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AIM SUMMIT INVESTORS PLANS I
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PROSPECTUS AIM -- Registered Trademark --
FEBRUARY 28, 2000
AIM Summit Investors Plans I provides for the accumulation of
Class I Shares of AIM Summit Fund, Inc.
Class I Shares of AIM Summit Fund, Inc. are offered to and may be
purchased by the general public through AIM Summit Investors Plans
I. Details of AIM Summit Fund, Inc. are found in the AIM Summit
Fund, Inc. Prospectus located at the back of this Prospectus. You
should read both this Prospectus and the Prospectus of AIM Summit
Fund, Inc. and keep these Prospectuses for future reference.
AIM Summit Investors Plans I is closed to new investors.
AS WITH ALL OTHER INVESTMENT COMPANY SECURITIES, THE SECURITIES AND
EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED WHETHER THE INFORMATION IN THIS PROSPECTUS
IS ADEQUATE OR ACCURATE. ANYONE WHO TELLS YOU OTHERWISE IS
COMMITTING A CRIME.
[AIM LOGO APPEARS HERE] INVEST WITH DISCIPLINE
--Registered Trademark--
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TABLE OF CONTENTS
<TABLE>
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PAGE
<S> <C>
Introduction................................................ 1
Purpose and Benefits of the Plans...................... 1
Description of Plans................................... 1
Investment Objective of the Fund....................... 1
Principal Risks of Investing in the Plans.............. 1
Cancellation and Refund Rights......................... 1
Termination of the Plans............................... 2
Fee Table................................................... 2
A Typical $50 Monthly Investment Plan....................... 3
Choosing Your Investment Amount............................. 4
Allocation of Investments and Deductions............... 4
15 Year Plans.......................................... 4
Total 25 Year Allocations of Investments and Deductions
When Extended Investment Option is Used............... 5
Investments................................................. 6
Making Your Plans Investments.......................... 6
Extended Investment Option............................. 6
Creation and Sales Charges............................. 6
Rights of Accumulation................................. 6
Making Preinvestments to Complete the Plan Ahead of
Schedule.............................................. 7
Changing the Face Amount of a Plan..................... 7
Withdrawals and Terminations................................ 7
Timing of Receipt of Proceeds on Redemptions of Class I
Shares................................................ 7
Partial Withdrawals Without Terminating a Plan......... 8
Complete Withdrawal or Termination..................... 8
Plan Reinstatement Privilege........................... 9
Planholder Options and Services............................. 9
Retirement Plans....................................... 9
Systematic Withdrawal Program.......................... 10
Federal Income Tax Withholding......................... 10
Statements, Reports and Notices........................ 10
Rights and Policies......................................... 10
Cancellation and Refund Rights......................... 10
Voting Rights.......................................... 11
Transfer or Assignment Rights.......................... 11
Termination of a Plan by the Sponsor or Custodian...... 11
Substitution of Shares................................. 12
Plan Completion........................................ 12
Service Charges and Other Fees.............................. 13
Custodian Fees and Sponsor Charges..................... 13
Incidental Service Fees................................ 13
Dividends, Capital Gains and Taxes.......................... 13
Additional Information...................................... 14
The Custodian.......................................... 14
The Sponsor............................................ 15
General................................................ 16
Illustration of a Hypothetical $50 Monthly Investment AIM
Summit Investors Plans I.................................. 17
Financial Statements........................................ 18
AIM Summit Fund, Inc. Class I Shares Prospectus............. A-1
</TABLE>
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NO SALESMAN, DEALER OR OTHER PERSON IS AUTHORIZED BY AIM DISTRIBUTORS, INC.
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 THE
CLASS I SHARES OF AIM SUMMIT FUND, INC. OR IN ANY OTHER PRINTED OR WRITTEN
MATERIAL AUTHORIZED BY AIM DISTRIBUTORS, INC. OR AIM SUMMIT FUND, INC., AND
NO PERSON SHOULD RELY UPON ANY INFORMATION NOT CONTAINED IN THESE MATERIALS.
I
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INTRODUCTION
PURPOSE AND BENEFITS OF THE PLANS
AIM Summit Investors Plans I (Plans) are designed to provide you an
effective and convenient method to create an investment fund for your future
capital or income needs by systematically investing a modest sum each month in
shares of a mutual fund. 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.
Payments under a Plan are applied, after authorized deductions, to the
purchase of Class I Shares of AIM Summit Fund, Inc. (Class I Shares) at net
asset value. Ownership of Class I Shares through a Plan provides you with
several advantages:
(1) Diversification -- By pooling the money invested by many
investors, AIM Summit Fund, Inc. (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 -- Investors may benefit from the
full-time skill and attention of professional managers.
DESCRIPTION OF PLANS
Plans for the accumulation of Class I Shares of the Fund are 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). You have the option to make additional monthly
investments for up to a total of 25 years (300 investments).
Class I Shares should be considered a long-term investment and are not
suitable if you are seeking quick profits or you might not be able to complete a
Plan. The Plans contain a front-end sales load (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, you must pay
custodian fees and incidental service fees to State Street Bank and Trust
Company (Custodian) and service charges to the Sponsor. See "Service Charges and
Other Fees."
Investments made through a Plan will not result in direct ownership of
Class I Shares. Your Plan represents an interest in a trust which has direct
ownership of the Class I Shares. You 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 TERMS
DESCRIBED IN THIS PROSPECTUS AS AMENDED FROM TIME TO TIME. All Plans established
before March 1, 1995 are governed by the terms described in the applicable Plan
Certificate.
INVESTMENT OBJECTIVE OF THE FUND
The Fund's investment objective is growth of capital.
PRINCIPAL RISKS OF INVESTING IN THE PLANS
The value of the Class I Shares will change when the values of the
securities in the Fund's portfolio change. A Plan calls for monthly investments
at regular intervals regardless of the value of the Class I Shares. You should
therefore consider your 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 Class I 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. Because of the
Creation and Sales Charge, you will probably lose money if you withdraw an
investment or terminate your Plan during the early years of your Plan.
CANCELLATION AND REFUND RIGHTS
You have the right to a 45 day and an 18 month refund as described in more
detail under "Rights and Policies."
1
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TERMINATION OF THE PLANS
Plans established after May 1, 1993 may be terminated by the Custodian or
Sponsor if you fail to make investments under your Plan for a period of 6
months. Plans established before May 1, 1993 may be terminated by the Custodian
or Sponsor if you fail to make investments under your Plan for a period of 12
months. All Plans may be terminated if Class I Shares are not available and a
substitution is not made. See "Termination of a Plan by the Sponsor or
Custodian."
FEE TABLE
These are the estimated fees and expenses, based on plan Creation and Sales
Charges, you may pay if you invest in a Plan.
<TABLE>
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PLAN OWNER FEES PAID DIRECTLY FROM YOUR PLAN PAYMENT
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Creation and Sales Charges when you buy shares as a
percentage of net amount invested 50.00%(1)
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Custodian fee 3.00%(2)
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ANNUAL FUND OPERATING EXPENSES PAID FROM THE ASSETS OF THE
FUND
as a percentage of average daily net assets
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Management Fee 0.63%
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Other Expenses 0.04%
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Total Annual Fund Operating Expenses 0.67%
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</TABLE>
1 A Creation and Sales Charge of up to 50% will be deducted from your first 12
investments. If you complete scheduled payments over a 15-year plan, you will
pay Creation and Sales Charges of up to 8.50%.
2 Assumes a $50 monthly investment Plan. A custodian fee of $1.50 will be
deducted from each of your investments, up to a maximum of $5.00 at any one
time.
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A TYPICAL $50 MONTHLY INVESTMENT PLAN
This table shows you the investments and deductions under a Plan for a
typical $50 monthly investment Plan. The 15-year schedule assumes that all
investments were made in accordance with the terms of the Plan. The 25-year
schedule reflects the changes applicable to a 15-year Plan that is continued
under the Extended Investment Option. The table does not reflect Fund
performance, Fund expenses or the payment of any dividends or distributions by
the Fund.
<TABLE>
<CAPTION>
AT THE END OF AT THE END OF
6 MONTHS 1 YEAR
(6 INVESTMENTS) (12 INVESTMENTS)
---------------------------- ----------------------------
% OF TOTAL % OF TOTAL % OF TOTAL
AMOUNT INVESTMENTS AMOUNT INVESTMENTS AMOUNT INVESTMENTS
<S> <C> <C> <C> <C> <C> <C>
15 YEARS (180 INVESTMENTS)
--------------------------
Total Investments................. $ 9,000.00 100.00% $ 300.00 100.00% $ 600.00 100.00%
Deduct:
Creation and Sales Charge..... 765.36 8.50 150.00 50.00 300.00 50.00
Custodian fee................. 270.00 3.00 9.00 3.00 18.00 3.00
Total Deductions(A)........... 1,035.36 11.50 159.00 53.00 318.00 53.00
Net Amount Invested Under Plan.... 7,964.64 88.50 141.00 47.00 282.00 47.00
25 YEARS (300 INVESTMENTS)
Total Investments................. $15,000.00 100.00% $ 300.00 100.00% $ 600.00 100.00%
Deduct:
Creation and Sales Charges.... 1,097.76 7.32 150.00 50.00 300.00 50.00
Custodian Fee................. 450.00 3.00 9.00 3.00 18.00 3.00
Total Deductions(A)........... 1,547.76 10.32 159.00 53.00 318.00 53.00
Net Amount Invested Under Plan.... 13,452.24 89.68 141.00 47.00 282.00 47.00
<CAPTION>
AT THE END OF
2 YEARS
(24 INVESTMENTS)
------------------------
% OF TOTAL
AMOUNT INVESTMENTS
<S> <C> <C>
15 YEARS (180 INVESTMENTS)
--------------------------
Total Investments................. $1,200.00 100.00%
Deduct:
Creation and Sales Charge..... 333.24 27.77
Custodian fee................. 36.00 3.00
Total Deductions(A)........... 369.24 30.77
Net Amount Invested Under Plan.... 830.76 69.23
25 YEARS (300 INVESTMENTS)
Total Investments................. $1,200.00 100.00%
Deduct:
Creation and Sales Charges.... 333.24 27.77
Custodian Fee................. 36.00 3.00
Total Deductions(A)........... 369.24 30.77
Net Amount Invested Under Plan.... 830.76 69.23
</TABLE>
NOTE:
(A) Excludes 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.
After the first twelve payments, the Creation and Sales Charge deducted
from any investment will not exceed 5.86% of the net investment in Class I
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.
3
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CHOOSING YOUR INVESTMENT AMOUNT
Use the following tables to select among the range of available monthly
Plan investment options. Each table shows the face amount of the Plan, the
Creation and Sales Charges and Custodian Fee that will be charged and the total
charges as a percentage of the total amount invested under a Plan and as a
percentage of the net amount invested. This information is based solely on
investments made under a Plan and does not reflect any investment performance,
dividend or income from the Fund over the period of a Plan or expenses of the
Fund or any other charges.
ALLOCATION OF INVESTMENTS AND DEDUCTIONS
15 YEAR PLANS
<TABLE>
<CAPTION>
CREATION AND SALES CHARGES
--------------------------------------------------- CUSTODIAN FEE
MONTHLY PER PER --------------------
INVESTMENT TOTAL INVESTMENT INVESTMENT % OF TOTAL PER TOTAL
UNIT INVESTMENTS 1 THRU 12 13 THRU 180 TOTAL INVESTMENTS INVESTMENT TOTAL DEDUCTIONS
- ---------- ------------- ---------- ----------- ---------- ----------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 50.00 $ 9,000.00 $ 25.00 $ 2.77 $ 765.36 8.50% $1.50 $270.00 $ 1,035.36
75.00 13,500.00 37.50 4.15 1,147.20 8.50 1.50 270.00 1,417.20
100.00 18,000.00 50.00 5.00 1,440.00 8.00 1.50 270.00 1,710.00
125.00 22,500.00 62.50 6.25 1,800.00 8.00 1.50 270.00 2,070.00
150.00 27,000.00 75.00 5.89 1,889.52 7.00 1.50 270.00 2,159.52
166.66 29,998.80 83.33 6.54 2,098.68 7.00 1.50 270.00 2,368.68
200.00 36,000.00 100.00 7.86 2,520.48 7.00 1.50 270.00 2,790.48
250.00 45,000.00 125.00 9.82 3,149.76 7.00 1.50 270.00 3,419.76
300.00 54,000.00 150.00 5.36 2,700.48 5.00 1.50 270.00 2,970.48
350.00 63,000.00 175.00 5.31 2,992.08 4.75 1.50 270.00 3,262.08
400.00 72,000.00 200.00 5.00 3,240.00 4.50 1.50 270.00 3,510.00
500.00 90,000.00 225.00 5.36 3,600.48 4.00 1.50 270.00 3,870.48
600.00 108,000.00 260.00 6.62 4,232.16 3.92 1.50 270.00 4,502.16
750.00 135,000.00 300.00 8.70 5,061.60 3.75 1.50 270.00 5,331.60
1,000.00 180,000.00 350.00 12.50 6,300.00 3.50 1.50 270.00 6,570.00
1,500.00 270,000.00 375.00 13.39 6,749.52 2.50 1.50 270.00 7,019.52
3,000.00 540,000.00 450.00 16.07 8,099.76 1.50 1.50 270.00 8,369.76
6,000.00 1,080,000.00 600.00 21.43 10,800.24 1.00 1.50 270.00 11,070.24
<CAPTION>
% OF TOTAL DEDUCTIONS
------------------------
NET TO NET
MONTHLY INVESTMENT INVESTMENT
INVESTMENT IN FUND TO TOTAL IN FUND
UNIT SHARES INVESTMENTS SHARES
- ---------- ------------- ----------- ----------
<S> <C> <C> <C>
$ 50.00 $ 7,964.64 11.50% 13.00%
75.00 12,082.80 10.50 11.73
100.00 16,290.00 9.50 10.50
125.00 20,430.00 9.20 10.13
150.00 24,840.48 8.00 8.70
166.66 27,630.12 7.90 8.57
200.00 33,209.52 7.75 8.40
250.00 41,580.24 7.60 8.22
300.00 51,029.52 5.50 5.82
350.00 59,737.92 5.18 5.46
400.00 68,490.00 4.88 5.12
500.00 86,129.52 4.30 4.49
600.00 103,497.84 4.17 4.35
750.00 129,668.40 3.95 4.11
1,000.00 173,430.00 3.65 3.79
1,500.00 262,980.48 2.60 2.67
3,000.00 531,630.24 1.55 1.57
6,000.00 1,068,927.76 1.03 1.04
</TABLE>
4
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TOTAL 25 YEAR ALLOCATIONS OF INVESTMENTS AND DEDUCTIONS WHEN EXTENDED INVESTMENT
OPTION IS USED
<TABLE>
<CAPTION>
CREATION % OF TOTAL DEDUCTIONS
AND SALES NET ---------------------------
MONTHLY CREATION CHARGES AS INVESTMENT TO TO NET
INVESTMENT TOTAL AND SALES % OF TOTAL CUSTODIAN TOTAL IN FUND TOTAL INVESTMENT IN
UNIT INVESTMENTS CHARGES INVESTMENTS FEE DEDUCTIONS SHARES 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>
5
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INVESTMENTS
MAKING YOUR PLAN INVESTMENTS
To start a Plan, you must complete an application indicating your monthly
Plan investment amount. You may make Plan investments by check or automatically.
Plan investments after deduction of applicable Creation and Sales Charges will
be invested in Class I Shares at net asset value.
BY CHECK
Your check should be in the amount of your initial monthly investment
unit and made payable to State Street Bank and Trust Company, Custodian,
and mailed to, Boston Financial Data Services, Inc. (BFDS), P.O. Box
8300, Boston, Massachusetts 02266-8300.
AUTOMATIC INVESTMENT PROGRAM
If you wish to have investments in your Plan made automatically without
having to write a check each month, you may request that investments be
made by means of pre-authorized checks. Under this program, each month
BFDS will draft your bank account in the amount of the monthly
investment. You may also choose to have investments in your Plan made
automatically through a military or government allotment.
To initiate a Pre-Authorized Check Investment Program, you should
complete the appropriate forms and forward them to BFDS. You 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.
After your Plan application has been accepted and initial investment has
been received, you will receive a statement showing the number of Class I Shares
purchased for your account.
EXTENDED INVESTMENT OPTION
You may continue making monthly investments through an Extended Investment
Option after completing all scheduled investments under your Plan. These
additional investments are subject to the same deductions as applied to your
last scheduled investment. The Custodian, however, may increase the Custodian
fee applicable during this period to the rate then being charged for new Plans
of the same denomination, but not greater than 75% higher than the Custodian
fees detailed in this Prospectus. You may stop all future additional investments
under this option by notifying BFDS in writing.
When the Extended Investment Option is terminated for any reason, the
Custodian may increase its fee to the rate then 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.
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 Class I Shares available to you at their net asset value and for
all selling expenses and commissions with respect to the Plans. These charges
are deducted from each investment you make 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 you make during
the first year. After the first year, the charge drops to $2.77 per investment.
During the fiscal years ended October 31, 1999, 1998 and 1997, total
investments made by all planholders amounted to $245,083,897, $216,452,620 and
$123,758,764, respectively. The amount of Creation and Sales Charges deducted
from these investments was $8,429,296, $8,074,777 and $7,565,209, respectively,
of which amount $649,309, $597,753 and $572,877, respectively, was retained by
the Sponsor and $7,779,987, $7,477,024 and $6,992,332, respectively, was paid to
investment dealers who participated in the sale of Plans.
Directors, officers and full-time employees of the Fund and the Sponsor and
its affiliates may purchase and make investments in Plans directly through the
Sponsor without deduction of Creation and Sales Charges. Any expense incurred by
the Sponsor during such sales are expected to be minimal.
RIGHTS OF ACCUMULATION
You, your spouse, your children under the age of 21 and a trustee may
combine the face amounts of two or more Plans purchased at any time and the
value of any other Plans then owned to take advantage of the lower Creation and
Sales Charges available on larger sized investments.
You and the other persons listed in the preceding paragraph may also
qualify for a reduced Creation and Sales Charge on a new Plan purchase by
combining the face amount of any existing Plan(s) on which investments are
current with the face amount of the new purchase or when increasing the face
amount of any existing Plan(s) on which investments are current.
6
<PAGE> 9
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.
Reduced Creation and Sales Charges apply to investments 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,
reduced Creation and Sales Charges will apply to investments made on both the
existing Plan and the new Plan.
To qualify for reduced Creation and Sales Charges, you must submit all of
the applications for the Plans involved at the same time and include a letter
from you (or your dealer) requesting that the face amounts of your Plans be
aggregated for the purpose of determining applicable Creation and Sales Charges.
If you discontinue investments under one or more of your Plans, you will be
responsible for paying the Creation and Sales Charges previously avoided.
MAKING PREINVESTMENTS TO COMPLETE THE PLAN AHEAD OF SCHEDULE
You may complete a Plan ahead of schedule by making investments in advance
of their due dates, but you may make no more than 24 investments in one calendar
year, including any monthly investments. In addition to these advance
investments, you may make an additional 24 investments which may be made
initially or at any time during the life of the Plan. You may accumulate and pay
investments in a lump sum. These preinvestments provisions may be waived only
(a) to make a Plan that is in arrears current,
(b) for a transfer of assets from a tax-sheltered retirement plan to a
Fund tax-sheltered retirement plan, or
(c) in the event of your death, to allow the Plan to be completed at
one time by the estate or beneficiary.
You will not avoid Creation and Sales Charges by making investments ahead
of schedule. However, on multiple investments, the Custodian fee cannot exceed
$5.00. See "Custodian Fees and Service Charges."
CHANGING THE FACE AMOUNT OF A PLAN
You may increase the amount of your Plan at any time. In addition, prior to
making the sixth investment under a Plan, you may decrease the amount of your
Plan by as much as 50% of the face amount. You should send requests for changes
in the face amount of your Plan and a completed Plan application for the new
face amount to AIM Distributors or BFDS. The revised Plan must be in one of the
denominations listed on page 5. 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 revised Plan at the time that it is established. Any
additional Creation and Sales Charges due on the revised Plan will be obtained
from a liquidation of Class I Shares. The Custodian will charge $2.50 for any
change in a Plan denomination and for any applicable transfer taxes. For a
period of 12 months following an increase in the face value of a Plan, you may
reduce the face value of the Plan to an amount not less than the original face
value. Investments already made will be credited to the revised Plan.
WITHDRAWALS AND TERMINATION
TIMING OF RECEIPT OF PROCEEDS ON REDEMPTIONS OF CLASS I SHARES
You will be sent the proceeds of a partial or complete redemption of Class
I Shares within seven days after BFDS receives all necessary documents in proper
order. However, if you redeem shares recently purchased by check, you may be
required to wait up to ten business days before BFDS will send your redemption
proceeds. This delay is necessary to ensure that the purchase check has 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 New York
Stock Exchange (NYSE) is restricted, as determined by the applicable rules and
regulations of the Securities and Exchange Commission (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.
7
<PAGE> 10
PARTIAL WITHDRAWALS WITHOUT TERMINATING A PLAN
If you withdraw or sell all of the Class I Shares in your Plan, your Plan
will normally be terminated. However, if you have owned your Plan for at least
45 days, you may request a partial withdrawal or sale of up to 90% of your Class
I Shares without terminating your Plan and keep your Plan in effect. A charge of
$2.50 will be made by the Custodian for each partial withdrawal, liquidation or
restoration and you will be liable for any transfer taxes that may be required.
If you withdraw your Class I Shares from your Plan, you will own those shares
directly. If you elect to sell your shares, BFDS, acting as your agent, will
withdraw and sell the shares and pay the proceeds to you. There may be federal
income tax consequences to you from engaging in a partial withdrawal or sale of
your shares.
You may request a partial withdrawal or sale by writing BFDS at the address
listed in this prospectus or by calling BFDS at (617) 483-5000. You may withdraw
or sell your Class I Shares by telephone only if:
(a) the proceeds are made payable to you and mailed to your address of
record with us;
(b) there has been no change of address of record with us within the
proceeding 30 days;
(c) you can provide proper identification information;
(d) the proceeds of the withdrawal do not exceed $50,000; and
(e) your Class I Shares are not held in an IRA or other retirement
plan.
Class I Shares you elect to withdraw are redeemed at their net asset value
next determined after BFDS receives a request in proper form. You may withdraw
or sell Class I Shares during the hours the NYSE is open for business. A dealer
who fails to submit a request for withdrawal within the prescribed time frame
will be responsible for any losses.
AIM Distributors has made arrangements with certain dealers to accept
telephone instructions for the withdrawal of Class I Shares. AIM Distributors
may impose conditions on these dealers, including the condition that they enter
into agreements (which contain additional conditions with respect to the
withdrawal of shares) with AIM Distributors. The Fund, AIM Distributors, the
Custodian, and BFDS will not be liable for any loss, expense or cost arising out
of any telephone withdrawal request effected in accordance with the
authorization set forth in your account application if they reasonably believe
such request to be genuine.
While there is currently no limit to the number of partial withdrawals or
sales that you can make, the Sponsor could limit you to exercising the partial
withdrawal privilege once during each calendar year. Each partial withdrawal or
sale must be at least $100. No partial withdrawal will 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 your Plan.
After a partial withdrawal and sale of Class I shares, you may, but are not
required to, restore the value of your Plan by remitting to BFDS an amount equal
to the cash withdrawal. This amount will be used to purchase Class I Shares for
your account at their next determined net asset value. You may make a repayment
of a partial cash withdrawal after a period of 90 days from the date of
redemption, except in the case of plan accounts that are IRAs, for which a
reinvestment may be made after a period of 45 days. All reinvestments must be at
least 25% of the amount withdrawn or $2,000, whichever is less. Restoration of a
partial liquidation of Class I Shares held in an IRA account must be made within
60 days in order to avoid tax consequences, including early withdrawal
penalties. You must clearly identify replacements of partial cash withdrawals to
distinguish them from regular monthly plan investments.
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.
COMPLETE WITHDRAWAL OR TERMINATION
You may terminate your Plan at any time by writing to BFDS. When you
terminate your Plan you may request that the Custodian deliver the Class I
Shares you have accumulated (properly registered in your name) in book entry
form or in certificate form. You may instead direct the Custodian, as your
agent, to withdraw your shares, redeem them and send you the proceeds. A charge
of $2.50 will be made by the Custodian for a complete withdrawal, and you will
be liable for any transfer taxes that may be required. If you direct the
delivery of your Class I Shares, sufficient shares will be redeemed to pay
authorized deductions and any applicable transfer taxes, with any net balance to
be paid in cash. The redemption of Class I Shares is a taxable event. See
"DIVIDENDS, CAPITAL GAINS AND TAXES."
The Custodian requires that instructions in writing for both partial or
full redemption of Class I Shares held in a Plan be in the form of a signed
letter with your signature guaranteed. A signature guarantee is designed to
protect you, the Plan, the Sponsor and
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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 SEC. A
notary public is not an acceptable guarantor. The Sponsor currently does not
require signature guarantees for redemption 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. You will be given notice if
this policy is changed. Currently, in addition to these requirements, if you
have invested in the Plan to establish an IRA, you should include the following
information along with your written request for either partial or full
redemption of Class I Shares: (a) a statement as to whether or not you have
attained age 59 1/2; (b) a statement as to whether or not you are legally
disabled; (c) a statement as to whether or not you elect to have federal income
tax withheld from the proceeds of the redemption; and (d) your 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 you have been notified by the Internal
Revenue Service that you are currently subject to backup withholding, then you
should modify the preceding statement accordingly. Even if you elect not to have
federal income tax withheld, you are liable for federal income tax on the
taxable portion of the redemption. You may also be subject to tax penalties
under the estimated tax payment rules if your payments of estimated tax and
withholding, if any, are not adequate. All documents must be in proper order
before any redemption can be executed. You should send redemption requests to
BFDS. The redemption price will be the net asset value of Class I Shares next
determined after BFDS receives such documents in proper order.
PLAN REINSTATEMENT PRIVILEGE
You may, within 90 days after you have completely terminated your Plan, by
written request to BFDS, reinstate your Plan without any additional sales
charge, subject to certain restrictions:
(a) By including with the request an amount which is 10% or more 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 10% or more of the shares redeemed,
if the termination was done under the privileges described under
"Cancellation and Refund Rights."
You may not reinstate a terminated plan if you have ever exercised the
privilege previously. If you exercise the Plan Reinstatement Privilege, neither
the total number of monthly investments to be made nor the unpaid balance of
monthly Plan investments under the Plan will be changed.
The complete termination of your Plan will normally result in the
realization of gain or loss for federal income tax purposes. Any gain will be
recognized and subject to the applicable capital gains tax. If a loss is
realized, reinstatement of your Plan could effect a "wash sale," meaning that
the loss will not be recognized for tax purposes. The amount of the
non-recognized loss will however, be added to the cost of the reinstated Plan to
determine your 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:
(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 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.
PLANHOLDER OPTIONS AND SERVICES
RETIREMENT PLANS
You may use a Plan to establish tax-deferred qualified retirement plans
such as IRAs, IRA-SEPs, Profit Sharing Plans and Money Purchase Plans. The
Sponsor has detailed information about such Plans, including service fees
charged. If you establish your Plan as
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<PAGE> 12
an IRA, the Custodian will deduct an annual IRA custodial fee of $10 from your
account. You may pay this annual fee in advance by sending a separate check
clearly identified as an IRA custodial fee payment to the Custodian. In
addition, IRA rollover or transfer contributions can be accepted into a Plan for
qualified individuals. However, a tax-deferred qualified retirement plan may not
be established by changing the registration of an existing plan.
SYSTEMATIC WITHDRAWAL PROGRAM
When you complete all regularly scheduled investments, you may choose to
establish a Systematic Withdrawal Program. If you are holding Plans in IRAs,
Keogh plans, or other retirement plans you may choose to establish a Systematic
Withdrawal Program prior to Plan completion by notifying the Sponsor that you do
not intend to make any further Plan investments. Under this program, you may
choose to receive monthly or quarterly checks in any amount of $50 or more. To
provide funds for these payments, the Custodian, as your agent, will redeem
shares held in your account on the first business day of each month or quarter
at the Fund's current net asset value. You may cancel or change the amount of
payments made to you under a Systematic Withdrawal Program at any time.
While a Systematic Withdrawal Program is in effect, you may not elect to
receive dividends and distributions in cash on Class I Shares held in your
account. If you have not completed a Plan, except if you are holding Plans in
IRAs, Keogh plans or other retirement plans, you may not establish a Systematic
Withdrawal Program.
The IRS considers payments you receive under a Systematic Withdrawal
Program as 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. The payments will result in the recognition
of a capital gain or loss, rather than ordinary income.
A charge of $1.00 per check will be made for each payment under a
Systematic Withdrawal Program. This charge is collected by redeeming the
necessary fractional shares. For any payment made ten years after the issuance
of a Plan, the charge may be increased to the amount specified in the then
current Prospectus. However, this charge may not exceed $1.75. Following 90
days' notice to you, the Sponsor may discontinue offering Systematic Withdrawal
Programs.
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 your tax liability, if any. The amount
withheld may or may not be equal to the additional taxes you may owe due to the
dividend or distribution. The withholding service, however, is only available to
you if you reinvest your distributions in full. If you elect to authorize this
withholding, the number of Class I 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. You may initiate this option upon written
request to BFDS. Once initiated, the withholding remains in effect until you
notify BFDS in writing to terminate the withholding.
STATEMENTS, REPORTS AND NOTICES
BFDS will mail to you a statement for each investment stating the price per
Class I Share purchased, the number of shares purchased after applicable
deductions and the total number of Class I Shares held for your account. A
notice of the next investment due is also included. You 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. You will
also be sent notices of all income dividends and capital gains distributions
made with respect to Class I Shares, together with tax reporting information
relating to such dividends and distributions. Any notices, reports or documents
required to be given to you under this Prospectus will be conclusively deemed to
have been given upon mailing to your address of record, and the date of such
mailing will be deemed the date such notice was given.
RIGHTS AND POLICIES
CANCELLATION AND REFUND RIGHTS
You have certain rights of cancellation as follows:
(a) You have the right to cancel your Plan within 45 days after you
have received notice of your cancellation rights. You will receive notice
regarding your cancellation rights within 60 days after issuance of the
Plan. If you elect to cancel your Plan, you must submit a written request
to Boston Financial Data Services, Inc., P.O. Box 8300, Boston,
Massachusetts 02266-8300. You will receive a cash refund equal to the
current net asset value of the Class I Shares credited to your Plan account
on the date that the cancellation request is received by BFDS plus an
amount equal to the difference between the total investments
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<PAGE> 13
made under the Plan and the net amount invested in Class I Shares. BFDS
must receive your written request on or before the 45th day.
(b) You have the right to cancel your Plan within 18 months beginning
on the date of the issuance of the Plan. You will receive from the Sponsor
a cash payment equal to the sum of (1) the current net asset value of the
Class I Shares credited to the account on the date of redemption and (2)
the amount by which the Creation and Sales Charges deducted from your
investments exceed 15% of the investments made up to the date of
redemption. Service charges and other fees are not refundable.
You will be sent a written notice of the 18-month right of cancellation:
(a) if during the first 15 months after the date of issuance of the Plan, you
have 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),
you have missed one investment or more. If 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 you of your rights, and will also include the
value of the account and the amount you would be entitled to receive upon
cancellation, as of the date of the notice. For a cancellation request above
$50,000 your signature must be guaranteed.
VOTING RIGHTS
You will receive a notice and proxy statement for each meeting of the Fund.
The Custodian will vote the shares held in your account as you instruct 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. You may attend any such meetings, and if you
desire to vote in person the shares held in your account, you may make a written
request to the Custodian for a proxy prior to the meeting which will permit the
shares to be voted in person.
TRANSFER OR ASSIGNMENT RIGHTS
To secure a loan, you may assign your 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,
you will be entitled to all dividends and distributions on Class I Shares. In
addition, you may:
(a) transfer your right, title and interest to another person whose
only right shall be the privilege of complete withdrawal from the Plan; or
(b) transfer your 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 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 you as the sole and absolute owner of the Plan and
the related Class I Shares.
TERMINATION OF A PLAN BY THE SPONSOR OR CUSTODIAN
A Plan will normally remain in existence until you have made 300 investment
units into your Plan. Neither the Sponsor nor the Custodian can terminate a Plan
established after May 1, 1993 sooner unless you have failed to make investments
under your 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, if your Plan was established after May 1, 1993 and you
have made all investments due under your Plan through June 30th of a given year
(regardless of when such investments were made) and you make no further
investments, your Plan may not be terminated before December 31st of that same
year. Any scheduled investment you make prior to the termination of your Plan
extends the due dates of all future investments for a period equal to the period
during which no investments were made. Accordingly, you need only make one
investment during each 6-month period (or 12-month period for Plans established
prior to May 1, 1993) to prevent your Plan from being terminated.
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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 may terminate
a Plan 60 days after mailing to you a written notice of the termination.
On termination, the Custodian, acting as your agent, must withdraw the
shares from the Custodianship and, as your agent, may surrender for sale all of
your Class I Shares, or sufficient Class I Shares to pay all authorized
deductions. Any adjustment in Creation and Sales Charges or other charges
occasioned by virtue of your termination 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 your
agent for delivery to you upon your instruction. No interest will be paid on any
cash balances held. If the Custodian does not receive a response within 60 days
after mailing the notice of termination to you, the Custodian, in its
discretion, may mail the shares, and its check payable to you, to your last
known address of record, and you will be deemed to have no further rights under
your Plan. In all events, terminated Plans will not be resold. Undeliverable
shares and funds will be held by the Custodian in trust for your account,
subject to abandoned property laws.
SUBSTITUTION OF SHARES
The Sponsor may substitute shares of another investment as the underlying
investment if it deems such action to be in the best interests of the
Planholders. Substituted shares generally will be comparable in character and
quality to the Class I Shares, and will be registered with the SEC under the
Securities Act of 1933, as amended. Before any substitution can be made, 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 you, giving a
reasonable description of the substituted fund shares, disclosing that,
unless you respond within 30 days of the date of mailing of such notice,
you will be considered to have agreed to bear your 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 Class I Shares held for your
account; and
(d) Provide the Custodian with a signed certificate stating that such
notice has been given to you.
If you do not respond within the 30-day notice period, the Custodian will
purchase shares of the substituted fund with your subsequent investments and any
dividends and distributions which may be reinvested for your 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 substituted.
If Class I 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 you, and
if, within 30 days after mailing such notice, you give your written approval of
the substitution and agree to bear your pro rata share of actual expenses,
including any tax liability sustained by the Custodian, the Custodian may
thereafter purchase such substituted shares. Your failure to give such written
approval within the 30-day period shall give the Custodian authority to
terminate your Plan.
If Class I 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 has the authority, without further action on its part, to terminate
the Plans.
PLAN COMPLETION
After you have completed your Plan investments, you have the following
options:
(a) Have the Custodian hold your Class I Shares until after the 300th
investment has been made;
(b) Register your Class I Shares in your name;
(c) Sell your Class I Shares and receive the cash proceeds; or
(d) Establish a Systematic Withdrawal Program.
You may also continue the Custodianship after the 300th investment under
the Plan, subject to the right of the Sponsor or Custodian to terminate the
Plan.
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SERVICE CHARGES AND OTHER FEES
CUSTODIAN FEES AND SPONSOR CHARGES
The Custodian deducts $1.50 per investment you make as a service fee. This
fee is deducted from Plan investments prior to the purchase of Class I Shares.
The maximum Custodian fee charged at any one time is $5.00. Therefore, if you
make four or more investments at one time, the aggregate Custodian fee deducted
from all such investments will be $5.00.
After you complete all Plan investments, or, if you made investments in
advance, after the expiration of 15 years from the date of the Plan (provided
you have 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, if necessary, the Custodian may collect these
fees from the proceeds of the sale of Class I Shares held for your account.
The aggregate amount of Custodian fees deducted by the Custodian with
respect to the Plan during the fiscal year ended October 31, 1999 was
$2,016,942.
Each year the Custodian will deduct from your account an amount necessary
to reimburse actual expenses (such as postage, forms and envelopes) incurred by
the Sponsor during the previous year in performing its administrative duties, up
to a maximum of $10.00 per year. These duties include mailing to you required
periodic reports, dividend statements and tax notices; arranging for periodic
audits of the Custodian's records by independent certified public accountants;
and preparing 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 Class I Shares held for your 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 will be as specified in your Plan Certificate.
The aggregate annual charges and deductions for maintenance and other
expenses assessed to planholders by the Sponsor for the fiscal year ended
October 31, 1999 was $551,543.
The aggregate annual charges and deductions for maintenance and other
expenses assessed to planholders for the fiscal years ended October 31, 1999,
1998 and 1997, stated as a percentage of total distributions (includes dividends
and capital gains) from Class I Shares for such period or years were 0.75%,
0.50% and 0.60%, respectively. Distributions, if any, are normally declared in
December of each year.
INCIDENTAL SERVICE FEES
In addition to the amount of any applicable transfer taxes, a custodian
charge of $2.50 is made for each transfer of title, each change in your Plan's
denomination, each partial or complete liquidation, each restoration, each
declaration of trust (other than one filed concurrently with the application for
your Plan), each recording of an assignment, each reissuance of your Plan, and
each termination of your 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 your
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 may 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, Class I Shares held
for your account, or dividends or distributions paid by the Fund.
DIVIDENDS, CAPITAL GAINS AND TAXES
Unless otherwise directed by you, the net amount of all income dividends
and capital gains distributions is automatically used to purchase additional
Class I Shares at net asset value. No Creation and Sales Charge will be deducted
from any such reinvestment. You 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 you.
You may change these directions at any time.
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You are deemed for federal income tax purposes to be the owner of the
underlying Class I Shares accumulated in your account. Dividends and
distributions on such shares paid to you are used to pay the Custodian fee or
service charge or reinvested in additional Class I Shares are taxable to you.
See "Taxes" 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, you will be advised of the amount and nature of the
ordinary income dividends and capital gains distributions received on your
behalf during such year. Qualified retirement plans, including IRAs, may be
entitled to defer taxes until some later date. Participants should consult their
tax advisors.
The Creation and Sales Charges deducted from your investments in your Plan
are not deductible for tax purposes by you, but are included in your tax basis
for the Class I Shares in your account. Any Custodian fee and service charge you
may have paid (whether as a deduction from your investments in your Plan or as a
deduction from the distributions made on the Class I Shares in your account) may
be deductible for tax purposes by you depending on whether you itemize
deductions, the total amount of your miscellaneous itemized deductions and the
level of your adjusted gross income.
Under provisions of the Code, the Custodian may be required to withhold
from dividends and liquidations 31% of all amounts otherwise payable to you if
you have not provided the Custodian with a correct certified tax identification
number or if you have been notified by the Internal Revenue Service that you are
subject to "backup withholding" because of underreporting of reportable
payments. The amounts withheld will be credited against your federal income tax
liability, and, if withholding results in an overpayment of taxes, you may
obtain a refund from the Internal Revenue Service.
Neither the Custodian, BFDS, nor the Sponsor bears any taxes arising from
the custody of the Class I 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 your account on a pro rata basis (determined by reference to the total
number of Class I Shares affected) in order to pay or set up reserves for such
claims and related expenses.
ADDITIONAL INFORMATION
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 June 1, 1983, as amended and restated on May 1, 1996 (the
Custodian Agreement). The Custodian is a corporation organized under the laws of
the Commonwealth of Massachusetts. The Custodian's Internal Revenue Service
Employer Identification Number is 04-1867445.
The duties of the Custodian under the Custodian Agreement include the
receipt of all of your investments and income dividends and capital gain
distributions on Class I Shares, the processing of all authorized deductions
therefrom and the purchase and retention of Class I Shares for your accounts.
The Custodian also effects partial or complete liquidations of Plans in
connection with withdrawals or terminations and the various other functions
discussed above.
The Custodian receives and holds in trust without interest all cash and
Class I Shares held by a Plan until completion and/or termination of the Plan.
BFDS keeps a complete record of your account and mails receipts for each of your
investments showing the number of shares held for your 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 it maintains 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 assumes 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 the Sponsor's compliance
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 Class I 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 discussed above, and
in certain cases to sell Class I Shares, may be considered authorization to the
Custodian to create such liens.
14
<PAGE> 17
The Custodian Agreement cannot be amended in such a manner as to adversely
affect your rights and privileges without your written consent.
An unlimited number of Plans may be issued under the Custodian Agreement.
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 Class I Shares have been liquidated and the
proceeds distributed to you, or unless a successor custodian has been designated
and has accepted the custodianship. Any successor custodian must be a bank or
trust 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 you,
but your consent is not required.
THE SPONSOR
A I M Distributors, Inc., (11 Greenway Plaza, Houston, Texas 77046) is a
Delaware corporation organized 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, is engaged in institutional
investment management and retail mutual fund businesses in the United States,
Europe and the Pacific Region. AIM Distributors is a member of the National
Association of Securities Dealers, Inc. The Sponsor's directors and principal
officers, all of whom have the same business address as the Sponsor, are listed
below. AIM Distributors' Internal Revenue Service Employer Identification Number
is 74-1894784.
Charles T. Bauer is Chairman, 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 Executive 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, and CEO,
Managed Products AMVESCAP PLC.
Gary T. Crum is Director and President, A I M Capital Management, Inc.;
Director and Executive Vice President, A I M Management Group Inc.; Director and
Senior Vice President, 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 Executive 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.
Gene L. Needles 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.; Senior 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.
Dawn Hawley is Chief Financial Officer, Treasurer and Senior Vice President
of A I M Management Group Inc.; Director, Senior Vice President and Treasurer of
A I M Advisors, Inc.; Vice President and Treasurer of 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.
Mary A. Corcoran is Senior Vice President, A I M Fund Services, Inc. and
Vice President of A I M Distributors, Inc.
James R. Anderson is Vice President, A I M Distributors, Inc. and Fund
Management Company.
Mary K. Coleman is Vice President, A I M Distributors, Inc.
15
<PAGE> 18
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.
Glenda A. Dayton 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.
Ofelia M. Mayo is General Counsel, Vice President and Assistant Secretary,
A I M Distributors, Inc.; Assistant General Counsel and Assistant Secretary,
A I M Capital Management, Inc., A I M Fund Services, Inc. and Fund Management
Company and Assistant General Counsel, Assistant Secretary and Vice President,
A I M Advisors, Inc.
Charles H. McLaughlin is Vice President, A I M Distributors, Inc. and AIM
Fund Services, Inc.
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.
Gary K. Wendler is Vice President, A I M Distributors, Inc.
Norman W. Woodson is Vice President, A I M Distributors, Inc.
Mr. Bauer and Mr. Graham are directors of, and Messrs. Bauer, Graham, and
Ms. Relihan are officers of, some or all of the investment companies advised or
managed by AIM. As of February 1, 2000, Mr. Bauer owned of record 0.006% of the
Plans, which represented beneficial ownership of 8,621.994 shares of the Fund
and Mr. Graham owned of record 0.02% of the Plans, which represented beneficial
ownership of 31,263.456 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 $35,000,000. AIM, a wholly owned subsidiary of
AIM Management, acts as investment advisor of the Fund and receives a fee from
the Fund for its services.
The Sponsor is the principal underwriter of the Fund and of the following
other open-end investment companies advised or managed by AIM: AIM Advisor
Funds, Inc., AIM Equity Funds, Inc., AIM Funds Group, AIM Growth Series, AIM
International Funds, Inc., AIM Investment Funds, AIM Investment Securities
Funds, AIM Series Trust, AIM Special Opportunities Funds, AIM Tax-Exempt Funds,
Inc., AIM Variable Insurance Funds, Inc.
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 your substantive legal rights if your Plan was 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.
AIM Summit Investors Plans I are presently offered in all states.
This Prospectus omits some of the information contained in the registration
statement filed with the SEC. You may obtain copies of the registration
statement, including items omitted herein, from the SEC by paying the charges
prescribed under its rules and regulations.
16
<PAGE> 19
ILLUSTRATION OF A HYPOTHETICAL $50 MONTHLY INVESTMENT
AIM SUMMIT INVESTORS PLANS I
FOR INVESTMENT IN CLASS I 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 AIM Summit
Investors Plans I, November 1, 1982, to December 31, 1999. The results assume
the reinvestment of capital gains distributions and income dividends in
additional Class I Shares of AIM Summit Fund, Inc.
You should not consider the results shown in this table 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 TOTAL
12/31 --------------------- INVESTMENT CUMULATIVE SALES CUSTODIAN IN FUND FUND GAINS SHARES
(a) ANNUALLY CUMULATIVE INCOME COST(b) CHARGES FEE(d) SHARES SHARES REINVESTED OWNED(e)
- -------- -------- ---------- ---------- ---------- -------- --------- --------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1982
(2 mos.) $100.00 $ 100.00 $ -- $ 100.00 $ 50.00 $ 3.00 $ 47.00 $ 47.00 $ -- 9.428
1983 600.00 700.00 -- 700.00 255.54 18.00 326.46 373.46 -- 68.444
1984 600.00 1,300.00 1.75 1,301.75 33.24 18.00 550.51 923.97 .62 180.052
1985 600.00 1,900.00 6.91 1,908.66 33.24 18.00 555.67 1,479.64 2.76 277.847
1986 600.00 2,500.00 36.47 2,545.13 33.24 18.00 585.23 2,064.87 200.48 390.732
1987 600.00 3,100.00 53.22 3,198.35 33.24 18.00 601.98 2,666.85 254.88 515.282
1988 600.00 3,700.00 81.11 3,879.46 33.24 18.00 629.87 3,296.72 -- 613.217
1989 600.00 4,300.00 318.37 4,797.83 33.24 18.00 867.13 4,163.85 229.36 755.981
1990 600.00 4,900.00 128.25 5,526.08 33.24 18.00 677.01 4,840.86 119.97 860.497
1991 600.00 5,500.00 339.23 6,465.31 33.24 18.00 887.99 5,728.85 368.73 992.132
1992 600.00 6,100.00 107.51 7,172.82 33.24 18.00 656.27 6,385.12 839.09 1,147.268
1993 600.00 6,700.00 114.24 7,887.06 33.24 18.00 663.00 7,048.12 769.61 1,294.014
1994 600.00 7,300.00 135.18 8,622.24 33.24 18.00 683.94 7,732.06 520.43 1,426.949
1995 600.00 7,900.00 428.92 9,651.16 33.24 18.00 977.68 8,709.74 865.23 1,597.970
1996 600.00 8,500.00 52.57 10,303.73 33.24 18.00 601.33 9,311.07 1,925.38 1,810.440
1997 600.00 9,100.00 564.43 11,468.16 33.24 18.00 1,113.19 10,424.26 2,066.18 2,049.122
1998 600.00 9,700.00 72.06 12,140.22 33.24 18.00 620.82 11,045.08 1,945.95 2,212.145
1999 600.00 10,300.00 1,095.81 13,836.03 33.24 18.00 1,644.57 12,689.65 6,004.52 2,596.995
------- ------- ----------
$837.38 $309.00 $16,113.19
<CAPTION>
YEAR
ENDED VALUE OF
12/31 ACCUMULATED
(a) SHARES(f)
- -------- -----------
<S> <C>
1982
(2 mos.) $ 46.48
1983 370.97
1984 905.68
1985 1,803.23
1986 2,610.09
1987 2,937.11
1988 4,028.84
1989 5,889.09
1990 6,505.36
1991 10,010.61
1992 11,059.66
1993 12,551.94
1994 12,742.66
1995 17,849.33
1996 21,996.85
1997 27,929.53
1998 38,225.87
1999 58,380.45
</TABLE>
NOTES:
(a) The fiscal year end of AIM Summit Investors Plans I 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.
17
<PAGE> 20
INDEPENDENT AUDITORS' REPORT
The Board of Directors of
A I M Distributors, Inc. and Planholders
of AIM Summit Investors Plans I:
We have audited the accompanying statement of assets and liabilities of AIM
Summit Investors Plans I as of October 31, 1999, 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, 1999 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 AIM Summit Investors Plans I
as of October 31, 1999, the results of its operations for the year then ended,
and the changes in its net assets for each of the years in the three-year period
then ended in conformity with generally accepted accounting principles.
KPMG LLP
Houston, Texas
February 11, 2000
18
<PAGE> 21
AIM SUMMIT INVESTORS PLANS I
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
<TABLE>
<S> <C>
ASSETS:
AIM Summit Fund, Inc. shares, at value (Plans' investment
$1,502,642,855)........................................ $2,611,168,727
Cash...................................................... 108,610
--------------
Total assets........................................... 2,611,277,337
--------------
LIABILITIES:
Creation and sales charges payable........................ 68,200
Custodian charges payable................................. 1,598
Due to AIM Summit Fund, Inc. ............................. 38,812
--------------
Total liabilities...................................... 108,610
--------------
NET ASSETS (Equivalent to $20.17 per share based on
129,458,143 shares of capital stock owned on outstanding
plans).................................................... $2,611,168,727
==============
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1999
<TABLE>
<S> <C>
Investment income:
Dividends received on shares of AIM Summit Fund, Inc...... $115,760,912
Expenses.................................................... (863,914)
------------
Net investment income....................................... 114,896,998
------------
Realized gain and unrealized appreciation on investments:
Net realized gain on plan liquidations.................... 83,901,111
Unrealized appreciation of investments.................... 582,613,307
------------
Net increase in net assets resulting from operations........ $781,411,416
============
</TABLE>
See Notes to Financial Statements.
19
<PAGE> 22
AIM SUMMIT INVESTORS PLANS I
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED OCTOBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
---------------------------- ---------------------------- ----------------------------
AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
-------------- ----------- -------------- ----------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of
period............................. $1,821,706,274 121,771,810 $1,642,717,284 108,430,184 $1,256,343,722 96,716,222
Planholders investments:
Additions from Planholder
Payments......................... 245,083,897 216,452,620 123,758,764
Less:
Creation and sales charges....... (8,429,296) (8,074,777) (7,565,209)
Custodian charges................ (1,704,572) (1,579,199) (1,513,872)
-------------- -------------- --------------
Amount invested in AIM Summit Fund,
Inc. shares...................... 234,950,029 13,325,545 206,798,644 13,836,000 114,679,683 8,581,865
Net investment income reinvested:
Net investment income.............. 114,896,998 156,719,051 116,565,800
Less: Amount paid in cash.......... (3,000,094) (2,508,881) (1,200,031)
-------------- -------------- --------------
111,896,904 6,980,814 154,210,170 11,621,870 115,365,769 9,777,010
Net realized gain on plan
liquidations....................... 83,901,111 57,052,843 26,492,781
Unrealized market appreciation
(depreciation) of investments...... 582,613,307 (56,850,023) 219,803,135
Planholder liquidations.............. (223,898,898) (12,620,026) (182,222,644) (12,116,244) (89,967,806) (6,644,913)
-------------- ----------- -------------- ----------- -------------- -----------
Net asset value at end of period..... $2,611,168,727 129,458,143 $1,821,706,274 121,771,810 $1,642,717,284 108,430,184
============== =========== ============== =========== ============== ===========
</TABLE>
See Notes to Financial Statements.
20
<PAGE> 23
AIM SUMMIT INVESTORS PLANS I
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1999
NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES
AIM Summit Investors Plans I 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, 1999.
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, 1999
<TABLE>
<S> <C>
Total payments made by Planholders on Plans outstanding
(net of liquidations)..................................... $ 958,794,321
Net investment income dividends reinvested.................. 686,090,338
--------------
Total............................................. 1,644,884,659
Less:
Creation and Sales Charges................................ (125,367,076)
Custodian charges......................................... (16,874,728)
--------------
Net investment in AIM Summit Fund, Inc. shares (identified
cost)..................................................... 1,502,642,855
Unrealized market appreciation of investments............... 1,108,525,872
--------------
Value of Plans outstanding.................................. $2,611,168,727
==============
</TABLE>
21
<PAGE> 24
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To 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, 1999, 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, 1999, and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Houston, Texas
January 24, 2000
22
<PAGE> 25
A I M DISTRIBUTORS, INC.
STATEMENT OF FINANCIAL CONDITION
AS OF DECEMBER 31, 1999
<TABLE>
<S> <C> <C>
ASSETS
CASH EQUIVALENTS, affiliated registered investment companies............ $ 5,012,253
ACCOUNTS RECEIVABLE:
Due from dealers for sales of capital stock of affiliated
registered investment companies........................ $1,803,252
Due from affiliated registered investment companies....... 3,683,507
Commissions receivable.................................... 1,509,287
Other accounts receivable................................. 2,461 6,998,507
==========
SEGREGATED TRUST........................................................ 1,122,274
OTHER ASSETS............................................................ 32,141
-----------
$13,165,175
===========
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES:
Due to affiliated registered investment companies for sales of capital
stock.............................................................. $ 1,801,834
Due to dealers for redemptions from affiliated registered investment
companies.......................................................... 976,465
Due to affiliated companies........................................... 2,093,208
Deferred tax payable.................................................. 2,375,669
State taxes payable................................................... 19,213
Accounts payable and accrued expenses................................. 169,530
-----------
Total liabilities............................................. 7,435,919
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......................................... 4,350,256
==========
Total stockholder's equity.................................... 5,729,256
-----------
$13,165,175
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
23
<PAGE> 26
A I M DISTRIBUTORS, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C> <C>
INCOME:
Underwriting income, net of dealers' concessions........................ $ 15,776,857
Marketing servicing fees................................................ 134,700,000
Distribution fees....................................................... 27,894,225
Sponsor fees on periodic payment investment plans,
net of commissions paid.............................................. 689,566
Interest income......................................................... 414,224
------------
Total operating income.......................................... 179,474,872
------------
EXPENSES:
Allocations from parent company........................... $105,285,482
Compensation allocation from parent company............... 71,294,554
============
Total operating expenses........................................ 176,580,036
------------
Income before income taxes...................................... 2,894,836
INCOME TAX EXPENSE (BENEFIT):
Current................................................... $ (1,166,934)
Deferred.................................................. 2,456,586 1,289,652
============ ------------
Net income...................................................... $ 1,605,184
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
24
<PAGE> 27
A I M DISTRIBUTORS, INC.
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON PAID-IN RETAINED STOCKHOLDER'S
STOCK CAPITAL EARNINGS EQUITY
------ ---------- ----------- -------------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1998........................... $10 $1,378,990 $ 7,737,072 $ 9,116,072
Net income......................................... -- -- 1,605,184 1,605,184
Dividends paid..................................... -- -- (4,992,000) (4,992,000)
--- ---------- ----------- -----------
BALANCE, December 31, 1999........................... $10 $1,378,990 $ 4,350,256 $ 5,729,256
=== ========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
25
<PAGE> 28
A I M DISTRIBUTORS, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................ $ 1,605,184
Deferred tax provision.................................... 2,456,586
Change in operating assets and liabilities --
Increase in accounts receivable...................... $(1,373,859)
Decrease in other assets............................. 427
Increase in segregated trust account................. (201,729)
Decrease in amounts due to affiliated registered
investment companies for sales of capital stock..... (16,145)
Increase in due to dealers for redemptions from
affiliated registered investment companies.......... 215,376
Decrease in due to affiliated companies.............. (746,118)
Decrease in state taxes payable...................... (185,328)
Decrease in accounts payable and accrued expenses.... (18,757)
===========
Total adjustments............................ 130,453
-----------
Net cash provided by operating activities.... 1,735,637
-----------
CASH FLOWS FROM FINANCING ACTIVITIES -- Dividends paid...... (4,992,000)
-----------
Net cash used in financing activities........ (4,992,000)
-----------
NET DECREASE IN CASH EQUIVALENTS............................ (3,256,363)
CASH EQUIVALENTS, beginning of year......................... 8,268,616
-----------
CASH EQUIVALENTS, end of year............................... $ 5,012,253
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
26
<PAGE> 29
A I M DISTRIBUTORS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
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. (Advisors). Advisors is owned by A I M Management Group
Inc., which in turn is owned by AVZ, Inc. (AVZ), the ultimate U.S. parent of the
Company. AVZ is owned by AMVESCAP PLC, a publicly traded holding company that,
through its subsidiaries, is engaged in institutional investment management and
retail mutual fund businesses in the United States, Europe and the Pacific
Region.
The Company acts as the principal underwriter and distributor for
affiliated registered investment companies.
Cash Equivalents
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.
Concentration of Credit Risk
The Company is engaged in brokerage activities in which counterparties
primarily include broker-dealers. In the event that counterparties do not
fulfill their obligations, the Company may be exposed to risk. The risk of
default depends on the creditworthiness of the counterparty. It is the Company's
policy to review, as necessary, the credit standing of each counterparty.
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. The required 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. This note is recorded at fair market value
at December 31, 1999.
Underwriting Income
Underwriting income represents sales charges on sales of capital stock of
affiliated registered investment companies, net of concessions paid to other
dealers in the amount of $9,841,870.
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 affiliated registered investment companies. The fees are based on a
specified annual percentage of a fund's average daily net assets.
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 managed by those companies.
The Company has entered into an agreement with A I M Management Group Inc.
(Management), whereby Management provides funding to the Company for payment of
Class B and Class C share commissions. Management obtains the rights to certain
future revenues to be generated by the Class B and Class C shares under the
respective fund's 12b-1 plan provisions and contingent
27
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A I M DISTRIBUTORS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
deferred sales charge (CDSC) provisions for a purchase price equal to a
percentage of the price at which each Class B and Class C share 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 and Class C 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 AVZ. 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. The effective
tax rate was 44.6 percent due primarily to the effect of state taxes and other
nondeductible items.
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, as defined, and a ratio of
aggregate indebtedness to net capital that does not exceed 15 to 1, as defined.
At December 31, 1999, the Company had net capital of $1,722,419 which exceeded
required net capital of $235,246 by $1,487,173. The ratio of aggregate
indebtedness to net capital was 2.05 to 1 at December 31, 1999.
3. SUBORDINATED DEBT
The Company had no subordinated debt at December 31, 1999, or at any time
during the year then ended.
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