may consult
with legal counsel to be selected with reasonable care by them and they shall
not be liable for any action taken or suffered by them in good faith in
accordance with the advice of such counsel nor for anything done or omitted to
be done or suffered in connection with the Custodianship except for their own
lack of good faith, willful misconduct or negligence.
41
<PAGE> 45
Further the Custodian shall not be responsible for, and the Sponsor
shall at all times fully indemnify, save and hold harmless the Custodian its
agents and successors from any and all liability and expense, including
reasonable attorneys' fees, arising out of or attributable to (a) all actions
of the Custodian or its agents or subcontractors required to be taken pursuant
to this Agreement, provided that such actions are taken in good faith and
without negligence or willful misconduct, or (b) the Sponsor's lack of good
faith, negligence or willful misconduct.
C. COMMUNICATIONS. All communications provided for hereunder shall be in
writing sent by first class mail to the respective parties as follows:
A I M Distributors, Inc.
Eleven Greenway Plaza
Suite 1919
Houston, Texas 77046-1173
Attn: General Counsel
State Street Bank and Trust Company
c/o Summit Investors Plan
225 Franklin Street
Boston, Massachusetts 02101
provided that either party may, by notice duly given in accordance herewith,
specify a different address for the purpose hereof.
D. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
be deemed one and the same instrument.
E. INSPECTION. An executed copy of this Agreement and all amendments
thereto shall be kept on file by the Custodian and
42
<PAGE> 46
shall be open to inspection by any Planholder at any time during the business
hours of the Custodian.
F. SCHEDULES. All references herein to Schedules shall be deemed to
refer to the Schedules attached to this Agreement which are hereby expressly
made a part hereof.
G. AMENDMENT. This Agreement shall not be amended in such a manner as to
adversely affect the rights and privileges of any Planholder without first
obtaining his written consent.
H. CONSTRUCTION. This Agreement shall be subject to and construed under
the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, and their respective corporate
43
<PAGE> 47
seals to be hereunto affixed and attested, all as of the day and year first
above written.
A I M DISTRIBUTORS, INC.
BY: /s/ MICHAEL J. CEMO
-----------------------------
President
SEAL
ATTEST:
/s/ STEPHEN I. WINER
- -----------------------------
Assistant Secretary
STATE STREET BANK AND TRUST
COMPANY
BY: /s/ [ILLEGIBLE]
-----------------------------
Executive Vice President
ATTEST:
/s/ S. CESSO
- -----------------------------
Vice President and Counsel
44
<PAGE> 48
SCHEDULE A
<TABLE>
<CAPTION>
FEE CATEGORY PER TRANSACTION COMMENTS
------------ --------------- --------
<S> <C> <C>
*CUSTODIAN FEES
Payments $ 1.50 Charged to planholder account (per Prospectus)
Liquidations 2.50 All of these invoiced monthly to sponsor, per
AIM's request. Prospectus makes reference to
these fees, but sponsor currently pays them.
Terminations 2.50
Face Changes 2.50
Transfers 2.50
Option Changes 2.50
SWP's 1.00
*INACTIVE/COMPLETE PLANS $12.00 annually Charged to planholder account (per Prospectus)
*BOUNCED CHECKS $ 5.00 per check Invoiced monthly to sponsor
*COMMUNICATIONS FEES
Phone Calls $ 2.50 Invoiced monthly to sponsor
Letters 2.50 Invoiced monthly to sponsor
*FIDUCIARY ACCOUNTS $10.00 annually Charged to planholder account (per Prospectus)
*DELEGATED DUTY FEE Not to exceed $10.00 Charged to planholder account and paid to
annually sponsor (per Prospectus)
*OUT-OF-POCKETS Forms, postage, phone lines, microfiche, etc.
Invoiced monthly to sponsor.
</TABLE>
<PAGE> 1
EXHIBIT 1.A(3)(b)(ii)
DEALER AGREEMENT
This Agreement is made by and between A I M Distributors, Inc.
(hereinafter called "AIM"), as sponsor and principal underwriter of Summit
Investors Plans for the accumulation of shares of Summit Investors Fund, Inc.,
a mutual fund (hereinafter referred to as the "Plans"), and
__________________________ ("Dealer") (City, State, Zip).
1. All applications for the Plans shall be made on application forms
provided by AIM, and all initial payments collected shall be remitted
in full, without deduction of any commission by Dealer, together with
such application forms, signed by each applicant (an "Investor"), to A
I M Distributors, Inc., P.O. Box 4739, Houston, Texas 77210-4739.
Checks or money orders for initial payments shall be drawn to the
order of "State Street Bank and Trust Company, Custodian". A separate
check or money order shall accompany the application form submitted
for each Plan. After the initial payment has been made and the Plan
has been issued, the Investor shall send all future payments to State
Street Bank and Trust Company (the "Custodian") at P.O. Box 8300,
Boston, MA 02266 or such other addressee as AIM shall identify to
Dealer in writing.
2. AIM reserves the right in its sole discretion to reject any Plan
application and to return any payment made in connection therewith.
AIM also reserves the right in its sole discretion to give any
accepted applicant the privilege of canceling that applicant's Plan in
accordance with any rights described in the Plans Prospectus effective
at the time of purchase of the Plan. AIM further reserves the right
to refund all or part of any payment or payments made by an Investor
in the event that it, in its sole discretion, believes that the
solicitation and/or sale associated therewith was effected in
violation of any applicable state or federal law or rule or regulation
of the National Association of Securities Dealers, Inc. ("NASD"). In
the event of any such refund or refunds, Dealer shall not be entitled
to any commissions thereon, and, if such commissions have been paid,
Dealer shall promptly refund same to AIM or AIM may, at its option,
charge the same against future commissions. To this end, Dealer
hereby grants AIM a lien on any such commissions.
3. On all approved sales of Plans made by Dealer as evidenced by the
issuance of a Plan Certificate or a purchase transaction confirmation
and its acceptance by Investor, AIM shall pay Dealer commissions in
accordance with the terms of this Agreement and the "Summit Investors
Plan Commission Schedule" which is attached hereto and made a part of
this Agreement. All commissions on first-year and subsequent payments
will be paid monthly as the Creation and Sales Charges applicable
thereto are received by AIM from the Custodian. Dealer's rights to
all commissions on Plans sold during the term of this Agreement shall
survive termination of this Agreement if Dealer is in compliance with
Paragraph 10 hereof.
4. Anything herein to the contrary notwithstanding, the attached "Summit
Investors Plan Commission Schedule" is subject to change by AIM at any
time and from time to time, but
1
<PAGE> 2
no such changes shall affect amounts payable to Dealer as commissions
on Plans accepted by AIM prior to any such changes.
5. In the event a Planholder exercises his right under Section 27 of the
Investment Company Act of 1940, as amended, to surrender his Plan
within the first 18 months following its issuance, and to receive the
value of his account plus an amount equal to that part of the excess
paid with respect to that Plan for Creation and Sales Charges which
exceeds 15% of the gross payments made, Dealer shall promptly refund
to AIM a portion of the commission previously paid to Dealer with
respect to such Plan which bears the same relationship to the total
amount of such commission as the amount refunded to the Planholder
bears to the total Creation and Sales Charge paid by him with respect
to such Plan, or AIM may, at its option, charge such amount against
future commissions receivable by Dealer. To this end, Dealer hereby
grants AIM a lien on any such commissions.
6. Dealer will accept Plan applications only from persons who have
received a copy of the current Plan Prospectus issued under the
Securities Act of 1933 and who, to the best of Dealer's knowledge and
belief, can and will complete all payments specified in the
applications. If an Investor becomes delinquent in his payments, it
shall be Dealer's responsibility to contact the Investor for the
purpose of reinstating the payment schedule.
7. Plans shall be offered and sold in such denominations and units
calling for such periodic payments as AIM shall from time to time
determine and set forth in the Plans Prospectus. AIM reserves the
right in its sole discretion, to suspend, restrict, alter, or modify
in any way the sale of any of the Plans or to withdraw the offering of
the Plans entirely.
8. No person is authorized or permitted to give any information or make
any representations concerning the Plan other than those which are
contained in the current Plans Prospectus and in such other printed
information as may be subsequently issued by AIM as information
supplemental to such Plans Prospectus or approved by AIM in writing
for use in connection therewith. Dealer will not use the words
"Summit Investors Fund", (hereinafter referred to as the "Fund") or "A
I M Distributors", whether in writing, by radio and television, or any
other advertising media, without prior written approval.
9. Additional copies of the current Plan Prospectus, any printed
information issued as supplemental to such Plans Prospectus, and the
Plan application forms will be supplied by AIM in reasonable
quantities upon request. All other expenses incurred by Dealer in
connection with activities under this Agreement shall be borne by
Dealer.
10. Dealer represents that it is and will remain in good standing of the
NASD, and agrees to abide by all of its rules and regulations,
including its Conduct Rules. Dealer further agrees to comply with all
applicable state and federal laws and rules and regulations of
regulatory agencies having jurisdiction. Reference is hereby
specifically made to Rule 2830, Conduct Rules (formerly Section 26,
Article III, of the Rules of Fair Practice) of the NASD which is
incorporated herein as if set forth in full.
2
<PAGE> 3
11. Dealer's commissions shall vest as follows: Commissions on first and
subsequent year payments will be paid to Dealer as long as this
Agreement remains in full force and effect or so long thereafter as
Dealer continues membership in the NASD. If Dealer should voluntarily
terminate its membership in the NASD, AIM reserves the right to assign
Plan accounts as to which Dealer is the Dealer of Record and the right
to receive commissions with respect to such Plan accounts to one of
its active dealers. Nevertheless, AIM in its sole discretion, may pay
commissions to Dealer on Plan payments made with respect to such Plan
accounts subsequent to such voluntary termination by dealer.
Notwithstanding the above, in the event Dealer's membership in the
NASD is discontinued or suspended because of disciplinary proceedings
by the NASD, the Securities and Exchange Commission, or other
regulatory bodies, no commissions will be paid on any Investor's
payments received during the period of a suspension or after the
effective date of an expulsion or revocation of a membership;
provided, however, that in the event Dealer's NASD membership is
thereafter reinstated in good standing, or if such disciplinary action
by another regulatory body is thereafter terminated by same, payment
of such commission to Dealer shall then resume, if such payment
resumption is allowable under applicable law, rules, or regulations.
12. In all sales of the Plans to the public, Dealer shall act as a dealer
for its own account and in no transaction shall it have any authority
to act or hold itself out as agent for AIM, the Fund, or any other
member of the selling group of the Fund, and nothing in this
Agreement, including the use of the word "commissions", shall
constitute Dealer as a partner, employee, or agent of AIM or give
Dealer any authority to act for AIM. Neither AIM nor the Fund shall
be liable for any of the acts or obligations of Dealer as a dealer
under this Agreement.
13. Each party hereto has the right to cancel this Agreement at any time
upon ninety (90) days written or telegraphic notice to the other.
14. Dealer will comply with all applicable state and federal laws and with
the rules and regulations of authorized regulatory agencies
thereunder. Dealer will not offer Plans for sale unless such Plans
are duly registered under the applicable state and federal statues and
the rules and regulations thereunder.
15. All communications to AIM shall be sent to A I M Distributors Inc.,
Attn: General Counsel at the address below or to such other address as
AIM may authorize in writing. All communications and/or notices to
Dealer shall be duly given, mailed, or telegraphed to Dealer, at the
address specified by Dealer below, or at such other address as Dealer
may authorize in writing.
16. Failure of either party to terminate this Agreement upon the
occurrence of any event set forth in this Agreement as a cause for
termination shall not constitute a waiver of the right to terminate
this Agreement at a later time on account of such occurrence.
3
<PAGE> 4
17. This Agreement shall be construed in accordance with the laws of the
State of Texas and on modification hereof shall be valid unless in
writing.
18. This Agreement or any moneys due or to become due hereunder shall not
be assignable by Dealer without prior written approval by AIM.
19. This Agreement supersedes and cancels all previous Agreements
pertaining to the Fund between AIM and Dealer, whether oral or
written.
20. In the event of a dispute with respect to this Agreement that the
parties are unable to resolve themselves, such dispute will be settled
by arbitration in accordance with the then existing NASD Code of
Arbitration Procedure ("NASD Code"). The arbitrators will act by
majority decision, and their award may allocate attorney's fees and
arbitration costs between the parties. Their award will be final and
binding between the parties, and such award may be entered as a
judgment in any court of competent jurisdiction. The parties agree
that, to the extent permitted by the NASD code, the arbitrators will
be selected from the securities industry.
AGREED this _________ day of ____________________, 1997.
A I M DISTRIBUTORS, INC. Company
P.O. Box 4333 Address
Houston, Texas 77210-4739 City, State Zip
By: By:
------------------------------ ------------------------------
Title: Title:
--------------------------- ---------------------------
4
<PAGE> 1
EXHIBIT 1.A(3)(c)(ii)
SUMMIT INVESTORS PLAN COMMISSION SCHEDULE
<TABLE>
<CAPTION>
FIRST YEAR NEXT 14 YEARS
MONTHLY ---------------------- -------------------- TOTAL FOR TOTAL FOR TOTAL FOR
PAYMENT UNIT MONTHLY TOTAL MONTHLY TOTAL 15 YEARS EXTENDED 10 YR. 25 YR.
- ------------ -------- ---------- ------- ---------- ---------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 50.00 $ 23.10 $ 277.20 $ 2.56 $ 430.08 $ 707.28 $ 307.20 $ 1,014.48
75.00 34.65 415.80 3.84 645.12 1,060.92 460.80 1,521.72
93.75 43.31 519.72 4.33 727.44 1,247.16 519.60 1,766.76
100.00 46.20 554.40 4.62 776.16 1,330.56 554.40 1,884.96
125.00 57.75 693.00 5.78 971.04 1,664.04 693.60 2,357.64
150.00 69.30 831.60 5.44 913.92 1,745.52 652.80 2,398.32
166.66 77.00 924.00 6.04 1,014.72 1,938.72 724.80 2,663.52
200.00 92.40 1,108.80 7.26 1,219.68 2,328.48 871.20 3,199.68
250.00 115.50 1,386.00 9.07 1,523.76 2,909.76 1,088.40 3,998.16
300.00 138.60 1,663.20 4.95 831.60 2,494.80 594.00 3,088.80
350.00 161.70 1,940.40 4.91 824.88 2,765.28 589.20 3,354.48
400.00 184.80 2,217.60 4.62 776.16 2,993.76 554.40 3,548.16
500.00 207.90 2,494.80 4.95 831.60 3,326.40 594.00 3,920.40
600.00 240.24 2,882.88 6.12 1,028.16 3,911.04 734.40 4,645.44
750.00 277.20 3,326.40 8.04 1,350.72 4,677.12 964.80 5,641.92
1,000.00 323.40 3,880.80 11.55 1,940.40 5,821.20 1,386.00 7,207.20
1,500.00 346.50 4,158.00 12.37 2,078.16 6,236.16 1,484.40 7,720.56
3,000.00 415.80 4,989.60 14.85 2,494.80 7,484.40 1,782.00 9,266.40
6,000.00 554.40 6,652.60 19.80 3,326.40 9,979.00 2,376.00 12,355.00
</TABLE>
<PAGE> 1
EXHIBIT 1.A(9)(a)(iv)
[AIM LOGO APPEARS HERE SUMMIT INVESTORS PLANS] ROTH IRA APPLICATION
<TABLE>
<S> <C> <C> <C>
ACCOUNT NO.
-----------------------------------
Monthly Amount $ Total Plan Amount $
-------------- ----------------
- -------------- --------------------------------------------------------------
[ ] for Tax Year 19__
INVESTMENT $ [ ] Conversion from Traditional IRA
-------------------- [ ] Transfer from another Roth IRA
=============== Initial Investment
MAKE CHECK PAYABLE TO: STATE STREET BANK & TRUST CO.
--------------------------------------------------------------
Special Pricing Requested [ ] Yes [ ] No Total Breakpoint $
-----------------
I am an associated person of a NASD member firm. [ ] Yes [ ] No If yes name of firm
---------------------------
Account Names Account Numbers Monthly Amounts
$
-------------------------------------- ---------------------------- ------------------------
$
-------------------------------------- ---------------------------- ------------------------
$
-------------------------------------- ---------------------------- ------------------------
$
-------------------------------------- ---------------------------- ------------------------
- -------------- ===================================================================================================================
Name of Investor
ACCOUNT --------------------------------------------------------------------------------------------------
REGISTRATION First Middle Initial Last
Street or P.O. Box
============== -------------------------------------------------------------------------------------------------
City State Zip
------------------------------------------------- ----------------------------------- -----------------
Social Security Number Date of Birth
------------------------------- ------------------------------------------------
- -------------- ===================================================================================================================
I designate the following person(s) primary beneficiary(ies), to receive the balance of my Roth IRA custodial
BENEFICIARY account upon my death. The balance of my account shall be distributed in equal amounts to the beneficiary(ies) who
INSTRUCTIONS survive me. I hereby certify that there is no legal impediment to the designation of the beneficiary(ies).
============== Name Relationship Percentage Birth Date
------------------------------ ---------------------------- ---------------- --------------------------
------------------------------ ---------------------------- ---------------- --------------------------
===================================================================================================================
I hereby adopt the Summit Investors Plans' Roth IRA appointing State Street Bank and Trust Company as custodian. I
have received and read the current prospectus of Summit Investors Plans including the prospectus of AIM Summit Fund
and have read and understand the Roth IRA custodial agreement and disclosure statement and consent to the custodial
account fees as specified herein. I understand that the $10.00 annual Roth IRA fee is paid by the redemption of
AIM Summit Fund shares. The undersigned warrants that I have full authority and, if a natural person, I am of
legal age to purchase shares pursuant to this Application.
===================================================================================================================
WITHHOLDING INFORMATION (SUBSTITUTE FORM W-9)
Under the Interest and Dividend Tax Compliance Act of 1983, the Fund is required to have the following
certification: Under the penalties of perjury, I certify by signing this Application as provided below that:
(1) The number shown in Section 2 of this Application is my correct Social Security (or Tax Identification)
Number, and
- -------------- (2) I am not subject to backup withholding either because (a) I have not been notified by the Internal
PLEASE READ Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report
AND SIGN all interest or dividends or (b) the IRS has notified me that I am no longer subject to backup
(SIGNATURE) withholding. (This paragraph (2) does not apply to real estate transactions, mortgage interest paid,
the acquisition or abandonment of secured property, contributions to an individual retirement
============== arrangement and payments other than interest and dividends.)
YOU MUST CROSS OUT PARAGRAPH (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE CURRENTLY
SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDER-REPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN.
In addition, the Fund hereby incorporates, by reference, into this section of the Application either the
IRS instructions for Form W-9, or the substance of those instructions whichever is attached to this
Application.
==================================================================================================================
SIGNATURE PROVISIONS
I, the undersigned Depositor, have read and understand the foregoing Application and the attached material
included herein by reference. In addition, I certify that the information which I have provided and the
information which is included within the Application and the attached material included herein by reference is
accurate including but not limited to the representations contained in the Withholding Information Section of
this Application above.
Dated , 19 At
----------------------- -- -------------------------------------------------------------------------
City State Zip
Signature of Shareholder X
----------------------------------------------------------------------------------------
- -------------- ===================================================================================================================
Dealer's Name Authorized Signature
INVESTMENT ------------------------------------------- ------------------------------------
DEALER
INFORMATION Branch Office (Location)
-------------------------------------------------------------------------------------------
==============
Representative Representative's Signature
------------------------------------------ -------------------------------
Name Number
===================================================================================================================================
</TABLE>
12/97 SUM-FRM-11
<PAGE> 2
SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE.
PURPOSE OF FORM. -- A person who is required to file an information return
with the IRS must get your correct TIN to report income paid to you, real
estate transactions, mortgage interest you paid, the acquisition or abandonment
of secured property, cancellation of debt or contributions you made to an IRA.
Use Form W-9 to give your correct TIN to the requester (the person requesting
your TIN) and when applicable. (1) to certify the TIN you are giving is correct
or you are waiting for a number to be issued). (2) to certify you are not
subject to backup withholding, or (3) to claim exemption from backup
withholding if you are an exempt payee. Giving your correct TIN and making the
appropriate certifications will prevent certain payments from being subject to
backup withholding.
NOTE: If a requester gives you a form other than a W-9 to request your TIN,
you must use the requester's form if it is substantially similar to this Form
W-9.
WHAT IS BACKUP WITHHOLDING? -- Persons making certain payments to you must
withhold and pay to the IRS 31% of such payments under certain conditions.
This is called "backup withholding." Payments that could be subject to backup
withholding include interest, dividends, broker and barter exchange
transactions, rents royalties, nonemployee pay, and certain payments from
fishing boat operators. Real estate transactions are not subject to backup
withholding.
If you give the requester the correct TIN, make the proper certifications, and
report all your taxable interest and dividends on your tax return, your payments
will not be subject to backup withholding. Payments you receive will be
subject withholding if:
1. You do not furnish your TIN to the requester, or
2. The IRS tells the requester that you furnished an incorrect TIN, or
3. The IRS tells you that you are subject to backup withholding because
you did not report all your interest and dividends on your tax return (for
reportable interest and dividends only), or
4. You do not certify to the requester that you are not subject to backup
withholding under 3 above (for reportable interest and dividend accounts opened
after 1983 only), or
5. You do not certify your TIN. See the Part III instructions for
exceptions.
Certain payees and payments are exempt from backup withholding and
information reporting. See the Part II instructions and the separate
instructions for the Requester of Form W-9.
HOW TO GET A TIN. -- If you do not have a TIN, apply for one immediately. To
apply, get Form SS-5, Application for a Social Security Number Card (for
individuals), from your local office of the Social Security Administration, or
Form SS-4, Application for Employer Identification Number (for business and all
other entities), from your local IRS office.
If you do not have a TIN, write "Applied For" in the space for the TIN in
Part I, sign and date the form and give it to the requester. Generally, you
will then have 60 days to get a TIN and give it to the requester. If the
requester does not receive your TIN within 60 days, backup withholding, if
applicable, will begin and continue until you furnish your TIN.
Note: Writing "Applied For" on the form means that you have already applied
for a TIN or that you intend to apply for one soon.
As soon as you receive your TIN, complete another Form W-9, include your TIN,
sign and date the form, and give it to the requester.
PENALTIES
FAILURE TO FURNISH TIN. -- If you fail to furnish your correct TIN to a
requester, you are subject to a penalty of $50 for each such failure unless
your failure is due to reasonable cause and not to willful neglect.
CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis that results in no backup
withholding, you are subject to $500 penalty.
CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
MISUSE OF TINS. -- If the requester discloses or uses TINs in violation
of federal law, the requester may be subject to civil and criminal penalties.
SPECIFIC INSTRUCTIONS
NAME. -- If you are individual, you must generally enter the name shown on
your social security card. However, if you have changed your last name, for
instance, due to marriage, without informing the Social Security Administration
of the name change, please enter your first name, the last name shown on your
social security card, and your new last name.
SOLE PROPRIETOR. -- You must enter your individual name. (Enter either your
SSN or EIN in Part 1.) You may enter your business name or "doing business as"
name on the business name line. Enter your name as shown on your social
security card and business name as it was used to apply for your EIN on Form
SS-4.
PART I - TAXPAYER IDENTIFICATION NUMBER (TIN)
You must enter your TIN in the appropriate box. If you are a sole proprietor,
you may enter your SSN or EIN. Also see the chart on this page for further
clarification of name and TIN combinations. If you do not have a TIN, follow
the instructions under How to Get a TIN on page 1.
PART II - FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING
Individuals (including sole proprietors) are not exempt from backup
withholding. Corporations are exempt from backup withholding for certain
payments, such as interest and dividends. For a complete list of exempt
payees, see the separate instructions for the Requester of Form W-9.
If you are exempt from backup withholding, you should still complete this form
to avoid possible erroneous backup withholding. Enter your correct TIN in Part
I, write "Exempt" in Part II, and sign and date the form. If you are a
nonresident alien or a foreign entity not subject to backup withholding, give
the requester a completed Form W-8, Certificate of Foreign Status.
PART III - CERTIFICATION
For a joint account, only the person whose TIN is shown in Part I should sign.
1. INTEREST, DIVIDEND, AND BARTER EXCHANGE ACCOUNTS OPENED BEFORE 1984
AND BROKER ACCOUNTS CONSIDERED ACTIVE DURING 1993. You must give your correct
TIN, but you do not have to sign the certification.
2. INTEREST, DIVIDEND, BROKER, AND BARTER EXCHANGE ACCOUNTS OPENED AFTER
1983 AND BROKER ACCOUNTS CONSIDERED INACTIVE DURING 1983. You must sign the
certification or backup withholding will apply. If you are subject to backup
withholding and you are merely providing your correct TIN to the requester, you
must cross out item 2 in the certification before signing the form.
3. REAL ESTATE TRANSACTIONS. You must sign the certification. You may
cross out item 2 of the certification.
4. OTHER PAYMENTS. You must give your correct TIN, but you do not have
to sign the certification unless you have been notified of an incorrect TIN.
Other payments include payments made in the course of the requester's payments
made in the course of the requester's trade or business for rents, royalties,
goods (other than bills for merchandise), medical and health care services,
payments to a nonemployee for services (including attorney and accounting
fees), and payments to certain fishing boat crew members.
5. MORTGAGE INTEREST PAID BY YOU, ACQUISITION OR ABANDONMENT OF SECURED
PROPERTY, CANCELLATION OF DEBT, OR IRA CONTRIBUTIONS. You must give your
correct TIN, but you do not have to sign the certification.
PRIVACY ACT NOTICE
Section 6109 requires you to give your correct TIN to persons who must file
information returns with the IRS to report interest, dividends, and certain
other income paid to you, mortgage interest you paid, the acquisition or
abandonment of secured property, cancellation of debt, or contributions you
made to an IRA. The IRS uses the numbers for identification purposes and to
help verify the accuracy of your tax return. You must provide your TIN whether
or not you are required to file a tax return. Payers must generally withhold
31% of taxable interest, dividend, and certain other payments to a payee who
does not give a TIN to a payer. Certain penalties may also apply.
WHAT NAME AND NUMBER TO GIVE THE REQUESTER
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE NAME AND SSN OF:
- -----------------------------------------------------------------------------------------------------
<S> <C>
1. Individual The individual
2. Two or more individuals (joint account) The actual owner of the account or, if
combined funds, the first individual on
the account(1)
3. Custodian account of a minor (Uniform Gift The minor(2)
to Minors Act)
4. a. The usual recoverable savings trust The grantor - trustee(1)
(grantor is also trustee)
b. So-called trust account that is not a The actual owner(1)
legal or valid trust under state law
5. Sole proprietorship The owner(3)
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE NAME AND EIN OF:
- -----------------------------------------------------------------------------------------------------
<S> <C>
6. Sole proprietorship The owner(3)
7. A valid trust, estate, or pension trust Legal entity(4)
8. Corporate The corporation
9. Association, club, religious, charitable, The organization
educational, or other tax-exempt organization
10. Partnership The partnership
11. A broker or registered nominee The broker or nominee
12. Account with the Department of Agriculture in The public entity
the name of a public entity (such as a state
or local government, school district or
prison) that receives agricultural program
payments.
- -----------------------------------------------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's SSN.
(3) You must show your individual name, but you may also enter your business
or "doing business as" name. You may also use either you SSN or EIN.
(4) List first and circle the name of the legal trust, estate, or pension
trust. (Do not furnish the TIN or the personal representative or trustee
unless the legal entity itself is not designated in the account title.)
NOTE: If no name is circled when more than one name is listed, the number will
be considered to be that of the first name listed.
<PAGE> 3
<TABLE>
<S> <C> <C>
Form 5305-RA ROTH INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT Do not file
(January 1998) with the Internal
Department of the Treasury (Under Section 408A of the Internal Revenue Code) Revenue Service
Internal Revenue Service
- ------------------------------------------------------------------------------------------------------------------------------------
Name of depositor Date of birth of depositor Social security number
- ------------------------------------------------------------------------------------------------------------------------------------
Address of depositor Check If Roth Conversion IRA -) [ ]
Check If Amendment -) [ ]
- ------------------------------------------------------------------------------------------------------------------------------------
Name of Custodian Address or principal place of business or custodian
State Street Bank and Trust Company The Commonwealth of Massachusetts
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The depositor whose name appears above is establishing a Roth
individual retirement account (Roth IRA) under section 408A to provide for his
or her retirement and for the support of his or her beneficiaries after death.
The custodian named above has given the depositor the disclosure
statement required under Regulations section 1.408-6.
The depositor assigned the custodial account $.................
The depositor and the custodian make the following agreement:
- --------------------------------------------------------------------------------
ARTICLE I
1. If this Roth IRA is not designated as a Roth Conversion IRA, then,
except in the case of a rollover contribution described in section 408A(e), the
custodian will accept only cash contributions and only up to a maximum amount
of $2,000 for any tax year of the depositor.
2. If this Roth IRA is designated as a Roth Conversion IRA, no
contributions other than IRA Conversion Contributions made during the same tax
year will be accepted.
ARTICLE II
The $2,000 limit described in Article I is gradually reduced to $0
between certain levels of adjusted gross income (AGI). For a single depositor,
the $2,000 annual contribution is phased out between AGI of $85,000 and
$110,000; for a married depositor who files jointly, between AGI of $150,000
and $160,000; and for a married depositor who files separately, between $0 and
$10,000. In the case of a conversion, the custodian will not accept IRA
Conversion Contributions in a tax year if the depositor's AGI for that tax year
exceeds $100,000 or if the depositor is married and files a separate return.
Adjusted gross income is defined in section 408A(c)(3) and does not include IRA
Conversion Contributions.
ARTICLE III
The depositor's interest in the balance in the custodial account is
nonforfeitable.
ARTICLE IV
1. No part of the custodial funds may be invested in life insurance
contracts, nor may the assets of the custodial account be commingled with other
property except in a common trust fund or common investment fund (within the
meaning of section 408(a)(5)).
2. No part of the custodial funds may be invested in collectibles
(within the meaning of section 408(m)) except as otherwise permitted by section
408(m)(3), which provides an exception for certain gold, silver, and platinum
coins, coins issued under the laws of any state, and certain bullion.
ARTICLE V
1. If the depositor dies before his or her entire interest is
distributed to him or her and the grantor's surviving spouse is not the sole
beneficiary, the entire remaining interest will, at the election of the
depositor or, if the depositor has not so selected, at the election of the
beneficiary or beneficiaries, either:
(a) Be distributed by December 31 of the year containing the fifth
anniversary of the depositor's death, or
(b) Be distributed over the life expectancy of the designated
beneficiary starting no later than December 31 of the following the year of the
depositor's death.
If distributions do not begin by the date described in (b),
distribution method (a) will apply.
2. In case of distribution method 1.(b) above, to determine the
minimum annual payment for each year, divide the grantor's entire interest in
the trust as of the close of business on December 31 of the preceding year by
the life expectancy of the designated beneficiary using the attained age of the
designated beneficiary as of the beneficiary's birthday in the year
distributions are required to commence and subtract 1 for each subsequent year.
3. If the depositor's spouse is the sole beneficiary on the
depositor's date of death, such spouse will then be treated as the depositor.
ARTICLE VI
1. The depositor agrees to provide the custodian with information
necessary for the custodian to prepare any reports required under sections
408(l) and 408A(d)(3)(E). Regulations sections 1.408-5 and 1.408-6, and under
guidance published by the Internal Revenue Service.
2. The custodian agrees to submit reports to the Internal Revenue
Service and the depositor prescribed by the Internal Revenue Service.
ARTICLE VII
Notwithstanding any other articles which may be added or
incorporated, the provisions of Articles I through IV and this sentence will be
controlling. Any additional articles that are not consistent with section 408A,
the related regulations, and other published guidance will be invalid.
ARTICLE VIII
This agreement will be amended from time to time to comply with the
provisions of the Code, related regulations, and other published guidance.
Other amendments may be made with the consent of the persons whose signatures
appear below.
- --------------------------------------------------------------------------------
3 Cat. No. 25094Y Form 5305-RA (1-98)
- --------------------------------------------------------------------------------
<PAGE> 4
ARTICLE IX
The following information is applicable to Roth IRAs, not Traditional
IRAs. The rules regarding Roth IRAs are new. Congress and the Internal Revenue
Service are refining the rules, so the following rules and/or their
interpretation are subject to change.
1. PURSUANT TO THE TERMS of this Summit Investors Plans Individual
Retirement Custodial Account Agreement and the related Roth IRA Application
(referred to herein as the "Roth IRA Adoption Agreement"), the Depositor
directs the Custodian to invest all custodial account funds after deductions
for sales charges and Custodian fees, in shares (hereinafter referred to as
"Fund Shares") of AIM Summit Fund, Inc. (the "Fund").
2. (i) ANNUAL CASH CONTRIBUTIONS:
The Depositor may make annual cash contributions to the account within the
limits specified in Article I. All contributions shall be hand delivered or
mailed to the Custodian by the Depositor, with an indication of the taxable
year to which such contribution relates.
(ii) ROLLOVER CONTRIBUTIONS:
In addition to any annual contributions referred to in Paragraph (i)
above, but subject to this Paragraph (ii), the Depositor may contribute to the
account, at any time, a rollover contribution of such cash or other property as
shall constitute a rollover amount or contribution under section 402(c),
403(a)(4), 403(b)(8), 408(d)(3) or 408A(e) of the Code. The Depositor shall be
responsible for determining whether a rollover to a Roth IRA is permissible
under the Internal Revenues Code, and the timeliness of any rollover. The
Custodian will accept for the account all rollover contributions which consist
of cash, and it may, but shall be under no obligation to, accept any other
rollover contribution. In the case of rollover contributions composed
of assets other than cash, the prospective Depositor shall provide the
Custodian with a description of such assets and such other information as the
Custodian may reasonably require. The Custodian may accept all or any part of
such a rollover contribution if it determines that the assets of which such
contribution consists are either in a medium proper for investment hereunder or
that the assets can be promptly liquidated for cash. The Custodian may reject
any rollover contribution.
The Depositor warrants that any rollover contribution to the account
consists of cash, the same property received in the distribution or, in the
case of amounts distributed to the Depositor from a qualified employer's plan
or annuity, the proceeds from the sale of the same property received in the
distribution.
3. THE DEPOSITOR SHALL BE FULLY AND SOLELY RESPONSIBLE for all taxes,
interest and penalties which may accrue or be assessed by reason of any excess
or impermissible deposit, and interest, if any, earned thereon. Any
contributions made by or on behalf of the Depositor in respect of a taxable year
of the Depositor shall be made by or on behalf of the Depositor to the Custodian
for deposit in the custodial account within the time period for claiming any
income tax deduction for such taxable year. It shall be the sole responsibility
of the Depositor to determine the amount of the contributions made hereunder.
The Depositor shall execute such forms as the Custodian may require in
connection with any contribution thereunder.
ARTICLE X
1. THE CUSTODIAN SHALL from time to time, subject to the provisions of
Articles IV and V, make distributions out of the custodial account to the
Depositor, in such manner and amounts as may be specified in written
instructions to the Depositor. All such instructions shall be deemed to
constitute a certification by the Depositor that the distribution so directed
is one that the Depositor is permitted to receive. A declaration of the
Depositor's intention as to the disposition of an amount distributed pursuant
to Article V hereof shall be in writing and given to the Custodian. The
Custodian shall have no liability with respect to any contribution to the
custodial account, any investment of assets in the custodial account or any
distribution therefrom pursuant to instructions received from the Depositor or
pursuant to this Agreement, or for any consequences to the Depositor arising
from such contributions, investments or distributions including, but not
limited to, excise and other taxes and penalties which might accrue or be
assessed by reason thereof, nor shall the Custodian be under any duty to make
any inquiry or investigation with respect thereto.
2. THE DEPOSITOR SHALL BE fully and solely responsible for all taxes and
penalties which might accrue or be assessed for having failed to make the
annual minimum withdrawal required in any year.
ARTICLE XI
A Depositor shall have the right to designate a beneficiary or
beneficiaries to receive any amounts remaining in his account in the event of
his death. Any prior beneficiary designation may be changed or revoked at any
time by a Depositor by written designation signed by the Depositor on a form
acceptable to, and filed with, the Custodian; provided, however, that such
designation, or change or revocation of a prior designation shall not become
effective until it has been received by the Custodian, nor shall it be effective
unless received by the Custodian no later than thirty days before the death of
the Depositor, and provided further that the last such designation of
beneficiary or change or revocation of beneficiary executed by the Depositor,
if received by the Custodian within the time specified, shall control. Unless
otherwise provided in the beneficiary designation, amounts payable by reason of
the Depositor's death will be paid in equal shares only to the primary
beneficiary or beneficiaries who survive the Depositor, or, if no primary
beneficiary survives the Depositor, to the contingent beneficiary or
beneficiaries who survive the Depositor. If the Depositor had not, by the date
of his death, properly designated a beneficiary in accordance with the
preceding sentences, or if no designated beneficiary survives the Depositor,
then the Depositor's beneficiary shall be the Depositor's estate.
ARTICLE XII
1. ANY ADMINISTRATIVE OR OTHER FEES of the Custodian and its agents for
performing duties pursuant to this Agreement shall be in such amount as shall be
established from time to time. The Depositor agrees to pay the custodian the
fees specified in its current fee schedule and authorizes the Custodian to
charge the Depositor's custodian account for the amount of such fees.
2. UPON 30 DAYS' PRIOR WRITTEN NOTICE, the Custodian may substitute a new
fee schedule. The Custodian's fees, any income, gift, estate and inheritance
taxes and other taxes of any kind whatsoever, including transfer taxes incurred
in connection with the investment or reinvestment of the assets of the
custodial account, that may be levied or assessed in respect of such assets,
and all other administrative expenses incurred by the Custodian in the
performance of its duties including fees for legal services rendered to the
Custodian, may be charged to the custodial account with the right to liquidate
Investment Company shares for this purpose, or at the Custodian's option, shall
be billed to the Depositor directly.
ARTICLE XIII
1. THIS AGREEMENT SHALL take effect only when accepted and signed by the
Custodian. As directed, the Custodian shall then open and maintain a separate
custodial account for Depositor and invest the initial contribution hereunder
in shares of the Fund. Where the Roth IRA Adoption Agreement is checked for
spousal accounts, separate custodial accounts will be opened and maintained in
each spouse's name. The amounts specified in the Roth IRA Adoption Agreement
shall be credited to each spouse's separate custodial account except that no
more than $2,000 shall be credited to either custodial account.
2. THE CUSTODIAN SHALL invest subsequent contributions as directed. If
any such written instructions are not received as required however, or if
received, are in the opinion of the Custodian unclear, or if the accompanying
contribution exceeds $2,000 for the Depositor and/or $2,000 for the Depositor's
spouse, the Custodian may hold or return all or a portion of the contribution
uninvested without liability for loss of income or appreciation, and without
liability for interest, pending receipt of written instructions or
clarification.
3. ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS, less charges, received
on Fund shares held in the custodial account shall (unless received in
additional such shares) be reinvested in shares of the Fund, which shall be
credited to the custodial account. If any distribution on such shares may be
received at the election of the Depositor in additional such shares or in cash
or other property, the Custodian shall elect to receive it in additional Fund
shares.
4. ALL FUND SHARES ACQUIRED by the Custodian hereunder shall be
registered in the name of the Custodian (with or without identifying the
Depositor) or of its nominees. The Custodian shall deliver, or cause to be
executed and delivered, to the Depositor all notices, prospectuses, financial
statements, proxies and proxy solicitation materials relating to such Fund
shares held in the custodial account. The Custodian shall not vote any Fund
shares except in accordance with the written instructions received from the
Depositor.
ARTICLE XIV
1. THE CUSTODIAN SHALL keep adequate records of transactions it is
required to perform hereunder. Not later than six months after the close of
each calendar year or after the Custodian's registration or removal pursuant to
Article XV below, the Custodian shall render to the Depositor or the
Depositor's legal representative a written report or reports reflecting the
transactions effected by it during such period and the assets and liabilities
of the custodial account at the close of the period. Sixty days after rendering
such report(s), the Custodian shall (to the extent permitted by law) be forever
released and discharged from all liability and accountability to anyone with
respect to its acts and transactions shown in or reflected by such report(s),
except with respect to those as to which the Depositor or the Depositor's legal
representative shall have filed written objections with the Custodian within
the latter such sixty-day period.
2. THE CUSTODIAN SHALL receive and invest contributions as directed by
the Depositor, hold and distribute such investments, and keep adequate records
and reports thereon, all in accordance with this Agreement. The parties do not
intend to confer any other fiduciary duties of the Custodian, and none shall be
implied. The Custodian shall not be liable (and assumes no responsibility) for
the collection of contributions, the deductibility or propriety of any
contribution under this Agreement, or the purposes of propriety of any
distribution from the account, which matters are the responsibility of the
Depositor or the Depositor's legal representative.
3. THE DEPOSITOR, to the extent permitted by law, shall always fully
indemnify the Custodian and save it harmless from any and all liability
whatsoever which may arise in connection with this Agreement and matters which
it contemplates, except that which arises due to the Custodian's negligence and
willful misconduct. The Custodian shall not be obligated or expected to
commence or defend any legal action or proceeding in connection with this
Agreement or such matters
4
<PAGE> 5
unless agreed upon by the Custodian and Depositor or said legal representative,
and unless fully indemnified for so doing to the Custodian's satisfaction.
4. THE CUSTODIAN MAY conclusively rely upon and shall be protected in
acting upon any written order from the Depositor or the Depositor's legal
representative or any other notice, request, consent, certificate or other
instruments or paper believed by it to be genuine and to have been properly
executed, and as long as it acts in good faith in taking or omitting to take any
other action in reliance thereon.
ARTICLE XV
1. THE CUSTODIAN MAY resign at any time upon 30 days' notice in writing
to the Depositor, and may be removed by the Depositor at any time upon thirty
days' notice in writing to the Custodian. Upon such resignation or removal, the
Depositor shall appoint a successor custodian to serve under this Agreement.
Upon receipt by the Custodian of written acceptance of such appointment by the
successor custodian, the Custodian shall transfer to such successor the assets
of the custodial account and all necessary records (or copies thereof)
pertaining thereto, provided that (at the Custodian's request) any successor
custodian shall agree not to dispose of any such records without the Custodian's
consent. The Custodian is authorized, however, the reserve such assets as it may
deem advisable for payment of any other liabilities constituting a charge on or
against the assets of the custodial account or on or against the Custodian, with
any balance of such reserve remaining after the payment of all such items to be
paid over to the successor custodian.
2. THE CUSTODIAN SHALL NOT be liable for the acts or omissions of such
successor custodian.
3. THE CUSTODIAN, AND EVERY SUCCESSOR CUSTODIAN appointed to serve under
this agreement, must be a bank (as defined in Section 408(n) of the Code) or
such other person who qualifies with the Internal Revenue Service to serve in
the manner prescribed by Code section 408(a)(2) and satisfies the Custodian,
upon request, as to such qualification.
4. AFTER THE CUSTODIAN HAS transferred the custodial account assets
(including any reserve balance as contemplated above) to the successor
custodian, the Custodian shall be relieved of all further liability with respect
to this Agreement, the custodial account and the assets thereof.
ARTICLE XVI
1. THE CUSTODIAN SHALL terminate the custodial account and pay the
proceeds of the account to the account to the depositor if within 30 days after
the resignation or removal of the Custodian pursuant to Article IV above, the
Depositor has not appointed a successor custodian which has accepted such
appointment unless within the time the Distributor appoints such successor and
gives written notice thereof to the Depositor and the Custodian. The Distributor
shall have the right, but not the duty, to appoint such a successor. Termination
of the custodial account shall be effected by distributing all of the assets
therein in cash or in kind to the Depositor in a lump sum, subject to the
Custodian's right to reserve funds as provided in said Article XV.
2. UPON TERMINATION of the custodial account in any manner provided for
in this Article XVI, this Agreement shall terminate and have no further force
and effect, and the Custodian shall be relieved from all further liability with
respect to this Agreement, the custodial account and all assets thereof so
distributed.
ARTICLE XVII
1. ANY NOTICE FROM THE CUSTODIAN TO THE DEPOSITOR provided for in this
Agreement shall be effective when mailed if sent by first class mail to the
Depositor at the Depositor's last known address as shown on the Custodian's
records. Any notice required or permitted to be given to the Custodian, shall
become effective upon actual receipt by the Custodian at such address as the
Custodian shall provide the Depositor from time to time in writing.
2. THIS AGREEMENT IS accepted by the Custodian and shall be construed and
administered in accordance with the laws of The Commonwealth of Massachusetts.
The Custodian and the Depositor hereby waive and agree to waive right to trial
by jury in an action or proceeding instituted in respect to this custodial
account. The Depositor further agrees that the venue of any litigation between
him and the Custodian with respect to the custodial account shall be in The
Commonwealth of Massachusetts.
3. THIS AGREEMENT IS intended to qualify under section 408A of the Code
as a Roth IRA and if any provision hereof is subject to more than one
interpretation or any term used herein is subject to more than one
interpretation or any term used herein is subject to more than one construction,
such ambiguity shall be resolved in favor of that interpretation or construction
which is consistent with that intent.
4. ALL PROVISIONS IN THIS AGREEMENT ARE subject to the Code and to
regulations promulgated thereunder. In the event that any one or more of the
provisions contained in this Agreement shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement.
5. THE CUSTODIAN SHALL have no duties whatsoever except such duties as
it specifically agrees to writing, and no implied covenants or obligations shall
be read into this Agreement against the Custodian. The Custodian shall not be
liable under this Agreement, except for its own bad faith, gross negligence or
willful misconduct
6. NO INTEREST, RIGHT OR CLAIM IN OR TO ANY PART of the custodial account
or any payment therefrom shall be assignable, transferable, or subject to sale,
mortgage, pledge, hypothecation, communication, anticipation, garnishment,
attachment, execution, or levy of any kind and the Custodial shall not recognize
any attempt to assign, transfer, sell, mortgage, pledge, hypothecate, commute or
anticipate the same, except as required by law.
7. THE DEPOSITOR HEREBY DELEGATES to the Custodian the power to amend
this agreement from time to time as it deems appropriate, and hereby consents to
all such amendments, provided, however, that all such amendments are in
compliance with the provisions of the Code and the regulations promulgated
thereunder. All such amendments shall be effective as of the date specified in
a written notice of amendment which will be sent to the Depositor.
INSTRUCTIONS
(Section references are to the Internal Revenue Code unless otherwise noted.)
PURPOSE OF FORM
This model custodial account agreement may be used by an individual who
wishes to adopt a Roth IRA under section 408A. When fully executed by the
Depositor and the Custodian not later than the time prescribed by law for
filing the Federal income tax return for the Depositor's tax year (not
including any extensions thereof), a Depositor will have a Roth IRA custodial
account which meets the requirements of section 408A. This account must be
created in the United States for the exclusive benefit of the Depositor or
his/her beneficiaries.
DEFINITIONS
CUSTODIAN. The Custodian must be a bank or savings and loan association,
as defined in section 408(n), or other person who has the approval of the
Internal Revenue Service to act as a custodian.
DEPOSITOR. The Depositor is the person who establishes the custodial
account.
ROTH IRA FOR NONWORKING SPOUSES
Contributions to a Roth IRA custodial account for a non-working spouse
must be made to a separate Roth IRA custodial account established by the
nonworking spouse.
This form may be used to establish the Roth IRA custodial account for the
nonworking spouse.
An individual's social security number will serve as the identification
number of his or her individual retirement account.
For more information, obtain a copy of the required disclosure statement
from your custodian or get Publication 590, Individual Retirement Arrangements
(IRAs).
SPECIFIC INSTRUCTIONS
ARTICLE IV - Distribution made under this Article may be made in a single
sum, periodic payment, or a combination of both.
ARTICLE IX - This article and any that follow it may incorporate
additional provisions that are agreed upon by the Depositor and the Custodian
to complete the agreement. These may include, for example: definitions,
investment powers, voting rights, exculpatory provisions, amendment and
termination, removal of Custodian, Custodian's fees, state law requirements,
beginning date of distributions, accepting only cash, treatment of excess
contributions, prohibited transactions with the Depositor, etc. Use additional
pages if necessary and attach them to this form.
Note: This form may be reproduced and reduced in size for adoption to
passbook or card purposes.
SUMMIT INVESTORS PLANS
ROTH IRA CUSTODIAL ACCOUNT DISCLOSURE STATEMENT
Under applicable federal regulations, a custodian of a Roth IRA account is
required to furnish each depositor who has established or is establishing a
Roth IRA account with a statement which discloses certain information regarding
the account. State Street Bank and Trust Company (hereinafter referred to as
the "Custodian") is providing this Disclosure Statement to you in accordance
with that requirement, and this Disclosure Statement contains general
information about The Summit Investors Plans Roth IRA Custodial Account
(hereinafter referred to as "Roth IRA"). This Disclosure Statement should be
reviewed in conjunction with both the Roth Individual Retirement Custodial
Account agreement (Form 5305 and any attachments thereto, hereinafter referred
to as the "Custodial Agreement") and the Adoption Agreement for your Roth IRA.
You should review this Disclosure Statement and the Roth IRA documents with
your attorney or tax advisor. The Custodian cannot give tax advice or determine
whether or not the Roth IRA is appropriate for you.
5
<PAGE> 6
The following information is applicable to Roth IRAs, not Traditional IRAs. The
rules regarding Roth IRAs are new. Congress and the Internal Revenue Service
are refining the rules, so the following rules and/or their interpretation are
subject to change.
A. SEVEN DAY RIGHT TO REVOKE YOUR ROTH IRA.
You may revoke your Roth IRA at any time within 7 business days after the
date the Roth IRA is established, by giving proper notice. For purposes of
revocation, it will be assumed that you received the Disclosure Statement no
later than the date of your check with which you opened your Roth IRA. Written
notice must be hand delivered or sent by first class mail, in which case, the
revocation will be effective as of the date the notice is postmarked (or if
sent by certified or registered mail, the date of certification or
registration). Notice of revocation should be made to: A I M Distributors, Inc.,
Eleven Greenway Plaza, Suite 763, P.O. Box 4264, Houston, Texas 77210-4264,
Attention: Summit Client Services Department, area code (800) 995-4246. If you
revoke your Roth IRA, you are entitled to a refund of your entire contribution
to the Roth IRA, without adjustment for such items as sales commissions,
administrative expenses or fluctuation in market value. If you do not revoke
within 7 business days after the establishment of the Roth IRA, you will be
deemed to have accepted the terms and conditions of the Roth IRA and cannot
later revoke the Roth IRA without certain potential penalties.
B. STATUTORY REQUIREMENTS.
A Roth IRA is a trust or custodial account created or organized in the
United States for your exclusive benefit or that of your beneficiaries. It must
be created by a written governing instrument that meets the following
requirements:
(1) THE TRUSTEE OR CUSTODIAN MUST BE A BANK, federally insured credit
union, savings and loan association or another person eligible to act as
trustee or custodian;
(2) EXCEPT FOR ROLLOVER CONTRIBUTIONS (as described in Part F below), no
contribution will be accepted unless it is in cash or cash equivalent,
including, but not by way of limitation, personal checks, cashier's checks, and
wire transfers;
(3) EXCEPT FOR ROLLOVERS contributions of more than $2,000 for any tax
year may not be made;
(4) YOU WILL HAVE A NONFORFEITABLE INTEREST IN THE ACCOUNT;
(5) NO PART OF THE TRUST OR CUSTODIAL FUNDS will be invested in life
insurance contracts, nor may the assets by commingled with other property
except in a common trust fund or common investment fund. Furthermore, as
provided in section 408(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), your Roth IRA may not be invested in "collectibles," such as art
words, antiques, metals, gems, stamps, coins (with an exception for certain
U.S.-minted gold and silver coins and certain bullion), and certain other
types of tangible personal property. An investment in a collectible would be
treated as a distribution from you Roth IRA which would be includible in your
gross income, and, if you had not attained the age of 59 1/2, the distribution
would also be subject to the premature distribution penalty as discussed in
Part E(5) below;
(6) UNLIKE A TRADITIONAL IRA, YOUR INTEREST IN YOUR ROTH IRA IS NOT
REQUIRED TO BE DISTRIBUTED WHEN YOU REACH AGE 70 1/2.
C. INVESTMENT OF YOUR ROTH IRA.
Under the terms of the Custodial Agreement, your contributions will be
invested by the Custodian in full and fractional shares of AIM Summit Fund,
Inc. in accordance with the Summit Investors Plan that you have established.
Subject to the foregoing and to any additional restrictions described in the
Custodial Agreement, you have complete control over the investment of your Roth
IRA Funds. The Custodian will not provide any form of investment advice or make
investment recommendations of any type, so you will make all investment
decisions on the basis of information you obtain from other sources. When you
make a decision on how you wish to invest Funds held in your Roth IRA, you
should provide the Custodian with specific instructions, detailing your
investment decision so that the Custodian can effectuate such Investments as
provided in your Roth IRA Custodial Agreements. If you fall to direct the
Custodian as to the Investment of all or any portion of your Roth IRA account,
the Custodian shall hold such uninvested amount in your account and shall incur
no liability for interest or earnings thereon. All dividends, capital gain
distributions and contributions received on shares held in your Roth IRA will
be invested in shares of AIM Summit Fund, Inc. which shall be credited to the
Custodian account. Detailed information about the Summit Investors Plans and
the shares of AIM Summit Fund, Inc. must be furnished to you in the form of
prospectus governed by rules of the Securities and Exchange Commission.
D. LIMITATIONS AND RESTRICTIONS ON ROTH IRA CONTRIBUTIONS AND DEDUCTIONS.
Except in the case of rollover contributions (see Part F below), generally
you may contribute up to the lesser of $2,000 or 100% of your compensation
(earned income) to your Roth IRA for any taxable year. A non-working spouse
may contribute up to $2,000 to a separate Roth IRA.
Contributions to a Roth IRA are nondeductible, but earnings on a Roth IRA
generally are not subject to federal income tax. The $2,000 individual Roth IRA
limit is reduced by any deductible or nondeductible contributions you make to a
Traditional IRA. You should consult your tax advisor to determine the specific
application of such rules to your Roth IRA contributions for any particular
taxable year.
Contributions to a Roth IRA are not deductible, but earnings on a Roth IRA
generally are not subject to federal income tax if they are distributed after
the account has been in existence for five years and the distribution is made
on account of death, disability, after age 59 1/2, or for certain qualifying
events. The $2,000 maximum contribution to a Roth IRA is reduced for taxpayers
whose income exceeds $95,000 (single filer) or $150,000 (joint filers) and is
phased-out entirely for taxpayers whose income exceeds $110,000 (single) or
$160,000 (joint).
E. FEDERAL INCOME TAX STATUS OF THE ROTH IRA AND CERTAIN DISTRIBUTIONS.
(1) IN GENERAL. Except as described below, your Roth IRA and earnings
thereon are exempt from federal income tax at least until distributions are
made from the Roth IRA.
(2) TAX TREATMENT OF DISTRIBUTIONS FROM A ROTH IRA. Contributions to a Roth
IRA are not tax-deductible, but distributions may be received tax-free under
certain circumstances. After a Roth IRA account has been maintained for at least
five years (whether or not contributions were made for all years), investment
earnings may be withdrawn without being subject to federal income tax if the
distribution is made after age 59 1/2, in the case of death or disability, or
for a first home purchase. A withdrawal for a first home purchase is limited to
$10,000 and is available to a person who has not had an ownership interest in a
principal residence during the two years ending on the date of purchase. The
dollar amount of contributions (but not earnings) to a Roth IRA may be
withdrawn without penalty at any time.
(3) EXCESS CONTRIBUTIONS. If contributions to your Roth IRA are in excess
of the limits stated in Part D above, you will be assessed a 6% nondeductible
excise tax on such excess amounts. This tax is payable for each year the excess
is permitted to remain in your Roth IRA. However, if the excess contribution
and all earnings thereon are returned before the due date for filing your income
tax return for the year in which the excess contributions was made, the 6%
excise tax will not be assessed. The earnings on such excess contributions that
are returned to you will be assessed. The earnings on such excess contributions
that are returned to you will be taxable as ordinary income and will be deemed
to have been earned and taxable in the tax year during which the excess
contribution was made. In addition, if you are not disabled or have not reached
age 59 1/2, the earnings will be subject to the 10% premature withdrawal penalty
discussed below. The 6% excess contribution tax may be eliminated for future tax
years by withdrawing the excess contribution from your Roth IRA before the due
date for filing your tax return for that year or by under contributing for a
subsequent year by an amount equal to the excess contribution. If the total
contributions for the year to your Roth IRA are $2,000 or less, you may withdraw
any excess contributions after the due date for filing your tax return,
including extensions, and not include the amount withdrawn in your gross income.
It is not necessary to withdraw the interest or other income earned on the
excess. You will have to pay the 6% tax on the excess amount for each year the
excess contributions was in the Roth IRA.
If less than the maximum amount of contributions has been made in years
before the year you make an excess contribution, the prior year's difference
may not be used to reduce the excess contributions. Qualified rollover
contributions, as described in Part F below, are not considered excess
contributions.
(4) PREMATURE DISTRIBUTIONS. In addition to any regular income tax that
may be payable, distributions from your Roth IRA that occur before you reach
age 59 1/2 (except in the event of disability, death, rollover, or as a
qualifying distribution), will be assessed a 10% additional income tax on the
amount distributed which is includible in your gross income. However, the
additional 10% income tax will not be imposed if the distribution is one of a
scheduled series of level payments to be made over your life or life expectancy
or over the joint lives or joint life expectancies of you and your beneficiary.
Amounts treated as distributions from the Roth IRA because of pledging the Roth
IRA as described below, or prohibited transactions as described below, will also
be considered premature distributions if they occur before you reach age 59 1/2
(assuming you are not disabled).
(5) PLEDGING THE ROTH IRA. If you pledge your Roth IRA as security for a
loan, the portion so pledged is treated as being distributed to you in that
year. In addition to any regular income tax that may be payable on the
distribution, the premature distribution penalty as discussed above may also be
applicable.
(6) PROHIBITED TRANSACTIONS. If you or your beneficiary engages in a
prohibited transaction, as described in section 4975 of the Code with respect to
your Roth IRA, your Roth IRA will lose its exemption from tax and you must
include the fair market value of your Roth IRA in your gross income for the year
during which the prohibited transaction occurred. In addition to any regular
income tax that may be payable, the premature distribution penalty as discussed
above may also be applicable.
(7) ESTATE AND GIFT TAX STATUS OF DISTRIBUTIONS. You should consult your
tax advisor with respect to the application of community property laws on
estate and gift tax issues relating to your Roth IRA.
6
<PAGE> 7
(8) FEDERAL INCOME TAX WITHHOLDING. The taxable portion of distributions
from your Roth IRA, if any, is subject to federal income tax withholding unless
you elect not to have withholding applied. If you elect not to have withholding
applied to taxable distributions from your IRA, or if insufficient federal
income tax is withheld from any distribution, you may be responsible for
payment of estimated taxes, as well as for penalties under the estimated tax
rules, if withholding and estimated tax payments were not sufficient.
Additional information regarding withholding and the necessary election forms
will be provided no later than at the time a distribution is requested.
F. ROLLOVER CONTRIBUTIONS.
A rollover is a contribution of cash or other assets from one retirement
program to another. There are two kinds of rollover contributions to an IRA. In
one, you contribute amounts distributed to you from one IRA to another IRA. With
the other type, you contribute amounts distributed to you from your employer's
qualified plan or 403(b) plan to an IRA. A rollover is an allowable IRA
contribution which is not subject to the limits on regular contributions
discussed in Part D above. However, you may not deduct a rollover contribution
to your IRA on your tax return.
If you receive a distribution from the qualified plan of your employer or
former employer, the distribution must be an "eligible rollover distribution" in
order for you to be able to roll all or part of the distribution over to your
IRA. Your employer, or former employer will give you the opportunity to roll
over the distribution directly from the plan to the IRA. If you elect, instead,
to receive the distribution, you must deposit it into the IRA within 60 days
after you receive it.
An "eligible rollover distribution" is any distribution from a qualified
plan that would be taxable other than (1) a distribution that is one of a series
of periodic payments for any employee's life or over a period of 10 years or
more,(2) a required distribution after you attain age 70 1/2 and (3) certain
corrective distributions.
The proceeds of a Roth IRA may be rolled over only to another Roth IRA. A
Roth IRA may accept the proceeds of a tax-qualified plan or a traditional IRA,
but any taxable portion of such a rollover shall be subject to federal income
tax. Similarly, a Traditional IRA may be redesignated as a Roth IRA, with the
taxable portion of the converted IRA being subject to federal income tax at the
time of conversion. In the case of such a rollover or conversion during 1998,
the amount required to be included in income shall be spread ratably over four
years.
G. AMENDMENTS.
The Custodian of your Roth IRA may amend the agreements establishing your
Roth IRA at any time. The Custodian will comply with the amendment procedures
set forth in your Custodial Agreement.
H. FINANCIAL DISCLOSURE.
Because the value of assets held in your Roth IRA is subject to market
fluctuation, the value of your Roth IRA can neither be guaranteed nor
projected. There is no assurance of growth in the value of your Roth IRA or
guarantee of investment results. You will, however, be provided with periodic
statements of your Roth IRA, including current market values of investments.
Certain fees will be charged by the Custodian in connection with your Roth
IRA. Such fees are disclosed on the Custodian's fee schedule, a copy of which
has been provided to you. Upon thirty days' prior written notice, the Custodian
may substitute a new fee schedule. Any fees or other expenses incurred in
connection with your Roth IRA will be deducted from your Roth IRA (with
liquidation of Fund Shares, if necessary), or at the Custodian's option, such
fees or expenses may be billed to you directly.
For its services under Summit Investors Plans, State Street Bank and Trust
Company receives a custodian fee. This fee is in addition to fees it receives
for acting as Custodian under the Roth IRA. State Street Bank and Trust Company
and A I M Distributors, Inc., also will receive additional fees for performing
specific services with respect to Summit Investors Plans. Any such fees will
be fully disclosed to you. Potential investors should obtain a copy of the
current combined Prospectus relating to Summit Investors Plans/AIM Summit Fund,
Inc. prior to making an investment for a full description of all applicable
fees and expenses. Also, copies of the Statement of Additional Information
relating to AIM Summit Fund, Inc. will be provided upon your request to A I M
Distributors, Inc.
I. MISCELLANEOUS.
Each year you will be provided a statement(s) of account which will give
the amount of contributions to the Roth IRA, the year to which each
contribution relates, and the total value of the Roth IRA as of the end of the
year. Information relating to contributions and distributions must be reported
annually to the Internal Revenue Service and to you. You must also file Form
5329 (Return for Individual Retirement Savings Arrangement) with the Internal
Revenue Service for each taxable year during which you are assessed any penalty
or tax as discussed in Part E above.
Further information about Roth IRAs can be obtained from any district
office of the Internal Revenue Service or from the Custodian.
All provisions in the Disclosure Statement are subject to the Code and to
the regulations promulgated thereunder. This Disclosure Statement constitutes
a nontechnical restatement and summary of certain provisions of the Code which
may affect your Roth IRA. This is not a legal document. Your legal rights and
obligations are governed by the federal tax laws and regulations and your
Custodial Agreement and Adoption Agreement with the Custodian.
The Depositor has assigned the Roth IRA custodial account _____ dollars
($_____) in cash.
The Depositor has assigned the Roth IRA custodial account _____ dollars
($_____) in cash.
- --------------------------------------------------------------------
Depositor's signature Date
- --------------------------------------------------------------------
Custodian's signature Date
- --------------------------------------------------------------------
Witness
(Use only if signature of the Depositor or the Custodian is required to be
witnessed.)
7
<PAGE> 1
EXHIBIT 3.B(1)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
included in this Amendment No. 21 to Form S-6 of the registration statement on
Form N-8B-2 for Summit Investors Plans of our report dated February 9, 1998, on
A I M Distributors, Inc. financial statements for the year ended December 31,
1997.
/S/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Houston, Texas
February 27, 1998
<PAGE> 1
EXHIBIT 3.B(2)
INDEPENDENT AUDITORS' CONSENT
The Board of Directors of
A I M Distributors, Inc. and
Planholders of Summit Investors Plans
We consent to the use of our report on Summit Investors Plans dated February
13, 1998 included herein.
/s/ KPMG PEAT MARWICK LLP
-------------------------
KPMG Peat Marwick LLP
Houston, Texas
February 18, 1998
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<NAME> SUMMIT INVESTORS PLAN
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 1,059,954,697
<INVESTMENTS-AT-VALUE> 1,642,717,284
<RECEIVABLES> 0
<ASSETS-OTHER> 66,256
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<TOTAL-LIABILITIES> 66,256
<SENIOR-EQUITY> 0
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<SHARES-COMMON-STOCK> 108,430,184
<SHARES-COMMON-PRIOR> 96,716,222
<ACCUMULATED-NII-CURRENT> 0
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<OVERDISTRIBUTION-GAINS> 0
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<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8,581,865
<NUMBER-OF-SHARES-REDEEMED> (6,644,913)
<SHARES-REINVESTED> 9,777,010
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
