<PAGE> 1
As filed with the Securities and Exchange Commission on February 27, 1996
1933 Act Registration No. 2-76909
1940 Act Registration No. 811-3443
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ______
Post-Effective Amendment No. 19 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 20 X
(Check appropriate box or boxes)
AIM SUMMIT FUND, INC.
(formerly Summit Investors Fund, Inc.)
(Exact Name of Registrant as Specified in Charter)
11 Greenway Plaza, Suite 1919, Houston, Texas 77046
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code (713) 626-1919
Charles T. Bauer
11 Greenway Plaza, Suite 1919
Houston, Texas 77046
(Name and Address of Agent for Service)
Copy to:
Stephen I. Winer, Esquire Martha J. Hays, Esquire
A I M Advisors, Inc. Ballard Spahr Andrews & Ingersoll
11 Greenway Plaza, Suite 1919 1735 Market Street, 51st Floor
Houston, Texas 77046-1173 Philadelphia, Pennsylvania 19103-7599
Approximate Date of Proposed Public Offering: March 1, 1996
It is proposed that this filing will become effective:
----- immediately upon filing pursuant to paragraph (b)
X on March 1, 1996 pursuant to paragraph (b)
-----
----- 60 days after filing pursuant to paragraph (a)(1)
----- on (date) pursuant to paragraph(a)(1)
----- 75 days after filing pursuant to paragraph (a)(2)
----- on (date) pursuant to paragraph (a)(2) of rule 485.
(Continued on Next Page)
<PAGE> 2
If appropriate, check the following box:
____ this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
Registrant continues its election to register an indefinite number of shares of
Common Stock under Rule 24f-2 under the Investment Company Act of 1940 and
accordingly filed its Rule 24f-2 Notice for the fiscal year ended October 31,
1995 on or about December 22, 1995.
<PAGE> 3
AIM SUMMIT FUND, INC.
FORM N-1A CROSS REFERENCE SHEET
(AS REQUIRED BY RULE 495)
<TABLE>
<CAPTION>
N-1A ITEM NUMBER PROSPECTUS LOCATION
- ---------------- -------------------
<S> <C> <C>
PART A
Item 1. Cover Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover Page
Item 2. Synopsis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summary; Table of Fees and Expenses
Item 3. Condensed Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . Financial Highlights
Item 4. General Description of . . . . . . . . . . . . . . . . . . . . . . . . . Cover Page; Summary; Investment
Registrant Program; Management of the Fund;
General Information
Item 5. Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Management of the Fund
Item 5a. Management's Discussion of Fund Performance. . . . . . . . . . . . . . . . .(included in Annual Report)
Item 6. Capital Stock and Other . . . . . . . . . . . . . . . . . . . . . . . Summary; Dividends, Distributions
Securities and Tax Matters; General Information
Item 7. Purchase of Securities . . . . . . . . . . . . . . . . . . . . . . . . Sales of Shares; Determining Net
Being Offered Asset Value
Item 8. Redemption or Repurchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Redemption of Shares
Item 9. Pending Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
N-1A ITEM NUMBER SAI LOCATION
- ---------------- ------------
PART B
Item 10. Cover Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover Page
Item 11. Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Table of Contents
Item 12. General Information and History . . . . . . . . . . . . . . . . . . . Introduction; General Information
About the Fund
Item 13. Investment Objectives and Policies . . . . . . . . . . . . . . . . . Investment Program and Restrictions
Item 14. Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General Information
About the Fund
Item 15. Control Persons and Principal . . . . . . . . . . . . . . . . . . . . . . . . . . . General Information
Holders of Securities About the Fund
Item 16. Investment Advisory and Other Services . . . . . . . . . . . . . . . . . . . . . Management of the Fund
Item 17. Brokerage Allocation and Other Practices. . . . . . . . . . . . . . . . . . . . Investment Program and
Other Restrictions
Item 18. Capital Stock and Other Securities . . . . . . . . . . . . . . . . . . . . . . . . . General Information
About the Fund
Item 19. Purchase, Redemption and . . . . . . . . . . . . . . . . . . . . . . . . . Share Purchases, Redemptions
Pricing of Securities Being Offered and Repurchases
Item 20. Tax Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax and Dividend Information
Item 21. Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share Purchases, Redemptions
and Repurchases
Item 22. Calculations of Performance Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
Item 23. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial Statements
PART C
Information required to be included in Part C is set forth under the appropriate item, so numbered, in Part C to
this Registration Statement.
</TABLE>
<PAGE> 4
PROSPECTUS
MARCH 1, 1996
AIM SUMMIT FUND, INC.
11 GREENWAY PLAZA
SUITE 1919
HOUSTON, TEXAS 77046-1173
(800) 995-4246
AIM Summit Fund, Inc. (the "Fund") is a diversified, open-end investment
company whose objective is capital growth. Although the Fund may purchase
income-producing securities, income will generally not be a consideration in the
selection of securities for the Fund's portfolio.
Shares of the Fund are offered to and may be purchased by the general
public only through Summit Investors Plans, a unit investment trust. Details of
Summit Investors Plans, including the creation and sales charges and the
custodian charges applicable to Summit Investors Plans, may be found in the
Summit Investors Plans Prospectus which, along with this Prospectus of the Fund,
should be read and retained by the investor for future reference.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
THIS PROSPECTUS SETS FORTH BASIC INFORMATION THAT INVESTORS SHOULD KNOW
ABOUT THE FUND PRIOR TO INVESTING AND SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE. A STATEMENT OF ADDITIONAL INFORMATION DATED MARCH 1, 1996 HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND IS HEREBY INCORPORATED BY
REFERENCE. IT IS AVAILABLE UPON REQUEST AND WITHOUT CHARGE BY WRITING OR CALLING
A I M DISTRIBUTORS, INC. AT (800) 995-4246.
------------------------
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE PAGE
---- ----
<S> <C> <C> <C>
Summary............................... A-2 Determining Net Asset Value........... A-10
Table of Fees and Expenses............ A-3 Sales of Shares....................... A-11
Financial Highlights.................. A-4 Redemption of Shares.................. A-11
Investment Program.................... A-5 Open Account.......................... A-12
Dividends, Distributions and Tax Management of the Fund................ A-13
Matters............................. A-9 General Information................... A-16
</TABLE>
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM
logo), AIM and Design, AIM, AIM LINK and AIM Institutional Funds are registered
service marks of A I M Management Group Inc.
A-1
<PAGE> 5
SUMMARY
INVESTMENT OBJECTIVE
AIM Summit Fund, Inc. (the "Fund") is a diversified, open-end investment
company whose objective is capital growth. Although the Fund may purchase
income-producing securities, income will generally not be a consideration in the
selection of securities for the Fund's portfolio. There can be no assurance that
the Fund will achieve its investment objective. See "Investment Program."
SALES OF SHARES
The principal underwriter of the Fund's shares is A I M Distributors, Inc.
Shares of the Fund's common stock offered by this Prospectus are available to
the general public only by means of an investment in Summit Investors Plans.
Investors should consult the Summit Investors Plans Prospectus for information
regarding minimum initial and subsequent investments and creation and sales
charges applicable to Summit Investors Plans. See "Sales of Shares."
REDEMPTION OF SHARES
Planholders of Summit Investors Plans should consult the Summit Investors
Plans Prospectus for information concerning the redemption or repurchase of Fund
shares held in Plans. Investors who hold shares of the Fund directly may at any
time redeem all or a portion of their shares at net asset value without charge.
See "Redemption of Shares."
DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income and distributions from net capital
gains are paid annually. Dividends and distributions will be automatically
reinvested at net asset value without charge unless the shareholder has elected
to receive such payments in cash. See "Dividends, Distributions and Tax
Matters."
MANAGEMENT OF THE FUND
A I M Advisors, Inc. ("AIM"), 11 Greenway Plaza, Suite 1919, Houston, Texas
77046, acts as investment advisor to the Fund and in such capacity supervises
all aspects of management of the Fund, including the provision for the Fund of a
continuous investment program. AIM is primarily engaged in the business of
acting as investment advisor or manager to investment companies. AIM has entered
into a sub-advisory agreement with NationsBank of Texas, N.A. ("NationsBank
Texas") which furnishes AIM with investment research and advisory services
concerning a portion of the Fund's investment program. It is anticipated that on
or about March 15, 1996, NationsBank Texas will be replaced by TradeStreet
Investment Associates, Inc. ("TradeStreet"). TradeStreet is a new subsidiary of
NationsBank, N.A. and a registered investment advisor. TradeStreet will receive
the same sub-advisory fees currently payable to, and will perform the same
services as, NationsBank Texas. See "Management of the Fund."
SPECIAL CONSIDERATIONS
Shares of the Fund are available to the general public only through
investment in a Summit Investors Plan which calls for fixed monthly investments.
Investments in a continuous investment plan may involve special risks not
usually associated with an investment in other investment companies. As
securities are subject to market fluctuations, an investor who liquidates his
A-2
<PAGE> 6
investment when the market value of his accumulated shares is less than his
cost, including creation and sales charges, will incur a loss. Investments in a
continuous investment plan do not eliminate this risk. The Fund is designed for
investors who are seeking the accumulation of capital through systematic
investments over a period of 15 or more years. The net proceeds of systematic
investments will be received and invested, and additional Fund shares will be
issued, during periods of varying economic and market conditions. The investment
objective and policies of the Fund may not be appropriate for an investor who
may have to liquidate his investment after a relatively short period of time.
Investors should therefore consider their financial ability to continue regular
monthly investments in a Plan. See the Summit Investors Plans Prospectus for
further information.
TABLE OF FEES AND EXPENSES
<TABLE>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets):
Management Fees.................................................................... .65%
Other Expenses..................................................................... .06%
Total Fund Operating Expenses...................................................... .71%
</TABLE>
EXAMPLE:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor in the Fund would pay the following
expenses on a $1,000 investment, assuming (1) a
5% annual return and (2) redemption at the end of each
time period: $7 $23 $40 $88
</TABLE>
The purpose of the foregoing Table of Fees and Expenses is to assist an
investor in understanding the various costs and expenses that an investor in the
Fund will bear directly and indirectly. (For a more complete description of the
various costs and expenses, see "Management of the Fund," below.) The
information in the foregoing Table of Fees and Expenses should be read in
conjunction with the information appearing elsewhere in the prospectus of Summit
Investors Plans, particularly with respect to the Creation and Sales Charges
imposed in connection with the purchase of Summit Investors Plans. These and
other charges relating to the purchase of Summit Investors Plans are in addition
to the expenses shown in the foregoing Table of Fees and Expenses. (See
"Allocation of Investments and Deductions," "Rights and Privileges of
Planholders" and "Custodian and Sponsor Charges" sections of the attached Summit
Investors Plans prospectus immediately preceding the Fund prospectus.)
THE EXAMPLE SHOWN IN THE TABLE ABOVE SHOULD NOT BE CONSIDERED TO BE A
REPRESENTATION OF PAST OR FUTURE EXPENSES; ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN.
------------------------
A-3
<PAGE> 7
FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share of the Fund
outstanding during each of the years in the two-year period ended October 31,
1995, the ten months ended October 31, 1993 and each of the years in the
seven-year period ended December 31, 1992. The data has been audited by KPMG
Peat Marwick LLP, independent auditors, whose unqualified report is contained in
the Fund's Statement of Additional Information which is available upon request
and without charge from A I M Distributors, Inc.
<TABLE>
<CAPTION>
OCTOBER 31, DECEMBER 31,
---------------------------------------- --------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988(a)
----------- --------- --------- --------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 9.78 $ 10.46 $ 9.64 $ 10.09 $ 7.56 $ 7.79 $ 6.57 $ 5.70
- ----------------------- ------------ ---------- ---------- ---------- ---------- ---------- ---------- ----------
Income from investment
operations:
Net investment income 0.04 0.10 0.09 0.11 0.14 0.15 0.16 0.16
- ----------------------- ------------ ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net gains (losses) on
securities (both
realized and
unrealized) 2.81 (0.04) 0.73 0.35 3.16 (0.08) 1.86 0.84
- ----------------------- ------------ ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total from
investment
operations 2.85 0.06 0.82 0.46 3.30 0.07 2.02 1.00
- ----------------------- ------------ ---------- ---------- ---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net
investment income (0.10) (0.10) -- (0.11) (0.13) (0.16) (0.16) (0.13)
- ----------------------- ------------ ---------- ---------- ---------- ---------- ---------- ---------- ----------
Distributions from
capital gains (0.39) (0.64) -- (0.80) (0.64) (0.14) (0.64) --
- ----------------------- ------------ ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total distributions (0.49) (0.74) -- (0.91) (0.77) (0.30) (0.80) (0.13)
- ----------------------- ------------ ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of
period $ 12.14 $ 9.78 $ 10.46 $ 9.64 $ 10.09 $ 7.56 $ 7.79 $ 6.57
======================= ============ ========== ========== ========== ========== ========== ========== ==========
Total return(b) 31.03% 0.61% 8.51% 4.50% 43.64% 0.93% 30.92% 17.65%
======================= ============ ========== ========== ========== ========== ========== ========== ==========
Ratios/supplemental
data:
Net assets, end of
period (000s omitted) $ 1,050,011 $ 765,073 $ 705,580 $ 604,329 $ 517,835 $ 316,043 $ 262,655 $ 164,996
======================= ============ ========== ========== ========== ========== ========== ========== ==========
Ratio of expenses to
average net assets 0.71%(c) 0.72% 0.79%(d) 0.76% 0.75% 0.80% 0.82% 1.04%
======================= ============ ========== ========== ========== ========== ========== ========== ==========
Ratio of net investment
income to average net
assets 0.33%(c) 1.04% 1.13%(d) 1.09% 1.48% 2.02% 2.14% 2.57%
======================= ============ ========== ========== ========== ========== ========== ========== ==========
Portfolio turnover rate 126.00% 121.69% 115.76% 97.41% 109.04% 142.60% 97.26% 114.94%
======================= ============ ========== ========== ========== ========== ========== ========== ==========
<CAPTION>
1987 1986
--------- --------
<S> <C> <C>
Net asset value,
beginning of period $ 6.68 $ 6.49
- ----------------------- ---------- ---------
Income from investment
operations:
Net investment income 0.09 0.08
- ----------------------- ---------- ---------
Net gains (losses) on
securities (both
realized and
unrealized) (0.40) 0.82
- ----------------------- ---------- ---------
Total from
investment
operations (0.31) 0.90
- ----------------------- ---------- ---------
Less distributions:
Dividends from net
investment income (0.10) (0.05)
- ----------------------- ---------- ---------
Distributions from
capital gains (0.57) (0.66)
- ----------------------- ---------- ---------
Total distributions (0.67) (0.71)
- ----------------------- ---------- ---------
Net asset value, end of
period $ 5.70 $ 6.68
======================= ========== =========
Total return(b) (4.66)% 14.05%
======================= ========== =========
Ratios/supplemental
data:
Net assets, end of
period (000s omitted) $ 101,541 $ 72,458
======================= ========== =========
Ratio of expenses to
average net assets 0.98% 1.16%
======================= ========== =========
Ratio of net investment
income to average net
assets 1.06% 1.15%
======================= ========== =========
Portfolio turnover rate 81.99% 118.23%
======================= ========== =========
</TABLE>
(a) The Fund changed investment advisers on October 5, 1988.
(b) For periods less than one year, total return is not annualized.
(c) Ratios are based on average net assets of $881,067,069.
(d) Annualized.
A-4
<PAGE> 8
INVESTMENT PROGRAM
INVESTMENT OBJECTIVE
The investment objective of the Fund is capital growth. Although the Fund
may purchase income-producing securities, income will generally not be a
consideration in the selection of securities for the Fund's portfolio. There can
be no assurance that the Fund will achieve its investment objective.
The Fund will invest primarily in three types of securities:
1. Core Stocks -- These are securities issued by companies which have
established a long-term record of earnings growth and which are believed by
AIM, as the Fund's advisor, to be capable of sustaining such growth in the
future. Generally (but not always) the common stocks of these companies
will be listed on a national securities exchange.
2. Emerging Growth Stocks -- These securities are issued by smaller
growth-oriented companies. The securities of a number of such companies are
traded only in the over-the-counter market. Such securities may not have
widespread interest among institutional investors. Accordingly, such
securities may present increased opportunity for gain if significant
institutional investor interest subsequently develops, but may also involve
additional risk of loss in the event of adverse developments because of the
limited market for such securities. The business prospects and earnings of
emerging growth companies may be subject to more rapid or unanticipated
changes than in the case of larger, better established concerns.
3. Value-Oriented Stocks -- These are stocks which are believed to be
currently undervalued relative to other available investments. Since this
belief may be based upon projections made by the Fund's advisor or
sub-advisor of earnings, dividends or price-earnings ratios (which
projections may differ significantly from similar projections made by other
investors), the Fund's ability to realize capital appreciation on
value-oriented stocks may be more dependent upon the advisor's and
sub-advisor's capabilities than is the case with other types of securities
in which the Fund may invest.
It is anticipated that approximately 50% of the Fund's investments will be
in core stocks while the remaining 50% will be in emerging growth and
value-oriented stocks. However, these percentages may be changed by AIM from
time to time in response to current market conditions. The Fund does not
concentrate its investments in any particular industry or group of industries,
but diversifies its holdings among as many different companies and industries as
seems appropriate to the advisor in light of the monetary, economic and stock
market conditions prevailing at any given time.
Although the investment emphasis of the Fund is on common stocks, the Fund
may also invest in other securities believed by AIM to have capital appreciation
potential, including but not limited to, preferred stocks, bonds, debentures,
notes and other debt securities, and warrants and rights to acquire securities.
Consistent with the Fund's objective of capital growth, the Fund's assets will
tend to be fully invested in the securities listed above. However, pending
investment of the proceeds from the sale of the Fund's shares, or if market
conditions are believed to warrant a more conservative or defensive investment
strategy, the Fund's assets may be invested without limit in money market
instruments chosen by AIM or retained in cash. Such money market instruments
will
A-5
<PAGE> 9
consist of obligations of, or guaranteed by, the United States Government or its
agencies or instrumentalities; certificates of deposit, bankers' acceptances and
other obligations of domestic banks having total assets of at least $500
million; and commercial paper rated in the highest category by a nationally
recognized statistical rating organization.
The Fund may make short sales or maintain a short position in securities if
at all times when such a short position is open the Fund owns at least an equal
amount of such securities or securities convertible into or exchangeable for at
least an equal amount of such securities.
The receipt by the Fund of new money primarily through the medium of
continuing investments under systematic investment plans may tend to produce a
more even rate of influx than is the case with other funds. This may furnish a
base for a gradual and planned accumulation of positions in individual portfolio
securities when such a program is deemed to be appropriate. One example of how
this concept could be employed is through a program of "dollar-cost averaging"
in the purchase of securities for the Fund. "Dollar-cost averaging" involves the
purchase of a fixed dollar amount of stock of a company at regular intervals.
The number of shares of stock obtained upon each purchase will therefore vary
with the price of the stock, with more shares being obtained as the price of the
stock declines and fewer shares being obtained as the price of the stock
increases. Such a program could be hampered by increased redemptions of the
Fund's shares which would reduce amounts available for investment by the Fund.
CERTAIN INVESTMENT STRATEGIES AND POLICIES
LENDING OF FUND SECURITIES. The Fund may also lend its portfolio
securities in amounts up to 33-1/3% of its total assets to financial
institutions in accordance with the investment restrictions of the Fund. Such
loans would involve risks of delay in receiving additional collateral in the
event the value of the collateral decreased below the value of the securities
loaned or of delay in recovering the securities loaned or even loss of rights in
the collateral should the borrower of the securities fail financially. However,
loans will be made only to borrowers deemed by AIM to be of good standing and
only when, in AIM's judgment, the income to be earned from the loans justifies
the attendant risks.
ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
securities that are illiquid. Illiquid securities include securities that have
no readily available market quotations and cannot be disposed of promptly
(within seven days) in the normal course of business at a price at which they
are valued. Illiquid securities may include securities that are subject to
restrictions on resale because they have not been registered under the
Securities Act of 1933. Restricted securities may, in certain circumstances, be
resold pursuant to Rule 144A, and thus may or may not constitute illiquid
securities. The Fund's Board of Directors is responsible for developing and
establishing guidelines and procedures for determining the liquidity of Rule
144A restricted securities on behalf of the Fund and monitoring AIM's
implementation of the guidelines and procedures. Limitations on the resale of
restricted securities may have an adverse effect on their marketability, which
may prevent the Fund from disposing of them promptly at reasonable prices. The
Fund may have to bear the expense of registering such securities for resale, and
the risk of substantial delays in effecting such registrations.
INVESTMENTS IN FOREIGN SECURITIES. The Fund may invest up to 20% of its
total assets in foreign securities. These securities will be marketable equity
securities (including common and preferred
A-6
<PAGE> 10
stock, depositary receipts for stock and fixed income or equity securities
exchangeable for or convertible into stock) of foreign companies which, with
their predecessors, have been in continuous operation for three years or more
and which generally are listed on a recognized foreign securities exchange or
traded in a foreign over-the-counter market. The Fund may also invest in foreign
securities listed on recognized U.S. securities exchanges or traded in the U.S.
over-the-counter market. Such foreign securities may be issued by foreign
companies located in developing countries in various regions of the world. A
"developing country" is a country in the initial stages of its industrial cycle.
As compared to investment in the securities markets of developed countries,
investment in the securities markets of developing countries involves exposure
to markets that may have substantially less trading volume and greater price
volatility, economic structures that are less diverse and mature, and political
systems that may be less stable. The Fund may also purchase securities of
foreign issuers which are in the form of American Depository Receipts ("ADRs"),
European Depository Receipts ("EDRs"), or other securities representing
underlying securities of foreign issuers. ADRs, EDRs, and other securities
representing underlying securities of foreign issuers are included in the
percentage limitations applicable to the Fund's investments in foreign
securities. To the extent it invests in securities denominated in foreign
currencies, the Fund bears the risks of changes in the exchange rates between
U.S. currency and the foreign currency, as well as the availability and status
of foreign securities markets. For a discussion of the risks pertaining to
investments in foreign securities, see "Risk Factors Regarding Foreign
Securities" below.
RISK FACTORS REGARDING FOREIGN SECURITIES. Investments by the Fund in
foreign securities, whether denominated in U.S. dollars or foreign currencies
including Eurodollar, Yankee dollar and other foreign obligations, may entail
some or all of the risks set forth below. Investments by the Fund in ADRs and
EDRs may entail certain political and economic risks and regulatory risks
described below.
Currency Risk. The value of the Fund's foreign investments will be
affected by changes in currency exchange rates. The U.S. dollar value of a
foreign security decreases when the value of the U.S. dollar rises against the
foreign currency in which the security is denominated, and increases when the
value of the U.S. dollar falls against such currency.
Political and Economic Risk. The economies of many of the countries in
which the Fund may invest are not as developed as the United States economy and
may be subject to significantly different economic and political forces.
Political or social instability, expropriation or confiscatory taxation, and
limitations on the removal of funds or other assets could also adversely affect
the value of the Fund's investments.
Regulatory Risk. Foreign companies are not registered with the United
States Securities and Exchange Commission (the "SEC") and are generally not
subject to the regulatory controls imposed on United States issuers and, as a
consequence, there is generally less publicly available information about
foreign securities than is available about domestic securities. Foreign
companies are not subject to uniform accounting, auditing and financial
reporting standards, practices and requirements comparable to those applicable
to domestic companies. In addition, income from foreign securities owned by the
Fund may be reduced by a withholding tax at the source, which tax would reduce
dividend income payable to the Fund's shareholders.
Market Risk. The securities markets in many of the countries in which the
Fund may invest will have substantially less trading volume than the major
United States markets. As a result, the
A-7
<PAGE> 11
securities of some foreign companies may be less liquid and experience more
price volatility than comparable domestic securities. Increased custodian costs
as well as administrative costs (such as the need to use foreign custodians) may
be associated with the maintenance of assets in foreign jurisdictions. There is
generally less government regulation and supervision of foreign stock exchanges,
brokers and issuers which may make it difficult to enforce contractual
obligations. In addition, transaction costs in foreign securities markets are
likely to be higher, since brokerage commission rates in foreign countries are
likely to be higher than in the United States.
STOCK INDEX FUTURES CONTRACTS AND RELATED CALL OPTIONS. The Fund may
purchase and sell stock index futures contracts as a hedge against changes in
market conditions. A stock index futures contract is an agreement pursuant to
which two parties agree to take or make delivery of an amount of cash equal to a
specified dollar amount times the difference between the stock index value at
the close of the last trading day of the contract and the price at which the
futures contract is originally struck. No physical delivery of the underlying
stocks in the index is made. The Fund will only enter into domestic stock index
futures. The Fund will only enter into stock index futures contracts or write
call options thereon as a hedge against changes resulting from market conditions
in the values of the portfolio securities held or which the Fund intends to
purchase. Generally, the Fund may elect to close a position in a futures
contract by taking an opposite position which will operate to terminate the
Fund's position in the futures contract. The Fund may also write call options
with respect to such futures contracts. As the writer of a call option on a
futures contract, the Fund would be required to assume a short position in a
futures contract at a specified exercise price if the option is exercised during
the option period. If the option is exercised on the last trading date prior to
the expiration date of the option, the settlement of the option will be made
entirely in cash equal to the difference between the exercise price of the
option and the closing price of the underlying futures contract on the
expiration date. See the Statement of Additional Information for a description
of the Fund's investments in futures contracts including certain related risks.
The Fund may purchase or sell futures contracts if, immediately thereafter, the
sum of the amount of margin deposits and premiums on open positions with respect
to futures contracts and related call options would not exceed 5% of the market
value of the Fund's total assets.
PORTFOLIO TURNOVER
Consistent with its objective of capital growth, the Fund does not intend
to engage in substantial short-term trading. However, the Fund reserves the
right to dispose of any security without regard to the period of time it has
been held and to take short-term or long-term profits when such action is
consistent with its investment program. The Fund's historical portfolio turnover
rates are included in the Financial Highlights table on page A-4. A higher rate
of portfolio turnover may result in higher transaction costs, including
brokerage commissions. The Fund's turnover may vary greatly from year to year
and may exceed 100% during years when the Fund has taken a significant defensive
position or otherwise makes changes in the investment strategies which it
pursues consistent with its overall investment objective. Also, to the extent
that higher portfolio turnover results in a higher rate of net realized capital
gains to a Fund, the portion of the Fund's distributions constituting taxable
capital gains may increase.
A-8
<PAGE> 12
INVESTMENT RESTRICTIONS
The Fund's investment program is subject to a number of investment
restrictions which reflect self-imposed standards as well as federal and state
regulatory limitations. These restrictions are designed to minimize (but cannot
eliminate) certain risks associated with investing in specified types of
securities or engaging in certain transactions and to limit the amount of the
Fund's assets which may be invested in any specific industry or issuer. The most
significant of these restrictions provide that the Fund will not purchase a
security if as a result of such purchase:
(1) More than 25% of the value of the Fund's total assets would be
invested in the securities of issuers primarily engaged in the same
industry, except that this restriction does not apply to obligations issued
or guaranteed by the United States Government or its agencies or
instrumentalities;
(2) More than 5% of the value of the Fund's total assets would be
invested in the securities of a single issuer, except that this restriction
does not apply to obligations issued or guaranteed by the United States
Government or its agencies or instrumentalities, or repurchase agreements
pertaining to such securities; or
(3) The Fund would own more than 10% of the outstanding voting
securities of any issuer or more than 10% of any class of securities of an
issuer, with the debt and preferred stock of an issuer each considered to
be a separate single class for this purpose.
The foregoing percentage limitations will be calculated by giving effect to
such purchase and will be based upon values at the time of purchase. The Fund
may retain any security purchased by it notwithstanding changes in the value of
its assets occurring subsequent to the time of any such purchase.
The Fund's investment objective as described under "Investment Objective,"
the policy relating to lending of securities as described under "Certain
Investment Strategies and Policies -- Lending of Fund Securities," and the
foregoing investment restrictions are matters of fundamental policy which may
not be changed without the vote of a majority of the Fund's outstanding shares,
as defined in "General Information -- Organization and Description of Common
Stock."
Information concerning other investment restrictions and policies of the
Fund is contained in the Statement of Additional Information.
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
It is the present policy of the Fund to declare and pay annually net
investment income dividends and capital gains distributions. It is the Fund's
intention to distribute substantially all of its net investment income and
capital gains by the end of the calendar year. In determining the amount of
capital gains, if any, available for distribution, net capital gains will be
offset against available net capital losses, if any, carried forward from
previous fiscal periods. All dividends and distributions will be automatically
reinvested at the net asset value determined on the record date in full and
fractional shares of the Fund unless the shareholder has elected prior to the
record date, by written notice to Boston Financial Data Services, Inc. ("BFDS"),
P.O. Box 8300, Boston, Massachusetts 02266-8300, Attention: AIM Summit Fund,
Inc., to receive all such payments in cash. Such
A-9
<PAGE> 13
reinvestments will not be subject to sales charges and shares so purchased will
be automatically credited to the account of the shareholder.
Changes in the form of dividend and distribution payments may be made by
the shareholder at any time and will be effective as to any subsequent payment
if such notice is received by BFDS prior to the applicable record date. Any
dividend and distribution election will remain in effect until BFDS receives a
revised written election by the shareholder.
The Fund has qualified and intends to continue to qualify for treatment as
a regulated investment company under Subchapter M of the Internal Revenue Code
of 1986 (the "Code"). Because the Fund intends to distribute substantially all
of its net investment income and net realized capital gains to shareholders, it
is not expected that the Fund will be required to pay any federal income tax.
The Fund intends to meet the distribution requirements of the Code to avoid the
imposition of a 4% excise tax. However, shareholders normally are subject to
federal income taxes and any applicable state and local income taxes, on the
dividends and distributions from the Fund, whether received in cash or
reinvested in shares of the Fund. Shareholders are notified annually of the
federal income tax status of dividends and capital gains distributions. To avoid
being subject to a 31% federal backup withholding on dividends, distributions
and redemption payments a shareholder must furnish the Fund with his taxpayer
identification number and certify under penalties of perjury that the number
provided is correct and that he is not subject to backup withholding for any
reason.
Any dividend or distribution paid by the Fund has the effect of reducing
the net asset value per share on the ex-dividend date by the amount of the
dividend or distribution. Therefore, a dividend or distribution paid shortly
after a purchase of shares by an investor would represent, in substance, a
return of capital to the shareholder (to the extent it is paid on the shares so
purchased), even though it would be subject to income taxes, as discussed
herein.
Distributions may be subject to state and local taxes, and the treatment
thereof may differ from the federal income tax consequences discussed herein.
Additional information about taxes is set forth in the Statement of Additional
Information.
DETERMINING NET ASSET VALUE
The net asset value of a Fund share is determined as of the close of
trading of the New York Stock Exchange (4:00 p.m. Eastern Time) on each business
day of the Fund (defined as any day on which the New York Stock Exchange is open
for business). Net asset value is determined by dividing the value of the Fund's
assets, less all of its liabilities, by the number of shares outstanding. In the
event the New York Stock Exchange (the "NYSE") closes early (i.e. before 4:00
p.m. Eastern Time) on a particular day, the net asset value of a Fund share is
determined as of the close of the NYSE on such day. Determination of the Fund's
net asset value per share is made in accordance with generally accepted
accounting principles. Portfolio securities are valued using market values, if
available. For purposes of determining net asset value per share, futures and
options contract closing prices which are available 15 minutes after the close
of trading of the NYSE are generally used. Securities for which market
quotations are not readily available are valued at fair value as determined in
good faith by or under the supervision of the Fund's officers in a manner
specifically authorized by the Board of Directors of the Fund. Notwithstanding
the above, short-term obligations with maturities of 60 days or less are valued
at amortized cost as reflecting fair
A-10
<PAGE> 14
value. Additional information concerning the valuation of the Fund's shares is
contained in the Statement of Additional Information.
SALES OF SHARES
The Fund has entered into a Distribution Agreement (the "Distribution
Agreement") with A I M Distributors, Inc. ("AIM Distributors"), a registered
broker-dealer and a wholly-owned subsidiary of AIM, which in turn is a
wholly-owned subsidiary of A I M Management Group Inc. ("AIM Management"), under
which the Fund will issue shares at net asset value to State Street Bank and
Trust Company, as custodian for Summit Investors Plans ("State Street Bank" or
the "Custodian"). The address of AIM Distributors is P.O. Box 4264, Houston,
Texas 77210-4264. AIM Distributors acts as sponsor and principal underwriter of
Summit Investors Plans. The terms of offering of Summit Investors Plans are
contained in the Prospectus of Summit Investors Plans. AIM Distributors does not
receive any fee from the Fund pursuant to the Distribution Agreement. Certain
directors and officers of the Fund are affiliated with AIM Distributors and AIM
Management. More information concerning the directors and officers of the Fund
and their affiliation may be found in the Statement of Additional Information.
THE FUND WILL NOT OFFER ITS SHARES TO THE GENERAL PUBLIC EXCEPT THROUGH
SUMMIT INVESTORS PLANS. However, the following persons may purchase shares of
the Fund directly through AIM Distributors at net asset value: (a) any current
or retired officer, trustee, director, or employee, or any member of the
immediate family (spouse, minor children, parents and parents of spouse) of any
such person, of AIM Management or its affiliates, or of any investment company
managed or advised by AIM; or (b) any employee benefit plan established for
employees of AIM Management or its affiliates. The Fund reserves the right to
reject any purchase order.
REDEMPTION OF SHARES
THE FOLLOWING DISCUSSION RELATES ONLY TO THOSE INVESTORS WHO HOLD SHARES OF
THE FUND DIRECTLY. PLANHOLDERS SHOULD CONSULT THEIR SUMMIT INVESTORS PLANS
PROSPECTUS FOR THE REQUIREMENTS FOR REDEMPTION OF FUND SHARES HELD IN A SUMMIT
INVESTORS PLAN.
A shareholder may redeem his shares of the Fund at any time without charge.
Upon receipt by BFDS of a proper request, the Fund will redeem shares in cash at
the next determined net asset value. All redemption requests must be in writing
and directed to BFDS, P.O. Box 8300, Boston, Massachusetts 02266-8300,
Attention: AIM Summit Fund, Inc. Any written request sent to the Fund will be
forwarded to BFDS and the effective date of the redemption request will be when
the request is received by AIM Distributors or BFDS.
Requests for redemption must include the following: (a) signatures of each
registered owner exactly as the shares are registered; (b) the account number
and number of shares to be redeemed; (c) stock certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of State Street Bank; (d) signature guarantees, as described below; and
(e) any additional documents required for redemption by corporations,
partnerships, trusts or other fiduciaries.
A-11
<PAGE> 15
To assure proper redemption, and to protect the shareholder, the Fund, AIM
Distributors and the Custodian, the Fund requires that the signature of each
registered shareholder be guaranteed. 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
signature guarantee(s) must appear either: (a) on the written request for
redemption, which must clearly identify the exact name(s) in which the account
is registered, the account number and the number of shares or the dollar amount
to be redeemed; (b) on a stock power, which may be obtained from AIM
Distributors, State Street Bank or from most banks and stockbrokers; or (c) on
all share certificates tendered for redemption, in which case the signature
guarantee(s) must also appear on the written request or a stock power if shares
held by State Street Bank are also being redeemed. It is the present policy of
the Fund not to require signature guarantees for redemption requests of under
$50,000 unless the proceeds are to be paid to a person other than the record
owner or are to be sent to an address other than the one of record. Upon notice
to the shareholders, this policy may be changed. Currently, in addition to these
requirements, if a Planholder has invested in the Fund to establish an IRA, he
should include the following information along with his written request for
either partial or full liquidation of Fund shares: (a) a statement as to whether
or not he has attained age 59-1/2; (b) a statement as to whether or not he is
legally disabled; (c) a statement as to whether or not he elects to have federal
income tax withheld from the proceeds of his redemption, and (d) his Social
Security number along with the following statement: "I certify under penalties
of perjury that the Social Security number provided is correct and that I am not
subject to backup withholding either because I am exempt from backup
withholding, I have not been notified by the Internal Revenue Service that I am
subject to backup withholding, or the Internal Revenue Service has notified me
that I am no longer subject to backup withholding." If the Planholder has been
notified by the Internal Revenue Service that he is currently subject to backup
withholding, then the preceding statement should be modified accordingly. Even
if he elects not to have federal income tax withheld, he is liable for federal
income tax on the taxable portion of his redemption proceeds. He may also be
subject to tax penalties under the estimated tax payment rules if his payments
of estimated tax and withholding, if any, are not adequate.
Upon receipt of a proper request for redemption, payment is made as soon as
practicable, but in any event within seven days after presentation of all
required redemption documents in good order.
OPEN ACCOUNT
THE FOLLOWING DISCUSSION OF AN OPEN ACCOUNT IS APPLICABLE ONLY TO THOSE
SHAREHOLDERS WHO HOLD SHARES OF THE FUND DIRECTLY.
The Fund maintains an open account for each shareholder, under which
additional Fund shares acquired through reinvestment of dividends and capital
gains distributions are held by State Street Bank for the shareholder's account
unless the shareholder elects to receive stock certificates or to obtain
dividends and distributions in cash. Stock certificates (in full shares only)
are issued without charge (but only on written request) and may be redeposited
at any time. It is anticipated that as a matter of convenience most shareholders
will not request certificates. A shareholder receives a statement from BFDS
after each acquisition or redemption of Fund shares, and after each dividend or
capital gains distribution.
A-12
<PAGE> 16
MANAGEMENT OF THE FUND
THE BOARD OF DIRECTORS
The overall management of the business and affairs of the Fund is vested
with the Board of Directors. The Board of Directors approves all significant
agreements between the Fund and persons or companies furnishing services to the
Fund, including the Fund's agreements with the Fund's advisor, sub-advisor,
distributor, custodian and transfer agent. The day-to-day operations of the Fund
are delegated to the Fund's officers and to AIM, subject always to the
investment objective and policies of the Fund and to the general supervision of
the Fund's Board of Directors. Information concerning the Board of Directors may
be found in the Statement of Additional Information.
THE INVESTMENT ADVISOR
A I M Advisors, Inc. ("AIM"), 11 Greenway Plaza, Suite 1919, Houston, Texas
77046, serves as the Fund's investment advisor pursuant to an Investment
Advisory Agreement, dated October 18, 1993 (the "Advisory Agreement"). AIM,
organized in 1976, together with its affiliates, manages or advises 37
investment company portfolios (including the Fund). AIM is a wholly-owned
subsidiary of AIM Management. Certain of the directors and officers of AIM are
also executive officers of the Fund and their affiliations are set forth in
detail in the Statement of Additional Information. As of February 1, 1996, the
total assets of such investment company portfolios advised or managed by AIM and
its affiliates were approximately $47 billion.
Pursuant to the terms of the Advisory Agreement, AIM supervises all aspects
of the Fund's operations, including the investment and reinvestment of the cash,
securities or other properties comprising the Fund, subject at all times to the
policies and control of the Fund's Board of Directors. AIM obtains and evaluates
economic, statistical and financial information to formulate and implement
investment programs for the Funds. AIM may delegate to a sub-advisor certain of
its duties; however, AIM must supervise the performance of any such sub-advisor.
AIM has entered into a sub-advisory agreement with NationsBank of Texas, N.A.
("NationsBank Texas"), as described below. AIM maintains a trading desk and
selects the core stocks which generally comprise approximately 50% of the Fund's
portfolio and the emerging growth stocks which generally comprise 25% of the
Fund's portfolio. The remainder of the Fund's portfolio is invested in value-
oriented stocks selected by the sub-advisor.
The portion of the Fund's portfolio invested in core stocks and in emerging
growth and value oriented stocks is determined by AIM.
The Advisory Agreement also provides that, upon the request of the Fund's
Board of Directors, AIM may perform or arrange for the performance of certain
accounting, shareholder servicing and other administrative services not required
to be performed by AIM under the Advisory Agreement. For such services, pursuant
to an administrative service agreement with the Fund, AIM is entitled to receive
from the Fund reimbursement of its costs or such reasonable compensation as may
be agreed upon between AIM and the Fund's Board of Directors, upon a finding by
the Board of Directors that the provision of such services is in the best
interests of the Fund and its shareholders. The Board of Directors has made such
a finding and, accordingly, has entered into an Administrative Services
Agreement dated October 18, 1993 with AIM (the "Administrative Services
Agreement"). Under the Administrative Services Agreement, AIM is currently
reimbursed for the services of a
A-13
<PAGE> 17
principal financial officer and his staff, who maintain the financial accounts
and books and records of the Fund, including the calculation of the daily net
asset value of the Fund, and prepare tax returns and financial statements for
the Fund and is also reimbursed for any expenses related to providing such
services, as well as the services of staff responding to various shareholder
inquiries.
AIM may in its discretion from time to time agree to waive voluntarily all
or any portion of its advisory fee and/or assume certain expenses of the Fund
but will retain its ability to be reimbursed prior to the end of the fiscal
year. Fee waivers or reductions and waivers of expense reimbursements, other
than those set forth in the Advisory Agreement, may be rescinded at any time
without notice to investors.
For the fiscal year ended October 31, 1995, AIM received fees from the Fund
that amounted to 0.65% of the Fund's average daily net assets. For the fiscal
year ended October 31, 1995, NationsBank Texas received fees from AIM that
amounted to 0.23% of the Fund's average daily net assets for sub-advisory
services. For the fiscal year ended October 31, 1995, the Fund paid 0.007% of
its average daily net assets to AIM for reimbursement for administrative
services.
THE SUB-ADVISOR
NationsBank of Texas, N.A. ("NationsBank Texas"), 901 Main Street, Dallas,
Texas 75202, serves as the Fund's sub-advisor pursuant to a Sub-Advisory
Agreement dated October 18, 1993 (the "Sub-Advisory Agreement"). NationsBank
Corp., a bank holding company headquartered in Charlotte, North Carolina,
indirectly holds 100% of the voting stock of NationsBank Texas. It is
anticipated that on or about March 15, 1996, NationsBank Texas will be replaced
by Trade Street Investment Associates, Inc. ("TradeStreet"). TradeStreet is a
new subsidiary of NationsBank, N.A. and a registered investment advisor.
TradeStreet will receive the same sub-advisory fees currently payable to, and
will perform the same services as, NationsBank Texas.
Pursuant to the terms of the Sub-Advisory Agreement, AIM has appointed
NationsBank Texas to provide certain investment advisory services including
economic, statistical and financial research and securities analysis to the
Fund, subject to overall supervision by AIM and the Fund's Board of Directors.
Pursuant to the terms of the Sub-Advisory Agreement, AIM will determine the core
stocks and the emerging growth stocks to be purchased or sold by the Fund, while
NationsBank Texas, under AIM's supervision, will determine the value-oriented
stocks to be purchased or sold by the Fund. It is anticipated that
approximately, 25% of the Fund's portfolio will be invested in value-oriented
stocks, although that percentage may change from time to time as deemed
advisable by AIM based upon current market conditions.
For the fiscal year ended October 31, 1995, the expenses of the Fund borne
by the Fund, including the fees paid under the Advisory Agreement, amounted to
0.71% of the Fund's average daily net assets. The advisory fee rate paid by the
Fund is higher than that paid by some other investment companies. However, many
of those investment companies are a different size or have different objectives
than the Fund. The effective rate of fees and expenses paid by the Fund at its
current size is lower than that for many other funds with similar investment
objectives.
A-14
<PAGE> 18
PORTFOLIO MANAGERS
AIM uses a team approach and disciplined investment strategy in providing
investment advisory services to all its accounts, including the Fund. AIM's
investment staff consists of 85 individuals. While individual members of AIM's
investment staff are assigned primary responsibility for the day-to-day
management of each of AIM's accounts, all accounts are reviewed on a regular
basis by AIM's Investment Policy Committee to ensure that they are being
invested in accordance with the accounts' and AIM's investment policies. The
individuals on the investment team primarily responsible for the day-to-day
management of the Fund are David P. Barnard, Robert M. Kippes and Jonathan C.
Schoolar. Messrs. Barnard, Kippes and Schoolar have had responsibility for the
Fund since March 1, 1995. Jeffrey C. Moser is Senior Vice President of
NationsBank Texas, the Fund's sub-advisor, Senior Product Manager with
TradeStreet, and has been responsible for the Fund since 1995.
David P. Barnard is Vice President of A I M Capital Management, Inc. ("AIM
Capital") a wholly-owned subsidiary of AIM. Mr. Barnard has been associated with
AIM and/or its affiliates since 1982 and has 22 years experience as an
investment professional.
Mr. Kippes is Vice President of AIM Capital. Mr. Kippes has been associated
with AIM and/or its affiliates since 1989 and has seven years experience as an
investment professional.
Mr. Schoolar is Senior Vice President and Director of AIM Capital and is
Vice President of AIM and the Fund. Mr. Schoolar has been associated with AIM
and/or its affiliates since 1986 and has 13 years experience as an investment
professional.
Mr. Moser has been associated with NationsBank Texas since 1990 and has
nine years experience as an investment professional.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Fund's Board of Directors, AIM is
responsible for the selection of broker/dealers to effect transactions for the
Fund and for the negotiation of brokerage commission rates with such
broker/dealers. AIM's primary consideration in effecting a security transaction
will be execution at the most favorable price. When selecting a broker/dealer to
execute each particular transaction, AIM will take the following into
consideration: the best net price available; the reliability, integrity and
financial condition of the broker/dealer; the size of and difficulty in
executing the order; and the value of the expected contribution of the
broker/dealer to the investment performance of the Fund on a continuing basis.
Portfolio transactions placed through dealers serving as primary market makers
are effected at net prices, without commissions as such, but which include
compensation in the form of mark up or mark down. In certain instances, the Fund
makes purchases of underwritten issues at prices which include underwriting
fees.
Broker/dealers selected by AIM may furnish AIM, or any sub-advisor to AIM
with statistical, research and other information or services which are deemed by
them to be beneficial to the Fund's investment program. Certain research
services furnished by broker/dealers may be useful to AIM or any sub-advisor
with clients other than the Fund. AIM may cause the Fund to pay a higher price
for securities or higher commissions in recognition of research services
furnished by broker/dealers. AIM may also consider sales of shares of the Fund
and of the other open-end investment companies managed or advised by AIM as a
factor in the selection of broker/dealers to execute portfolio transactions for
the Fund, subject to the requirements of best price and execution.
A-15
<PAGE> 19
GENERAL INFORMATION
ORGANIZATION AND DESCRIPTION OF COMMON STOCK
The Fund is an open-end, diversified management investment company
organized as a corporation under the laws of the State of Maryland on February
17, 1982, and has an authorized capital of 1,000,000,000 shares of common stock,
par value $.01 per share. The shares of common stock of the Fund have equal
rights with respect to voting, dividends, distributions, redemption and
liquidation. Fractional shares have the same rights as full shares to the extent
of their proportionate interest. Shareholders of the Fund do not have cumulative
voting rights. There are no preemptive or conversion rights applicable to any of
the Fund's shares. The Fund's shares, when issued, are fully paid and
non-assessable.
Shares are redeemable at the net asset value thereof at the option of the
holders thereof. In the event of any dissolution or liquidation of the Fund, and
subject to the rights of creditors, the holders of the Fund's shares are
entitled to receive the assets of the Fund available for distribution in
proportion to the number of shares held by such holders.
As used in this Prospectus, the term "majority vote" means the affirmative
vote of (a) more than 50% of the outstanding shares of the Fund or (b) 67% or
more of the shares present at a meeting if more than 50% of the outstanding
shares of the Fund are represented at the meeting in person or by proxy,
whichever is less.
TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts, 02110, serves as transfer agent for the Fund's shares and as
custodian for the Fund's portfolio securities and cash. The custodian's
administrative duties have been delegated by State Street Bank to its partially
owned affiliate, Boston Financial Data Services, Inc., P.O. Box 8300, Boston,
Massachusetts 02266-8300. State Street Bank and BFDS will receive such
compensation from the Fund for their services in such capacities as may be
agreed to from time to time by State Street Bank and the Fund.
LEGAL MATTERS
The law firm of Ballard Spahr Andrews & Ingersoll, Philadelphia,
Pennsylvania, serves as counsel to the Fund and has passed upon the legality of
the shares of the Fund offered pursuant to this Prospectus.
FINANCIAL STATEMENTS
The financial statements of the Fund, including a report of the Fund's
auditors, are contained in the Statement of Additional Information.
SHAREHOLDER INQUIRIES
Shareholder inquiries concerning the status of an account should be
directed to AIM Distributors.
A-16
<PAGE> 20
OTHER INFORMATION
This Prospectus omits certain information contained in the registration
statement filed with the SEC. Copies of the registration statement, including
items omitted herein, may be obtained from the SEC by paying the charges
prescribed under its rules and regulations. From time to time, Fund sales
literature and/or advertisements may disclose top holdings included in the
Fund's portfolio. Information regarding the Fund's performance is contained in
the annual report to shareholders, which is available upon request without
charge.
A-17
<PAGE> 21
STATEMENT OF
ADDITIONAL INFORMATION
AIM SUMMIT FUND, INC.
11 Greenway Plaza
Suite 1919
Houston, Texas 77046
(713) 626-1919
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT
A PROSPECTUS, AND IT SHOULD BE READ IN CONJUNCTION
WITH A PROSPECTUS OF THE ABOVE-NAMED FUND,
A COPY OF WHICH MAY BE OBTAINED FREE OF CHARGE FROM
AUTHORIZED DEALERS OR BY WRITING
A I M DISTRIBUTORS, INC., P.O. BOX 4264,
HOUSTON, TEXAS 77210-4264 OR BY
CALLING (713) 626-1919 (IN HOUSTON) OR
(800) 995-4246 (ELSEWHERE).
______________________________
Statement of Additional Information dated March 1, 1996
Relating to the Prospectus dated March 1, 1996
<PAGE> 22
TABLE OF CONTENTS
<TABLE>
<S> <C>
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
GENERAL INFORMATION ABOUT THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Fund and its Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Investment Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
The Sub-Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Transfer Agent and Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
TAX AND DIVIDEND INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Qualification as a Regulated Investment Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Excise Tax on Regulated Investment Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Fund Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Sale or Redemption of Fund Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Foreign Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Effect of Future Legislation; Local Tax Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SHARE PURCHASES, REDEMPTIONS AND REPURCHASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Purchases and Redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Suspension of Right of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Valuation of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
The Distribution Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
INVESTMENT PROGRAM AND RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Investment Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Foreign Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Repurchase Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Rule 144A Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Futures Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Risks as to Futures Contracts and Related Call Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Portfolio Transactions and Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FS
</TABLE>
<PAGE> 23
INTRODUCTION
AIM Summit Fund, Inc. (formerly, Summit Investors Fund, Inc.) (the "Fund") is
a mutual fund. The rules and regulations of the United States Securities and
Exchange Commission (the "SEC") require all mutual funds to furnish prospective
investors certain information concerning the activities of the fund being
considered for investment. This information is included in a Prospectus dated
March 1, 1996, which may be obtained without charge by written request to A I M
Distributors, Inc. ("AIM Distributors"). Investors may also call AIM
Distributors at (713) 626-1919 (in Houston) or (800) 995-4246 (elsewhere) or
dealers authorized by AIM Distributors to distribute the Fund's shares.
Investors must receive a Prospectus before they invest.
The Statement of Additional Information is intended to furnish prospective
investors with additional information concerning the Fund. Some of the
information required to be in this Statement of Additional Information is also
included in the Fund's current prospectus and, in order to avoid repetition,
reference will be made to sections of the Prospectus. Additionally, the
Prospectus and this Statement of Additional Information omit certain
information contained in the registration statement filed with the SEC. Copies
of the registration statement, including items omitted from the Prospectus and
this Statement of Additional Information, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
GENERAL INFORMATION ABOUT THE FUND
THE FUND AND ITS CAPITAL STOCK
The Fund is an open-end, diversified management investment company organized
as a corporation under the laws of the State of Maryland on February 17, 1982.
Shares of the Fund are redeemable at the net asset value thereof at the option
of the holders thereof. For information concerning the methods of redemption
and the rights of share ownership, consult the Prospectus under the captions
"General Information" and "Redemption of Shares." As of February 1, 1996, no
person owned of record or is known by the Fund to own of record or beneficially
5% or more of the Fund's outstanding equity securities.
The Board of Directors may classify or reclassify any unissued shares into
shares of any class or classes in addition to that already authorized by
setting or changing in any one or more respects, from time to time, prior to
the issuance of such shares, the preference, conversion or other rights, voting
powers, restrictions, limitations as to dividends, qualification, or terms or
conditions of redemption, of such shares. Any such classification or
reclassification will comply with the provisions of the Investment Company Act
of 1940, as amended (the "1940 Act").
DIRECTORS AND OFFICERS
The directors and officers of the Fund and their principal occupations during
the last five years are set forth below. All of the Fund's executive officers
hold similar offices with some or all of the other AIM Funds. Unless otherwise
indicated, the address of each director and officer is 11 Greenway Plaza, Suite
1919, Houston, Texas 77046.
1
<PAGE> 24
*CHARLES T. BAUER, Chairman and Director (76)
Director, Chairman and Chief Executive Officer, A I M Management Group Inc.;
Chairman of the Board of Directors, A I M Advisors, Inc., A I M Capital
Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc., A I M
Global Associates, Inc., A I M Global Holdings, Inc., A I M Institutional Fund
Services, Inc. and Fund Management Company; and Director, AIM Global Advisors
Limited, A I M Global Management Company Limited and AIM Global Ventures Co.
BRUCE L. CROCKETT, Director (51)
COMSAT Corporation
6560 Rock Spring Drive
Bethesda, Maryland 20817
Director, President and Chief Executive Officer, COMSAT Corporation (includes
COMSAT World Systems, COMSAT Mobile Communications, COMSAT Video Enterprises,
COMSAT RSI and COMSAT International Ventures). Previously, President and Chief
Operating Officer, COMSAT Corporation; President, World Systems Division,
COMSAT Corporation; and Chairman, Board of Governors of INTELSAT; (each of the
COMSAT companies listed above is an international communication, information
and entertainment-distribution services company).
OWEN DALY II, Director (71)
Six Blythewood Road
Baltimore, Maryland 21210
Director, Cortland Trust Inc. (investment company). Formerly, Director, CF &
I Steel Corp., Monumental Life Insurance Company and Monumental General
Insurance Company; and Chairman of the Board of Equitable Bancorporation.
**CARL FRISCHLING, Director (59)
919 Third Avenue
New York, New York 10022
Partner, Kramer, Levin, Naftalis, Nessen, Kamin & Frankel (law firm).
Formerly, Partner, Reid & Priest (law firm); and, prior thereto, Partner,
Spengler Carlson Gubar Brodsky & Frischling (law firm).
*ROBERT H. GRAHAM, Director and President (49)
Director, President and Chief Operating Officer, A I M Management Group Inc.;
Director and President, A I M Advisors, Inc.; Director and Senior Vice
President, A I M Capital Management, Inc., A I M Distributors, Inc., A I M Fund
Services, Inc., A I M Global Associates, Inc., A I M Global Holdings, Inc., AIM
Global Ventures Co., A I M Institutional Fund Services, Inc. and Fund
Management Company; and Senior Vice President, AIM Global Advisors Limited.
__________________________________
* A director who is an "interested person" of the Fund and A I M
Advisors, Inc. as defined in the 1940 Act.
** A director who is an "interested person" of the Fund as defined in the
1940 Act.
2
<PAGE> 25
JOHN F. KROEGER, Director (71)
24875 Swan Road - Martingham
Box 464
St. Michaels, Maryland 21663
Director, Flag Investors International Fund, Inc., Flag Investors Emerging
Growth Fund, Inc., Flag Investors Telephone Income Fund, Inc., Flag Investors
Equity Partners Fund, Inc., Total Return U.S. Treasury Fund, Inc., Flag
Investors Intermediate Term Income Fund, Inc., Managed Municipal Fund, Inc.,
Flag Investors Value Builder Fund, Inc., Flag Investors Maryland Intermediate
Tax-Free Income Fund, Inc., Flag Investors Real Estate Securities Fund, Inc.,
Alex. Brown Cash Reserve Fund, Inc. and North American Government Bond Fund,
Inc. (investment companies). Formerly, Consultant, Wendell & Stockel
Associates, Inc. (consulting firm).
LEWIS F. PENNOCK, Director (53)
6363 Woodway, Suite 825
Houston, Texas 77057
Attorney, private practice in Houston, Texas.
IAN W. ROBINSON, Director (72)
183 River Drive
Tequesta, Florida 33469
Formerly, Executive Vice President and Chief Financial Officer, Bell Atlantic
Management Services, Inc. (provider of centralized management services to
telephone companies); Executive Vice President, Bell Atlantic Corporation
(parent of seven telephone companies); and Vice President and Chief Financial
Officer, Bell Telephone Company of Pennsylvania and Diamond State Telephone
Company.
LOUIS S. SKLAR, Director (56)
Transco Tower, 50th Floor
2800 Post Oak Road
Houston, Texas 77056
Executive Vice President, Development and Operations, Hines Interests Limited
Partnership (real estate development).
GARY T. CRUM, Senior Vice President (48)
Director and President, A I M Capital Management, Inc.; Director and Senior
Vice President, A I M Management Group Inc., A I M Advisors, Inc., A I M Global
Associates, Inc., A I M Global Holdings, Inc., and AIM Global Ventures Co.;
Director, A I M Distributors, Inc.; and Senior Vice President, AIM Global
Advisors Limited.
***JOHN J. ARTHUR, Senior Vice President and Treasurer (51)
Senior Vice President and Treasurer, A I M Advisors, Inc.; Vice President and
Treasurer, A I M Management Group Inc., A I M Capital Management, Inc., A I M
Distributors, Inc., A I M Fund Services, Inc., A I M Institutional Fund
Services, Inc. and Fund Management Company; and Vice President, AIM Global
Advisors Limited, A I M Global Associates, Inc., A I M Global Holdings, Inc.
and AIM Global Ventures Co.
- ----------------------
*** Mr. Arthur and Ms. Relihan are married to each other.
3
<PAGE> 26
***CAROL F. RELIHAN, Vice President and Secretary (41)
Senior Vice President, General Counsel and Secretary, A I M Advisors, Inc.;
Vice President, General Counsel and Secretary, A I M Management Group Inc.;
Vice President and General Counsel, Fund Management Company; Vice President and
Secretary, A I M Global Associates, Inc., and A I M Global Holdings, Inc.; Vice
President and Assistant Secretary, AIM Global Advisors Limited and AIM Global
Ventures Co.; and Vice President, A I M Capital Management, Inc., A I M
Distributors, Inc., A I M Fund Services, Inc. and A I M Institutional Fund
Services, Inc.
DANA R. SUTTON, Vice President and Assistant Treasurer (37)
Vice President and Fund Controller, A I M Advisors, Inc.; and Assistant Vice
President and Assistant Treasurer, Fund Management Company.
MELVILLE B. COX, Vice President (52)
Vice President, A I M Advisors, Inc., A I M Capital Management, Inc., A I M
Fund Services, Inc. and A I M Institutional Fund Services, Inc.; and Assistant
Vice President, A I M Distributors, Inc. and Fund Management Company. Formerly,
Vice President, Charles Schwab & Co., Inc.; Assistant Secretary, Charles Schwab
Family of Funds and Schwab Investments; Chief Compliance Officer, Charles
Schwab Investment Management, Inc.; and Vice President, Integrated Resources
Life Insurance Co. and Capitol Life Insurance Co.
JONATHAN C. SCHOOLAR, Vice President (34)
Director and Senior Vice President, A I M Capital Management, Inc.; and Vice
President, A I M Advisors, Inc.
The Board of Directors has an Audit Committee, an Investments Committee, and
a Nominating and Compensation Committee.
The members of the Audit Committee are Messrs. Daly, Kroeger, Pennock and
Robinson. The Audit Committee is responsible for meeting with the Fund's
auditors to review audit procedures and results and to consider any matters
arising from an audit to be brought to the attention of the directors as a
whole with respect to the Fund's fund accounting or its internal accounting
controls, or for considering such matters as may from time to time be set forth
in a charter adopted by the Board of Directors and such committee.
The members of the Investments Committee are Messrs. Bauer, Crockett, Daly,
Kroeger and Pennock. The Investments Committee is responsible for reviewing
portfolio compliance, brokerage allocation, portfolio investment pricing issues,
interim dividend and distribution issues, or considering such matters as may
from time to time be set forth in a charter adopted by the Board of Directors
and such committee.
The members of the Nominating and Compensation Committee are Messrs.
Crockett, Daly, Kroeger, Pennock and Sklar. The Nominating and Compensation
Committee is responsible for considering and nominating individuals to stand
for election as directors who are not interested persons, reviewing from time
to time the compensation payable to the disinterested directors, or
considering such matters as may from time to time be set forth in a charter
adopted by the board and such committee.
__________________________________
*** Mr. Arthur and Ms. Relihan are married to each other.
4
<PAGE> 27
Remuneration of Directors
Each director is reimbursed for expenses incurred in connection with each
meeting of the Board of Directors or any Committee attended. The directors of
the Fund who do not serve as officers of the Fund are compensated for their
services according to a fee schedule which recognizes the fact that they also
serve as directors or trustees of certain other investment companies advised or
managed by AIM. Each such director receives a fee, allocated among the AIM
Funds for which he serves as a director or trustee, which consists of an annual
retainer component and a meeting fee component.
Set forth below is information regarding compensation paid or accrued for
each director of the Fund:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
Director Aggregate Retirement Total
Compensation Benefits Compensation
from Fund(1) Accrued from all AIM
By All AIM Funds(3)
Funds(2)
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Charles T. Bauer $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------
Bruce L. Crockett 1,498.00 3,655.00 57,750.00
------------------------------------------------------------------------------------------------
Owen Daly II 1,595.00 18,662.00 58,125.00
------------------------------------------------------------------------------------------------
Carl Frischling 1,546.00 11,323.00 57,250.00
------------------------------------------------------------------------------------------------
Robert H. Graham 0 0 0
------------------------------------------------------------------------------------------------
John F. Kroeger 1,644.00 22,313.00 58,125.00
------------------------------------------------------------------------------------------------
Lewis F. Pennock 1,490.00 5,067.00 58,125.00
------------------------------------------------------------------------------------------------
Ian Robinson 1,488.00 15,381.00 56,750.00
------------------------------------------------------------------------------------------------
Louis S. Sklar 1,564.00 6,632.00 57,250.00
------------------------------------------------------------------------------------------------
</TABLE>
________________
(1) The total amount of compensation deferred by all Directors of the Fund
during the fiscal year ended October 31, 1995, including interest earned
thereon, was $5,990.
(2) During the calendar year ended December 31, 1995, the total amount of
expenses allocated to the Fund in respect of such retirement benefits was
$2,307.
(3) Messrs. Bauer, Daly, Graham, Kroeger and Pennock each serves as a Director
or Trustee of a total of 11 AIM Funds. Messrs. Crockett, Frischling, Robinson
and Sklar each serves as a Director or Trustee of a total of 10 AIM Funds.
Data reflect total compensation earned during the calendar year ended December
31, 1995.
AIM Funds Retirement Plan for Eligible Directors/Trustees
Under the terms of the AIM Funds Retirement Plan for Eligible
Directors/Trustees (the "Plan"), each director (who is not a employee of any of
the AIM Funds, A I M Management Group Inc. or any of their affiliates) may be
entitled to certain benefits upon retirement from the Board of Directors.
Pursuant to the Plan, the normal retirement date is the date on which the
eligible director has attained age 65 and has completed at least
5
<PAGE> 28
five years of continuous service with one or more of the regulated investment
companies managed, administered or distributed by AIM or its affiliates (the
"AIM Funds"). Each eligible director is entitled to receive an annual
benefit from the AIM Funds commencing on the first day of the calendar quarter
coincident with or following his date of retirement equal to 75% of the retainer
paid or accrued by the AIM Funds for such director during the twelve-month
period immediately preceding the director's retirement (including amounts
deferred under a separate agreement between the AIM Funds and the director) for
the number of such Director's years of service (not in excess of 10 years of
service) completed with respect to any of the AIM Funds. Such benefit is
payable to each eligible director in quarterly installments. If an eligible
director dies after attaining the normal retirement date but before receipt of
any benefits under the Plan commences, the director's surviving spouse (if any)
shall receive a quarterly survivor's benefit equal to 50% of the amount payable
to the deceased director, for no more than ten years beginning the first day of
the calendar quarter following the date of the director's death. Payments under
the Plan are not secured or funded by any AIM Fund.
Set forth below is a table that shows the estimated annual benefits payable
to an eligible director upon retirement assuming various compensation and years
of service classifications. The estimated credited years of service for
Messrs. Crockett, Daly, Frischling, Kroeger, Pennock, Robinson and Sklar are 8,
9, 18, 18, 14, 8 and 6 years, respectively.
<TABLE>
<CAPTION>
Estimated Benefits Upon Retirement
----------------------------------
Annual Compensation Paid
By All AIM Funds
$60,000 $65,000
<S> <C> <C> <C>
---------------------------------------------
Number of 10 $45,000 $48,750
Years of ---------------------------------------------
Service With 9 $40,500 $43,875
the AIM ---------------------------------------------
Funds 8 $36,000 $39,000
---------------------------------------------
7 $31,500 $34,125
---------------------------------------------
6 $27,000 $29,250
---------------------------------------------
5 $22,500 $24,375
---------------------------------------------
</TABLE>
Deferred Compensation Agreements
Messrs. Daly, Frischling, Kroeger, Robinson and Sklar (for purposes of this
paragraph only, the "deferring directors") have each executed a Deferred
Compensation Agreement (collectively, the "Agreements"). Pursuant to the
Agreements, the deferring directors may elect to defer receipt of up to 100% of
their compensation payable by the Fund, and such amounts are placed into a
deferral account. Currently, the deferring directors may select various AIM
Funds in which all or part of his deferral account shall be deemed to be
invested. Distributions from the deferring directors' deferral accounts will
be paid in cash, in generally equal quarterly installments over a period of ten
years beginning on the date the deferring director's retirement benefits
commence under the Plan. The Fund's Board of Directors, in its sole
discretion, may accelerate or extend the distribution of such deferral accounts
after the deferring director's termination of service as a director of the
Fund. If a deferring director dies prior to the distribution of amounts in his
deferral account, the balance of the deferral account will be distributed to
his designated beneficiary in a single lump sum payment as soon as practicable
after such deferring director's death. The Agreements are not funded and, with
respect to the payments of amounts held in the deferral accounts, the deferring
directors have the status of unsecured creditors of the Fund and of each other
AIM Fund from which they are deferring compensation.
6
<PAGE> 29
During the fiscal year ended October 31, 1995, the Fund paid $4,569 in legal
fees to the law firm in which Mr. Frischling, a director of the Fund, was
previously a partner.
As of February 1, 1996, the directors and officers of the Fund as a group
owned beneficially less than 1% of the Fund's outstanding shares.
THE INVESTMENT ADVISOR
The Fund has entered into an Investment Advisory Agreement dated as of
October 18, 1993, (the "Advisory Agreement") with A I M Advisors, Inc.,
("AIM"). AIM is a wholly-owned subsidiary of A I M Management Group Inc. ("AIM
Management"), 11 Greenway Plaza, Suite 1919, Houston, Texas 77046. Certain of
the directors and officers of AIM are also executive officers of the Fund and
their affiliations are shown under "Directors and Officers."
AIM and the Fund have adopted a Code of Ethics which requires investment
personnel (a) to pre-clear all personal securities transactions, (b) to file
reports or duplicate confirmations regarding such transactions, and (c) to
refrain from personally engaging in (i) short-term trading of a security, (ii)
transactions involving a security within seven days of an AIM Fund transaction
involving the same security, and (iii) transactions involving securities being
considered for investment by an AIM Fund. The Code of Ethics also prohibits
investment personnel and all other AIM employees from purchasing securities in
an initial public offering. Personal trading reports are reviewed periodically
by AIM, and the Board of Directors reviews an annual report (including
information on any substantial violations of the Code of Ethics). Violations
of the Code of Ethics may result in censure, monetary penalties, suspension or
termination of employment.
A I M Capital Management, Inc., ("AIM Capital") a wholly-owned subsidiary of
AIM, is engaged in the business of providing investment advisory services to
investment companies, corporations, institutions and other accounts. AIM
Distributors, a registered broker-dealer and a wholly-owned subsidiary of AIM,
acts as principal underwriter of other registered investment companies advised
or managed by AIM.
Pursuant to the terms of the Advisory Agreement, AIM: (a) supervises all
aspects of the operations of the Fund; (b) obtains and evaluates pertinent
information about significant developments and economic, statistical and
financial data, domestic, foreign or otherwise, whether affecting the economy
generally or the Fund, and whether concerning the individual issuers whose
securities are included in the Fund or the activities in which such issuers
engage, or with respect to securities which AIM considers desirable for
inclusion in the Fund; (c) determines which issuers and securities shall be
represented in the Fund's investment portfolio and regularly reports thereon to
the Fund's Board of Directors; and (d) formulates and implements continuing
programs for the purchases and sales of the securities of such issuers and
regularly reports thereon to the Fund's Board of Directors; and takes, on behalf
of the Fund, all actions which appear to the Fund necessary to carry into effect
such purchase and sale programs and supervisory functions as aforesaid,
including but not limited to the placing of orders for the purchase and sale of
securities for the Fund. Subject to the approval of the Board of Directors and
the shareholders of the Fund, AIM may delegate to a sub-advisor certain of its
duties, provided that AIM shall continue to supervise the performance of any
such sub-advisor.
As compensation for its services, AIM receives an annual fee, calculated
daily and paid monthly, at the annual rate of 1.00% of the first $10 million of
the Fund's average daily net assets, 0.75% of the next $140 million of the
Fund's average daily net assets and 0.625% of the Fund's average daily net
assets in excess of $150 million. Although the advisory fee rate paid by the
Fund is higher than that paid by other investment companies, many of those
investment companies are a different size or have different objectives than the
Fund. The effective rate of fees and expenses paid by the Fund at its current
size is lower than that for other funds with similar investment objectives. The
Advisory Agreement provides that if, for any fiscal year of the Fund, the total
of all ordinary business expenses of the Fund, including all investment
advisory fees (but excluding brokerage commissions and fees, taxes and
extraordinary expenses) would exceed applicable expense limitations imposed by
applicable state securities laws, the amount of advisory fees payable to AIM
7
<PAGE> 30
will be reduced by the amount of the excess. The amount of such reduction would
be deducted from monthly payments otherwise due to AIM for its annual advisory
fee during such fiscal year.
The Advisory Agreement became effective on October 18, 1993, and will
continue in effect until June 30, 1996, and from year to year thereafter only
if such continuance is specifically approved at least annually by (i) the
Fund's Board of Directors or the vote of a "majority of the outstanding voting
securities" of the Fund (as defined in the 1940 Act) and (ii) the affirmative
vote of a majority of the directors who are not parties to the agreement or
"interested persons" of any such party (the "Non-Interested Directors") by
votes cast in person at a meeting called for such purpose. The Fund or AIM may
terminate the Advisory Agreement on 60 days' written notice without penalty.
The Advisory Agreement terminates automatically in the event of assignment, as
defined in the 1940 Act.
The Advisory Agreement provides that upon the request of the Fund's Board of
Directors, AIM may perform, or arrange for the performance of, certain
accounting, shareholder servicing and other administrative services to the Fund
that are not required to be performed by AIM under the Advisory Agreement. For
such services, AIM is entitled to receive from the Fund reimbursement of its
costs or such reasonable compensation as may be agreed upon by AIM and the
Company's Board of Directors upon a finding by the Board of Directors that the
provision of such services is in the best interests of the Fund and its
shareholders.
The Board of Directors has made such a finding and, accordingly, has entered
into an Administrative Services Agreement dated October 18, 1993, with AIM (the
"Administrative Services Agreement"). Under the Administrative Services
Agreement, AIM currently provides the services of a principal financial officer
and his staff, who maintain the financial accounts and books and records of the
Fund, including the calculation of the daily net asset value of the Fund, and
prepare tax returns and financial statements for the Fund and also is
reimbursed for any expenses related to providing such services, as well as the
services of staff responding to various shareholder inquiries. The
Administrative Services Agreement became effective on October 18, 1993, and
will continue in effect until June 30, 1996, and from year to year thereafter
only if such continuance is specifically approved at least annually by (i) the
Fund's Board of Directors or the vote of a "majority of the outstanding voting
securities" of the Fund (as defined in the 1940 Act) and (ii) the affirmative
vote of a majority of the Non-Interested Directors by votes cast in person at a
meeting called for such purpose. In addition, a sub-contract between AIM and
A I M Fund Services, Inc. ("AFS"), a registered transfer agent and wholly-owned
subsidiary of AIM, provides that AFS may perform certain shareholders services
for the Fund which are not required to be performed by AIM under the Advisory
Agreement. Currently, AFS provides certain shareholders services for the Fund.
For such services, while AFS is entitled to receive from AIM such reimbursement
of its costs associated with providing those services as may be approved by the
Board of Directors, AFS does not presently receive any such reimbursement.
During the fiscal years ended October 31, 1995 and October 31, 1994, and the
fiscal period ended October 31, 1993, AIM received management and advisory fees
from the Fund of $5,719,169, $4,712,695 and $3,532,876, respectively. See
"Expenses."
For the fiscal years ended October 31, 1995 and October 31, 1994, and the
fiscal period ended October 31, 1993, AIM was reimbursed $60,994, $45,256, and
$34,385, respectively, for costs associated with performing administrative
services.
THE SUB-ADVISOR
NationsBank of Texas, N.A. ("NationsBank Texas"), 901 Main Street, Dallas,
Texas 75202, serves as the Fund's sub-advisor pursuant to a Sub-Advisory
Agreement dated October 18, 1993, (the "Sub-Advisory Agreement"). NationsBank
Corp., a bank holding company, indirectly holds 100% of the voting stock of
NationsBank Texas. It is anticipated that on or about March 15, 1996,
NationsBank Texas will be replaced by TradeStreet Investment Associates, Inc.
("TradeStreet"). TradeStreet is a new subsidiary of NationsBank, N.A. and a
registered investment advisor. TradeStreet will receive the same sub-advisory
fees currently payable to, and will perform the same services as, NationsBank
Texas.
8
<PAGE> 31
Pursuant to the terms of the Sub-Advisory Agreement, AIM has appointed
NationsBank Texas to provide certain investment advisory services to the Fund,
subject to the overall supervision by AIM and the Fund's Board of Directors.
As Sub-Advisor, NationsBank Texas shall: (a) obtain and evaluate pertinent
information about significant developments and economic, statistical and
financial data, domestic, foreign or otherwise, whether affecting the economy
generally or the Fund, and whether concerning the individual issuers whose
securities are included in the Fund or the activities in which such issuers
engage, or with respect to securities which it or AIM considers desirable for
inclusion in the Fund's investment portfolio; and (b) to the extent requested
by AIM, determine which issues and securities shall be represented in the
Fund's investment portfolio, formulate programs for the purchases and sales of
such securities and regularly report thereon to AIM. In performing these
services, NationsBank Texas, is required to comply with all applicable
provisions of federal or state law, including the applicable provisions of the
1940 Act and the Investment Advisers Act of 1940, as amended (the "Advisers
Act").
As compensation for its services, AIM pays NationsBank Texas an annual fee,
calculated daily and paid monthly, at an annual rate of 0.50% of the first $10
million of the Fund's average daily net assets, 0.35% of the next $140 million
of the Fund's average daily net assets and 0.225% of the Fund's average daily
net assets in excess of $150 million. NationsBank Texas has agreed to an
adjustment to the above contractual fee schedule so that it will accept a fee
on the Fund's average daily net assets in excess of $700 million of 0.15% of
the Fund's average daily net assets. The sub-advisor's fee is paid to
NationsBank Texas by AIM from the advisory fee which AIM receives from the
Fund.
The Sub-Advisory Agreement became effective on October 18, 1993, and will
continue in effect until June 30, 1996, and from year to year thereafter only
if such continuance is specifically approved at least annually by (i) the
Fund's Board of Directors or a vote of "a majority of the outstanding voting
securities" of the Fund (as defined by the 1940 Act), and (ii) by the
affirmative vote of a majority of the Non-Interested Directors by votes cast
in person at a meeting called for such purpose.
For the fiscal years ended October 31, 1995 and October 31, 1994, and the
fiscal period ended October 31, 1993, NationsBank Texas received fees from AIM
of $2,049,101, $1,807,547, and $1,376,778, respectively. See "Expenses."
EXPENSES
All of the ordinary business expenses incurred in the operations of the Fund
and the offering of its shares shall be borne by the Fund unless specifically
provided otherwise in the Advisory Agreement. These expenses borne by the Fund
include but are not limited to brokerage commissions, taxes, legal, auditing,
or governmental fees, the cost of preparing share certificates, custodian,
transfer and shareholder service agent costs, expenses of issue, sale,
redemption and repurchase of shares, expenses of registering and qualifying
shares for sale, expenses relating to directors' and shareholders' meetings,
the cost of preparing and distributing reports and notices to shareholders, the
fees and other expenses incurred by the Fund in reports and notices to
shareholders, the fees and other expenses incurred by the Fund in connection
with membership in investment company organizations and the cost of pricing
copies of prospectuses and statements of additional information distributed to
the Fund's shareholders.
If, for any fiscal year, the total of all ordinary business expenses of the
Fund, including all investment advisory fees, but excluding brokerage
commissions and fees, taxes, interest and extraordinary expenses, such as
litigation, would exceed the applicable expense limitations imposed by state
securities regulations in any state in which the Fund's shares are qualified
for sale, as such limitations may be raised or lowered from time to time, the
aggregate of all such investment advisory fees shall be reduced by the amount
of such excess.
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TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company ("State Street Bank") acts as transfer
agent for the Fund's shares and as custodian for the Fund's portfolio securities
and cash. The transfer agent's administrative duties have been delegated by
State Street Bank to its partially-owned affiliate, Boston Financial Data
Services, Inc. ("BFDS"). State Street Bank and BFDS receive such compensation
from the Fund for their services in such capacities as are agreed to from time
to time by State Street Bank and the Fund. The address of State Street Bank and
of BFDS is P.O. Box 8300, Boston, Massachusetts 02266-8300.
REPORTS
At least semi-annually, the Fund will furnish shareholders with a list of the
investments held in the Fund's portfolio and its financial statements. The
annual financial statements will be audited by the Fund's independent certified
public accountants. The Board of Directors has selected KPMG Peat Marwick LLP,
700 Louisiana, NationsBank Building, Houston, Texas 77002, as the Fund's
independent certified public accountants to audit the Fund's books and review
the Fund's tax returns.
TAX AND DIVIDEND INFORMATION
The following is only a summary of certain additional tax considerations
generally affecting the Fund and its shareholders that are not described in the
Prospectus. No attempt is made to present a detailed explanation of the tax
treatment of the Fund or its shareholders, and the discussion here and in the
Prospectus is not intended as a substitute for careful tax planning. Because
shares of the Fund may be purchased by the general public only through Summit
Investors Plans, the following discussion is addressed only to individual
(rather than corporate) investors.
QUALIFICATION AS A REGULATED INVESTMENT COMPANY
The Fund has elected to be taxed as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). As
a regulated investment company, the Fund is not subject to federal income tax on
the portion of its net investment income (i.e., taxable interest, dividends and
other taxable ordinary income, net of expenses) and capital gain net income
(i.e., the excess of capital gains over capital losses) that it distributes to
shareholders, provided that it distributes at least 90% of its investment
company taxable income (i.e., net investment income and the excess of net
short-term capital gain over net long-term capital loss) for the taxable year
(the "Distribution Requirement"), and satisfies certain other requirements of
the Code that are described below. Distributions by the Fund made during the
taxable year or, under specified circumstances, within twelve months after the
close of the taxable year, will be considered distributions of income and gains
of the taxable year and can therefore satisfy the Distribution Requirement.
In addition to satisfying the Distribution Requirement, a regulated
investment company must (1) derive at least 90% of its gross income from
dividends, interest, certain payments with respect to securities loans, gains
from the sale or other disposition of stock or securities or foreign currencies
(to the extent such currency gains are directly related to the regulated
investment company's principal business of investing in stock or securities) and
other income (including but not limited to gains from options, futures or
forward contracts) derived with respect to its business of investing in such
stock, securities or currencies (the "Income Requirement"); and (2) derive less
than 30% of its gross income (exclusive of certain gains on designated hedging
transactions that are offset by realized or unrealized losses on offsetting
positions) from the sale or other disposition of stock, securities or foreign
currencies (or options, futures or forward contracts thereon) held for less than
three months (the "Short-Short Gain Test"). However, foreign currency gains,
including those derived from options, futures and forwards, will not be
characterized as Short-Short Gain if they are directly related to the regulated
investment company's investments in stock or securities (or options or futures
thereon). Because of the Short-Short Gain Test, the Fund may have to limit the
sale of appreciated securities that it has held for less than three months.
However, the Short-Short Gain Test will not prevent the Fund from disposing of
investments at a loss, since the recognition of a loss before the expiration of
the three-month holding period
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<PAGE> 33
is disregarded. Interest (including original issue discount) received by the
Fund at maturity or upon the disposition of a security held for less than
three months will not be treated as gross income derived from the sale or other
disposition of such security within the meaning of the Short-Short Gain Test.
However, income that is attributable to realized market appreciation will be
treated as gross income from the sale or other disposition of securities for
this purpose.
In general, gain or loss recognized by the Fund on the disposition of an
asset will be a capital gain or loss. However, gain recognized on the
disposition of a debt obligation purchased by the Fund at a market discount
(generally, at a price less than its principal amount) will be treated as
ordinary income to the extent of the portion of the market discount which
accrued during the period of time the Fund held the debt obligation.
In general, for purposes of determining whether capital gain or loss
recognized by a Fund on the disposition of an asset is long-term or short-term,
the holding period of the asset may be affected if (i) the asset is used to
close a "short sale" (which includes for certain purposes the acquisition of a
put option) or is substantially identical to another asset so used, (ii) the
asset is otherwise held by the Fund as part of a "straddle" (which term
generally excludes a situation where the asset is stock and the Fund grants a
qualified covered call option (which, among other things, must not be
deep-in-the-money) with respect thereto) or (iii) the asset is stock and the
Fund grants an in-the-money qualified covered call option with respect
thereto. However, for purposes of the Short-Short Gain Test, the holding
period of the asset disposed of may be reduced only in the case of clause (i)
above. In addition, the Fund may be required to defer the recognition of a
loss on the disposition of an asset held as part of a straddle to the extent of
any unrecognized gain on the offsetting position.
In addition to satisfying the requirements described above, the Fund must
satisfy an asset diversification test in order to qualify as a regulated
investment company. Under this test, at the close of each quarter of the
Fund's taxable year, at least 50% of the value of the Fund's assets must
consist of cash and cash items, U.S. Government securities, securities of other
regulated investment companies, and securities of other issuers (as to which
the Fund has not invested more than 5% of the value of the Fund's total assets
in securities of such issuer and as to which the Fund does not hold more than
10% of the outstanding voting securities of such issuer), and no more than 25%
of the value of its total assets may be invested in the securities of any one
issuer (other than U.S. Government securities and securities of other regulated
investment companies), or in two or more issuers which the Fund controls and
which are engaged in the same or similar trades or businesses.
If for any taxable year the Fund does not qualify as a regulated investment
company, all of its taxable income (including its net capital gain) will be
subject to tax at regular corporate rates without any deduction for
distributions to shareholders, and such distributions will be taxable as
ordinary dividends to the extent of the Fund's current and accumulated earnings
and profits.
EXCISE TAX ON REGULATED INVESTMENT COMPANIES
A 4% non-deductible excise tax is imposed on regulated investment companies
that fail to distribute in each calendar year an amount equal to 98% of
ordinary taxable income for the calendar year and 98% of capital gain net
income for the one-year period ended on October 31 of such calendar year (or,
at the election of a regulated investment company having a taxable year ending
November 30 or December 31, for its taxable year (a "taxable year election")).
The balance of such income must be distributed during the next calendar year.
For the foregoing purposes, a regulated investment company is treated as having
distributed any amount on which it is subject to income tax for any taxable
year ending in such calendar year.
For purposes of the excise tax, a regulated investment company must (1)
reduce its capital gain net income (but not below its net capital gain) by the
amount of any net ordinary loss for any calendar year and (2) unless it has
made a taxable year election, exclude foreign currency gains and losses
incurred after October 31 of any year in determining the amount of ordinary
taxable income for the current calendar year
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<PAGE> 34
(and, instead, include such gains and losses in determining ordinary taxable
income for the succeeding calendar year).
The Fund intends to make sufficient distributions or deemed distributions of
its ordinary taxable income and capital gain net income prior to the end of
each calendar year to avoid liability for the excise tax. However, investors
should note that the Fund may in certain circumstances be required to liquidate
portfolio investments to make sufficient distributions to avoid excise tax
liability.
FUND DISTRIBUTIONS
The Fund anticipates distributing substantially all of its investment company
taxable income for each taxable year. Such distributions will be taxable to
shareholders as ordinary income and treated as dividends for federal income tax
purposes.
The Fund may either retain or distribute to shareholders its net capital gain
for each taxable year. The Fund currently intends to distribute any such
amounts. If net capital gain is distributed and designated as a capital gain
dividend, it will be taxable to shareholders as long-term capital gain,
regardless of the length of time the shareholder has held his shares or whether
such gain was recognized by the Fund prior to the date on which the shareholder
acquired his shares. Conversely, if the Fund elects to retain its net capital
gain, the Fund will be taxed thereon (except to the extent of any available
capital loss carryovers) at the 35% corporate tax rate. If the Fund elects to
retain its net capital gain, it is expected that the Fund also will elect to
have shareholders treated as if each received a distribution of its pro rata
share of such gain, with the result that each shareholder will be required to
report its pro rata share of such gain on its tax return as long-term capital
gain, will receive a refundable tax credit for its pro rata share of tax paid
by the Fund on the gain, and will increase the tax basis for its shares by an
amount equal to the deemed distribution less the tax credit.
Distributions by the Fund that do not constitute ordinary income dividends or
capital gain dividends will be treated as a return of capital to the extent of
(and in reduction of) the shareholder's tax basis in his shares; any excess
will be treated as gain from the sale of his shares, as discussed below.
Distributions by the Fund will be treated in the manner described above
regardless of whether such distributions are paid in cash or reinvested in
additional shares of the Fund. Shareholders receiving a distribution in the
form of additional shares will be treated as receiving a distribution in an
amount equal to the fair market value of the shares received, determined as of
the reinvestment date. In addition, if the net asset value at the time a
shareholder purchases shares of the Fund reflects undistributed net investment
income or recognized capital gain net income, or unrealized appreciation in the
value of the assets of the Fund, distributions of such amounts will be taxable
to the shareholder in the manner described above, although such distributions
economically constitute a return of capital to the shareholder.
Ordinarily, shareholders are required to take distributions by the Fund into
account in the year in which the distributions are made. However, dividends
declared in October, November or December of any year and payable to
shareholders of record on a specified date in such a month will be deemed to
have been received by the shareholders (and made by the Fund) on December 31 of
such calendar year if such dividends are actually paid in January of the
following year. Shareholders will be advised annually as to the U.S. federal
income tax consequences of distributions made (or deemed made) during the year.
The Fund will be required in certain cases to withhold and remit to the U.S.
Treasury 31% of ordinary income dividends and capital gain dividends, and the
proceeds of redemption of shares, paid to any shareholder (1) who has provided
either an incorrect tax identification number or no number at all, (2) who is
subject to backup withholding by the Internal Revenue Service for failure to
report the receipt of interest or dividend income properly, or (3) who has
failed to certify to the Fund that he is not subject to backup withholding or
that it is an "exempt recipient."
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<PAGE> 35
SALE OR REDEMPTION OF FUND SHARES
A shareholder will recognize gain or loss on the sale or redemption of shares
of the Fund in an amount equal to the difference between the proceeds of the
sale or redemption and the shareholder's adjusted tax basis in the shares. All
or a portion of any loss so recognized may be disallowed if the shareholder
purchases other shares of the Fund within 30 days before or after the sale or
redemption. In general, any gain or loss arising from (or treated as arising
from) the sale or redemption of shares of the Fund will be considered capital
gain or loss and will be long-term capital gain or loss if the shares were held
for longer than one year. However, any capital loss arising from the sale or
redemption of shares held for six months or less will be treated as a long-term
capital loss to the extent of the amount of capital gain dividends received on
such shares. For this purpose, the special holding period rules of Code
Section 246(c)(3) and (4) generally will apply in determining the holding
period of shares. Long-term capital gains of noncorporate taxpayers are
currently taxed at a maximum rate 11.6% lower than the maximum rate applicable
to ordinary income. Capital losses in any year are deductible only to the
extent of capital gains plus, in the case of a noncorporate taxpayer, $3,000 of
ordinary income.
If a shareholder (i) incurs a sales load in acquiring shares of the Fund,
(ii) disposes of such shares less than 91 days after they are acquired and
(iii) subsequently acquires shares of the same or another Fund at a reduced
sales load pursuant to a right to reinvest at such reduced sales load acquired
in connection with the acquisition of the shares disposed of, then the sales
load on the shares disposed of (to the extent of the reduction in the sales
load on the shares subsequently acquired) shall not be taken into account in
determining gain or loss on the shares disposed of but shall be treated as
incurred on the acquisition of the shares subsequently acquired.
FOREIGN SHAREHOLDERS
Taxation of a shareholder who, as to the United States, is a nonresident
alien individual, foreign trust or estate ("foreign shareholder"), depends on
whether the income from the Fund is "effectively connected" with a U.S. trade
or business carried on by such shareholder.
If the income from the Fund is not effectively connected with a U.S. trade or
business carried on by a foreign shareholder, ordinary income dividends will be
subject to U.S. withholding tax at the rate of 30% (or lower treaty rate) upon
the gross amount of the dividend. Such a foreign shareholder would generally
be exempt from U.S. federal income tax on gains realized on the sale of shares
of the Fund, capital gain dividends and amounts retained by the Fund that are
designated as undistributed capital gains.
If the income from the Fund is effectively connected with a U.S. trade or
business carried on by a foreign shareholder, then ordinary income dividends,
capital gain dividends and any gains realized upon the sale of shares of the
Fund will be subject to U.S. federal income tax at the rates applicable to U.S.
citizens or domestic corporations.
In the case of foreign shareholders, the Fund may be required to withhold
U.S. federal income tax at a rate of 31% on distributions that are otherwise
exempt from withholding tax (or taxable at a reduced treaty rate) unless such
shareholders furnish the Fund with proper notification of their foreign status.
The tax consequences to a foreign shareholder entitled to claim the benefits
of an applicable tax treaty may be different from those described herein.
Foreign shareholders are urged to consult their own tax advisers with respect
to the particular tax consequences to them of an investment in the Fund,
including the applicability of foreign taxes.
EFFECT OF FUTURE LEGISLATION; LOCAL TAX CONSIDERATIONS
The foregoing general discussion of U.S. federal income tax consequences is
based on the Code and the regulations issued thereunder as in effect on
February 7, 1996. Future legislative or administrative
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<PAGE> 36
changes or court decisions may significantly change the conclusions expressed
herein, and any such changes or decisions may have a retroactive effect with
respect to the transactions contemplated herein.
Rules of state and local taxation of ordinary income dividends and capital
gain dividends from regulated investment companies often differ from the rules
for U.S. federal income taxation described above. Shareholders are urged to
consult their tax advisers as to the consequences of these and other state and
local tax rules affecting investment in the Fund.
SHARE PURCHASES, REDEMPTIONS AND REPURCHASES
PURCHASES AND REDEMPTIONS
The terms of offering of Fund shares and the methods of accomplishing
redemption are set forth in full in the Fund's Prospectus and in the Summit
Investors Plans' Prospectus.
SUSPENSION OF RIGHT OF REDEMPTION
The right of redemption may be suspended or the date of payment postponed
when (a) trading on the New York Stock Exchange is restricted, as determined by
applicable rules and regulations of the SEC; (b) the New York Stock Exchange 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 disposal of portfolio securities or the valuation of the net
assets of the Fund not reasonably practicable.
VALUATION OF SHARES
In accordance with the current rules and regulations of the SEC, the net
asset value of a Fund share is determined as of the close of trading of the New
York Stock Exchange (4:00 p.m. Eastern Time) on each day in which the New York
Stock Exchange (the "NYSE") is open for trading. Net asset value is determined
by dividing the value of the Fund's securities, cash and other assets
(including accrued expenses but excluding capital and surplus), by the number
of shares outstanding. In the event the NYSE closes early (i.e. before
4:00 p.m. Eastern Time) on a particular day, the net asset value of a Fund
share is determined as of the close of the NYSE on such day. Determination of
the Fund's net asset value per share is made in accordance with generally
accepted accounting principles. For purposes of determining net asset value
per share, futures and options contract closing prices which are available 15
minutes after the close of trading of the NYSE is generally used.
Except as provided in the next sentence, a security listed or traded on an
exchange is valued at its last sale price on the exchange where the security is
principally traded, or lacking any sales on a particular day, the security is
valued at the mean between the closing bid and asked prices on that day.
Exchange listed convertible debt securities are valued at the mean between the
last bid and asked prices obtained from brokers-dealers. Each security traded
in the over-the-counter market (but not including securities reported on the
NASDAQ National Market System) is valued at the mean between the last bid and
asked prices based upon quotes furnished by market makers for such securities.
Each security reported on the NASDAQ National Market System is valued at the
last sale price on the valuation date, or absent a last sales price, at the
mean between the closing bid and asked prices on that day. Securities for
which market quotations are not readily available are valued at fair values as
determined in good faith by or under the supervision of the Fund's officers in
a manner specifically authorized by the Board of Directors of the Fund.
Notwithstanding the above, short-term obligations with maturities of 60 days or
less are valued at amortized cost.
Generally, trading in foreign securities, as well as corporate bonds, U.S.
Government securities and money market instruments, is substantially completed
each day at various times prior to the close of the NYSE.
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<PAGE> 37
The values of such securities used in computing the net asset value of the
Fund's shares are determined as of such times. Foreign currency exchange rates
are also generally determined prior to the close of the NYSE. Occasionally,
events affecting the values of such securities and such exchange rates may
occur between the times at which they are determined and the close of the NYSE
which will not be reflected in the computation of the Fund's net asset value.
If events materially affecting the value of such securities occur during such
period, then these securities will be valued at their fair value as determined
in good faith by or under the supervision of the Board of Directors.
THE DISTRIBUTION AGREEMENT
Information concerning the Fund's distributor, AIM Distributors, and the
continuous offering of the Fund's shares is set forth in the Prospectus under
the caption "Sales of Shares." The Distribution Agreement provides that AIM
Distributors will pay promotional expenses, including the incremental costs of
printing prospectuses, statements of additional information, annual reports and
other periodic reports for distribution to persons who are not shareholders of
the Fund and the costs of preparing and distributing any other supplemental
sales literature. AIM Distributors has not undertaken to sell any specified
number of shares of the Fund. The Fund or AIM Distributors may terminate the
Distribution Agreement on 60 days' written notice without penalty. The
Distribution Agreement will terminate automatically in the event of assignment.
INVESTMENT PROGRAM AND RESTRICTIONS
INVESTMENT PROGRAM
The Fund's investment objective and the methods by which the Fund seeks to
achieve that objective is set forth in the Prospectus under the caption
"Investment Program." It is the current policy of the Fund not to purchase or
own the common stock of any company which, in the opinion of AIM, derives a
substantial portion of its revenues from the manufacture of alcoholic beverages
or tobacco products or the operation of gambling establishments. In the
opinion of management based upon current conditions, such policy will not
have a significant effect on the investment performance of the Fund. This
policy may be modified or rescinded by the Fund's Board of Directors without
shareholder approval.
FOREIGN SECURITIES
The Fund has reserved the investment flexibility to invest up to 20% of its
total assets in foreign securities. For purposes of computing such limitation
American Depository Receipts, European Depository Receipts and other securities
representing underlying securities of foreign issuers shall be treated as
foreign securities. Investments by the Fund in securities of foreign
corporations may involve considerations and risks that are different in certain
respects from an investment in securities of U.S. companies. Such risks
include possible imposition of withholding taxes on interest or dividends,
possible adoption of foreign governmental restrictions on repatriation of
income or capital invested, or other adverse political or economic
developments. Additionally, it may be more difficult to enforce the rights of
a security holder against a foreign corporation, and information about the
operations of foreign corporations may be more difficult to obtain and
evaluate.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements. A repurchase agreement is an
instrument under which the Fund acquires ownership of a debt security and the
seller (usually a broker or a bank) agrees, at the time of the sale, to
repurchase the obligation at a mutually agreed upon time and price, thereby
determining the yield during the Fund's holding period. In the event of
bankruptcy or other default of a seller of a repurchase agreement, the Fund may
experience both delays in liquidating the underlying securities and losses,
including: (a) a possible decline in the value of the underlying security
during the period in which the Fund seeks to enforce its rights thereto; (b) a
possible subnormal level of income and lack of access to income
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<PAGE> 38
during this period; and (c) expenses of enforcing its rights. Repurchase
agreements entered into by the Fund are collateralized by United States
Government securities and the value of repurchase agreements is marked to market
daily in order to minimize the Fund's risk. Repurchase agreements usually are
for short periods, such as one or two days, but may be entered into for longer
periods of time.
RULE 144A SECURITIES
The Fund may purchase securities which, while privately placed, are eligible
for purchase and sale pursuant to Rule 144A under the Securities Act of 1933
(the "1933 Act"). This Rule permits certain qualified institutional buyers,
such as the Fund, to trade in privately placed securities even though such
securities are not registered under the 1933 Act. AIM, under the supervision of
the Fund's Board of Directors, will consider whether securities purchased under
Rule 144A are illiquid and thus subject to the Fund's restriction of investing
no more than 15% of its assets in illiquid securities. Determination of whether
a Rule 144A security is liquid or not is a question of fact. In making this
determination AIM will consider the trading markets for the specific security
taking into account the unregistered nature of a Rule 144A security. In
addition, AIM could consider the (i) frequency of trades and quotes, (ii)
number of dealers and potential purchasers, (iii) dealer undertakings to make a
market, and (iv) nature of the security and of market place trades (for
example, the time needed to dispose of the security, the method of soliciting
offers and the mechanics of transfer). The liquidity of Rule 144A securities
will also be monitored by AIM and, if as a result of changed conditions, it is
determined that a Rule 144A security is no longer liquid, the Fund's holdings
of illiquid securities will be reviewed to determine what, if any, action is
required to assure that the Fund does not invest more than 15% of its assets in
illiquid securities. Investing in Rule 144A securities could have the effect of
increasing the amount of the Fund's investments in illiquid securities if
qualified institutional buyers are unwilling to purchase such securities.
FUTURES CONTRACTS
The Fund may purchase stock index futures contracts. In cases of purchases
of stock index futures contracts, an amount of cash and cash equivalents,
equal to the cost of the stock index futures contracts (less any related
margin deposits), will be segregated by the Fund's custodian to collateralize
the position and ensure that the use of such stock index futures contracts is
unleveraged. Unlike when the Fund purchases or sells a security, no price is
paid or received by the Fund upon the purchase or sale of a stock index futures
contract. Initially, the Fund will be required to deposit with its custodian
for the account of the broker a stated amount, as called for by the particular
contract, of cash or U.S. Treasury bills. This amount is known as "initial
margin." The nature of initial margin in futures transactions is different from
that of margin in securities transactions in that stock index futures contract
margin does not involve the borrowing of funds by the customer to finance the
transactions. Rather, the initial margin is in the nature of a performance bond
or good faith deposit on the contract which is returned to the Fund upon
termination of the futures contract assuming all contractual obligations have
been satisfied. Subsequent payments, called "variation margin," to and from the
broker will be made on a daily basis as the price of the stock index futures
contract fluctuates making the long and short positions in the futures contract
more or less valuable, a process known as "marking-to-market." For example,
when the Fund has purchased a stock index futures contract and the price of the
underlying stock index has risen, that position will have increased in value and
the Fund will receive from the broker a variation margin payment with respect to
that increase in value. Conversely, where the Fund has purchased a stock index
futures contract and the price of the underlying stock index has declined, that
position would be less valuable and the Fund would be required to make a
variation margin payment to the broker. At any time prior to expiration of the
stock index futures contract, the Fund may elect to close the position by taking
an opposite position which will operate to terminate the Fund's position in the
stock index futures contract. A final determination of variation margin is then
made, additional cash is required to be paid by or released to the Fund and the
Fund realizes a loss or gain.
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Stock Index Futures Contracts
A stock index assigns relative values to the common stocks included in the
index and the index fluctuates with changes in the market values of the common
stocks so included. A stock index futures contract is an agreement pursuant to
which two parties agree to take or make delivery of an amount of cash equal to
a specified dollar amount times the difference between the stock index value at
the close of the last trading day of the contract and the price at which the
futures contract is originally struck. No physical delivery of the underlying
stocks in the index is made. Currently, stock index futures contracts can be
purchased or sold primarily with respect to broad based stock indices such as
the S&P's 500 Stock Index, the NYSE Composite Index, the American Stock
Exchange Major Market Index, the NASDAQ -- 100 Stock Index and the Value Line
Stock Index. The stock indices listed above consist of a spectrum of stocks
not limited to any one industry such as utility stocks. Utility stocks, at
most, would be expected to comprise a minority of the stocks comprising the
portfolio of the index. The Fund will only enter into stock index futures
contracts as a hedge against changes resulting from market conditions in the
values of the securities held or which it intends to purchase. When the Fund
anticipates a significant market or market sector advance, the purchase of a
stock index futures contract affords a hedge against not participating in such
advance. Conversely, in anticipation of or in a general market or market
sector decline that adversely affects the market values of the Fund's portfolio
of securities, the Fund may sell stock index futures contracts.
RISKS AS TO FUTURES CONTRACTS AND RELATED CALL OPTIONS
There are several risks in connection with the use of stock index futures
contracts and related call options as hedging devices. One risk arises because
of the imperfect correlation between movements in the price of hedging
instruments and movements in the price of the stocks, which are the subject of
the hedge. If the price of a hedging instrument moves less than the price of
the stocks, which are the subject of the hedge, the hedge will not be fully
effective. If the price of a hedging instrument moves more than the price of
the stocks, the Fund will experience either a loss or gain on the hedging
instrument which will not be completely offset by movements in the price of the
stocks, which are the subject of the hedge. The use of call options on futures
contracts involves the additional risk that changes in the value of the
underlying futures contract will not be fully reflected in the value of the
call option.
Successful use of hedging instruments by the Fund is also subject to AIM's
ability to predict correctly movements in the direction of the stock market, of
interest rates or of particular stock indices. Because of possible price
distortions in the futures and options markets and because of the imperfect
correlation between movements in the prices of hedging instruments and the
investments being hedged, even a correct forecast by AIM of general market
trends may not result in a completely successful hedging transaction.
It is also possible that where the Fund has sold stock index futures
contracts to hedge its portfolio against a decline in the market, the market
may advance and the value of stocks or debt securities held in its portfolio
may decline. If this occurred, the Fund would lose money on the stock index
futures contracts and also experience a decline in the value of its portfolio
securities.
Positions in futures contracts or options may be closed out only on an
exchange on which such contracts are traded. Although the Fund intends to
purchase or sell stock index futures contracts only on exchanges or boards of
trade where there appears to be an active market, there is no assurance that a
liquid market on an exchange or a board of trade will exist for any particular
contract at any particular time. If there is not a liquid market, it may not
be possible to close a stock index futures or option position at such time. In
the event of adverse price movements under those circumstances, the Fund would
continue to be required to make daily cash payments of maintenance margin on
its futures positions. The extent to which the Fund may engage in stock index
futures contracts will be limited by Internal Revenue Code requirements for
qualification as a regulated investment company and the Fund's intent to
continue to qualify as such. The result of a hedging program cannot be
foreseen and may cause the Fund to suffer losses which it would not otherwise
sustain.
17
<PAGE> 40
PORTFOLIO TRANSACTIONS AND BROKERAGE
The factors governing AIM's decisions to place orders to buy and sell
securities are set forth in the Prospectus under the caption "Management of the
Fund -- Portfolio Transactions and Brokerage." Under Section 28(e) of the
Securities Exchange Act of 1934, an investment advisor who exercises investment
discretion shall not be "deemed to have acted unlawfully or to have breached
its fiduciary duty" solely because under certain circumstances it has caused
the account to pay a higher commission than the lowest available. To obtain
the benefit of Section 28(e), AIM must make a good faith determination that the
commissions paid are "reasonable in relation to the value of the brokerage and
research services provided...viewed in terms of either that particular
transaction or its overall responsibilities with respect to the accounts as to
which it exercises investment discretion and that the services provided by a
broker provide AIM and any sub-advisor with lawful and appropriate assistance
in the performance of their investment decision-making responsibilities."
Accordingly, the price to the Fund in any transaction may be less favorable
than that available from another broker/dealer if the difference is reasonably
justified by other aspects of the portfolio execution services offered.
Those broker/dealers utilized by the Fund may furnish statistical, research
and other information or services which are deemed by AIM or any sub-advisor or
its affiliates to be beneficial to the Fund's investment program or which they
otherwise may lawfully and appropriately use in their investment advisory
capacities. Such services supplement the research of AIM or such sub-advisor.
Research services may include the following: statistical and background
information on U.S. and foreign economies, money market fixed income markets,
equity markets, specific industry groups and individual companies; information
on federal, state, local and foreign political developments; portfolio
management strategies; performance information on securities, indexes and
investment accounts; information concerning prices of securities; the providing
of equipment used to communicate research information; the arranging of
meetings with management of companies; and the providing of access to
consultants who supply research information. Such information may be
communicated electronically, orally or in written form. Research services may
also include: the providing of equipment used to communicate research
information; the arranging of meetings with management of companies and the
providing of access to consultants who supply research information.
The outside research assistance is useful to AIM and any sub-advisor since
the brokers as a group tend to follow a broader universe of securities and
other matters than the staffs of AIM or any sub-advisor can follow. In
addition, this research provides AIM and any sub-advisor with a diverse
perspective on financial markets. Research services which are provided to AIM
and any sub-advisor by brokers are available for the benefit of all accounts
managed or advised by AIM and any sub-advisor. In some cases, the research
services are available only from the broker providing such services. In other
cases, the research services may be obtainable from alternative sources in
return for cash payments. AIM is of the opinion that because the broker
research supplements rather than replaces its research, the receipt of such
research does not tend to decrease its expenses, but tends to improve the
quality of its investment advice. However, to the extent that AIM or any
sub-advisor would have purchased any such research services had such services
not been provided by brokers, the expenses of such services to AIM or any
sub-advisor could be considered to have been reduced accordingly. Certain
research services furnished by broker/dealers may be useful to AIM or any
sub-advisor with clients other than the Fund. Similarly, any research services
received by AIM or any sub-advisor through the placement of portfolio
transactions of other clients may be of value to AIM or any sub-advisor in
fulfilling its obligations to the Fund. AIM is of the opinion that this
material is beneficial in supplementing AIM's and/or any sub-advisor's research
and analysis; and therefore, it may benefit the Fund by improving the quality
of the investment advisor's advice. The advisory fee paid by the Fund is not
reduced because AIM or any sub- advisor receives such services.
Some broker/dealers may indicate that the provision of research services is
dependent upon the generation of certain specified levels of commissions and
underwriting concessions by AIM's and any sub-advisor's clients, including the
Fund.
AIM may from time to time determine target levels of commission business for
AIM to transact with various brokers on behalf of its clients (including the
Fund) over a certain time period. The target levels will
18
<PAGE> 41
be determined based upon the following factors, among others: (1) the execution
services provided by the broker; (2) the research services provided by the
broker; and (3) the broker's attitude toward and interest in mutual funds in
general and in the Fund and other mutual funds managed or advised by AIM,
affiliates of AIM, or any sub-advisor. No specific formula will be used in
connection with any of the foregoing considerations in determining the target
levels. However, if a broker has indicated a certain level of desired
commissions in return for certain research services provided by the broker, this
factor will be taken into consideration by AIM.
Subject to the overall objective of obtaining best price and execution for
the Fund, and consistent with the National Association of Securities Dealers'
Rules of Fair Practice, AIM may also consider sales of shares of the Fund and
of the other AIM Funds as a factor in the selection of broker/dealers to
execute portfolio transactions for the Fund.
AIM will seek, whenever possible, to recapture for the benefit of the Fund
any commission, fees, brokerage or similar payments paid by the Fund on
portfolio transactions. Normally, the only fee which may be recaptured is the
soliciting dealer fees on the tender of an account's portfolio securities in a
tender or exchange offer.
For the fiscal years ended October 31, 1995 and October 31, 1994, and the
fiscal period ended October 31, 1993, the Fund paid brokerage commissions of
$3,896,038, $2,549,248, and $2,252,080, respectively. During the fiscal year
ended October 31, 1995, AIM directed certain of the Fund's brokerage
transactions to certain broker-dealers that provided AIM with research,
statistical and other information. Such transactions amounted to $116,410,765
and the related brokerage commissions were $188,428. Substantially all of such
commissions were directed to broker-dealers that provided AIM with certain
research, statistical and other information. No brokerage commissions were paid
by the Fund to any broker who is an affiliated person of the Fund, an
affiliated person of such person or an affiliated person of the Fund, the
Fund's principal underwriter, or AIM.
Provisions of the 1940 Act and rules and regulations thereunder have been
construed to prohibit the Fund from purchasing securities or instruments from,
or selling securities or instruments to, any holder of 5% or more of the voting
securities of any investment company managed or advised by AIM. The Fund has
obtained an order of exemption from the SEC which permits the Fund to engage in
certain transactions with such 5% holder, if the Fund complies with conditions
and procedures designed to ensure that such transactions are executed at fair
market value and present no conflicts of interest.
AIM and its affiliates manage several other investment companies (the "AIM
Funds"), some of which may have investment objectives similar to those of the
Fund. It is possible that, at times, identical securities will be appropriate
for investment by the Fund and by one or more of the AIM Funds. The position
of each account, however, in the securities of the same issue, may vary and the
length of time that each account may choose to hold its investment in the
securities of the same issue may likewise vary. The timing and amount of
purchase by each account will also be determined by its cash position. If the
purchase or sale of securities consistent with the investment policies of the
Fund and one or more of the AIM Funds is considered at or about the same time,
transactions in such securities will be allocated among the Fund and the AIM
Funds in a manner deemed equitable by AIM. AIM may combine such transactions,
in accordance with applicable laws and regulations, in order to obtain the best
net price and most favorable execution. Simultaneous transactions could,
however, adversely affect the ability of the Fund to obtain or dispose of the
full amount of a security which it seeks to purchase or sell.
The Fund may invest in securities traded in the over-the-counter market and
may deal directly with broker/dealers who make markets in such securities.
Such transactions generally are entered into with broker/dealers acting as
principals for their own accounts.
19
<PAGE> 42
Under the 1940 Act, persons affiliated with the Fund are prohibited from
dealing with the Fund as principal in any purchase or sale of securities unless
an exemptive order allowing such transactions is obtained from the SEC. The
Board of Directors has adopted procedures pursuant to Rule 17a-7 under the 1940
Act relating to portfolio transactions between the Fund and other accounts
advised by AIM, and the Fund may from time to time enter into transactions in
accordance with such Rule and procedures.
From time to time, an identical security may be sold by an AIM Fund or
another investment account advised by AIM or AIM Capital and simultaneously
purchased by another investment account advised by AIM or AIM Capital when such
transactions comply with applicable rules and regulations and are deemed
consistent with the investment objective(s) and policies of the investment
accounts advised by AIM or AIM Capital involved. Procedures pursuant to Rule
17a-7 under the 1940 Act regarding transactions between investment accounts
advised by AIM or AIM Capital have been adopted by the Board of
Directors/Trustees, in the Company. Although such transactions may result in
custodian, tax or other related expenses, no brokerage commissions or other
direct transaction costs are generated by transactions among the investment
accounts advised by AIM or AIM Capital.
INVESTMENT RESTRICTIONS
The Fund's investment program is subject to a number of investment
restrictions which reflect self-imposed standards as well as federal and state
regulatory limitations. These restrictions are designed to minimize certain
risks associated with investing in specified types of securities or engaging in
certain transactions and to limit the amount of the Fund's assets which may be
concentrated in any specific industry or issue. The most significant of these
investment restrictions applicable to the Fund's investment program are set
forth in the Prospectus under the caption "Investment Program -- Investment
Restrictions." In addition to those restrictions set forth in the Prospectus,
the Fund will not:
(1) purchase or hold securities of any issuer if the Fund has knowledge
that the officers and directors of the Fund and its investment
advisor collectively own beneficially more than 5% of the outstanding
securities of such issuer (Individual holdings of less than 1/2 of 1%
will not be counted for the purpose of this restriction.);
(2) borrow money or issue senior securities, except that the Fund may
borrow from banks for temporary or emergency purposes in amounts up
to 10% of the value of its total assets at the time of borrowing
(This provision is included solely to facilitate the orderly sale of
portfolio securities to accommodate abnormally heavy redemption
requests if they should occur and is not for leverage purposes. Any
borrowings by the Fund will be repaid prior to the purchase of
additional portfolio securities.);
(3) underwrite securities issued by any other person;
(4) invest in real estate or purchase oil, gas or mineral interests,
except that this restriction does not apply to marketable securities
secured by real estate or interests therein or issued by issuers
which invest in real estate or interests therein, or to securities
issued by companies engaged in the exploration, development,
production, refining, transporting and marketing of oil, gas or
minerals;
(5) buy or sell commodities or commodity futures contracts;
(6) make loans of money or securities other than (a) through the purchase
of securities in accordance with the Fund's investment program, and
(b) by entering into repurchase agreements; provided that the Fund
may lend its portfolio securities so long as the value of securities
loaned by it does not exceed an amount equal to 33 1/3% of the Fund's
total assets;
(7) purchase securities on margin, except to the extent necessary for the
clearance of its securities transactions;
20
<PAGE> 43
(8) make short sales of securities or maintain a short position in
securities unless at all times when a short position is open, the
Fund owns at least an equal amount of such securities or owns
securities convertible into or exchangeable for at least an equal
amount of such securities, and unless not more than 10% of the Fund's
total assets (taken at current value) is held as collateral for such
short sales at any one time;
(9) invest in companies for the purpose of exercising control or
management;
(10) acquire for value the securities of any other investment companies,
other than in connection with a merger, consolidation, reorganization
or acquisition of assets, except that the Fund may invest up to 5% of
its assets in securities of other investment companies. The Fund
will not purchase more than 3% of the outstanding voting stock of any
investment company; or
(11) purchase or sell puts or purchase calls.
The foregoing investment restrictions are matters of fundamental policy which
may not be changed without the vote of a majority of the Fund's outstanding
shares, as defined in "General Information -- Organization and Description of
Common Stock" in the Prospectus. In addition to the foregoing restrictions, the
Fund is subject to the following policies, which may be amended by its Board of
Directors:
(1) The Fund may not invest more than 5% of its net assets in warrants or
rights nor more than 2% of its net assets in warrants or rights which
are not listed on the New York or American Stock Exchanges, except
that warrants or rights acquired in units or attached to other
securities are not subject to the foregoing limitation;
(2) The Fund may not invest more than 5% of its total assets in
securities of issuers, which, with their predecessors, have been in
business for less than three years;
(3) The Fund may not invest more than 5% of its total assets in financial
futures contracts or related call options.
In order to permit the sale of Fund shares in certain states, the Fund may
from time to time make commitments more restrictive than the restrictions
described above. For example, as of the date of this Statement of Additional
Information, the Fund has undertaken that it will not invest more than 15% of
its average net assets at the time of purchase in investments which are not
readily marketable (Texas), the Fund will not invest more than 35% of its assets
in high yield or "junk" bonds (Indiana), and the Fund will not purchase or
retain securities of any issuer if the officers or directors of the Fund, its
advisors or managers owning beneficially more than one half of one percent of
the securities of an issuer together own beneficially more than five percent of
the securities of that issuer nor will the Fund invest in the securities of
other investment companies, except by purchase in the open market where no
commission or profit to a sponsor or dealer results from the purchase other than
the customary broker's commission, or except when the purchase is part of a plan
of merger, consolidation, reorganization or acquisition (Ohio).
In addition, the Fund has undertaken to comply with California Rule
260.140.84, relating to aggregate annual expenses and California Rule
260.140.85, relating to short sales or margin securities, writing, buying or
selling puts and calls on securities, stock index futures, options on stock
index futures, financial futures contracts or options thereon, and other
investment practices deemed highly speculative by California. Should the Fund
determine that any such commitment is no longer in the best interests of the
Fund and its shareholders, it will revoke the commitment by terminating sales of
its shares in the state involved.
21
<PAGE> 44
FINANCIAL STATEMENTS
FS
<PAGE> 45
AUDITORS' REPORT
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors
AIM Summit Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of the
AIM Summit Fund, Inc., including the schedule of investments, as of October 31,
1995, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the years in the two-year period
then ended, and the financial highlights for each of the years in the two-year
period then ended, the ten months ended October 31, 1993 and each of the years
in the seven-year period ended December 31, 1992. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of AIM
Summit Fund, Inc. as of October 31, 1995, the results of its operations for the
year then ended, the changes in its net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the two-year period then ended, the ten month period ended October 31, 1993
and each of the years in the seven-year period ended December 31, 1992, in
conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Houston, Texas
December 8, 1995
FS-1
<PAGE> 46
FINANCIALS
SCHEDULE OF INVESTMENTS
October 31, 1995
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
COMMON STOCKS -- 95.57%
ADVERTISING/BROADCASTING -- 0.16%
52,500 Infinity Broadcasting Corp.(a) $ 1,706,250
- ----------------------------------------------------------------------------------------------
AEROSPACE/DEFENSE -- 1.26%
40,000 Boeing Co. (The) 2,625,000
- ----------------------------------------------------------------------------------------------
110,000 McDonnell Douglas Corp. 8,992,500
- ----------------------------------------------------------------------------------------------
18,000 United Technologies Corp. 1,597,500
- ----------------------------------------------------------------------------------------------
13,215,000
- ----------------------------------------------------------------------------------------------
AIRLINES -- 1.00%
60,000 United Airlines Corp. 10,552,500
- ----------------------------------------------------------------------------------------------
APPLIANCES -- 0.50%
120,000 Newell Co. 2,895,000
- ----------------------------------------------------------------------------------------------
50,000 Premark International Inc. 2,312,500
- ----------------------------------------------------------------------------------------------
5,207,500
- ----------------------------------------------------------------------------------------------
AUTOMOBILE/TRUCKS PARTS & TIRES -- 0.34%
100,000 Echlin Inc. 3,575,000
- ----------------------------------------------------------------------------------------------
BANKING -- 2.78%
180,000 Bank of New York Co., Inc. 7,560,000
- ----------------------------------------------------------------------------------------------
83,800 Chase Manhattan Corp. 4,776,600
- ----------------------------------------------------------------------------------------------
220,000 Corestates Financial Corp. 8,002,500
- ----------------------------------------------------------------------------------------------
100,000 Southern National Corp. 2,575,000
- ----------------------------------------------------------------------------------------------
30,000 Wells Fargo & Co. 6,303,750
- ----------------------------------------------------------------------------------------------
29,217,850
- ----------------------------------------------------------------------------------------------
BEVERAGES -- 0.63%
125,000 PepsiCo Inc. 6,593,750
- ----------------------------------------------------------------------------------------------
BUILDING MATERIALS -- 0.59%
110,000 Black & Decker Corp. 3,726,250
- ----------------------------------------------------------------------------------------------
30,000 Georgia-Pacific Corp. 2,475,000
- ----------------------------------------------------------------------------------------------
6,201,250
- ----------------------------------------------------------------------------------------------
BUSINESS SERVICES -- 1.92%
80,000 Equifax, Inc. 3,120,000
- ----------------------------------------------------------------------------------------------
125,100 Healthcare COMPARE Corp.(a) 4,628,700
- ----------------------------------------------------------------------------------------------
200,000 Manpower Inc. 5,425,000
- ----------------------------------------------------------------------------------------------
116,800 Olsten Corp. 4,496,800
- ----------------------------------------------------------------------------------------------
107,750 Value Health, Inc.(a) 2,464,782
- ----------------------------------------------------------------------------------------------
20,135,282
- ----------------------------------------------------------------------------------------------
</TABLE>
FS-2
<PAGE> 47
FINANCIALS
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
CHEMICALS -- 0.74%
130,000 Eastman Chemical Co. $ 7,735,000
- ----------------------------------------------------------------------------------------------
CHEMICALS (SPECIALTY) -- 0.36%
55,100 Airgas Inc.(a) 1,467,037
- ----------------------------------------------------------------------------------------------
41,000 W.R. Grace & Co. 2,285,750
- ----------------------------------------------------------------------------------------------
3,752,787
- ----------------------------------------------------------------------------------------------
COMPUTER MINI/PCS -- 3.77%
163,000 COMPAQ Computer Corp.(a) 9,087,250
- ----------------------------------------------------------------------------------------------
262,000 Dell Computer Corp.(a) 12,215,750
- ----------------------------------------------------------------------------------------------
130,000 Hewlett-Packard Co. 12,041,250
- ----------------------------------------------------------------------------------------------
80,000 Sun Microsystems, Inc.(a) 6,240,000
- ----------------------------------------------------------------------------------------------
39,584,250
- ----------------------------------------------------------------------------------------------
COMPUTER NETWORKING -- 4.16%
148,000 Bay Networks, Inc.(a) 9,805,000
- ----------------------------------------------------------------------------------------------
80,000 Cabletron Systems, Inc.(a) 6,290,000
- ----------------------------------------------------------------------------------------------
152,800 Cisco Systems, Inc.(a) 11,842,000
- ----------------------------------------------------------------------------------------------
35,800 Madge, N.V.(a) 1,499,125
- ----------------------------------------------------------------------------------------------
41,000 Network Equipment Technologies, Inc.(a) 1,337,625
- ----------------------------------------------------------------------------------------------
37,800 Optical Data Systems, Inc.(a) 1,129,275
- ----------------------------------------------------------------------------------------------
250,000 3Com Corp.(a) 11,750,000
- ----------------------------------------------------------------------------------------------
43,653,025
- ----------------------------------------------------------------------------------------------
COMPUTER PERIPHERALS -- 2.51%
129,000 Adaptec Inc.(a) 5,740,500
- ----------------------------------------------------------------------------------------------
82,800 Alliance Semiconductor Corp.(a) 2,546,100
- ----------------------------------------------------------------------------------------------
58,000 Digi International, Inc.(a) 1,551,500
- ----------------------------------------------------------------------------------------------
76,400 Microchip Technology, Inc.(a) 3,032,125
- ----------------------------------------------------------------------------------------------
35,000 Oak Technology, Inc.(a) 1,916,250
- ----------------------------------------------------------------------------------------------
125,000 Oracle Systems Corp.(a) 5,453,125
- ----------------------------------------------------------------------------------------------
70,000 Read-Rite Corp.(a) 2,441,250
- ----------------------------------------------------------------------------------------------
40,000 U.S. Robotics, Inc.(a) 3,700,000
- ----------------------------------------------------------------------------------------------
26,380,850
- ----------------------------------------------------------------------------------------------
</TABLE>
FS-3
<PAGE> 48
FINANCIALS
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
COMPUTER SOFTWARE/SERVICES -- 7.35%
75,000 Acclaim Entertainment, Inc.(a) $ 1,771,875
- ----------------------------------------------------------------------------------------------
74,800 Adobe Systems, Inc. 4,263,600
- ----------------------------------------------------------------------------------------------
132,000 BMC Software, Inc.(a) 4,702,500
- ----------------------------------------------------------------------------------------------
22,300 Broderbund Software, Inc.(a) 1,547,062
- ----------------------------------------------------------------------------------------------
196,350 Cadence Design Systems, Inc.(a) 6,332,288
- ----------------------------------------------------------------------------------------------
250,000 Computer Associates International, Inc. 13,750,000
- ----------------------------------------------------------------------------------------------
150,000 Computervision Corp.(a) 1,762,500
- ----------------------------------------------------------------------------------------------
85,000 Electronic Arts, Inc.(a) 3,113,125
- ----------------------------------------------------------------------------------------------
45,000 Fiserv, Inc.(a) 1,158,750
- ----------------------------------------------------------------------------------------------
54,600 FTP Software, Inc. 1,474,200
- ----------------------------------------------------------------------------------------------
60,000 HBO & Co. 4,245,000
- ----------------------------------------------------------------------------------------------
100,600 Informix Corp.(a) 2,929,975
- ----------------------------------------------------------------------------------------------
40,000 Intuit(a) 2,880,000
- ----------------------------------------------------------------------------------------------
72,000 Mentor Graphics Corp.(a) 1,512,000
- ----------------------------------------------------------------------------------------------
37,000 Microsoft Corp.(a) 3,700,000
- ----------------------------------------------------------------------------------------------
50,000 PairGain Technologies, Inc.(a) 2,137,500
- ----------------------------------------------------------------------------------------------
70,000 Parametric Technology Corp.(a) 4,681,250
- ----------------------------------------------------------------------------------------------
88,600 Policy Management Systems Corp.(a) 4,175,275
- ----------------------------------------------------------------------------------------------
25,000 Rational Software Corp.(a) 390,625
- ----------------------------------------------------------------------------------------------
51,400 SoftKey International Inc.(a) 1,619,100
- ----------------------------------------------------------------------------------------------
54,400 Sterling Software, Inc.(a) 2,509,200
- ----------------------------------------------------------------------------------------------
85,100 Symantec Corp.(a) 2,068,993
- ----------------------------------------------------------------------------------------------
120,000 Synopsys, Inc.(a) 4,500,000
- ----------------------------------------------------------------------------------------------
77,224,818
- ----------------------------------------------------------------------------------------------
CONGLOMERATES -- 1.48%
110,000 Du Pont (E.I.) de Nemours & Co. 6,861,250
- ----------------------------------------------------------------------------------------------
90,000 TRW Inc. 5,917,500
- ----------------------------------------------------------------------------------------------
45,300 Tyco International Ltd. 2,751,975
- ----------------------------------------------------------------------------------------------
15,530,725
- ----------------------------------------------------------------------------------------------
CONTAINERS -- 0.18%
69,200 Ball Corp. 1,911,650
- ----------------------------------------------------------------------------------------------
COSMETICS & TOILETRIES -- 0.52%
106,000 General Nutrition, Inc.(a) 2,636,750
- ----------------------------------------------------------------------------------------------
22,000 Gillette Co. (The) 1,064,250
- ----------------------------------------------------------------------------------------------
22,000 Procter & Gamble Co. 1,782,000
- ----------------------------------------------------------------------------------------------
5,483,000
- ----------------------------------------------------------------------------------------------
</TABLE>
FS-4
<PAGE> 49
FINANCIALS
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
ELECTRONIC COMPONENTS/MISCELLANEOUS -- 2.73%
76,000 Anixter International, Inc.(a) $ 1,453,500
- ----------------------------------------------------------------------------------------------
11,100 AVX Corp. 345,488
- ----------------------------------------------------------------------------------------------
255,000 Parker-Hannifin Corp. 8,606,250
- ----------------------------------------------------------------------------------------------
49,800 Philips Electronics N.V. -- New York Shares-ADR 1,923,525
- ----------------------------------------------------------------------------------------------
39,200 Symbol Technologies, Inc.(a) 1,367,100
- ----------------------------------------------------------------------------------------------
80,100 Tektronix, Inc. 4,745,925
- ----------------------------------------------------------------------------------------------
305,800 Teradyne, Inc.(a) 10,206,075
- ----------------------------------------------------------------------------------------------
28,647,863
- ----------------------------------------------------------------------------------------------
ELECTRONIC/PC DISTRIBUTORS -- 0.96%
125,000 Arrow Electronics, Inc(a) 6,343,750
- ----------------------------------------------------------------------------------------------
75,000 Avnet, Inc. 3,778,125
- ----------------------------------------------------------------------------------------------
10,121,875
- ----------------------------------------------------------------------------------------------
FINANCE (CONSUMER CREDIT) -- 3.80%
50,000 American Express Co. 2,031,250
- ----------------------------------------------------------------------------------------------
125,000 Countrywide Credit Industries, Inc. 2,765,625
- ----------------------------------------------------------------------------------------------
80,200 Credit Acceptance Corp. 1,884,700
- ----------------------------------------------------------------------------------------------
52,000 Dean Witter Discover & Co. 2,587,000
- ----------------------------------------------------------------------------------------------
65,000 Federal Home Loan Mortgage Corp. 4,501,250
- ----------------------------------------------------------------------------------------------
3,600 Federal National Mortgage Association 377,550
- ----------------------------------------------------------------------------------------------
120,000 First USA, Inc. 5,520,000
- ----------------------------------------------------------------------------------------------
233,800 Green Tree Acceptance, Inc. 6,224,925
- ----------------------------------------------------------------------------------------------
183,800 MBNA Corp. 6,777,625
- ----------------------------------------------------------------------------------------------
92,000 Medaphis Corp.(a) 2,921,000
- ----------------------------------------------------------------------------------------------
130,000 Mercury Finance Co. 2,502,500
- ----------------------------------------------------------------------------------------------
30,000 Student Loan Marketing Association 1,766,250
- ----------------------------------------------------------------------------------------------
39,859,675
- ----------------------------------------------------------------------------------------------
FOOD PROCESSING -- 1.32%
40,000 ConAgra, Inc. 1,545,000
- ----------------------------------------------------------------------------------------------
180,000 IBP, Inc. 10,777,500
- ----------------------------------------------------------------------------------------------
47,600 Lancaster Colony Corp. 1,582,700
- ----------------------------------------------------------------------------------------------
13,905,200
- ----------------------------------------------------------------------------------------------
FUNERAL SERVICES -- 0.91%
88,700 Loewen Group, Inc. 3,552,160
- ----------------------------------------------------------------------------------------------
150,000 Service Corp. International 6,018,750
- ----------------------------------------------------------------------------------------------
9,570,910
- ----------------------------------------------------------------------------------------------
</TABLE>
FS-5
<PAGE> 50
FINANCIALS
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
HOTELS/MOTELS -- 0.82%
90,000 Hospitality Franchise Systems, Inc.(a) $ 5,512,500
- ----------------------------------------------------------------------------------------------
119,000 La Quinta Motor Inns, Inc. 3,064,250
- ----------------------------------------------------------------------------------------------
8,576,750
- ----------------------------------------------------------------------------------------------
INSURANCE (MULTI-LINE PROPERTY) -- 1.13%
85,000 ACE, Ltd. 2,890,000
- ----------------------------------------------------------------------------------------------
90,000 CIGNA Corp. 8,921,250
- ----------------------------------------------------------------------------------------------
11,811,250
- ----------------------------------------------------------------------------------------------
LEISURE & RECREATION -- 1.47%
39,800 Avid Technology, Inc.(a) 1,741,250
- ----------------------------------------------------------------------------------------------
113,900 Carnival Cruise Lines, Inc. 2,648,175
- ----------------------------------------------------------------------------------------------
130,000 Eastman Kodak Co. 8,141,250
- ----------------------------------------------------------------------------------------------
100,000 Mattel, Inc. 2,875,000
- ----------------------------------------------------------------------------------------------
15,405,675
- ----------------------------------------------------------------------------------------------
MACHINE TOOLS -- 0.10%
35,000 Kennametal Inc. 1,089,375
- ----------------------------------------------------------------------------------------------
MACHINERY (HEAVY) -- 0.95%
55,200 Case Corp. 2,104,500
- ----------------------------------------------------------------------------------------------
200,000 Dover Corp. 7,900,000
- ----------------------------------------------------------------------------------------------
10,004,500
- ----------------------------------------------------------------------------------------------
MACHINERY (MISCELLANEOUS) -- 1.02%
180,000 American Standard, Inc.(a) 4,815,000
- ----------------------------------------------------------------------------------------------
127,500 Thermo Electron Corp.(a) 5,865,000
- ----------------------------------------------------------------------------------------------
10,680,000
- ----------------------------------------------------------------------------------------------
MEDICAL (DRUGS) -- 5.32%
65,000 Abbott Laboratories 2,583,750
- ----------------------------------------------------------------------------------------------
50,000 American Home Products Corp. 4,431,250
- ----------------------------------------------------------------------------------------------
53,000 Amerisource Healthcorp(a) 1,444,250
- ----------------------------------------------------------------------------------------------
141,000 Bristol-Meyers Squibb Co. 10,751,250
- ----------------------------------------------------------------------------------------------
113,000 Cardinal Health, Inc. 5,805,375
- ----------------------------------------------------------------------------------------------
32,300 Elan Corp., PLC -- ADR(a) 1,296,038
- ----------------------------------------------------------------------------------------------
15,600 Forest Laboratories, Inc.(a) 645,450
- ----------------------------------------------------------------------------------------------
35,000 Johnson & Johnson 2,852,500
- ----------------------------------------------------------------------------------------------
83,700 Mallinckrodt Group, Inc. 2,908,575
- ----------------------------------------------------------------------------------------------
27,000 Merck & Co., Inc. 1,552,500
- ----------------------------------------------------------------------------------------------
230,900 Mylan Laboratories, Inc. 4,387,100
- ----------------------------------------------------------------------------------------------
50,000 Pfizer Inc. 2,868,750
- ----------------------------------------------------------------------------------------------
125,000 Schering-Plough Corp. 6,703,125
- ----------------------------------------------------------------------------------------------
150,000 Upjohn Co. 7,612,500
- ----------------------------------------------------------------------------------------------
55,842,413
- ----------------------------------------------------------------------------------------------
</TABLE>
FS-6
<PAGE> 51
FINANCIALS
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
MEDICAL (INSTRUMENTS/PRODUCTS) -- 2.92%
27,500 Becton, Dickinson and Co. $ 1,787,500
- ----------------------------------------------------------------------------------------------
156,700 Biomet Inc.(a) 2,605,138
- ----------------------------------------------------------------------------------------------
140,300 Boston Scientific Corp.(a) 5,910,138
- ----------------------------------------------------------------------------------------------
30,000 Cordis Corp.(a) 3,315,000
- ----------------------------------------------------------------------------------------------
50,000 Medtronic, Inc. 2,887,500
- ----------------------------------------------------------------------------------------------
45,500 Nellcor Puritan Bennett, Inc.(a) 2,616,250
- ----------------------------------------------------------------------------------------------
65,100 St. Jude Medical, Inc.(a) 3,466,575
- ----------------------------------------------------------------------------------------------
330,000 United States Surgical Corp. 8,085,000
- ----------------------------------------------------------------------------------------------
30,673,101
- ----------------------------------------------------------------------------------------------
MEDICAL (PATIENT SERVICES) -- 6.29%
126,000 Apria Healthcare Group, Inc.(a) 2,724,750
- ----------------------------------------------------------------------------------------------
182,800 Columbia/HCA Healthcare Corp. 8,980,050
- ----------------------------------------------------------------------------------------------
42,400 Community Health Systems, Inc.(a) 1,346,200
- ----------------------------------------------------------------------------------------------
90,000 Health Care & Retirement Corp.(a) 2,643,750
- ----------------------------------------------------------------------------------------------
180,000 Health Management Associates, Inc.(a) 3,870,000
- ----------------------------------------------------------------------------------------------
116,200 Healthsource, Inc.(a) 6,158,600
- ----------------------------------------------------------------------------------------------
381,100 Healthsouth Rehabilitation Corp.(a) 9,956,238
- ----------------------------------------------------------------------------------------------
74,300 Horizon Healthcare Corp.(a) 1,504,575
- ----------------------------------------------------------------------------------------------
76,600 Integrated Health Services, Inc. 1,752,225
- ----------------------------------------------------------------------------------------------
158,000 Lincare Holdings Inc.(a) 3,930,250
- ----------------------------------------------------------------------------------------------
43,200 Living Centers of America, Inc.(a) 1,117,800
- ----------------------------------------------------------------------------------------------
88,000 Manor Care, Inc. 2,882,000
- ----------------------------------------------------------------------------------------------
42,600 Omnicare Inc. 1,544,250
- ----------------------------------------------------------------------------------------------
130,000 OrNda HealthCorp(a) 2,291,250
- ----------------------------------------------------------------------------------------------
40,000 Oxford Health Plans, Inc.(a) 3,130,000
- ----------------------------------------------------------------------------------------------
17,000 Pacificare Health Systems, Inc. -- Class A(a) 1,198,500
- ----------------------------------------------------------------------------------------------
129,000 Sybron International Corp.(a) 5,482,500
- ----------------------------------------------------------------------------------------------
200,000 Vencor, Inc.(a) 5,550,000
- ----------------------------------------------------------------------------------------------
66,062,938
- ----------------------------------------------------------------------------------------------
METALS -- 2.30%
160,000 Aluminum Co. of America 8,160,000
- ----------------------------------------------------------------------------------------------
133,400 Illinois Tool Works, Inc. 7,753,875
- ----------------------------------------------------------------------------------------------
130,000 Phelps-Dodge Corp. 8,238,750
- ----------------------------------------------------------------------------------------------
24,152,625
- ----------------------------------------------------------------------------------------------
NATURAL GAS PIPELINE -- 0.74%
200,000 Williams Companies, Inc. (The) 7,725,000
- ----------------------------------------------------------------------------------------------
</TABLE>
FS-7
<PAGE> 52
FINANCIALS
<TABLE>
<CAPTION>
SHARES MARKET VALUE
f<S> <C> <C>
OFFICE AUTOMATION -- 0.97%
147,600 Danka Business Systems PLC -- ADR $ 4,944,600
- ----------------------------------------------------------------------------------------------
40,000 Xerox Corp. 5,190,000
- ----------------------------------------------------------------------------------------------
10,134,600
- ----------------------------------------------------------------------------------------------
OFFICE PRODUCTS -- 0.52%
51,500 Avery-Dennison Corp. 2,304,625
- ----------------------------------------------------------------------------------------------
89,300 Reynolds & Reynolds Co. -- Class A 3,181,312
- ----------------------------------------------------------------------------------------------
5,485,937
- ----------------------------------------------------------------------------------------------
OIL & GAS (SERVICES) -- 2.99%
70,000 Atlantic Richfield Co. 7,472,500
- ----------------------------------------------------------------------------------------------
80,000 British Petroleum Co. PLC -- ADR 7,060,000
- ----------------------------------------------------------------------------------------------
120,000 Exxon Corp. 9,165,000
- ----------------------------------------------------------------------------------------------
360,000 Occidental Petroleum Corp. 7,740,000
- ----------------------------------------------------------------------------------------------
31,437,500
- ----------------------------------------------------------------------------------------------
OIL EQUIPMENT & SUPPLIES -- 0.75%
190,000 Halliburton Co. 7,885,000
- ----------------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS -- 0.76%
150,000 Bowater, Inc. 6,637,500
- ----------------------------------------------------------------------------------------------
25,000 Champion International Corp. 1,337,500
- ----------------------------------------------------------------------------------------------
7,975,000
- ----------------------------------------------------------------------------------------------
PUBLISHING -- 0.13%
35,300 Harcourt General, Inc. 1,398,763
- ----------------------------------------------------------------------------------------------
RESTAURANTS -- 0.26%
88,500 Outback Steakhouse, Inc.(a) 2,776,687
- ----------------------------------------------------------------------------------------------
RETAIL (FOOD & DRUG) -- 1.90%
70,800 Eckerd Corp.(a) 2,805,450
- ----------------------------------------------------------------------------------------------
78,000 Hannaford Bros. Co. 2,037,750
- ----------------------------------------------------------------------------------------------
169,200 Kroger Co.(a) 5,647,050
- ----------------------------------------------------------------------------------------------
200,000 Safeway Inc.(a) 9,450,000
- ----------------------------------------------------------------------------------------------
19,940,250
- ----------------------------------------------------------------------------------------------
RETAIL (STORES) -- 4.57%
125,000 AutoZone, Inc.(a) 3,093,750
- ----------------------------------------------------------------------------------------------
29,400 Baby Superstore, Inc.(a) 1,389,150
- ----------------------------------------------------------------------------------------------
49,700 Bed, Bath & Beyond, Inc.(a) 1,553,125
- ----------------------------------------------------------------------------------------------
154,000 Circuit City Stores, Inc. 5,139,750
- ----------------------------------------------------------------------------------------------
182,000 Consolidated Stores Corp.(a) 4,208,750
- ----------------------------------------------------------------------------------------------
106,100 Dollar General Corp. 2,599,450
- ----------------------------------------------------------------------------------------------
103,000 Gap, Inc. (The) 4,055,625
- ----------------------------------------------------------------------------------------------
</TABLE>
FS-8
<PAGE> 53
FINANCIALS
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
Retail (Stores)-continued
109,800 Gymboree Corp.(a) $ 2,484,225
- ----------------------------------------------------------------------------------------------
60,000 Heilig Meyers Co. 1,102,500
- ----------------------------------------------------------------------------------------------
25,000 Kohl's Corp.(a) 1,134,375
- ----------------------------------------------------------------------------------------------
57,200 Micro Warehouse, Inc.(a) 2,545,400
- ----------------------------------------------------------------------------------------------
123,800 Office Depot, Inc.(a) 3,543,775
- ----------------------------------------------------------------------------------------------
97,100 Sports Authority, Inc. (The)(a) 2,111,925
- ----------------------------------------------------------------------------------------------
150,000 Staples, Inc.(a) 3,993,750
- ----------------------------------------------------------------------------------------------
62,000 Talbots, Inc. 1,503,500
- ----------------------------------------------------------------------------------------------
35,100 Tandy Corp. 1,733,062
- ----------------------------------------------------------------------------------------------
129,900 Viking Office Products Inc.(a) 5,780,550
- ----------------------------------------------------------------------------------------------
47,972,662
- ----------------------------------------------------------------------------------------------
SCIENTIFIC INSTRUMENTS -- 0.66%
135,000 Varian Associates, Inc. 6,935,625
- ----------------------------------------------------------------------------------------------
SEMICONDUCTORS -- 13.71%
147,000 Altera Corp.(a) 8,893,500
- ----------------------------------------------------------------------------------------------
240,000 Analog Devices Inc.(a) 8,670,000
- ----------------------------------------------------------------------------------------------
300,000 Applied Materials, Inc.(a) 15,037,500
- ----------------------------------------------------------------------------------------------
35,600 ASM Lithography Holding(a) 1,766,650
- ----------------------------------------------------------------------------------------------
221,200 Atmel Corp.(a) 6,912,500
- ----------------------------------------------------------------------------------------------
85,300 Cirrus Logic, Inc.(a) 3,593,262
- ----------------------------------------------------------------------------------------------
150,000 Cypress Semiconductor Corp.(a) 5,287,500
- ----------------------------------------------------------------------------------------------
200,000 Integrated Device Technology, Inc.(a) 3,800,000
- ----------------------------------------------------------------------------------------------
50,000 Intel Corp. 3,493,750
- ----------------------------------------------------------------------------------------------
138,000 KLA Instruments Corp.(a) 5,899,500
- ----------------------------------------------------------------------------------------------
146,000 LAM Research Corp.(a) 8,887,750
- ----------------------------------------------------------------------------------------------
133,000 Linear Technology Corp. 5,818,750
- ----------------------------------------------------------------------------------------------
200,000 LSI Logic Corp.(a) 9,425,000
- ----------------------------------------------------------------------------------------------
27,900 Maxim Integrated Products, Inc.(a) 2,085,525
- ----------------------------------------------------------------------------------------------
185,000 Micron Technology Inc. 13,065,625
- ----------------------------------------------------------------------------------------------
25,000 Motorola, Inc. 1,640,625
- ----------------------------------------------------------------------------------------------
60,000 National Semiconductor Corp.(a) 1,462,500
- ----------------------------------------------------------------------------------------------
65,000 Novellus Systems, Inc.(a) 4,476,875
- ----------------------------------------------------------------------------------------------
105,000 Solectron Corp.(a) 4,226,250
- ----------------------------------------------------------------------------------------------
33,800 Tencor Instruments(a) 1,440,725
- ----------------------------------------------------------------------------------------------
200,000 Texas Instruments Inc. 13,650,000
- ----------------------------------------------------------------------------------------------
2,200 Ultratech Stepper, Inc.(a) 88,000
- ----------------------------------------------------------------------------------------------
74,000 Vishay Intertechnology, Inc.(a) 2,608,500
- ----------------------------------------------------------------------------------------------
170,000 VLSI Technology Inc.(a) 3,995,000
- ----------------------------------------------------------------------------------------------
168,000 Xilinx, Inc.(a) 7,728,000
- ----------------------------------------------------------------------------------------------
143,953,287
- ----------------------------------------------------------------------------------------------
</TABLE>
FS-9
<PAGE> 54
FINANCIALS
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
SHOES & RELATED APPAREL -- 1.24%
194,000 NIKE Inc. -- Class B $ 11,009,500
- ----------------------------------------------------------------------------------------------
45,000 Nine West Group, Inc.(a) 2,002,500
- ----------------------------------------------------------------------------------------------
13,012,000
- ----------------------------------------------------------------------------------------------
TELECOMMUNICATIONS -- 3.82%
46,000 ADC Telecommunications, Inc.(a) 1,840,000
- ----------------------------------------------------------------------------------------------
43,200 Allen Group, Inc. 1,058,400
- ----------------------------------------------------------------------------------------------
100,000 A T & T Corp. 6,400,000
- ----------------------------------------------------------------------------------------------
38,600 DSC Communications Corp.(a) 1,428,200
- ----------------------------------------------------------------------------------------------
39,400 Glenayre Technologies, Inc.(a) 2,531,450
- ----------------------------------------------------------------------------------------------
77,800 Nokia Corp -- ADR 4,337,350
- ----------------------------------------------------------------------------------------------
74,100 Northern Telecom Ltd. 2,667,600
- ----------------------------------------------------------------------------------------------
39,000 Octel Communications Corp.(a) 1,330,875
- ----------------------------------------------------------------------------------------------
100,000 Scientific-Atlanta Inc. 1,237,500
- ----------------------------------------------------------------------------------------------
28,200 StrataCom, Inc.(a) 1,734,300
- ----------------------------------------------------------------------------------------------
440,000 Telefonaktiebolaget L.M. Ericsson -- ADR 9,398,136
- ----------------------------------------------------------------------------------------------
104,000 Tellabs, Inc.(a) 3,536,000
- ----------------------------------------------------------------------------------------------
10,800 Transpro, Inc.(a) 118,800
- ----------------------------------------------------------------------------------------------
75,000 WorldCom, Inc.(a) 2,446,875
- ----------------------------------------------------------------------------------------------
40,065,486
- ----------------------------------------------------------------------------------------------
TELEPHONE -- 0.26%
91,600 Cincinnati Bell, Inc. 2,690,750
- ----------------------------------------------------------------------------------------------
Total Common Stocks 1,003,453,184
- ----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
- ----------
<S> <C> <C>
REPURCHASE AGREEMENT -- 4.51%(b)
$47,390,469 Daiwa Securities America Inc., 5.90%, 11/01/95(c) 47,390,469
- ----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.08% 1,050,843,653
- ----------------------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES -- (0.08)% (833,028)
- ----------------------------------------------------------------------------------------------
NET ASSETS -- 100.00% $1,050,010,625
============================================================================================
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Non-income producing security.
(b) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102 percent of the sales price of
the repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds managed by
the investment advisor.
(c) Joint repurchase agreement entered into 10/31/95 with a maturing value of
$401,494,601. Collateralized by $353,853,000 U.S. Treasury obligations,
8.375% due 08/15/08.
See Notes to Financial Statements.
FS-10
<PAGE> 55
FINANCIALS
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost $793,642,038) $1,050,843,653
- --------------------------------------------------------------------------------------------
Receivables for:
Investments sold 5,166,766
- --------------------------------------------------------------------------------------------
Capital stock sold 22,658
- --------------------------------------------------------------------------------------------
Dividends and interest 529,136
- --------------------------------------------------------------------------------------------
Investment for deferred compensation plan 12,412
- --------------------------------------------------------------------------------------------
Other assets 6,626
- --------------------------------------------------------------------------------------------
Total assets 1,056,581,251
- --------------------------------------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 5,596,600
- --------------------------------------------------------------------------------------------
Capital stock reacquired 154,167
- --------------------------------------------------------------------------------------------
Deferred compensation 12,412
- --------------------------------------------------------------------------------------------
Accrued advisory fees 571,703
- --------------------------------------------------------------------------------------------
Accrued accounting service fees 4,900
- --------------------------------------------------------------------------------------------
Accrued directors' fees 967
- --------------------------------------------------------------------------------------------
Accrued operating expenses 229,877
- --------------------------------------------------------------------------------------------
Total liabilities 6,570,626
- --------------------------------------------------------------------------------------------
Net assets applicable to shares outstanding $1,050,010,625
============================================================================================
CAPITAL SHARES, $.01 PAR VALUE PER SHARE:
Authorized 1,000,000,000
- --------------------------------------------------------------------------------------------
Outstanding 86,480,005
============================================================================================
Net asset value and redemption price per share $ 12.14
============================================================================================
</TABLE>
See Notes to Financial Statements.
FS-11
<PAGE> 56
FINANCIALS
STATEMENT OF OPERATIONS
For the Year Ended October 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends $ 8,058,735
- --------------------------------------------------------------------------------------------
Interest 1,150,005
- --------------------------------------------------------------------------------------------
Total investment income 9,208,740
- --------------------------------------------------------------------------------------------
EXPENSES:
Advisory fees 5,719,169
- --------------------------------------------------------------------------------------------
Custodian fees 126,109
- --------------------------------------------------------------------------------------------
Transfer agent fees 23,419
- --------------------------------------------------------------------------------------------
Accounting service fees 60,994
- --------------------------------------------------------------------------------------------
Directors' fees 12,048
- --------------------------------------------------------------------------------------------
Other 337,963
- --------------------------------------------------------------------------------------------
Total expenses 6,279,702
- --------------------------------------------------------------------------------------------
Net investment income 2,929,038
- --------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENT SECURITIES:
Net realized gain on sales of investment securities 74,322,239
- --------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities 169,626,929
- --------------------------------------------------------------------------------------------
Net gain on investment securities 243,949,168
- --------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $246,878,206
============================================================================================
</TABLE>
See Notes to Financial Statements.
FS-12
<PAGE> 57
FINANCIALS
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended October 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
OPERATIONS:
Net investment income $ 2,929,038 $ 7,489,641
- ---------------------------------------------------------------------------------------------
Net realized gain on sales of investment securities 74,322,239 30,323,385
- ---------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investment
securities 169,626,929 (31,641,947)
- ---------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 246,878,206 6,171,079
- ---------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (7,935,485) (6,514,217)
- ---------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains (30,550,717) (43,881,387)
- ---------------------------------------------------------------------------------------------
Net equalization credits 1,739,780 2,423,169
- ---------------------------------------------------------------------------------------------
Net increase from capital stock transactions 74,806,153 101,293,556
- ---------------------------------------------------------------------------------------------
Net increase in net assets 284,937,937 59,492,200
- ---------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 765,072,688 705,580,488
- ---------------------------------------------------------------------------------------------
End of period $1,050,010,625 $765,072,688
=============================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $ 700,176,586 $625,370,433
- ---------------------------------------------------------------------------------------------
Undistributed net investment income 19,000,287 22,266,954
- ---------------------------------------------------------------------------------------------
Undistributed net realized gain on sales of investment
securities 73,632,137 29,860,615
- ---------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities 257,201,615 87,574,686
- ---------------------------------------------------------------------------------------------
$1,050,010,625 $765,072,688
=============================================================================================
</TABLE>
See Notes to Financial Statements.
FS-13
<PAGE> 58
FINANCIALS
NOTES TO FINANCIAL STATEMENTS
October 31, 1995
NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES
AIM Summit Fund, Inc. (the "Fund") is a Maryland corporation registered under
the Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The following is a summary of significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. Security Valuations -- A security listed or traded on an exchange is valued
at its last sales price on the exchange where the security is principally
traded, or lacking any sales on a particular day, the security is valued at
the mean between the closing bid and asked prices on that day. Each
security traded in the over-the-counter market (but not including
securities reported on the NASDAQ National Market System) is valued at the
mean between the last bid and asked prices based upon quotes furnished by
market makers for such securities. Each security reported on the NASDAQ
National Market System is valued at the last sales price on the valuation
date or absent a last sales price, at the mean of the closing bid and asked
prices. Securities for which market quotations are not readily available
are valued at fair value as determined in good faith by or under the
supervision of the Fund's officers in a manner specifically authorized by
the Board of Directors of the Fund. Short-term obligations having 60 days
or less to maturity are valued at amortized cost which approximates market
value.
B. Securities Transactions, Investment Income and Distributions -- Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date.
C. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income
taxes is recorded in the financial statements.
D. Equalization -- The Fund follows the accounting practice known as
equalization by which a portion of the proceeds from sales and costs of
repurchases of Fund shares, equivalent on a per share basis to the amount
of undistributed net investment income, is credited or charged to
undistributed income when the transaction is recorded so that the
undistributed net investment income per share is unaffected by sales or
redemptions of Fund shares.
NOTE 2 -- ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund has entered into an investment advisory agreement with A I M Advisors,
Inc. ("AIM"). Under the terms of the advisory agreement, the Fund pays AIM a fee
at an annual rate of 1.0% of the first $10 million of the Fund's average daily
net assets, 0.75% of the next $140 million of the Fund's average daily net
assets and 0.625% of the Fund's average daily net assets in excess of $150
million. Under the terms of a sub-advisory agreement between AIM and NationsBank
of Texas, N.A. ("NationsBank"), AIM pays NationsBank a fee at an annual rate of
0.50% of the first $10 million of the Fund's average daily net assets, 0.35% of
the next $140 million of the Fund's average daily net assets, 0.225% of the next
$550 million of the Fund's average daily net assets and 0.15% of the Fund's
average daily net assets in excess of $700 million. These agreements require AIM
to reduce its fees or, if necessary, make payments to the Fund to the extent
required to satisfy any expense limitations imposed by the securities laws or
regulations thereunder of any state in which the Fund's shares are qualified for
sale.
The Fund, pursuant to an administrative services agreement with AIM, has
agreed to reimburse AIM for certain costs incurred in providing accounting
services to the Fund. During the year ended October 31, 1995, the Fund
reimbursed AIM $60,994 for such services.
During the year ended October 31, 1995, the Fund paid legal fees of $4,569
for services rendered by Kramer, Levin, Naftalis, Nessen, Kamin & Frankel as
counsel to the Board of Directors. A member of that firm is a director of
the Fund.
Substantially all shares of the Fund are held of record by State Street
Bank & Trust Company as custodian for Summit Investors Plans, a unit investment
trust that is sponsored by A I M Distributors, Inc. (an affiliated company of
AIM). Certain officers and directors of the Fund are officers of AIM and A I M
Distributors, Inc.
NOTE 3 -- DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of AIM. The Fund may invest directors' fees, if so
elected by a director, in mutual fund shares in accordance with a deferred
compensation plan.
FS-14
<PAGE> 59
FINANCIALS
NOTE 4 -- BANK BORROWINGS
The Fund has a $14,700,000 committed line of credit with a financial institution
syndicate with Chemical Bank of New York as the administrative agent. Interest
on borrowings under the line of credit is payable on maturity or prepayment
date. During the period July 20, 1995 (effective date of Credit Agreement)
through October 31, 1995, the Fund did not borrow under the line of credit
agreement. The Fund is charged a commitment fee, payable quarterly, at the rate
of 1/10 of 1% per annum on the unused balance of the Fund's commitment.
NOTE 5 -- INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended October 31, 1995, was
$1,096,638,136 and $1,081,422,456, respectively.
The amount of unrealized appreciation (depreciation) of investment
securities as of October 31, 1995, on a tax basis, is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities $270,162,529
- ---------------------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (13,025,219)
- ---------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities $257,137,310
=============================================================================================
</TABLE>
Cost of investments for tax purposes is $793,706,343.
NOTE 6 -- CAPITAL STOCK
Changes in capital stock outstanding for the years ended October 31, 1995 and
1994 were as follows:
<TABLE>
<CAPTION>
1995 1994
----------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold 10,287,176 $101,899,889 11,078,117 $104,089,393
- ------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends 4,324,777 36,847,100 5,136,785 48,593,992
- ------------------------------------------------------------------------------------------------
Reacquired (6,354,529) (63,940,836) (5,457,028) (51,389,829)
- ------------------------------------------------------------------------------------------------
8,257,424 $ 74,806,153 10,757,874 $101,293,556
================================================================================================
</TABLE>
FS-15
<PAGE> 60
FINANCIALS
NOTE 7 -- FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a Fund share outstanding
during each of the years in the two-year period ended October 31, 1995, the ten
months ended October 31, 1993 and each of the years in the seven-year period
ended December 31, 1992.
<TABLE>
<CAPTION>
October 31,
------------------------------------
1995 1994 1993
---------- --------- --------
<S> <C> <C> <C>
Net asset value, beginning of period $ 9.78 $ 10.46 $ 9.64
- --------------------------------------------- ---------- -------- --------
Income from investment operations:
Net investment income 0.04 0.10 0.09
- --------------------------------------------- ---------- -------- --------
Net gains (losses) on securities (both
realized and unrealized) 2.81 (0.04) 0.73
- --------------------------------------------- ---------- -------- --------
Total from investment operations 2.85 0.06 0.82
- --------------------------------------------- ---------- -------- --------
Less distributions:
Dividends from net investment income (0.10) (0.10) --
- --------------------------------------------- ---------- -------- --------
Distributions from capital gains (0.39) (0.64) --
- --------------------------------------------- ---------- --------- --------
Total distributions (0.49) (0.74 --
- --------------------------------------------- ---------- -------- --------
Net asset value, end of period $ 12.14 $ 9.78 $ 10.46
============================================= ========== ======== ========
Total return(b) 31.03% 0.61% 8.51%
============================================= ========== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,050,011 $765,073 $705,580
============================================= ========== ======== ========
Ratio of expenses to average net assets 0.71%(c) 0.72% 0.79%(d)
============================================= ========== ======== ========
Ratio of net investment income to average net
assets 0.33%(c) 1.04% 1.13%(d)
============================================= ========== ======== ========
Portfolio turnover rate 126.00% 121.69% 115.76%
============================================= ========== ======== ========
<CAPTION>
December 31,
-----------------------------------------------------------------------------------
1992 1991 1990 1989 1988(a) 1987 1986
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.09 $ 7.56 $ 7.79 $ 6.57 $ 5.70 $ 6.68 $ 6.49
- --------------------------------------------- -------- -------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.11 0.14 0.15 0.16 0.16 0.09 0.08
- --------------------------------------------- -------- -------- -------- -------- -------- -------- --------
Net gains (losses) on securities (both
realized and unrealized) 0.35 3.16 (0.08) 1.86 0.84 (0.40) 0.82
- --------------------------------------------- -------- -------- -------- -------- -------- -------- --------
TotaL from investment operations 0.46 3.30 0.07 2.02 1.00 (0.31) 0.90
- --------------------------------------------- -------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.11) (0.13) (0.16) (0.16) (0.13) (0.10) (0.05)
- --------------------------------------------- -------- -------- -------- -------- -------- -------- --------
Distributions from capital gains (0.80) (0.64) (0.14) (0.64) -- (0.57) (0.66)
- --------------------------------------------- -------- -------- -------- -------- -------- -------- --------
Total distributions (0.91) (0.77) (0.30) (0.80) (0.13) (0.67) (0.71)
- --------------------------------------------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of period $ 9.64 $ 10.09 $ 7.56 $ 7.79 $ 6.57 $ 5.70 $ 6.68
============================================= ======== ======== ======== ======== ======== ======== ========
Total return(b) 4.50% 43.64% 0.93% 30.92% 17.65% (4.66)% 14.05%
============================================= ======== ======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $604,329 $517,835 $316,043 $262,655 $164,996 $101,541 $ 72,458
============================================= ======== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net assets 0.76% 0.75% 0.80% 0.82% 1.04% 0.98% 1.16%
============================================= ======== ======== ======== ======== ======== ======== ========
Ratio of net investment income to average net
assets 1.09% 1.48% 2.02% 2.14% 2.57% 1.06% 1.15%
============================================= ======== ======== ======== ======== ======== ======== ========
Portfolio turnover rate 97.41% 109.04% 142.60% 97.26% 114.94% 81.99% 118.23%
============================================= ======== ======== ======== ======== ======== ======== ========
</TABLE>
(a) The Fund changed investment advisers on October 5, 1988.
(b) For periods less than one year, total return is not annualized.
(c) Ratios are based on average net assets of $881,067,069.
(d) Annualized.
FS-16
<PAGE> 61
PART C
OTHER INFORMATION
Item 24. (a) Financial Statements
In Part A:
Financial Highlights
In Part B:
Audited Financial Statements
(1) Independent Auditors' Report
(2) Schedule of Investments as of October 31, 1995
(3) Statement of Assets and Liabilities as of October 31,
1995
(4) Statement of Operations for the fiscal year ended
October 31, 1995
(5) Statement of Changes in Net Assets for the fiscal
years ended October 31, 1995 and October 31, 1994
(b) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
- -------- -----------------------------------------------------------------------------------------------------------
<S> <C>
(1) (a) - Articles of Incorporation, of the Registrant, as filed with the State of Maryland on February 17, 1982,
were filed as an Exhibit to Registrant's Pre-Effective Amendment No. 1 on Form N-1 filed on September 30,
1982, and are filed electronically herewith.
(b) - Articles of Amendment to the Articles of Incorporation, as filed with the State of Maryland on September
16, 1982, were filed as an Exhibit to Registrant's Pre-Effective Amendment No. 1 on Form N-1 filed on
September 30, 1982, and are filed electronically herewith.
(c) - Articles of Amendment to the Articles of Incorporation, as filed with the State of Maryland on September
30, 1982, are filed electronically herewith.
(d) - Articles of Amendment to the Articles of Incorporation, as filed with the State of Maryland on November 23,
1988, were filed as an Exhibit to Registrant's Post-Effective Amendment No. 9 on Form N-1A filed on
September 12, 1988, and are filed electronically herewith.
(2) (a) - By-Laws of the Registrant were filed as an Exhibit to Registrant's Pre-Effective Amendment No. 1 on Form
N-1 filed on September 30, 1982.
(b) - Amended By-Laws of the Registrant as adopted on February 18, 1987 were filed as an Exhibit to Registrant's
Post-Effective Amendment No. 10 on Form N-1A filed on April 28, 1989.
</TABLE>
1
<PAGE> 62
<TABLE>
<S> <C>
(c) - Amended By-Laws of the Registrant as adopted on May 24, 1988 were filed as an Exhibit to
Registrant's Post-Effective Amendment No. 10 on Form N-1A filed on April 28, 1989.
(d) - Amended and Restated By-Laws of the Registrant as adopted on June 11, 1989 were filed as an Exhibit to
Registrant's Post-Effective Amendment No. 11 on Form N-1A filed on April 30, 1990, and are filed
electronically herewith.
(e) - First Amendment to the Amended and Restated By-Laws of the Registrant as adopted on May 3, 1991 was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 13 on Form N-1A filed on April 30, 1992, and is
filed electronically herewith.
(f) - Second Amendment to the Amended and Restated By-Laws of the Registrant as adopted on March 14, 1995 is
filed electronically herewith.
(3) - Voting Trust Agreement - None.
(4) - Form of Specimen certificate for shares of common stock of Registrant was filed as an Exhibit to
Registrant's Pre-Effective Amendment No. 1 on Form N-1 filed on September 30, 1982.
(5) (a) - Form of Investment Advisory Agreement, between Registrant and A I M Advisors, Inc., was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 9 on Form N-1A filed on September 12, 1988.
(b) - Investment Advisory Agreement, dated October 5, 1988, between Registrant and A I M Advisors, Inc., was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 13 on Form N-1A filed on April 30, 1992.
(c) - Investment Advisory Agreement, dated October 18, 1993, between Registrant and A I M Advisors, Inc., was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 15 on Form N-1A filed on December 29,
1993, and is filed electronically herewith.
(d) - Form of Sub-Advisory Agreement, between A I M Advisors, Inc. and NCNB Texas National Bank, was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 9 on Form N-1A filed on September 12, 1988.
(e) - Sub-Advisory Agreement, dated October 5, 1988, between A I M Advisors, Inc. and NCNB Texas National Bank,
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 13 on Form N-1A filed on April 30,
1992.
(f) - Sub-Advisory Agreement, dated October 18, 1993, between A I M Advisors, Inc. and NationsBank of Texas,
N.A., was filed as an Exhibit to Registrant's Post-Effective Amendment No. 15 on Form N-1A filed on
December 29, 1993, and is filed electronically herewith.
(6) (a) - Distribution Agreement, dated August 27, 1985, between Registrant and A I M Distributors, Inc., was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 5 on Form N-1A filed on April 28, 1986.
(b) - Distribution Agreement, dated October 18, 1993, between Registrant and A I M Distributors, Inc., was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 15 on Form N-1A filed on December 29, 1993, and
is filed electronically herewith.
(7) (a) - Retirement Plan for Registrant's Non-Affiliated Directors was filed as an Exhibit to Registrant's Post-
Effective Amendment No. 17 on Form N-1A filed on December 23, 1994.
</TABLE>
2
<PAGE> 63
<TABLE>
<S> <C>
(b) - Retirement Plan for Registrant's Non-Affiliated Directors, effective as of March 8, 1994, as restated
September 18, 1995, is filed electronically herewith.
(c) - Form of Deferred Compensation Agreement for Registrant's Non-Affiliated Directors was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 17 on Form N-1A filed on December 23, 1994.
(d) - Form of Deferred Compensation Plan for Registrant's Non-Affiliated Directors as approved on December 5,
1995, is filed electronically herewith.
(8) (a) - Custodian Contract between Registrant and State Street Bank and Trust Company was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 7 on Form N-1A filed on March 1, 1988.
(b) - Custodian Contract, dated March 7, 1988, between Registrant and State Street Bank and Trust Company is
filed electronically herewith.
(c) - Amendment No. 1 dated September 19, 1995, to the Custodian Contract dated March 7, 1988, between Registrant
and State Street Bank and Trust Company is filed electronically herewith.
(9) (a) - Transfer Agency Agreement was filed as an Exhibit to Registrant's Post-Effective Amendment No. 2 to
Registrant's Registration Statement on Form N-1 filed on May 13, 1983.
(b) - Administrative Services Agreement, dated June 11, 1989, between Registrant and A I M Advisors, Inc., was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 11 on Form N- 1A filed on April 30, 1990.
(c) - Administrative Services Agreement, dated October 18, 1993, between the Registrant and A I M Advisors, Inc.,
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 15 on Form N-1A filed on December 29,
1993, and is filed electronically herewith.
(d) - Administrative Services Agreement, dated October 18, 1993, between A I M Advisors, Inc. and A I M Fund
Services, Inc., was filed as an Exhibit to Registrant's Post-Effective Amendment No. 15 on Form N-1A filed
on December 29, 1993, and is filed electronically herewith.
(d)(i) - Amendment No.1, dated May 11, 1994, to the Administrative Services Agreement dated October 18, 1993,
between A I M Advisors, Inc. and A I M Fund Services, Inc. was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 17 on Form N-1A filed on December 23, 1994, and is filed electronically
herewith.
(d)(ii) - Amendment No. 2, dated July 1, 1994, to the Administrative Services Agreement dated October 18, 1993,
between A I M Advisors, Inc. and A I M Fund Services, Inc. was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 17 on Form N-1A filed on December 23, 1994, and is filed electronically
herewith.
(d)(iii) - Amendment No. 3, dated September 16, 1994, to the Administrative Services Agreement dated October 18,
1993, between A I M Advisors, Inc. and A I M Fund Services, Inc. was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 17 on Form N-1A filed on December 23, 1994, and is filed
electronically herewith.
(d)(iv) - Amendment No. 4, dated November 1, 1994, to the Administrative Services Agreement dated November 1,
1994, between A I M Advisors, Inc. and A I M Fund Services, Inc. is filed electronically herewith.
</TABLE>
3
<PAGE> 64
<TABLE>
<S> <C>
(10) (a) - Opinion and consent of Spengler Carlson Gubar Brodsky & Frischling, dated March 5, 1984, was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 3 on Form N-1A filed on March 7, 1984, and is filed
electronically herewith.
(b) - Opinion of Ballard Spahr Andrews & Ingersoll was filed as an Exhibit to Registrant's Rule 24f-2 Notice for
the fiscal year ending October 31, 1995 on December 22, 1995.
(11) (a) - Consent of KPMG Peat Marwick LLP is filed electronically herewith.
(b) - Consent of Ballard Spahr Andrews & Ingersoll is filed electronically herewith.
(12) - Financial Statements - None.
(13) - Letter from A I M Distributors, Inc., dated September 24, 1992, re: initial capital was filed as an Exhibit
to the Registrant's Pre-Effective Amendment No. 1 on Form N-1 filed on September 30, 1982 and is filed
electronically herewith.
(14) - Retirement Plan Documents - None.
(15) - Plans Pursuant to Rule 12b-1 under the Investment Company Act of 1940 - None.
(16) - Schedule of Performance Quotations - None.
(18) - Copy of Rule 18f-3 Plan - None.
(27) - Financial Data Schedule is filed electronically herewith.
</TABLE>
Item 25. Persons Controlled by or under Common Control With Registrant.
Furnish a list or diagram or all persons directly or indirectly
controlled by or under common control with the Registrant and as to each such
person indicate (1) if a company, the state or other sovereign power under the
laws of which it is organized, and (2) the percentage of voting securities
owned or other basis of control by the person, if any, immediately controlling
it.
All of Registrant's issued and outstanding shares of Common Stock
are owned of record by State Street Bank and Trust Company ("State Street") as
custodian for Summit Investors Plans, a unit investment trust. State Street
votes such shares in accordance with the instructions received from beneficial
owners of Registrant's shares; and, as to shares for which no instructions are
received, proportionately based upon the votes cast by beneficial owners who
furnished instructions.
Item 26. Number of Holders of Securities
State in substantially the tabular form indicated, as of a
specified date within 90 days prior to the date of filing, the number of record
holders of each class of securities of the Registrant.
Number of Record Holders
Title Class February 1, 1996
----------- ------------------------
Common Stock 156
Item 27. Indemnification
4
<PAGE> 65
State the general effect of any contract, arrangements or stature under
which any director, officer, underwriter or affiliated person of the Registrant
is insured or indemnified in any manner against any liability which may be
incurred in such capacity, other than insurance provided by any director,
officer, affiliated person or underwriter for their own protection.
Under the terms of the Maryland General Corporation Law and the Registrant's
Articles of Incorporation and By-laws, the Registrant may indemnify any person
who was or is a director, officer or employee of the Registrant to the maximum
extent permitted by the Maryland General Corporation Law. The specific terms of
such indemnification are reflected in the Registrant's Articles of Incorporation
and By-laws, which are incorporated herein by reference. No indemnification
will be provided by the Registrant to any director or officer of the Registrant
for any liability to the Registrant or shareholders to which such director or
officer would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of duty.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered hereby, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy and will be
governed by the final adjudication of such issue. Insurance coverage is
provided under a joint Mutual Fund and Investment Advisory Professional
Directors and Officers Liability Policy, issued by ICI Mutual Insurance Company,
with a $15,000,000 limit of liability.
Item 28. Business and Other Connections of Investment Advisor
Describe any other business, profession, vocation or employment of a
substantial nature in which each investment advisor of the Registrant, and each
director, officer or partner of any such investment advisor, is or has been, at
any time during the past two fiscal years, engaged for his own account or in the
capacity of director, officer, employee, partner or trustee.
A I M Advisors, Inc.
See Statement of Additional Information, Part B under headings
"General Information About the Fund - Directors and Officers" for
information concerning A I M Advisors, Inc.
NationsBank of Texas, N.A.
The names and principal occupations of the chief executive officer
and each director of NationsBank of Texas, N.A. ("NationsBank
Texas") are as follows:
Hugh L. McColl, Jr. Chief Executive Officer ("CEO"),
NationsBank Texas, and NationsBank
Texas Corporation; Chairman and CEO,
NationsBank Corp.; CEO, NationsBank of
North Carolina, South Carolina and
Florida
Timothy P. Hartman Chairman, NationsBank Texas, N.A and
NationsBank Texas Corporation; Vice
Chairman, NationsBank Corp.
James R. Erwin Vice Chairman, NationsBank of Texas,
N.A
5
<PAGE> 66
Joseph R. Musolino Vice Chairman, NationsBank of Texas,
N.A.
Samuel J. Adkins, III Executive Vice President, Nations Bank
of Texas, N.A.
Robert B. Lane President, NationsBank Texas
Corporation
Kenneth W. Lewis President, NationsBank Corp.;
President, General Bank; Managing
Director, NationsBank of North
Carolina, South Carolina and Florida
All of the foregoing persons may be reached c/o NationsBank of
Texas, N.A., 901 Main Street, Dallas, Texas 75202.
Item 29. Principal Underwriters
(a) A I M Distributors, Inc., the Registrant's principal
underwriter, also acts as a principal underwriter, depositor
or investment advisor to the following investment companies:
AIM Equity Funds, Inc. (Retail Classes)
AIM Funds Group
AIM International Funds, Inc.
AIM Investment Securities Funds (Retail Class)
AIM Tax-Exempt Funds, Inc.
AIM Variable Insurance Funds, Inc.
Summit Investors Plans
(b) The following information is furnished with respect to the
officers and directors of A I M Distributors, Inc. the
Registrant's principal underwriter.
<TABLE>
<CAPTION>
Name and Principal Position and Offices with Position and Offices
Business Address * Principal Underwriter with Registrant
------------------- ------------------------ ---------------------
<S> <C> <C>
Charles T. Bauer Chairman of the Board of Directors Chairman & Director
Michael J. Cemo President & Director None
Gary T. Crum Director Senior Vice President
Robert H. Graham Senior Vice President & Director President & Director
James L. Salners Senior Vice President & Director None
John Caldwell Senior Vice President None
W. Gary Littlepage Senior Vice President None
Gordon J. Sprague Senior Vice President & Director None
Michael C. Vessels Senior Vice President None
Lawrence E. Manierre First Vice President None
James E. Stueve First Vice President None
Carol F. Relihan Vice President Vice President & Secretary
</TABLE>
- --------------------
* P.O. Box 4333
Houston, TX 77210-4333
6
<PAGE> 67
<TABLE>
<CAPTION>
Name and Principal Position and Offices with Position and Offices
Business Address* Principal Underwriter with Registrant
------------------ ------------------------- --------------------
<S> <C> <C>
Ofelia M. Mayo Vice President, General Counsel & Assistant Assistant Secretary
Secretary
John J. Arthur Vice President & Treasurer Senior Vice President & Treasurer
Charles R. Dewey Vice President None
Sidney M. Dilgren Vice President None
William H. Kleh Vice President Senior Vice President
Frank V. Serebrin Vice President None
B. J. Thompson Vice President None
Robert D. Van Sant Vice President None
David E. Hessel Assistant Vice President, None
Assistant Treasurer & Controller
Melville B. Cox Assistant Vice President Vice President
Mary E. Gentempo Assistant Vice President None
Jeffrey L. Horne Assistant Vice President None
Kim T. Lankford Assistant Vice President None
David L. Kite Assistant General Counsel & Assistant Assistant Secretary
Secretary
Nancy L. Martin Assistant General Counsel & Assistant Assistant Secretary
Secretary
Samuel D. Sirko Assistant General Counsel & Assistant Assistant Secretary
Secretary
Kathleen J. Pflueger Secretary Assistant Secretary
Stephen I. Winer Assistant Secretary Assistant Secretary
(c) Not Applicable.
</TABLE>
Item 30. Location of Accounts and Records
With respect to each account, book or other document required to be
maintained by Section 31(a) of the 1940 Act and the Rules (17 CFR 270.31a-1 to
31a-3) promulgated thereunder, furnish the name and address of each person
maintaining physical possession of each such account, book or other document.
A I M Advisors, Inc., 11 Greenway Plaza, Suite 1919, Houston,
Texas 77046, maintains physical possession of each such account,
book or other document of the Registrant at its principal
executive offices, except for those maintained by the Registrant's
Custodian and Transfer Agent, State Street Bank and Trust Company,
225 Franklin Street, Boston, Massachusetts 02105 and its partially
owned subsidiary, Boston Financial Data Services, Inc., P.O. Box
8300, Boston, Massachusetts 02266-8300.
- -----------------
* P.O. BOX 4333
Houston, TX 77210-4333
7
<PAGE> 68
Item 31. Management Services
Furnish a summary of the substantive provisions of any management related
service contract not discussed in Part I of this Form (because the contract was
not believed to be material to a purchaser of securities of the Registrant)
under which services are provided to the Registrant, indicating the parties to
the contract, the total dollars paid and by whom, for the last three fiscal
years.
None.
Item 32. Undertakings.
The Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of its annual report upon
request and without charge.
8
<PAGE> 69
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this Amendment
to its Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the city of Houston, Texas on the 23rd day of
February 1996.
REGISTRANT: AIM SUMMIT FUND, INC.
By: /s/ Robert H. Graham
------------------------------------
Robert H. Graham, President
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Charles T. Bauer Chairman & Director February 23, 1996
- ---------------------------------
(Charles T. Bauer)
/s/ Robert H. Graham President & Director February 23, 1996
- --------------------------------- (Principal Executive Officer)
(Robert H. Graham)
/s/ Bruce L. Crockett Director February 23, 1996
- ---------------------------------
(Bruce L. Crockett)
/s/ Owen Daly II Director February 23, 1996
- ---------------------------------
(Owen Daly II)
/s/ Carl Frischling Director February 23, 1996
- ---------------------------------
(Carl Frischling)
/s/ John F. Kroeger Director February 23,1996
- ---------------------------------
(John F. Kroeger)
/s/ Lewis F. Pennock Director February 23, 1996
- ---------------------------------
(Lewis F. Pennock)
/s/ Ian W. Robinson Director February 23, 1996
- ---------------------------------
(Ian W. Robinson)
/s/ Louis S. Sklar Director February 23, 1996
- ---------------------------------
(Louis S. Sklar)
/s/ John J. Arthur Senior Vice President & February 23, 1996
- --------------------------------- Treasurer (Principal Financial
(John J. Arthur) and Accounting Officer)
</TABLE>
<PAGE> 70
INDEX TO EXHIBITS
Exhibit
Number
- -------
1(a) Articles of Incorporation, of the Registrant, as filed with the
State of Maryland on February 17, 1982
1(b) Articles of Amendment to the Articles of Incorporation, as filed
with the State of Maryland on September 16, 1982
1(c) Articles of Amendment to the Articles of Incorporation, as filed
with the State of Maryland on September 30, 1982
1(d) Articles of Amendment to the Articles of Incorporation, as filed
with the State of Maryland on November 23, 1988
2(d) Amended and Restated By-Laws of the Registrant as adopted on
June 11, 1989
2(e) First Amendment to the Amended and Restated By-Laws of the
Registrant as adopted on May 3, 1991
2(f) Second Amendment to the Amended and Restated By-Laws of the
Registrant as adopted on March 14, 1995
5(c) Investment Advisory Agreement, dated October 18, 1993, between
Registrant and A I M Advisors, Inc.
5(f) Sub-Advisory Agreement, dated October 18, 1993, between A I M
Advisors, Inc. and NationsBank of Texas, N.A.
6(b) Distribution Agreement, dated October 18, 1993, between Registrant
and A I M Distributors, Inc.
7(b) Retirement Plan for Registrant's Non-Affiliated Directors,
effective as of March 8, 1994, as restated September 18, 1995
7(d) Form of Deferred Compensation Plan for Registrant's Non-Affiliated
Directors as approved on December 5, 1995
8(b) Custodian Contract, dated March 7, 1988, between Registrant and
State Street Bank and Trust Company
8(c) Amendment No. 1 dated September 19, 1995, to the Custodian Contract
dated March 7, 1988, between Registrant and State Street Bank and
Trust Company
9(c) Administrative Services Agreement, dated October 18, 1993, between
the Registrant and A I M Advisors, Inc.
9(d) Administrative Services Agreement, dated October 18, 1993, between
A I M Advisors, Inc. and A I M Fund Services, Inc.
9(d)(i) Amendment No.1, dated May 11, 1994, to the Administrative Services
Agreement dated October 18, 1993, between A I M Advisors, Inc. and
A I M Fund Services, Inc.
9(d)(ii) Amendment No. 2, dated July 1, 1994, to the Administrative Services
Agreement dated October 18, 1993, between A I M Advisors, Inc. and
A I M Fund Services, Inc.
9(d)(iii) Amendment No. 3, dated September 16, 1994, to the Administrative
Services Agreement dated October 18, 1993, between A I M Advisors,
Inc. and A I M Fund Services, Inc.
9(d)(iv) Amendment No. 4, dated November 1, 1994, to the Administrative
Services Agreement dated November 1, 1994, between A I M Advisors,
Inc. and A I M Fund Services, Inc.
10 Opinion and consent of Spengler Carlson Gubar Brodsky & Frischling,
dated March 5, 1984
<PAGE> 71
11(a) Consent of KPMG Peat Marwick LLP
11(b) Consent of Ballard Spahr Andrews & Ingersoll
13 Letter from A I M Distributors, Inc., dated September 24, 1982 re:
initial capital was filed as an Exhibit to the Registrant's
Pre-Effective Amendment No. 1 on Form N-1 filed on September 30,
1982
27 Financial Data Schedule
<PAGE> 1
EXHIBIT 1(a)
ARTICLES OF INCORPORATION
OF
SUMMIT FUND, INC.
FIRST: THE UNDERSIGNED, CARL FRISCHLING, whose post office address is 280
Park Avenue, New York, New York, being at least eighteen years of age, does,
under and by virtue of the General Laws of the State of Maryland authorizing the
formation of corporations, act as incorporator with the intention of forming a
corporation under the Maryland General Corporation Law.
SECOND: The name of the corporation is SUMMIT FUND, INC. (hereinafter
called the "Corporation").
THIRD: The purpose for which the Corporation is formed and the business or
objects to be transacted, carried on and promoted by it, is to act as an
open-end investment company of the management type registered as such with the
Securities and Exchange Commission pursuant to the Investment Company Act of
1940 and to exercise and generally to enjoy all of the powers, rights and
privileges granted to, or conferred upon, corporations by the general laws of
the State of Maryland now or hereafter in force.
FOURTH: The post office address of the principal office of the Corporation
in the State of Maryland is c/o The Corporation Trust Incorporated, First
Maryland Building, 25 South Charles Street, Baltimore, Maryland 21201. The name
of the resident agent of the Corporation in Maryland is The Corporation Trust
Incorporated, First Maryland Building, 25 South Charles Street, Baltimore,
Maryland 21201.
FIFTH: The total number of shares of capital stock which the Corporation
shall have authority to issue is Ten Million (10,000,000), all of which shall be
Common Stock having a par vale of one cent ($.01) per share, and having an
aggregate par value for all such shares of $100,000.
SIXTH: The preference, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms or
conditions of redemption of the Common Stock of the Corporation, shall be as
follows:
(a) Each holder of shares of stock of the Corporation, upon proper
written request (including signature guarantees, if required by the Board
of Directors) to
<PAGE> 2
the Corporation accompanied, when stock certificates representing such shares
are outstanding, by surrender of the appropriate stock certificate or
certificates in proper form for transfer, or any such form as the Board of
Directors may provide, shall be entitled to require the Corporation to redeem,
to the extent that the Corporation may lawfully effect such redemption under the
laws of the State of Maryland, all or any number of the shares standing in the
name of such holder on the books of the Corporation, at the net asset value of
such shares computed as hereinafter provided. Notwithstanding the foregoing, the
Board of Directors of the Corporation may suspend the right of the holders of
the shares of stock of the Corporation to require the Corporation to redeem such
shares when permitted or required to do so by the Investment Company Act of 1940
or any rule or regulation of the Securities and Exchange Commission promulgated
thereunder.
(b) When the Board of Directors of the Corporation, including a
majority of the Directors who are not interested persons as defined in
Section 2(a)(19) of the Investment Company Act of 1940, determines, in its
sole discretion, that the action is necessary for the business success and
general welfare of the Corporation in order to reduce disproportionate and
unduly burdensome expenses in the operation of the Corporation's affairs,
to achieve efficiencies in the administration of its activities, or to
reduce or eliminate excessive expenditures and undue difficulties in
servicing, accounting and reporting requirements with respect to the
accounts of shareowners, it may by resolution order the redemption of all
shares of the stock of the Corporation at the net asset value of such
shares computed as hereinafter provided in accounts having a new asset
value for a period of three months less than that specified in such
resolution (but not exceeding $5,000 on the date of notice), excepting
accounts established within one year and accounts in which a purchase
(other than reinvestment of dividends and/or capital gains distributions)
has been made within the preceding six calendar months, and further
excepting accounts having a net asset value less than that specified in
such resolution as a result of a decline in the net asset value per share,
following notice to affected holders by mail, postage prepaid, at their
addressed contained in the books and records of the Corporation or its
transfer agent, and subject to such other reasonable terms and conditions
as the Board of Directors may, in its sole discretion, determine
appropriate and desirable and to any requirements of applicable statutes or
regulations.
(c) When the Board of Directors of the Corporation, including a
majority of the Directors who are not interested persons as defined in
Section 2(a)(19) of the Investment Company Act of 1940, determines in its
sole discretion that concentration in the ownership of Corporation shares
might cause the Corporation to be deemed a
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<PAGE> 3
personal holding company within the meaning of the Internal Revenue Code, the
Corporation may by resolution order the redemption of the shares of any
shareholder or refuse to give effect on the Corporation's books to the transfer
of Corporation shares in an effort to prevent personal holding company status,
such redemption or refusal to be on notice to affected holders by mail, postage
prepaid, at their addresses contained in the books and records of the
Corporation or its transfer agent, and subject to such other reasonable terms
and conditions as the Board of Directors may, in its sole discretion, determine
appropriate and desirable and to any requirements of applicable statutes or
regulations.
(d) No holder of shares of stock of the Corporation shall, as such
holder, have any right to purchase or subscribe for any shares of stock of
the Corporation, other than such rights, if any, as the Board of Directors
of the Corporation, in its discretion, may from time to time determine.
(e) All persons who shall acquire stock or securities of the
Corporation shall acquire the same subject to the provisions of these
Articles of Incorporation.
SEVENTH: The number of directors of the Corporation shall be two and the
names of those who will serve as such directors until the first annual meeting
and until their successors are duly chosen and qualified are as follows:
CHARLES T. BAUER
CARL FRISCHLING
The By-Laws of the Corporation may fix the number of directors at a number
greater or less than that named in these Articles of Incorporation and may
authorize the Board of Directors, by the vote of a majority of the entire Board
of Directors, to increase or decrease the number of directors fixed by these
Articles of Incorporation or by the By-Laws within the limits specified from
time to time in the By-Laws, provided that in no case shall the number of
directors be less than three or the number of shareholders, whichever is less,
and to fill the vacancies created by any such increase in the number of
directors. Unless otherwise provided by the By-Laws of the Corporation, the
directors of the Corporation need not be stockholders therein.
EIGHTH: In furtherance and not in limitation of the powers conferred by
the laws of the State of Maryland, the following provisions are hereby adopted
for the purpose of defining and regulating the powers of the Corporation and of
the directors and stockholders:
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<PAGE> 4
(a) The Board of Directors of this Corporation is hereby empowered to
authorize the issuance from time to time of shares of stock of this
Corporation and/or securities convertible into shares of stock of this
Corporation, in each case upon such terms and conditions and for such
consideration as such Board of Directors shall from time to time determine.
(b) The Board of Directors of the Corporation shall be authorized,
from time to time, to classify or to reclassify any unissued shares of
stock of the Corporation by setting or changing the preference, conversion
or other rights, voting powers, restrictions, limitations as to dividends,
qualifications, or terms and conditions of redemption of the stock and
pursuant to such classification or reclassification to increase or decrease
the number of authorized shares of any class, but the number of shares of
any class shall not be reduced by the Board of Directors below the number
of shares thereof then outstanding and the total number of authorized
shares shall not be increased above ten million (10,000,000) shares except
by amendment to the Corporation's Articles of Incorporation. Without
limiting the generality of the foregoing, the dividends and distributions
of investment income and capital gains with respect to the stock of the
Corporation and with respect to each class that may hereafter be created
shall be in such amount as may be declared from time to time by the Board
of Directors, and such dividends and distributions may vary from class to
class to such extent and for such purposes as the Board of Directors may
deem appropriate, including but not limited to, the purpose of complying
with requirements of regulatory or legislative authorities.
(c) The Board of Directors of this Corporation is hereby empowered to
authorize the issuance from time to time of fractional shares of stock of
this Corporation, whether now or hereafter authorized, and any fractional
shares so issued shall entitle the holders thereof to exercise voting
rights receive dividends and participate in the distribution of assets of
the Corporation in the event of liquidation or dissolution to the extent
of their proportionate interest represented by such fractional shares.
(d) The Corporation reserves the right to make from time to time any
amendment of its Articles of Incorporation, now or hereafter authorized by
law, including, but without limitation, any amendment which alters the
contract rights as expressly set forth in such Articles of Incorporation of
any outstanding stock.
(e) Except to the extent otherwise prohibited by applicable law, the
Corporation may enter into any management or investment advisory contract
or underwriting contract or any other type of contract with, and
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<PAGE> 5
may otherwise engage in any transaction or do business with, any person,
firm or corporation or any subsidiary or other affiliate of any such
person, firm or corporation and may authorize such person, firm or
corporation or such subsidiary or other affiliate to enter into any other
contracts or arrangements with any other person, firm or corporation which
relate to the Corporation or the conduct of its business, notwithstanding
that any directors or officers of the Corporation are or may subsequently
become partners, directors, officers, stockholders or employees of such
person, firm or corporation or of such subsidiary or other affiliate or may
have a material financial interest in any such contract, transaction or
business; and except to the extent otherwise provided by applicable law, no
such contract or transaction or business shall be invalidated or voidable
or in any way affected thereby nor shall any of such directors or officers
of the Corporation be liable to the Corporation or to any stockholder or
creditor thereof or to any other person for any loss incurred solely
because of the entering into and performance of such contract or the
engaging in such transaction or business or the existence of such material
financial interest therein, provided that such relationship to such person,
firm or corporation or said subsidiary or affiliate or such material
financial interest was disclosed or otherwise known to the Board of
Directors prior to the Corporation's entering into such contract or
engaging in such transaction or business and in the case of directors of
the Corporation that any requirements of the Maryland General Corporation
Law have been satisfied; and provided further that nothing herein shall
protect any director or officer of the Corporation from liability to the
Corporation or its security holders to which he would be otherwise subject
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.
(f) The method of computing the "net asset value" of each share of
stock of the Corporation shall be determined by or pursuant to the
direction of the Board of Directors of the Corporation; and subject to the
authority of the Board of Directors to change the method of such
computation, such net asset value as of the close of business on The New
York Stock Exchange, Inc. on any day shall be computed as follows:
The net asset value of a Corporation share will be determined as of
the close of business on The New York Stock Exchange, Inc. on each business
day on which that Exchange is open for trading by dividing the value of the
Corporation' securities, cash and other assets (including interest and
dividends accrued but not collected) less all its liabilities (including
accrued expenses but excluding capital and surplus), by the number of
shares outstanding. Determination of the Corpo-
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<PAGE> 6
ration's net asset value per share will also be made in accordance with
generally accepted accounting principles. Except as provided in the next
sentence, a security listed or traded on an exchange will be valued at its
last sale price on the exchange where the security is principally traded,
and lacking any sales on a particular day, the security will be valued at
the mean between the closing bid and asked prices on that day. Each
security traded in the over-the-counter market (including securities listed
on exchanges whose primary market is believed to be over-the-counter) will
be valued at the mean between the last bid and asked prices based upon
quotes furnished by a market maker for such securities. Securities for
which market quotations are not readily available, "restricted securities",
and any other assets will be valued at fair values as determined in good
faith by or under the supervision of the Corporation's officers in a manner
specifically authorized by the Board of Directors.
The net asset value of each share of stock of the Corporation as of
any time other than the close of business on The New York Stock Exchange,
Inc. on any day shall be determined by applying to the net asset value
thereof, as of the close of trading on said Exchange on the preceding
business day computed as provided in this Article EIGHTH, such adjustments
as are authorized by or pursuant to the direction of the Board of Directors
and designed reasonably to reflect any material changes in the value of the
assets or the liabilities or in the number of shares used for such
computation which shall have taken place since the close of trading on said
Exchange on such preceding business day.
The Board of Directors is empowered in its absolute discretion to
establish other methods of determining the net asset value of the shares of
stock whenever such methods are deemed by it to be necessary or desirable
in order (i) to enable the Corporation to comply with any provision of the
Investment Company Act of 1940, or any rule or regulation thereunder, or
(ii) to more fairly and accurately reflect the net asset value of such
shares of stock.
(g) Any determination made in good faith and, so far as accounting
matters are involved, in accordance with generally accepted accounting
principles by or pursuant to the direction of the Board of Directors as to
the amount of the assets, debts, obligations or liabilities of the
Corporation, as to the amount of any reserves or charges set up and the
propriety thereof, as to the time of or purpose for creating such reserves
or charges, as to the use, alteration or cancellation or any reserves or
charges (whether or not any debt, obligation or liability for which such
reserves or charges shall have been created shall have been paid or
discharged or shall be then or thereafter required to be paid or
discharged), as to the price or closing bid or asked price of any
investment owned or held by the Corporation, as to the market value of any
investment or fair value of any other asset of the
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<PAGE> 7
Corporation, as to the number of shares of the Corporation outstanding, as
to the ability to liquidate investments in orderly fashion, or as to any
other matters relating to the issue, sale, purchase or other acquisition or
disposition of investments or shares of the Corporation, shall be final and
conclusive and shall be binding upon the Corporation and all holders of its
shares, past, present and future, and shares of the Corporation are issued
and sold on the condition and understanding that any and all such
determinations shall be binding as aforesaid.
(h) The stockholders of the Corporation may remove any director of
the Corporation prior to the expiration of his term of office for cause,
and not otherwise, by the affirmative vote of a majority of all votes
entitled to be cast for the election of directors.
(i) Except to the extent otherwise specifically provided in the
Articles of Incorporation or By-Laws of the Corporation, the Corporation
may authorize or take any corporate action (including, but without
limitation, any amendment to its Articles of Incorporation) upon the
affirmative vote of the holders of a majority of the outstanding shares of
stock entitled to vote thereon, notwithstanding any provision of the
Maryland General Corporation Law which would otherwise require more than a
majority vote of the outstanding shares of stock to authorize or take such
action.
(j) To the maximum extent permitted by the Maryland General
Corporation Law as from time to time amended, but subject to any
limitations which may be imposed pursuant to the Investment Company Act of
1940 or any rule or regulation thereunder, the Corporation shall indemnify
its currently acting and its former directors, officers and agents and
those persons who, at the request of the Corporation, serve or have served
another corporation, partnership, joint venture, trust or other enterprise
in one or more of such capacities.
NINTH: The duration of the Corporation shall be perpetual.
IN WITNESS WHEREOF, the undersigned incorporator of SUMMIT FUND, INC. who
executed the foregoing Articles of Incorporation hereby acknowledges the same to
be his act and further acknowledges that, to the best of his knowledge,
information and belief, the matters and facts set forth therein are true in all
material respects under the penalties of perjury.
Dated the 9th day of February, 1982.
/s/ CARL FRISCHLING
-----------------------------
Carl Frischling
Sole Incorporator
7
<PAGE> 1
EXHIBIT 1(b)
SUMMIT FUND, INC.
ARTICLES OF AMENDMENT
SUMMIT FUND, INC., a Maryland corporation having its principal
office in the State of Maryland in Baltimore City (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland, that:
FIRST: The charter of the Corporation is hereby amended by striking out
ARTICLE SECOND of the Articles of Incorporation, as heretofore amended, and
inserting in lieu thereof the following:
"SECOND: the name of the corporation is SUMMIT INVESTORS FUND,
INC. (hereinafter called the "Corporation)".
SECOND: The amendment to the charter of the Corporation herein made was
duly approved by the unanimous consent of the entire Board of Directors dated as
of September 3, 1982; and that at the time of the approval by the Directors
there were no shares of stock of the Corporation entitled to vote on the matter
either outstanding or subscribed for.
IN WITNESS WHEREOF, SUMMIT FUND, INC. has caused these articles to be
signed in its name and on its behalf by its President and attested by its
Secretary on September 9, 1982.
SUMMIT FUND, INC.
By /s/ CHARLES T. BAUER
-------------------------
ATTEST:
By /s/ ILLEGIBLE
----------------------------
<PAGE> 2
STATE OF TEXAS )
: ss.:
COUNTY OF HARRIS )
I hereby certify that on September 9, 1982, before me the subscriber, a
Notary Public of the State of Texas, in and for the county of Harris, personally
appeared Charles Bauer, who acknowledged himself to be President of SUMMIT FUND,
INC., a Maryland corporation, and that he, as such President, being authorized
so to do, executed the foregoing Articles of Amendment for the purposes therein
contained, by signing the name of the corporation by himself as President, and
who made oath in due form of law that the matters of fact set forth in the
Articles of Amendment with respect to the authorization and approval thereof are
true to the best of his knowledge, information and belief.
IN WITNESS WHEREOF, I hereunto set my hand and official seal this 14th day
of September, 1982.
/s/ JUDITH C. CREEL
----------------------------------
Notary Public
<PAGE> 1
EXHIBIT 1(c)
SUMMIT INVESTORS FUND, INC.
ARTICLES OF AMENDMENT
SUMMIT INVESTORS FUND, INC., a Maryland corporation having its principal
office in the State of Maryland in Baltimore City (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland, that:
FIRST: The charter of the Corporation is hereby amended by striking out
ARTICLE FIFTH of the Articles of Incorporation, as heretofore amended, and
inserting in lieu thereof the following:
"FIFTH: The total number of shares of capital stock which the
Corporation shall have authority to issue is One Billion
(1,000,000,000), all of which shall be Common Stock having a par value
of one cent ($.01) per share, and having an aggregate par value for
all such shares of $10,000,000".
SECOND: Immediately before the effectiveness of the amendment to the
charter of the Corporation herein the Corporation had authority to issue Ten
Million (10,000,000) shares of Common Stock, par value $.01 per share, having an
aggregate par value of $100,000 and as amended the Corporation shall have
authority to issue One Billion (1,000,000,000) shares of Common Stock, par value
$.01 per share, having an aggregate par value of $10,000,000.
THIRD: The amendment to the charter of the Corporation herein made was duly
approved by the unanimous consent of the entire Board of Directors dated as of
September 21, 1982; and that at the time of the approval by the Directors there
were no shares of stock of the Corporation entitled to vote on the matter either
outstanding or subscribed for.
IN WITNESS WHEREOF, SUMMIT INVESTORS FUND, INC. has caused these Articles
of Amendment to be signed in its name and on its behalf by its duly authorized
officers, who acknowledge and state that these Articles are the Act of the
Corporation, that to the best of their knowledge, information and belief all
matters set forth herein relating to the authorization and approval of the
Articles are true in all material respects and that this statement is made under
the penalties of perjury.
SUMMIT INVESTORS FUND, INC.
By /s/ CHARLES T. BAUER
----------------------------------
President
Attest:
/s/ ROBERT H. GRAHAM
- -------------------------------
Secretary
<PAGE> 1
EXHIBIT 1(d)
SUMMIT INVESTORS FUND, INC.,
ARTICLES OF AMENDMENT
SUMMIT INVESTORS FUND, INC., a Maryland corporation having its principal
office in Houston, Texas, hereby certifies to the State Department of
Assessments and Taxation of Maryland, that:
FIRST: The Charter of Summit Investors, Inc. is hereby amended by striking
out Article SECOND, as previously amended, and inserting in lieu thereof the
following:
SECOND: The name of the corporation is AIM Summit Fund, Inc.
(hereinafter referred to as the "Corporation").
SECOND: The Charter of the Corporation is hereby amended by striking out
the second paragraph (i) of Article EIGHTH, and inserting in lieu thereof the
following:
(j) To the fullest extent that limitations on the liability of
directors and officers are permitted by the Maryland General
Corporation Law, no director or officer of the Corporation shall have
any liability to the Corporation or its stockholders for damages. This
limitation on liability applies to events occurring at the time a
person serves as a director or officer of the Corporation whether or
not such person is a director or officer at the time of any proceeding
in which liability is asserted.
The Corporation shall indemnify and advance expenses to its currently acting and
its former directors to the fullest extent that indemnification of directors is
permitted by the Maryland General Corporation Law. The Corporation shall
indemnify and
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advance expenses to its officers to the same extent as its directors
and to such further extent as is consistent with law. The Board of
Directors may by By-law, resolution or agreement make further provisions
for indemnification of directors, officers, employees and agents to the
fullest extent permitted by the Maryland General Corporation Law.
No provision of this Article shall be effective to protect or purport
to protect any director or officer of the Corporation against any
liability to the Corporation or its security holders to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
his office.
References to Maryland General Corporation Law in this Article are to
the law as from time to time amended. No further amendment to the Articles
of Incorporation shall affect any right of any person under this Article
based on any event, omission or proceeding prior to such amendment.
THIRD: The Board of Directors of the Corporation, is a meeting duly
convened and held on May 24, 1988, adopted a resolution which recommended that
the foregoing amendments be adopted upon the approval of the shareholders at the
special meeting of shareholders of the Corporation held on September 15, 1988.
2
<PAGE> 3
FOURTH: Notice setting forth a summary of the changes to be effected by
said amendments of the Charter and stating that a purpose of the special meeting
of the shareholders would be to take action thereon was given, as required by
law, to all record shareholders of the Corporation on June 24, 1988, all of whom
were entitled to vote thereon. The amendments of the Charter of the Corporation
as hereinabove set forth were approved by the shareholders of the Corporation at
said meeting by the affirmative vote of a majority of all the votes entitled to
be cast thereon, pursuant to Article EIGHTH, paragraph (i) of the Corporation's
Articles of Incorporation and Section 2-104(b)(5) of the Maryland General
Corporation Law.
FIFTH: The amendments of the Charter of the Corporation as hereinabove set
forth have been duly advised by the Board of Directors and approved by the
shareholders of the Corporation.
IN WITNESS WHEREOF, Summit Investors Fund, Inc. has caused these Articles
of Amendment to be signed in its name and on its behalf by its President and its
corporate seal to be hereunto affixed and attested by its Secretary on Nov. 22,
1988.
SUMMIT INVESTORS FUND, INC.
By: /s/ CHARLES T. BAUER
--------------------------------
Charles T. Bauer, President
ATTEST:
/s/ WILLIAM H. KLEH
- --------------------------------
William H. Kleh, Secretary
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<PAGE> 4
STATE OF TEXAS
COUNTY OF HARRIS
Before me, a notary public, on this day personally appeared Charles T.
Bauer and William H. Kleh, known to me to be the persons whose names are
subscribed to the foregoing document and, being by me first duly sworn, declared
that the statements therein contained are true and correct.
Given under my hand and seal of this office this 22nd day of November,
1988.
/s/ KATHLEEN J. PFLUEGER
--------------------------------
Notary Public, State of Texas
My Commission Expires:
October 14, 1990.
4
<PAGE> 1
EXHIBIT 2(d)
AIM SUMMIT FUND, INC.
MARYLAND
AMENDED AND RESTATED
BY-LAWS
ARTICLE 1
STOCKHOLDERS
Section 1. Time and Place of Meeting. Meetings of the stockholders
need not be held except as required under the general laws of the State of
Maryland, as the same may be amended from time to time. Such meetings of the
stockholders shall be held from time to time at a place designated by the Board
of Directors and stated in the notice of the meeting.
Section 2. Annual Meetings. If a meeting of the stockholders of the
Corporation is required by the Investment Company Act of 1940, as amended, to
take action on (1) the election of directors, (2) the approval of the
investment advisory agreement, (3) the ratification of the selection of
independent public accountants, or (4) the approval of a distribution
agreement, then there shall be submitted to the stockholders at such meeting
the question of the election of directors, and a special meeting called for any
of the foregoing purposes shall be deemed the annual meeting of stockholders
for that year. In other years in which no action by stockholders is required
for any of the foregoing purposes, no annual meeting need be held.
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Section 3. Special or Extraordinary Meetings. Special or
extraordinary meetings of the stockholders for any purpose or purposes may be
called by the Chairman of the Board of Directors, if any, or by the President
or by the Board of Directors. In addition, such special or extraordinary
meetings shall be called by the Secretary upon receipt of a request in writing
signed by stockholders entitled to cast a least 10% of all the votes entitled
to be cast at the meeting stating the purpose of the meeting and the matters
proposed to be acted on and upon payment by such stockholders of the estimated
cost of preparing and mailing a notice of the meeting. Unless requested by
stockholders entitled to cast a majority of all of the votes entitled to be
cast at the meeting, a special meeting need not be called to consider any
matter which is substantially the same as a matter voted on at a special
meeting of the stockholders held during the preceding 12 months.
Section 4. Notice of Meeting of Stockholders. Not less than ten
days' and not more than ninety days' written or printed notice of every meeting
of stockholders, stating the time and place thereof (and the purpose of any
special or extraordinary meeting), shall be given to each stockholder entitled
to vote thereat and each other stockholder entitled to notice, by leaving the
same with him or at his residence or usual place of business or by mailing it,
postage prepaid, and addressed to him at his address as it appears upon the
books of the Corporation.
Each person who is entitled to notice of any meeting waives notice if
he is present at the meeting, or attends in person or by proxy or either before
or after the meeting signs a waiver of notice which is filed with the records
of stockholders meetings.
Section 5. Closing of Transfer Books, Record Dates. The Board of
Directors may direct that the stock transfer books of the Corporation be closed
for a stated period not exceeding twenty days for the purpose of making any
proper determination with respect to stockholders, including which stockholders
are entitled to notice of and to vote at the
2
<PAGE> 3
meeting, receive a dividend or be allotted other rights. If such books are
closed for the purpose of determining stockholders entitled to notice of or to
vote at a meeting of stockholders, such books shall be closed for at least ten
days immediately preceding such meeting. In lieu of providing for the closing
of the stock transfer books, the Board of Directors may set a date, not
exceeding ninety days and not less than ten days preceding the date of any
meeting of stockholders, and not exceeding ninety days preceding any dividend
payment date or any date for the allotment of rights, as a record date for the
determination of the stockholders entitled to notice of and to vote at such
meeting, or entitled to receive such dividends or rights, as the case may be;
and only stockholders of record on such date shall be entitled to notice of and
to vote at such meeting or to receive such dividends or rights, as the case may
be.
Section 6. Quorum, Adjournment of Meetings. The presence in person
or by proxy of stockholders entitled to cast a majority of all votes entitled
to be cast at the meeting shall constitute a quorum at all meetings of the
stockholders; and a majority of all votes cast at a meeting at which a quorum
is present is sufficient to approve any matter which properly comes before the
meeting, unless otherwise provided by applicable law, the Articles of
Incorporation or the By-Laws of the Corporation. If at any meeting of the
stockholders there shall be less than a quorum present, the stockholders
present at such meeting may, without further notice, adjourn the same from time
to time (but not more than 120 days after the original record date for such
meeting) until a quorum shall attend, but no business shall be transacted at
any such adjourned meeting except such as might have been lawfully transacted
had the meeting not been adjourned.
Section 7. Voting and Inspectors. At all meetings of stockholders
every stockholder of record entitled to vote thereat shall be entitled to vote
at such meeting either in person or by proxy appointed by instrument in writing
subscribed by such stockholder or his duly authorized attorney. Unless a proxy
provides otherwise, such proxy is not valid more than eleven months after its
date.
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At any election of Directors, the Board of Directors prior thereto
may, or, if they have not so acted, the Chairman of the meeting may appoint two
inspectors of election who shall first subscribe an oath or affirmation to
execute faithfully the duties of inspectors at such election with strict
impartiality and according to the best of their ability, and shall after the
election make a certificate of the result of the vote taken. No candidate for
the office of Director shall be appointed to act as such Inspector.
The Chairman of the meeting may cause a vote by ballot to be taken
upon any election or matter.
Section 8. Conduct of Stockholders Meetings. The meetings of the
stockholders shall be presided over by the Chairman of the Board, or if he
shall not be present or if there is no Chairman, by the President, or if he
shall not be present, by a Vice-President, or if neither the President nor any
Vice-President is present, by a chairman to be elected at the meeting. The
Secretary of the Corporation, if present, shall act as Secretary of such
meetings, or if he is not present, an Assistant Secretary shall so act, and if
neither the Secretary nor an Assistant Secretary is present, then the meeting
shall elect a secretary.
Section 9. Concerning Validity of Proxies, Ballots, Etc. At every
meeting of the stockholders, all proxies shall be received and taken in charge
of and all ballots shall be received and canvassed by the secretary of the
meeting, who shall decide all questions touching the qualification of voters,
the validity of the proxies, and the acceptance or rejection of votes, unless
inspectors of election shall have been appointed as provided in Section 7
hereof, in which event such inspectors of election shall decide all such
questions.
4
<PAGE> 5
ARTICLE II
BOARD OF DIRECTORS
Section 1. Number and Term of Office. The business and property of
the Corporation shall be conducted and managed under the direction of a Board
of Directors consisting of two Directors, which number may be increased and
decreased as provided in Section 2 of this Article. Each Director shall hold
office until his successor is duly elected and qualified. Directors need not
be stockholders.
Section 2. Increase or Decrease in Number of Directors. The Board of
Directors, by the vote of a majority of the entire Board, may increase the
number of Directors to a number not exceeding fifteen, and may elect Directors
to fill the vacancies created by any such increase in the number of Directors
until their successors are duly elected and qualify. The Board of Directors,
by the vote of a majority of the entire Board, may decrease the number of
Directors to a number not less than three or the number of stockholders,
whichever is less, but any such decrease shall not affect the term of office of
any Director. Vacancies occurring other than by reason of any such increase
shall be filed as provided by the Maryland General Corporation Law.
Section 3. Place of Meeting. The Directors may hold their meetings,
have one or more offices, and keep the books of the Corporation outside the
State of Maryland, at any office or offices of the Corporation or at any other
place as they may from time to time determine, and in the case of meetings, as
they may from time to time determine or as shall be specified in the respective
notices of such meetings or waivers of notice thereof.
Section 4. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such time and on such notice, if any, as the
Directors may from time to time determine.
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Section 5. Special Meetings. Special meetings of the Board of
Directors may be held from time to time upon call of the Chairman of the Board
of Directors, if any, the President or two or more of the Directors, by oral or
telegraphic or written notice duly served on each Director not less than one
business day before such meeting or if sent or mailed to each Director not less
than three business days before such meeting. Each Director who is entitled to
notice waives such notice if he either before or after the meeting signs a
waiver of the notice which is filed with the minutes of the meeting or is
present at the meeting. Such notice or waiver of notice need not state the
purpose or purposes of such meeting.
Section 6. Quorum. One third of the Directors then in office (but in
no event less than two Directors), shall constitute a quorum for the
transaction of business. If at any meeting of the Board there shall be less
than a quorum present, a majority of those present may adjourn the meeting from
time to time until a quorum shall have been obtained. The act of the majority
of the Directors present at any meeting at which there is a quorum shall be the
act of the Directors, except as may be otherwise specifically provided by
applicable law, by the Articles of Incorporation or by these By-Laws.
Section 7. Telephonic Meetings, Etc. The members of the Board of
Directors or any committee of the Board of Directors may participate in a
meeting by means of a conference telephone or similar communications equipment
if all persons participating in such meeting can hear each other at the same
time, and participation in a meeting by these means constitutes presence in
person at such meeting.
Section 8. Executive Committee. The Board of Directors may elect
from the Directors an Executive Committee to consist of such number of
Directors (but not less than two) as the Board may from time to time determine.
The Board of Directors shall have power at any time to change the members of
such Committee and may fill vacancies in the Committee by election from the
Directors. When the Board of
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<PAGE> 7
Directors is not in session, the Executive Committee shall have and may
exercise any or all of the powers of the Board of Directors in the management
of the business and affairs of the Corporation (including the power to
authorize the seal of the Corporation to be affixed to all papers which may
require it) except as provided by law and except the power to increase or
decrease the size of, or fill vacancies on the Board. The Executive Committee
may fix its own rules of procedure, and may meet, when and as provided by such
rules or by resolution of the Board of Directors, but in every case the
presence of a majority shall be necessary to constitute a quorum. In the
absence of any member of the Executive Committee the members thereof present at
any meeting, whether or not they constitute a quorum, may appoint a member of
the Board of Directors to act in the place of such absent member.
Section 9. Other Committees. The Board of Directors may appoint
other committees which shall in each case consist of such number of members
(not less than two) and shall have and may exercise such powers as the Board
may determine in the resolution appointing them. A majority of all members of
any such committee may determine its action, and fix the time and place of its
meetings, unless the Board of Directors shall otherwise provide. The Board of
Directors shall have power at any time to change the members and powers of any
such committee, to fill vacancies, and to discharge any such committee. In the
absence of any member of such committee, the members thereof present at any
meeting, whether or not they constitute a quorum, may appoint a member of the
Board of Directors to act in the place of such absent member.
Section 10. Informal Action by Directors. Except to the extent
otherwise specifically provided by applicable law, any action required or
permitted to be taken at any meeting of the Board of Directors or any Committee
thereof may be taken without a meeting, if a written consent to such action is
signed by all members of the Board or Committee and is filed with the minutes
of proceedings of the Board or Committee.
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<PAGE> 8
Section 11. Compensation of Directors. Directors shall be entitled
to receive such compensation from the Corporation for their services as
Directors as may from time to time be voted by the Board of Directors.
ARTICLE III
OFFICERS
Section 1. Executive Officers. The executive officers of the
Corporation shall be chosen by the Board of Directors as soon as may be
practicable after the incorporation of the Corporation. These may include a
Chairman of the Board, and shall include a President, one or more Vice
Presidents (the number thereof to be determined by the Board of Directors), a
Secretary and a Treasurer. The Chairman of the Board, if any, shall be
selected from among the Directors. The Board of Directors may also in its
discretion appoint Assistant Vice Presidents, Assistant Secretaries, Assistant
Treasurers, and other officers, agents and employees, who shall have such
authority and perform such duties as the Board may determine. The Board of
Directors may fill any vacancy which may occur in any office. Any two
officers, except those of President and Vice President, may be held by the same
person, but no officer shall execute, acknowledge or verify any instrument in
more than one capacity, if such instrument is required by law or by these
By-Laws to be executed, acknowledged or verified by two or more officers.
Section 2. Term of Office. Unless otherwise specifically determined
by the Board of Directors, the officers shall serve at the pleasure of the
Board of Directors. If the Board of Directors in its judgment finds that the
best interests of the Corporation will be served, the Board of Directors may
remove any officer of the Corporation at any time with or without cause.
8
<PAGE> 9
Section 3. President. The President shall be the chief executive
officer and head of the Corporation and, subject to the Board of Directors,
shall have the general control and management of the business and affairs of
the Corporation. If no Chairman of the Board be appointed, or if appointed,
said Chairman is absent, the President shall, if present, preside at all
meetings of the stockholders and the Board of Directors.
Section 4. Chairman of the Board. The Chairman of the Board shall
preside at all meetings of the stockholders and the Board of Directors at which
he shall be present. Subject to the provisions of Section 2, he shall have
such other powers and duties as shall be prescribed by the Board of Directors,
and shall undertake such other assignments as may be requested by the
President.
Section 5. Other Officers. The Chairman or one or more Vice
Presidents shall have and exercise such powers and duties of the President in
the absence or inability of the President as may be assigned to them,
respectively, by resolution of the Board of Directors or, to the extent not so
assigned, as the President may assign to them, respectively. In the absence or
inability to act of the President, the powers and duties of the President not
assigned by the Board of Directors or the President shall devolve upon the
Chairman or in his absence the Vice Chairman or in his absence upon the Senior
Vice President.
Section 6. Secretary. The Secretary shall have custody of the seal
of the Corporation. He shall keep the minutes of the meetings of the
stockholders, Board of Directors and any committees thereof, and he shall
attend to the giving and serving of all notices of the Corporation. He shall
have charge of the stock certificate book and such other books and papers as
the Board may direct; and he shall perform such other duties as may be
incidental to his office or as may be assigned to him by the Board of
Directors. He shall also keep or cause to be kept a stock book, which may be
maintained by means of computer systems, containing the names, alphabetically
arranged, of all persons who
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<PAGE> 10
are stockholders of the Corporation showing their places of residence, the
number and class or series of any class of shares of stock held by them
respectively, and the dates when they respectively became the owners of record
thereof, and such book shall be opened for inspection as prescribed by the laws
of the State of Maryland.
Section 7. Treasurer. The Treasurer shall have the care and custody
of the funds and securities of the Corporation and shall deposit the same in
the name of the Corporation in such bank or banks or other depositories and
subject to withdrawal in such manner as these By-laws or the Board of Directors
may determine; he shall, if required by the Board of Directors, give such bond
for the faithful discharge of his duties in such form as the Board of Directors
may require.
ARTICLE IV
CAPITAL STOCK
Section 1. Certificates of Shares. Each stockholder of the
Corporation shall be entitled to a certificate or certificates for the full
number of shares of each class of stock of the Corporation owned by him in such
form as the Board of Directors may from time to time prescribe.
Section 2. Transfer of Shares. Shares of the Corporation shall be
transferable on the books of the Corporation by the holder thereof in person or
by his duly authorized attorney or legal representative, upon surrender and
cancellation of certificates, if any, for the same number of shares, duly
endorsed or accompanied by proper instruments of assignment and transfer, with
such proof of the authenticity of the signature as the Corporation or its
agents may reasonably require. In the case of shares not represented
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<PAGE> 11
by certificates, the same or similar requirements may be imposed by the Board
of Directors.
Section 3. Stock Ledgers. The stock ledgers of the Corporation,
containing the names and addresses of the stockholders and the number of shares
held by them respectively, shall be kept at the principal offices of the
Corporation, or if the Corporation employs a transfer agent, at the offices of
the transfer agent of the Corporation.
Section 4. Lost, Stolen or Destroyed Certificates. The Board of
Directors may determine the conditions upon which a new certificate of stock of
the Corporation of any class may be issued in place of a certificate which is
alleged to have been lost, stolen or destroyed; and may, in their discretion,
require the owner of such certificate or his legal representative to give bond,
with sufficient surety to the Corporation and the transfer agent, if any, to
indemnify it and such transfer agent against any and all loss or claims which
may arise by reason of the issue of a new certificate in the place of the one
so lost, stolen or destroyed.
ARTICLE V
CORPORATE SEAL
The Board of Directors may provide a suitable corporate seal, in such
form and bearing such inscriptions as it may determine. In lieu of fixing the
Corporation's seal to a document, it is sufficient to meet the requirements of
any law, rule or regulation relating to a corporate seal to place the word
"(seal)" adjacent to the signature of the person authorized to sign the
document on behalf of the Corporation.
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<PAGE> 12
ARTICLE VI
FISCAL YEAR
The fiscal year of the Corporation shall be fixed by the Board of
Directors.
ARTICLE VII
INDEMNIFICATION
Section 1. Indemnification of Directors and Officers. The
Corporation shall indemnify its directors to the fullest extent that
indemnification of directors is permitted by the Maryland General Corporation
Law. The Corporation shall indemnify its officers to the same extent as its
directors and to such further extent as is consistent with law. The
Corporation shall indemnify its directors and officers who while serving as
directors or officers also serve at the request of the Corporation as a
director, officer, partner, trustee, employee, agent or fiduciary of another
corporation, partnership, joint venture, trust, other enterprise or employee
benefit plan to the fullest extent consistent with law. The indemnification
and other rights provided by this Article shall continue as to a person who has
ceased to be a director or officer and shall inure to the benefit of the heirs,
executors and administrators of such a person. This Article shall not protect
any such person against any liability to the Corporation or any stockholder
thereof to which such person would otherwise be subject by reason of willful
misfeasance, bad faith,
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<PAGE> 13
gross negligence or reckless disregard of the duties involved in the conduct of
his office ("disabling conduct").
Section 2. Advances. Any current or former director or officer of
the Corporation seeking indemnification within the scope of this Article shall
be entitled to advances from the Corporation for payment of the reasonable
expenses incurred by him in connection with the matter as to which he is
seeking indemnification in the manner and to the fullest extent permissible
under the Maryland General Corporation Law. The person seeking indemnification
shall provide to the Corporation a written affirmation of his good faith belief
that the standard of conduct necessary for indemnification by the Corporation
has been met and a written undertaking to repay any such advance if it should
ultimately be determined that the standard of conduct has not been met. In
addition, at least one of the following additional conditions shall be met: (a)
the person seeking indemnification shall provide a security in form and amount
acceptable to the Corporation for his undertaking; (b) the Corporation is
insured against losses arising by reason of the advance; or (c) a majority of a
quorum of directors of the Corporation who are neither "interested persons" as
defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended,
nor parties to the proceeding ("disinterested non-party directors"), or
independent legal counsel, in a written opinion, shall have determined, based
on a review of facts readily available to the Corporation at the time the
advance is proposed to be made, that there is reason to believe that the person
seeking indemnification will ultimately be found to be entitled to
indemnification.
Section 3. Procedure. At the request of any person claiming
indemnification under this Article, the Board of Directors shall determine, or
cause to be determined, in a manner consistent with the Maryland General
Corporation Law, whether the standards required by this Article have been met.
Indemnification shall be made only following: (a) a final decision on the
merits by a court or other body before whom the proceeding
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<PAGE> 14
was brought that the person to be indemnified was not liable by reason of
disabling conduct or (b) in the absence of such a decision, a reasonable
determination, based upon a review of the facts, that the person to be
indemnified was not liable by reason of disabling conduct by (i) the vote of a
majority of a quorum of disinterested non-party directors or (ii) an
independent legal counsel in a written opinion.
Section 4. Indemnification of Employees and Agents. Employees and
agents who are not officers or directors of the Corporation may be indemnified,
and reasonable expenses may be advanced to such employees or agents, as may be
provided by action of the Board of Directors or by contract, subject to any
limitations imposed by the Investment Company Act of 1940.
Section 5. Other Rights. The Board of Directors may make further
provision consistent with law for indemnification and advance of expenses to
directors, officers, employees and agents by resolution, agreement or
otherwise. The indemnification provided by this Article shall not be deemed
exclusive of any other right, with respect to indemnification or otherwise, to
which those seeking indemnification may be entitled under any insurance or
other agreement or resolution of stockholders or disinterested directors or
otherwise.
Section 6. Amendments. References in this Article are to the
Maryland General Corporation Law and to the Investment Company Act of 1940 as
from time to time amended. No amendment of these By-laws shall affect any
right of any person under this Article based on any event, omission or
proceeding prior to the amendment.
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ARTICLE VIII
AMENDMENT OF BY-LAWS
The By-Laws of the Corporation may be altered, amended, added to or
repealed by the Board of Directors.
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<PAGE> 1
EXHIBIT 2(e)
AIM SUMMIT FUND, INC.
FIRST AMENDMENT, DATED MAY 3, 1991,
TO AMENDED AND RESTATED BY-LAWS
RESOLVED, that Article 1, Section 2 of the By-laws of the Corporation be and is
hereby amended in its entirety to read as follows:
"Section 2. ANNUAL MEETINGS. If a meeting of the stockholders of the Corporation
is required by the Investment Company Act of 1940, as amended, to take action on
the election of directors, then there shall be submitted to the stockholders at
such meeting the question of the election of directors, and a special meeting
called for such purpose shall be deemed the annual meeting of stockholders for
that year. In other years in which no such action by stockholders is required,
no annual meeting need be held."
<PAGE> 1
EXHIBIT 2(f)
AIM SUMMIT FUND, INC.
SECOND AMENDMENT, DATED MARCH 14, 1995,
TO AMENDED AND RESTATED BY-LAWS
Article 1, Section 7, paragraph 1, of the Amended and Restated By-Laws of
AIM Summit Fund, Inc. is hereby amended to read in full as follows:
"At all meetings of the stockholders, every stockholder of record
entitled to vote thereat shall be entitled to vote at such meeting
either in person or by written proxy signed by the stockholder or by
his duly authorized attorney in fact. A stockholder may duly authorize
such attorney in fact through written, electronic, telephonic,
computerized, facsimile, telecommunication, telex or oral
communication or by any other form of communication. Unless a proxy
provides otherwise, such proxy is not valid more than eleven months
after its date."
<PAGE> 1
EXHIBIT 5(c)
AIM SUMMIT FUND, INC.
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 18th day of October, 1993, by and between AIM
Summit Fund, Inc., a Maryland corporation (the "Fund"), and A I M Advisors,
Inc., a Delaware corporation (the "Advisor").
RECITALS
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end, diversified management investment
company; and
WHEREAS, the Advisor is registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), as an investment advisor and engages in
the business of acting as an investment advisor, and
WHEREAS, the Fund and the Advisor desire to enter into an agreement to
provide for investment advisory services to the Fund upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Advisory Services. The Advisor shall act as investment advisor for the
Fund and shall, in such capacity, supervise all aspects of the Fund's
operations, including the investment and reinvestment of the cash, securities
or other properties comprising the Fund, subject at all times to the policies
and control of the Fund's Board of Directors. The Advisor shall give the Fund
the benefit of its best judgment, efforts and facilities in rendering its
services as investment advisor.
2. Investment Analysis and Implementation. In carrying out its
obligations under Section I hereof, the Advisor shall:
(a) supervise all aspects of the operations of the Fund;
(b) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic, foreign or
otherwise, whether affecting the economy generally or the Fund, and whether
concerning the individual issuers whose securities are included in the Fund or
the activities in which such issuers engage, or with respect to securities
which the Advisor considers desirable for inclusion in the Fund;
(c) determine which issuers and securities shall be represented in the
Fund's investment portfolio and regularly report thereon to the Fund's Board of
Directors; and
(d) formulate and implement continuing programs for the purchases and
sales of the securities of such issuers, and regularly report thereon to the
Fund's Board of Directors;
and take, on behalf of the Fund, all actions which appear to the Fund necessary
to carry into effect such purchase and sale programs and supervisory functions
as aforesaid, including but not limited to the placing of orders for the
purchase and sale of securities for the Fund.
3. Delegation of Responsibilities. Subject to the approval of the Board
of Directors and the shareholders of the Fund, the Advisor may delegate to a
Sub-Advisor certain of its duties enumerated in Section 2 hereof, provided that
the Advisor shall continue to supervise the performance of any such
Sub-Advisor.
4. Control by Board of Directors. Any investment program undertaken by
the Advisor pursuant to this Agreement, as well as any other activities
undertaken by the Advisor on behalf of the Fund, shall at all times be subject
to any directives of the Board of Directors of the Fund.
5. Compliance with Applicable Requirements. In performing its obligations
under this Agreement, the Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and the Advisers Act and
any rules and regulations adopted thereunder;
(b) the provisions of the registration statement of the Fund, as the same
may be amended from time to time, under the Securities Act of 1933 and the 1940
Act;
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(c) the provisions of the corporate charter of the Fund, as the same may
be amended from time to time;
(d) the provisions of the by-laws of the Fund, as the same may be amended
from time to time; and
(e) any other applicable provisions of state or federal law.
6. Broker-Dealer Relationships. The Advisor is responsible for all
decisions to buy and sell securities for the Fund, broker-dealer selection, and
negotiation of brokerage commission rates. The Advisor's primary consideration
in effecting a security transaction will be to execution at the most favorable
price. In selecting a broker-dealer to execute each particular transaction, the
Advisor shall take the following into consideration: the best net price
available; the reliability, integrity and financial condition of the
broker-dealer, the size of and difficulty in executing the order, and the value
of the expected contribution of the broker-dealer to the investment performance
of the Fund on a continuing basis. Accordingly, the price to the Fund in any
transaction may be less favorable than that available from another
broker-dealer if the difference is reasonably justified by other aspects of the
portfolio execution services offered. Subject to such policies as the Board of
Directors may from time to time determine, the Advisor shall not be deemed to
have acted unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of its having caused the Fund to pay a broker or
dealer that provides brokerage and research services to the Advisor an amount
of commission for effecting a portfolio investment transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction, if the Advisor determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of either
that particular transaction or the Advisor's overall responsibilities with
respect to the Fund and to other clients of the Advisor as to which the Advisor
exercises investment discretion. The Advisor is further authorized to allocate
the orders placed by it on behalf of the Fund to such brokers and dealers who
also provide research or statistical material, or other services to the Fund,
to the Advisor, or to any Sub-Advisor. Such allocation shall be in such amounts
and proportions as the Advisor shall determine, and the Advisor shall report on
said allocations regularly to the Board of Directors of the Fund indicating the
brokers to whom such allocations have been made and the basis therefor. In
making decisions regarding broker-dealer relationships, the Advisor may take
into consideration the recommendations of any Sub-Advisor appointed to provide
investment research or advisory services in connection with the Fund, and may
take into consideration any research services provided to such Sub-Advisor by
broker-dealers.
7. Compensation. The Fund shall pay the Advisor, as compensation for
services rendered hereunder, an annual fee, payable monthly, based upon the
following average daily net assets of the Fund:
<TABLE>
<CAPTION>
Net Assets Rate
---------- ----
<S> <C>
First $10 million . . . . . . . . . . . . . . . . . . . 1.00%
Over $10 million to and including $150 million . . . . 0.75%
Over $150 million . . . . . . . . . . . . . . . . . . . 0.625%
</TABLE>
The average daily net assets of the Fund shall be determined in the
manner set forth in the corporate charter and registration statement of the
Fund, as amended from time to time.
8. Additional Services. Upon the request of the Fund's Board of
Directors, the Advisor may perform certain accounting, shareholder servicing or
other administrative services on behalf of the Fund which are not required by
this Agreement. Such services will be performed on behalf of the Fund, and the
Advisor may receive from the Fund such reimbursement for costs or reasonable
compensation for such services as may be agreed upon by the Advisor and the
Fund's Board of Directors, based on the finding by the Board of Directors that
the provision of such services by the Advisor is in the best interests of the
Fund and its shareholders. Payment or assumption by the Advisor of any Fund
expense that the Advisor is not otherwise required to pay or assume under this
Agreement shall not relieve the Advisor of any of its obligations to the Fund
nor obligate the Advisor to pay or assume any similar Fund expense on any
subsequent occasion. Such services may include, but are not limited to:
(i) the services of a principal financial officer of the Fund (including
applicable office space, facilities and equipment) whose normal duties consist
of maintaining the financial accounts and books and records of the Fund,
including the review and calculation of daily net asset value and the
preparation of tax returns; and the services (including applicable office
space, facilities and equipment) of any of the personnel operating under the
direction of such principal financial officer;
(ii) the services of staff to respond to shareholder inquiries concerning
the status of their accounts; providing assistance to shareholders in exchanges
among the mutual funds managed or advised by the Advisor; changing account
designations or changing addresses; assisting in the purchase or redemption of
shares;
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<PAGE> 3
supervising the operations of the custodian, transfer agent(s) or dividend
disbursing agent(s) for the Fund; or otherwise providing services to
shareholders of the Fund; and
(iii) such other administrative services as may be furnished from time to
time by the Advisor to the Fund at the request of the Fund's Board of
Directors.
9. Expenses of the Fund. All of the ordinary business expenses incurred
in the operations of the Fund and the offering of its shares shall be borne by
the Fund unless otherwise specifically provided otherwise in this Agreement.
These expenses borne by the Fund include but are not limited to brokerage
commissions, taxes, legal, accounting, auditing or governmental fees, the cost
of preparing share certificates, custodian, transfer agent and shareholder
service agent costs, expenses of issue, sale, redemption and repurchase of
shares, expenses of registering and qualifying shares for sale, expenses
relating to directors and shareholders meetings, the cost of preparing and
distributing reports and notices to shareholders, the fees and other expenses
incurred by the Fund in connection with membership in investment company
organizations and the cost of printing copies of prospectuses and statements of
additional information distributed to the Fund's shareholders.
10. Expense Limitation. If, for any fiscal year, the total of all
ordinary business expenses of the Fund, including all investment advisory fees,
but excluding brokerage commissions and fees, taxes, interest and extraordinary
expenses, such as litigation, would exceed the applicable expense limitations
imposed by state securities regulations in any state in which the Fund's shares
are qualified for sale, as such limitations may be raised or lowered from time
to time, the aggregate of all such investment advisory fees shall be reduced by
the amount of such excess. The amount of any such reduction to be borne by the
Advisor shall be deducted from the monthly investment advisory fee otherwise
payable to the Advisor during such fiscal year. If required pursuant to such
state securities regulations, the Advisor will, not later than the last day of
the first month of the next succeeding fiscal year, reimburse the Fund for any
such annual operating expenses (after reduction of all investment advisory fees
in excess of such limitation). For purposes of this paragraph, the term "fiscal
year" shall exclude the portion of the current fiscal year which shall have
elapsed prior to the date hereof, and shall include the portion of the then
current fiscal year which shall have elapsed at the date of termination of this
Agreement.
11. Non-Exclusivity. The services of the Advisor to the Fund are not to
be deemed exclusive, and the Advisor shall be free to render investment
advisory and administrative or other services to others (including other
investment Companies) and to engage in other activities. It is understood and
agreed that officers and directors of the Advisor may serve as officers and
directors of the Fund, and that officers and directors of the Fund may serve as
officers and directors of the Advisor, to the extent permitted by law; and that
officers and directors of the Advisor are not prohibited from engaging in any
other business activity or from rendering services to any other person, or from
serving as partners, officers, directors or trustees of any other firm or
trust, including other investment advisory companies.
12. Term and Approval. This Agreement shall become effective if approved
by the shareholders of the Fund, and if so approved, this Agreement shall
thereafter continue in force and effect until June 30, 1994, and may be
continued from year to year thereafter, provided that the continuation of the
Agreement is specifically approved at least annually.
(a) (i) by the Fund's Board of Directors or (ii) by the vote of "a
majority of the outstanding voting securities" of the Fund (as defined under
Section 2(a) (42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the directors of the Fund
who are not parties to this Agreement or "interested persons" (as defined under
the 1940 Act) of a party to this Agreement (other than as Fund directors), by
votes cast in person at a meeting specifically called for such purpose.
13. Termination. This Agreement may be terminated at any time, without
the payment of any penalty, by vote of the Fund's Board of Directors or by vote
of a majority of the Fund's outstanding voting securities, or by the Advisor,
on sixty (60) days' written notice to the other party. The notice provided for
herein may be waived by either party. This Agreement shall automatically
terminate in the event of its "assignment" (as defined under Section 2(a) (4)
of the 1940 Act).
14. Liability of Advisor. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Advisor or any of its officers, directors or
employees, the Advisor shall not be subject to liability to the Fund or to any
shareholder of the Fund for any act or omission in the course of, or connected
with, rendering services hereunder or for any losses that may be sustained in
the purchase, holding or sale of any security.
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<PAGE> 4
15. Indemnification. In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of duties hereunder on the part of the
Advisor or any Sub-Advisor appointed pursuant to this Agreement, or any
officers, directors or employees thereof, the Fund hereby agrees to indemnify
and hold harmless the Advisor and/or Sub-Advisor, as the case may be, against
all claims, actions, suits or proceedings at law or in equity, whether or not
brought by a private party or a governmental department, commission, board,
bureau, agency or instrumentality of any kind, arising from the advertising,
solicitation, sale, purchase or pledge of securities, whether of the Fund or
other securities, undertaken by the Fund, its officers, directors, employees or
affiliates, resulting from any violations of the securities laws, rules,
regulations, statutes and codes, whether federal or any state, by the Fund, its
officers, directors, employees or affiliates. It is expressly understood
between the parties that the Sub-Advisor assumes no responsibility or liability
for any of such actions by the Fund conducted in connection with the business
and the activities of the Fund.
16. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered by hand, telecopied or mailed, postage prepaid, to the
other party at such address as such other party may designate for the receipt
of such notice. Until further notice to the other party, it is agreed that the
address of the Fund and that of the Advisor shall be Eleven Greenway Plaza,
Suite 1919, Houston, Texas 77046.
17. Questions of Interpretation. Questions of interpretation of any term
or provision of this Agreement having a counterpart in or otherwise derived
from a term or provision of the 1940 Act or the Advisers Act shall be resolved
by reference to such term or provision of the 1940 Act or the Advisers Act and
to interpretations thereof, if any, by the United States Courts or in the
absence of any controlling decision of any such court, by rules, regulations or
orders of the Securities and Exchange Commission issued pursuant to said Acts.
In addition, where the effect of a requirement of the 1940 Act or the Advisers
Act reflected in any provision of the Agreement is revised by rule, regulation
or order of the Securities and Exchange Commission, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
18. License Agreement. The Fund shall be entitled to use the name "AIM
Summit Fund, Inc." only so long as A I M Advisors, Inc. serves as investment
manager or advisor to such Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective duly authorized officers on the day
and year first written above.
AIM SUMMIT FUND, INC.
(a Maryland corporation)
Attest:
/s/ NANCY L. MARTIN By: /s/ CHARLES T. BAUER
- ----------------------------------- -----------------------------------
Assistant Secretary President
A I M ADVISORS, INC.
Attest:
/s/ NANCY L MARTIN By: /s/ ROBERT H. GRAHAM
- ----------------------------------- -----------------------------------
Assistant Secretary President
(SEAL)
4
<PAGE> 1
EXHIBIT 5(f)
AIM SUMMIT FUND, INC
SUB-ADVISORY AGREEMENT
THIS AGREEMENT is made this 18th day of October, 1993, by and between
A I M Advisors, Inc., a Delaware corporation (the "Advisor"), and NationsBank
of Texas, N.A., a bank organized under the laws of the United States of America
(the "Sub-Advisor").
RECITALS
WHEREAS, AIM Summit Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "1940 Act") as an open-end,
diversified management investment company;
WHEREAS, the Advisor is registered under the Investment Advisers Act
of 1940 as amended (the "Advisers Act"), as an investment advisor and engages
in the business of acting as an investment advisor;
WHEREAS, the Sub-Advisor is registered under the Advisers Act, as an
investment advisor and engages in the business of acting as an investment
advisor;
WHEREAS, the Advisor has entered into an investment advisory agreement
of even date herewith with the Fund (the "Investment Advisory Agreement"),
pursuant to which the Advisor shall act as investment advisor with respect to
the Fund; and
WHEREAS, pursuant to Section 3 (Delegation of Responsibilities) of the
Investment Advisory Agreement, the Advisor wishes to retain the Sub-Advisor for
purpose of rendering advisory services to the Advisor in connection with the
Fund upon the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
1. Appointment of Sub-Advisor. The Advisor hereby appoints the
Sub-Advisor to render investment research and advisory services to the Advisor
with respect to the Fund, under the supervision of the Advisor and subject to
the approval and direction of the Fund's Board of Directors, and the
Sub-Advisor hereby accepts such appointment, all subject to the terms and
conditions contained herein.
2. Investment Analysis. The dudes of the Sub-Advisor shall be limited
to the following:
(a) obtaining and evaluating pertinent information about significant
developments and economic, statistical and financial data, domestic, foreign or
otherwise, whether affecting the economy generally or the Fund, and whether
concerning the individual issuers whose securities are included in the Fund or
the activities in which such issuers engage, or with respect to security which
the Advisor or Sub-Advisor considers desirable for inclusion in the Fund's
investment portfolio; and
(b) to the extent requested by the Advisor, determining which issuers
and securities shall be represented in the Fund's investment portfolio,
formulating programs for the purchase and sales of such securities and
regularly reporting thereon to the Advisor and, at the request of the Advisor,
to the Fund's Board of Directors.
3. Control by Board of Directors. Any investment program undertaken by
the Sub-Advisor pursuant to this Agreement, as well as any other activities
undertaken by the Sub-Advisor with respect to the Fund, shall at all times be
subject to any directives of the Board of Directors of the Fund.
4. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Sub-Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and Advisers Act and any
rules and regulations adopted thereunder;
(b) the provisions of the registration statement of the Fund, as the
same may be amended from time to time, under the Securities Act of 1933 and the
1940 Act;
(c) the provisions of the corporate charter of the Fund, as the same
may be amended from time to time;
(d) the provisions of the by-laws of the Fund, as the same may be
amended from time to time; and
(e) any other applicable provisions of state or federal law.
1
<PAGE> 2
5. Compensation. The Advisor shall pay the Sub-Advisor, as
compensation for services rendered hereunder, an annual fee, payable monthly,
based upon the following average daily net assets of the Fund:
<TABLE>
<CAPTION>
Net Assets Rate
---------- ----
<S> <C>
First $10 million . . . . . . . . . . . . . . . . . . . . . . 0.50%
Over $10 million to and including $150 million . . . . . . . 0.35%
Over $150 million . . . . . . . . . . . . . . . . . . . . . . 0.225%
</TABLE>
The average daily net asset value of the Fund shall be determined in
the manner set forth in the corporate charter and registration statement of the
Fund, as amended from time to time.
6. Expenses of the Fund. All of the ordinary business expenses incurred
in the operations of the Fund and the offering of its shares shall be borne by
the Fund unless specifically provided otherwise in this Agreement. These
expenses borne by the Fund include but are not limited to brokerage
commissions, taxes, legal, auditing, or governmental fees, the cost of
preparing share certificates, custodian, transfer and shareholder service agent
costs, expenses of issue, sale, redemption and repurchase of shares, expenses
of registering and qualifying shares for sale, expenses relating to directors
and shareholder meetings, the cost of preparing and distributing reports and
notices to shareholders, the fees and other expenses incurred by the Fund in
connection with membership in investment company organizations and the cost of
printing copies of prospectuses and statements of additional information
distributed to the Fund's shareholders.
7. Expense Limitation. If, for any fiscal year of the Fund, the amount
of the fee which the Advisor would otherwise receive from the Fund pursuant to
the Investment Advisory Agreement is reduced pursuant to expense limitation
provisions of the Investment Advisory Agreement, the fee which the Sub-Advisor
would otherwise receive from the Advisor pursuant to Section 5 of this
Agreement shall also be reduced proportionately. For example, if the Advisor's
fee from the Fund is reduced by 1/3, the Sub-Advisor's fee from the Advisor will
also be reduced by 1/3. Such reduction shall be deducted from the monthly fee
otherwise payable to the Sub-Advisor by the Advisor, and, if such amount should
exceed such monthly fee, the Sub-Advisor agrees to repay the Advisor such
amount of its fee previously received with respect to such fiscal year as may
be required to make up the deficiency no later than the last day of the
following month. In no event will the Sub-Advisor be required to reimburse the
Advisor for any amount in excess of the fee it receives pursuant to this
Agreement during the fiscal year of the Fund in which reimbursement is
required.
8. Non-Exclusivity. The services of the Sub-Advisor to the Advisor
with respect to the Fund are not to be deemed to be exclusive, and the
Sub-Advisor shall be free to render investment advisory and administrative or
other services to others (including other investment companies) and to engage
in other activities. It is understood and agreed that officers or directors of
the Sub-Advisor may serve as officers or directors of the Advisor or of the
Fund, and that officers or directors of the Fund or of the Advisor may serve as
officers or directors of the Sub-Advisor to the extent permitted by law; and
that the officers and directors of the Sub-Advisor are not prohibited from
engaging in any other business activity or from rendering services to any other
person, or from serving as partners, officers, directors or trustees of any
other firm or trust, including other investment advisory companies.
9. Term and Approval. This Agreement shall become effective if
approved by the shareholders of the Fund, and if so approved, this Agreement
shall thereafter continue in force and effect until June 30, 1994, and may be
continued from year to year thereafter, provided that the continuation of the
Agreement is specifically approved at least annually:
(a) (i) by the Fund's Board of Directors or (ii) by the vote of "a
majority of the outstanding voting securities" of the Fund (as defined in
Section 2(a) (42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the directors who are not
parties to this Agreement or "interested persons" (as defined in the 1940 Act)
of a party to this Agreement (other than as Fund directors), by votes cast in
person at a meeting specifically called for such purpose.
10. Termination. This Agreement may be terminated at any time, without
the payment of any penalty, by vote of the Fund's Board of Directors or by vote
of majority of the Fund's outstanding voting securities, or by the Advisor, or
by the Sub-Advisor on sixty (60) days' written notice to the other party and to
the Fund. The notice provided for herein may be waived by either party. This
Agreement shall automatically terminate in the event of its assignment, the
term "assignment" for purposes of this paragraph having the meaning defined in
Section 2(a) (4) of the 1940 Act.
2
<PAGE> 3
11. Liability of Sub-Advisor. In the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Sub-Advisor or any of its officers, directors or
employees, the Sub-Advisor shall not be subject to liability to the Advisor for
any act or omission in the course of, or connected with, rendering services
hereunder or for any losses that may be sustained in the purchase, holding or
sale of any security.
12. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to such address as may be
designated for the receipt of such notice, with a copy to the Fund. Until
further notice, it is agreed that the address of the Fund and that of the
Advisor shall be Eleven Greenway Plaza, Suite 1919, Houston, Texas 77046 and
that of the Sub-Advisor shall be 350 North St. Paul, Suite 500, Dallas, Texas
75201.
13. Questions of Interpretation; Applicable Law. Any question of
interpretation of any term or provision Or this Agreement having a counterpart
in or otherwise derived from a term or provision of the 1940 Act or the
Advisers Act shall be resolved by reference to such term or provision of the
1940 Act or the Advisers Act and to interpretations thereof if any, by the
United States Courts or in the absence of any controlling decision of any such
court, by rules, regulations or orders of the Securities and Exchange
Commission issued pursuant to said Acts. In addition, where the effect of a
requirement of the 1940 Act or the Advisers Act reflected in any provision of
the Agreement is revised by rule, regulation or order of the Securities and
Exchange Commission, such provision shall be deemed to incorporate the effect
of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in duplicate by their respective officers on the day and year first
written above.
A I M ADVISORS, INC.
Attest:
/s/ NANCY L. MARTIN By: /s/ ROBERT H. GRAHAM
- ----------------------------------- -----------------------------------
Assistant Secretary President
(SEAL) NATIONSBANK OF TEXAS, N.A.
Attest:
/s/ CARRIE SHERWOOD By: /s/ DONALD S. BERDINE
- ----------------------------------- -----------------------------------
Assistant Secretary President
Its: Senior Vice President
-----------------------------------
(SEAL)
3
<PAGE> 1
EXHIBIT 6(b)
DISTRIBUTION AGREEMENT
AGREEMENT, made as of the 18th day of October, 1993, by and between
AIM SUMMIT FUND, INC., a Maryland corporation (the "Company), and A I M
DISTRIBUTORS, INC., a Delaware corporation (the "Distributor").
WITNESSETH
WHEREAS, the Company is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended; and
WHEREAS, the Distributor sponsors systematic investment plans (the
"Plans") based upon shares of the common stock of the Company, and the
Distributor desires to arrange for the acquisition of Company shares for
deposit and use under the Plans; and
WHEREAS, the Company and the Distributor desire to enter into a new
agreement appointing the Distributor as the principal distributor of the shares
of common stock of the Company.
NOW, THEREFORE, in consideration of the premises and of other good and
valuable consideration by each of the parties hereto to the other party paid
and of the agreements, covenants and obligations herein contained:
1. The Company appoints the Distributor as the principal
distributor of Company shares for a term of two years commencing upon the date
first above written and continuing thereafter for consecutive periods of one
year provided the continuance of this Agreement is approved at least annually
(a) by the Company's Board of Directors, including a majority of the members of
the Board of Directors who are not parties to the Agreement or interested
persons of any such party (other than as a Company director), in person at a
meeting called for such purpose or (b) by the affirmative vote of the holders
of either: (i) 67% or more of the Company shares voting (if more than 50% of
the outstanding Company shares are voted) or (ii) more than 50% of the
outstanding Company shares. Notwithstanding the termination of this Agreement,
the Company agrees to sell sufficient Company shares to the Distributor or any
bank or banks acting as custodian for the Plans to permit completion of all
Plans begun prior to such termination. The Distributor represents and agrees
that it will use its best efforts to sell Plans based upon Company shares
throughout the term of this Agreement.
-1-
<PAGE> 2
2. The Company shall use its best efforts in maintaining
registration of itself and its securities under the Investment Company Act of
1940, as amended (the "Act"), and the Securities Act of 1933, as amended, and
shall bear all expenses in connection therewith. The Company shall provide to
the Distributor or the bank or banks acting as custodian for the Plans sold by
the Distributor a sufficient number of copies of any and all general mailings,
together with the necessary envelopes, including, without limitation, proxy
material, proxies, annual, semi-annual and quarterly reports, sent from time to
time to the holders of Company shares so as to provide a single copy, together
with the necessary envelope and postage, to each holder of a Plan. The Company
agrees to furnish all the above-mentioned material at no cost to the
Distributor. The Distributor agrees that it will furnish the Company for its
files two copies of all material supplied to holders of Plans by the
Distributor. The Company shall provide to the Distributor, at printer's
over-run costs, such additional copies of its prospectus and its annual,
semi-annual and other reports and communications to shareholders as the
Distributor may reasonably require for sales purposes. It is understood that
the Distributor is a wholly-owned subsidiary of A I M Advisors, Inc., the
investment adviser to the Company ("AIM"), and that AIM is a wholly-owned
subsidiary of A I M Management Group Inc., and that the Company's agreement to
supply information and printed material described in this Agreement may be
fulfilled by AIM.
3. The Company shall cooperate in the qualification of Company
shares under the laws of the various states of the United States and shall
execute and deliver such documents as may reasonably be required for such
purpose, but the Company shall not be required to qualify as a foreign
corporation in any jurisdiction, nor effect any modification of its policies or
practices without prior approval of the Company's officers. The officers of
the Company shall determine whether it is desirable to qualify or continue to
offer Company shares in any jurisdiction.
4. The Distributor agrees that all solicitations for
subscriptions to Company shares shall be made in accordance with the Company's
Articles of Incorporation and By-laws, Registration Statement and Prospectus,
and shall not at any time or in any manner violate any provisions of the laws
of the United States or of any state or other jurisdiction in which
solicitations are then being made. The Distributor may enter into sales
agreements with dealers to sell Company shares.
5. The Distributor shall purchase from the Company as principal,
and the Company agrees to sell to the Distributor at the net asset value
thereof, Company shares sufficient to meet the requirements of all such Plans
as are sold, distributed and/or issued by the Distributor. Such
-2-
<PAGE> 3
shares will be sold to the Distributor at net asset value computed in the manner
set forth in the Company prospectus in effect at the time of sale of such
shares. The Distributor shall not maintain a long or short position in Company
shares for its own account, except as may incidentally result from cancellation
or by-in of orders made by it or its dealers for customers because of such
customer's failure to pay.
6. The agreement on the part of the Company to sell Company
shares upon demand, at net asset value as set forth in paragraph 5 hereof, is
subject to the following limitations:
(a) that the Plans are maintained in good standing as
unit investment trusts under the Federal Securities Laws;
(b) that the membership of the Distributor in the
National Association of Securities Dealers, Inc. and its
registration as broker-dealer under the Securities Exchange
Act of 1934, as amended, have not been cancelled, revoked or
suspended; and
(c) that the Distributor is not in violation of any of
the federal or state laws and regulations relating to the
registration and sale of said Plans.
If the Distributor shall, within 30 days after a default under any of the
provisions of this paragraph, cure such default to the reasonable satisfaction
of the Company, then the agreement of the Company to sell at the net asset
value Company shares in accordance with paragraph 5 hereof shall remain
unimpaired, anything in this paragraph 6 to the contrary notwithstanding.
7. The Distributor's right to purchase Company shares at net
asset value for resale shall be exclusive, except that:
(a) the Company may issue its shares at their net asset
value to any shareholder of the Company purchasing such shares
with dividends or other distributions received from the
Company pursuant to an offer made to all shareholders;
-3-
<PAGE> 4
(b) the Company may issue its shares at their net asset
value in connection with certain classes of transactions or to
certain classes of persons as set forth in the then current
prospectus of the Company;
(c) the Distributor may, and when requested by the
Company shall, suspend its efforts to effectuate sales of
Company shares at any time when in the opinion of the
Distributor or of the Company no sales should be made because
of market or other economic considerations or abnormal
circumstances of any kind; and
(d) the Company may withdraw the offering of its common
stock (i) at any time with the consent of the Distributor, or
(ii) without such consent when so required by the provisions
of any statute or of any order, rule or regulation of any
governmental body having jurisdiction.
It is mutually understood and agreed that the
Distributor does not undertake to sell all or any specific
portion of the shares of common stock of the Company.
8. The Distributor may from time to time, whenever it is in the
best interest of holders of Plans, substitute a new investment medium for the
Company shares theretofore employed (such substitution to be made as to the
Company shares already purchased and to be purchased, or only as to Company
shares to be purchased), provided that no substitution shall result in a direct
or indirect payment, commission or other compensation to the Distributor or any
subsidiary or affiliate of the Distributor, and provided, further, that such
substituted shares are generally comparable in character and quality to the
Company shares theretofore purchased under the Plans and meet with the approval
of the custodian of the Plans and are shares registered with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, so long as
that statute remains in force; and further provided, that before any
substitution may be made, the Distributor shall:
-4-
<PAGE> 5
(a) Give notice of the proposed substitution to the
Company and the custodian of the Plans and first satisfy the
custodian that arrangements have been entered into by the
Distributor which reasonably assure that the new shares will
be available for purchase by the custodian and subject to
redemption on terms generally as favorable as those applicable
to the Company shares currently employed as the investment
medium;
(b) Give written notice to each holder of a Plan of the
proposed substitution giving a reasonable description of the
new shares and notifying each holder of a Plan that unless he
surrenders his Plan to the custodian for termination within 30
days of the date of such notice, he will be conclusively
deemed to have authorized the substitution, and to have agreed
to bear his pro rata share of the actual expenses including
tax liability incurred by the custodian and the Distributor in
connection therewith;
(c) In the case of substitution of new shares for Company
shares already purchased, arrange that the custodian will be
furnished, without payment of sales commission or fees, with
new shares having an aggregate value on the basis of their net
asset value at lease equal to the aggregate value of the old
Company shares similarly computed, or computed on the basis of
the best available bid price the custodian is able to obtain
for such old Company shares in the event the issuer thereof
does not quote the net asset value at the time in question;
(d) Furnish the custodian with a certificate signed by
the President or Secretary of the Distributor, showing that
the Distributor has given notice to each holder of a Plan as
above provided; and
-5-
<PAGE> 6
(e) File an application with the Securities and Exchange
Commission.
9. The Company agrees to indemnify and hold the Distributor and
each person (if any) who controls the Distributor within the meaning of Section
15 of the Securities Act of 1933 harmless from and against any and all losses,
claims, damages and liabilities caused by or alleged to exist by reason of any
untrue statement or alleged untrue statement of a material fact contained in the
Company's Registration Statement or Prospectus (as amended or supplemented if
the Company shall have made any amendments or supplements thereto) or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading if
such statement or omission or alleged untrue statement or omission shall have
been furnished by the Company for use in the Registration Statement or
Prospectus.
The Distributor agrees that, promptly upon its receipt of notice of the
commencement of any action against the Distributor or against any person so
controlling the Distributor, in respect of which indemnity or reimbursement may
be sought from the Company on account of its agreement in the preceding
paragraph, notice in writing will be given to the Company of the commencement
thereof. Thereupon, the Company shall be entitled to participate, to the extent
that it shall wish (including the selection of counsel), in the defense thereof.
The Distributor or any such controlling person shall have the right, at its or
his own expense, to employ separate counsel in any such case.
In the event that any such claim for indemnification is made by any
officer, director or person in control of the Distributor within the meaning of
Section 15 of the Securities Act of 1933 who is also an officer or director of
the Company, the Company will submit to a court of appropriate jurisdiction the
question of whether or not indemnification by it is against public policy as
expressed in the Securities Act of 1933, the Securities Exchange Act of 1934,
and the Act, and will be governed by the final adjudication of such question.
Notwithstanding anything to the contrary contained herein, the
foregoing indemnity does not protect or purport to protect or indemnity the
Distributor for any liability to the Company or to holders of Company shares to
which it would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement.
-6-
<PAGE> 7
10. The Distributor agrees to indemnify and hold harmless the
Company, its officers, directors or agents to the same extent as in the
foregoing indemnity from the Company to the Distributor, arising by reason of
the sponsorship or distribution by the Distributor of Plans based upon Company
shares, but only with respect to any untrue statement or omission or alleged
untrue statement or omission based upon information furnished in writing to the
Company by the Distributor or by any person on behalf of or at the request of
the Distributor, excluding the Company, expressly for use in the Registration
Statement or Prospectus. The Distributor also agrees to indemnify and hold
harmless the Company, its officers, agents and directors from and against any
and all losses, claims damages and liabilities caused by or alleged to exist by
reason of sales activities by it or its authorized agents, in violation of the
laws of the United States or of any state or other jurisdiction in which
solicitations are made or any rule or regulation promulgated by any lawfully
constituted authority.
In case any action shall be brought against the Company, its officers,
directors or agents, in respect of which it may seek indemnity or reimbursement
from the Distributor on account of the agreement of the Distributor contained
in the preceding paragraph, the Distributor shall have the rights and duties
given to the Company, and the Company, its directors, officers or agents shall
have the rights and duties given to the Distributor, in the second, third and
fourth paragraphs of paragraph 9.
11. This Agreement may be terminated at any time, without the
payment of any penalty, by vote of the Board of Directors of the Company or by
vote of a majority of the outstanding voting securities of the Company, or by
the Distributor, on sixty (60) days' written notice to the other party. This
Agreement shall automatically terminate in the event of its assignment, as
defined in the Act, by the Distributor.
-7-
<PAGE> 8
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto the day and year first above written.
<TABLE>
<S> <C>
AIM SUMMIT FUND, INC.
ATTEST:
By: /s/ CHARLES T. BAUER
--------------------------------------------------------
President
/s/ NANCY L. MARTIN
- ---------------------------------------
Assistant Secretary
A I M DISTRIBUTORS, INC.
ATTEST:
By: /s/ MICHAEL J. CEMO
--------------------------------------------------------
/s/ NANCY L. MARTIN
- ---------------------------------------
Assistant Secretary
</TABLE>
-8-
<PAGE> 1
EXHIBIT 7(b)
AIM FUNDS
RETIREMENT PLAN FOR ELIGIBLE
DIRECTORS/TRUSTEES
Effective as of March 8, 1994
As Restated September 18, 1995
<PAGE> 2
AIM FUNDS
RETIREMENT PLAN FOR ELIGIBLE
DIRECTORS/TRUSTEES
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITION OF TERMS AND CONSTRUCTION . . . . . . . . . 1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . 1
(a) Accrued Benefit . . . . . . . . . . . . . . . . . . . 1
(b) Actuary . . . . . . . . . . . . . . . . . . . . . . . 1
(c) Administrator . . . . . . . . . . . . . . . . . . . . 1
(d) AIM Funds . . . . . . . . . . . . . . . . . . . . . . 1
(e) Board of Directors . . . . . . . . . . . . . . . . . 1
(f) Code . . . . . . . . . . . . . . . . . . . . . . . . 2
(g) Compensation . . . . . . . . . . . . . . . . . . . . 2
(h) Deferred Retirement Date . . . . . . . . . . . . . . 2
(i) Director . . . . . . . . . . . . . . . . . . . . . . 2
(j) Disability . . . . . . . . . . . . . . . . . . . . . 2
(k) Effective Date . . . . . . . . . . . . . . . . . . . 2
(l) Fund . . . . . . . . . . . . . . . . . . . . . . . . 2
(m) Normal Retirement Date . . . . . . . . . . . . . . . 2
(n) Participant . . . . . . . . . . . . . . . . . . . . . 2
(o) Plan . . . . . . . . . . . . . . . . . . . . . . . . 2
(p) Plan Year . . . . . . . . . . . . . . . . . . . . . . 2
(q) Retirement . . . . . . . . . . . . . . . . . . . . . 2
(r) Retirement Benefit . . . . . . . . . . . . . . . . . 3
(s) Service . . . . . . . . . . . . . . . . . . . . . . . 3
(t) Year of Service . . . . . . . . . . . . . . . . . . . 3
1.2 Plurals and Gender . . . . . . . . . . . . . . . . . . . . . . 3
1.3 Directors/Trustees . . . . . . . . . . . . . . . . . . . . . . 3
1.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.5 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II PARTICIPATION . . . . . . . . . . . . . . . . . . . . . 4
2.1 Commencement of Participation . . . . . . . . . . . . . . . . 4
2.2 Termination of Participation . . . . . . . . . . . . . . . . . 4
2.3 Resumption of Participation . . . . . . . . . . . . . . . . . 4
2.4 Determination of Eligibility . . . . . . . . . . . . . . . . . 4
-i-
<PAGE> 3
Page
----
ARTICLE III BENEFITS UPON RETIREMENT AND OTHER
TERMINATION OF SERVICE. . . . . . . . . . . . . . . . . 4
3.1 Retirement. . .. . . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Termination of Service Before Retirement . . . . . . . . . . . 5
3.3 Termination of Service by Reason of Death. . . . . . . . . . . 5
3.4 Benefits Calculated in the Aggregate for all of the AIM Funds. 5
ARTICLE IV DEATH BENEFITS. . . . . . . . . . . . . . . . . . . . . 5
4.1 Death Prior to Commencement of Benefits . . . . . . . . . . . 5
4.2 Death Subsequent to Commencement of Benefits . . . . . . . . 5
4.3 Death of Spouse . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE V SUSPENSION OF BENEFITS, ETC. . . . . . . . . . . . . . 6
5.1 Suspension of Benefits Upon Resumption of Service . . . . . . 6
5.2 Payments Due Missing Persons . . . . . . . . . . . . . . . . . 6
ARTICLE VI ADMINISTRATOR . . . . . . . . . . . . . . . . . . . . 7
6.1 Appointment of Administrator . . . . . . . . . . . . . . . . . 7
6.2 Powers and Duties of Administrator . . . . . . . . . . . . . . 7
6.3 Action by Administrator . . . . . . . . . . . . . . . . . . . 8
6.4 Participation by Administrators . . . . . . . . . . . . . . . 8
6.5 Agents and Expenses. . . . . . . . . . . . . . . . . . . . . . 8
6.6 Allocation of Duties . . . . . . . . . . . . . . . . . . . . . 8
6.7 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . 9
6.8 Administrator's Action Conclusive . . . . . . . . . . . . . . 9
6.9 Records and Reports . . . . . . . . . . . . . . . . . . . . . 9
6.10 Information from the AIM Funds . . . . . . . . . . . . . . . . 9
6.11 Reservation of Rights by Boards of Directors . . . . . . . . . 9
6.12 Liability and Indemnification. . . . . . . . . . . . . . . . . 9
ARTICLE VII AMENDMENTS AND TERMINATION . . . . . . . . . . . . . . 10
7.1 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.2 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 10
8.1 Rights of Creditors . . . . . . . . . . . . . . . . . . . . . 10
8.2 Liability Limited. . . . . . . . . . . . . . . . . . . . . . . 11
8.3 Incapacity . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.4 Cooperation of Parties . . . . . . . . . . . . . . . . . . . . 11
8.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 11
8.6 Nonguarantee of Directorship . . . . . . . . . . . . . . . . . 12
8.7 Counsel . . . . . . . . . . . . . . . .. . . . . . . . . . . . 12
8.8 Spendthrift Provision . . . . . . . . . . . . . . . . . . . . 12
8.9 Forfeiture for Cause . . . . . . . . . . . . . . . . . . . . . 12
-ii-
<PAGE> 4
Page
----
ARTICLE IX CLAIMS PROCEDURE . . . . . . . . . . . . . . . . . . . . . 12
9.1 Notice of Denial . . . . . . . . . . . . . . . . . . . . . . . 12
9.2 Right to Reconsideration . . . . . . . . . . . . . . . . . . . 13
9.3 Review of Documents. . . . . . . . . . . . . . . . . . . . . . 13
9.4 Decision by Administrator. . . . . . . . . . . . . . . . . . . 13
9.5 Notice by Administrator. . . . . . . . . . . . . . . . . . . . 13
-iii-
<PAGE> 5
AIM FUNDS
RETIREMENT PLAN FOR ELIGIBLE
DIRECTORS/TRUSTEES
PREAMBLE
Effective as of March 8, 1994, the regulated investment
companies managed, administered and/or distributed by AIM Advisors, Inc. or its
affiliates (the "AIM Funds") have adopted THE AIM FUNDS RETIREMENT PLAN FOR
ELIGIBLE DIRECTORS/TRUSTEES (the "Plan") for the benefit of each of the
directors and trustees of each of the AIM Funds who is not an employee of any
of the AIM Funds, A I M Management Group Inc. or any of their affiliates. As
the Plan does not benefit any employees of the AIM Funds, it is not intended to
be classified as an employee benefit plan within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
ARTICLE I
DEFINITION OF TERMS AND CONSTRUCTION
------------------------------------
1.1 Definitions.
------------
Unless a different meaning is plainly implied by the context,
the following terms as used in this Plan shall have the following meanings:
(a) "Accrued Benefit" shall mean, as of any date prior to
a Participant's Normal Retirement Date, his Retirement Benefit commencing on
his Normal Retirement Date, but based upon his Compensation and Years of
Service computed as of such date of determination.
(b) "Actuary" shall mean the independent actuary selected
by the Administrator.
(c) "Administrator" shall mean the administrative
committee provided for in Article VI.
(d) "AIM Funds" shall mean the regulated investment
companies managed, administered or distributed by A I M Advisors, Inc. or its
affiliates.
(e) "Board of Directors" shall mean the Board of
Directors of each of the AIM Funds.
<PAGE> 6
(f) "Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time, or any successor statute.
(g) "Compensation" shall mean, for any Director, the
amount of the retainer paid or accrued by the AIM Funds for such Director
during the twelve month period immediately preceding the Director's Retirement,
including amounts deferred under a separate agreement between the AIM Funds and
the Director. The amount of such retainer Compensation shall be as determined
by the Administrator.
(h) "Deferred Retirement Date" shall mean the first day
of the month coincident with or next following the date on which a Participant
terminated Service after his Normal Retirement Date.
(i) "Director" shall mean an individual who is a director
or trustee of one or more of the AIM Funds which have adopted the Plan but who
is not an employee of any of the AIM Funds, A I M Management Group Inc. or any
of their affiliates.
(j) "Disability" shall mean the inability of the
Participant to participate in meetings of the Board of Directors, either in
person or by telephone, for a period of at least nine (9) months.
(k) "Effective Date" shall mean March 8, 1994.
(l) "Fund" shall mean an AIM Fund which has adopted this
Plan.
(m) "Normal Retirement Date" shall mean, the date on
which a Participant has both attained age 65 (or at least age 55 in the event
of the Director's termination of Service by reason of death or Disability) and
has completed at least five continuous and non-forfeited Years of Service (and
thirty months of Service with one or more of the AIM Funds).
(n) "Participant" shall mean a Director who has met all
of the eligibility requirements of the Plan and who is currently included in
the Plan as provided in Article II hereof.
(o) "Plan" shall mean the "AIM Funds Retirement Plan for
Eligible Directors/Trustees" as described herein or as hereafter amended from
time to time.
(p) "Plan Year" shall mean the calendar year.
(q) "Retirement" shall mean a Director's termination of
his active Service with the AIM Funds on or after his Normal Retirement Date,
due to his death, Disability, or voluntary or involuntary termination of his
Service.
(r) "Retirement Benefit" shall mean the benefit described
under Section 3.1 hereof.
-2-
<PAGE> 7
(s) "Service" shall mean an individual's serving as a
Director of one or more of the AIM Funds. Furthermore, any unbroken service
provided by a Participant (i) to an AIM Fund immediately prior to its being
managed or administered by A I M Advisors, Inc. (or any of its affiliates) or
(ii) to a predecessor of an AIM Fund immediately prior to its being merged into
such AIM Fund, will be taken into account in determining such Participant's
Years of Service, subject to all restrictions and other forfeiture provisions
contained herein.
(t) "Year of Service" shall mean a twelve consecutive
month period of Service. For all purposes in this Plan, if a Participant's
Service terminates prior to his Retirement, he shall forfeit credit for all
Years of Service completed prior to such termination unless (a) he again
becomes a Director and (b) the number of Years of Service he accumulated prior
to such termination exceeded the number of years in which he did not serve as a
Director.
1.2 Plurals and Gender.
Where appearing in the Plan, the masculine gender shall
include the feminine and neuter genders, and the singular shall include the
plural, and vice versa, unless the context clearly indicates a different
meaning.
1.3 Directors/Trustees.
Where appropriate, the term "director" shall refer to
"trustee", "directorship" shall refer to "trusteeship" and "Board of Directors"
shall refer to "Board of Trustees."
1.4 Headings.
The headings and sub-headings in this Plan are inserted for
the convenience of reference only and are to be ignored in any construction of
the provisions hereof.
1.5 Severability.
In case any provision of this Plan shall be held illegal or
void, such illegality or invalidity shall not affect the remaining provisions
of this Plan, but shall be fully severable, and the Plan shall be construed and
enforced as if said illegal or invalid provisions had never been inserted
herein.
-3-
<PAGE> 8
ARTICLE II
PARTICIPATION
-------------
2.1 Commencement of Participation.
------------------------------
Each Director shall become a Participant hereunder on the date
his directorship of one or more of the AIM Funds commences.
2.2 Termination of Participation.
-----------------------------
After commencement or resumption of his participation, a
Director shall remain a Participant until the earliest of the following dates:
(a) His actual Retirement date;
(b) His date of death;
(c) The date on which he otherwise incurs a termination
of Service; or
(d) The effective date of the termination of the Plan.
2.3 Resumption of Participation.
----------------------------
Any Participant whose Service terminates and who thereafter
again becomes a Director shall resume participation immediately upon again
becoming a Director except that, as provided in Section 1.1(t) hereof, if his
Service is terminated prior to his Normal Retirement Date, for all purposes of
this Plan he shall forfeit credit for all Years of Service completed prior to
such termination of his Service.
2.4 Determination of Eligibility.
-----------------------------
The Administrator shall determine the eligibility of Directors
in accordance with the provisions of this Article.
ARTICLE III
BENEFITS UPON
-------------
RETIREMENT AND OTHER TERMINATION OF SERVICE
-------------------------------------------
3.1 Retirement.
-----------
Upon Retirement a Participant shall be entitled to receive an
annual benefit from the AIM Funds commencing on the first day of the calendar
quarter coincident with or next following his date of Retirement, payable in
quarterly installments for a period of no more than
-4-
<PAGE> 9
ten (10) years (or, if less, the number of his Years of Service) equal
to seventy-five percent (75%) of his Compensation.
3.2 Termination of Service Before Retirement.
-----------------------------------------
In the event that a Participant's Service terminates by reason
of death, Disability or removal by the Board for cause (as defined in Section
8.9) prior to his Normal Retirement Date, he shall not be entitled to receive
any benefits hereunder. If a Participant's Service terminates for any other
reason and he has accumulated at least five (5) continuous and non-forfeited
Years of Service, he shall be entitled to receive his Accrued Benefit
determined as of such date of termination.
3.3 Termination of Service by Reason of Death.
------------------------------------------
No benefits will be paid under this Plan with respect to a
Participant after his death other than as provided in Article IV.
3.4 Benefits Calculated in the Aggregate for all of the AIM Funds.
--------------------------------------------------------------
With respect to each Participant, the benefits payable
hereunder shall be based on the aggregate Compensation paid by the AIM Funds
and on the Participant's non-forfeited Years of Service. Each Fund's share of
the obligation to provide such benefits shall be determined by use of
accounting methods adopted by the Administrator.
ARTICLE IV
DEATH BENEFITS
--------------
4.1 Death Prior to Commencement of Benefits.
----------------------------------------
In the event of a Participant's death subsequent to his Normal
Retirement Date, but prior to the commencement of his Retirement Benefits under
Article III hereof, the surviving spouse (if any) of such Participant shall be
entitled to receive a quarterly survivor's benefit for a period of no more than
ten (10) years (or, if less, the number of the Participant's Years of Service)
beginning on the first day of the calendar quarter next following the date of
the Participant's death equal to fifty percent (50%) of the amount of the
quarterly installments of Retirement Benefits that would have been paid to the
Participant under Sections 3.1 or 3.2 hereof had his Retirement occurred on his
date of death.
4.2 Death Subsequent to Commencement of Benefits.
---------------------------------------------
In the event a Participant dies after the commencement of his
Retirement Benefit under Article III, but prior to the cessation of the payment
of such Retirement Benefits, the surviving spouse (if any) of such Participant
shall be entitled to receive survivor's benefits equal to fifty percent (50%)
of the amount of the annual Retirement Benefit payable to the Participant
-5-
<PAGE> 10
under Article III hereunder, paid at such times, and for such period, as such
Retirement Benefit would have continued to have been paid to the Participant
had he not died.
4.3 Death of Spouse.
----------------
(a) In the event a Participant is not survived by a
spouse, no benefits will be paid hereunder upon the Participant's death.
(b) If a deceased Participant's surviving spouse dies
while receiving survivor's benefits hereunder, any installments not paid at the
time of the surviving spouse's death shall be forfeited.
ARTICLE V
SUSPENSION OF BENEFITS, ETC.
----------------------------
5.1 Suspension of Benefits Upon Resumption of Service.
--------------------------------------------------
In the case of a Participant who, at a time when he is
receiving Retirement Benefits under Article III of this Plan, resumes Service
with any AIM Fund, such Retirement Benefits shall be suspended until his
subsequent Retirement, termination of Service or death. Subject to the Years
of Service limitations of Section 3.1 hereof, in the event of his Retirement
or termination of Service following such a suspension, the quarterly amount of
his remaining Retirement Benefits shall thereafter be adjusted, if
appropriate, to reflect any additional Years of Service completed by, or a
higher rate of Compensation received by, such Participant.
5.2 Payments Due Missing Persons.
-----------------------------
The Administrator shall make a reasonable effort to locate all
persons entitled to benefits (including Retirement Benefits and survivor's
benefits for spouses) under the Plan; however, notwithstanding any provisions
of this Plan to the contrary, if, after a period of 5 years from the date any
of such benefits first become due, any such persons entitled to benefits have
not been located, their rights under the Plan shall stand suspended. Before
this provision becomes operative, the Administrator shall send a certified
letter to all such persons (if any) at their last known address advising them
that their benefits under the Plan shall be suspended. Any such suspended
amounts shall be held by the AIM Funds for a period of 3 additional years (or a
total of 8 years from the time the benefits first became payable) and
thereafter such amounts shall be forfeited.
-6-
<PAGE> 11
ARTICLE VI
ADMINISTRATOR
-------------
6.1 Appointment of Administrator.
-----------------------------
This Plan shall be administered by the Nominating and
Compensation Committees of the Boards of Directors of the AIM Funds. The
members of such committees are not "interested persons" (within the meaning of
Section 2(a)(19) of the Investment Company Act of 1940) of any of the AIM
Funds. The term "Administrator" as used in this Plan shall refer to the
members of such committees, either individually or collectively, as
appropriate.
6.2 Powers and Duties of Administrator.
-----------------------------------
Except as provided below, the Administrator shall have the
following duties and responsibilities in connection with the administration of
this Plan:
(a) To promulgate and enforce such rules, regulations and
procedures as shall be proper for the efficient administration of the Plan;
(b) To determine all questions arising in the
administration, interpretation and application of the Plan, including questions
of eligibility and of the status and rights of Participants and any other
persons hereunder;
(c) To decide any dispute arising hereunder; provided,
however, that no Administrator shall participate in any matter involving any
questions relating solely to his own participation or benefits under this Plan;
(d) To advise the Boards of Directors of the AIM Funds
regarding the known future need for funds to be available for distribution;
(e) To correct defects, supply omissions and reconcile
inconsistencies to the extent necessary to effectuate the Plan;
(f) To compute the amount of benefits and other payments
which shall be payable to any Participant or surviving spouse in accordance
with the provisions of the Plan and to determine the person or persons to whom
such benefits shall be paid;
(g) To make recommendations to the Boards of Directors of
the AIM Funds with respect to proposed amendments to the Plan;
(h) To file all reports with government agencies,
Participants and other parties as may be required by law, whether such reports
are initially the obligation of the AIM Funds, or the Plan;
-7-
<PAGE> 12
(i) To engage the Actuary of the Plan and to cause the
liabilities of the Plan to be evaluated by the Actuary; and
(j) To have all such other powers as may be necessary to
discharge its duties hereunder.
6.3 Action by Administrator.
------------------------
The Administrator may elect a Chairman and Secretary from
among its members and may adopt rules for the conduct of its business. A
majority of the members then serving shall constitute a quorum for the
transacting of business. All resolutions or other action taken by the
Administrator shall be by vote of a majority of those present at such meeting
and entitled to vote. Resolutions may be adopted or other action taken without
a meeting upon written consent signed by at least a majority of the members.
All documents, instruments, orders, requests, directions, instructions and
other papers shall be executed on behalf of the Administrator by either the
Chairman or the Secretary of the Administrator, if any, or by any member or
agent of the Administrator duly authorized to act on the Administrator's
behalf.
6.4 Participation by Administrators.
--------------------------------
No Administrator shall be precluded from becoming a
Participant in the Plan if he would be otherwise eligible, but he shall not be
entitled to vote or act upon matters or to sign any documents relating
specifically to his own participation under the Plan, except when such matters
or documents relate to benefits generally. If this disqualification results in
the lack of a quorum, then the Boards of Directors, by majority vote of the
members of a majority of such Boards of Directors (a "Majority Vote"), shall
appoint a sufficient number of temporary Administrators, who shall serve for
the sole purpose of determining such a question.
6.5 Agents and Expenses.
--------------------
The Administrator may employ agents and provide for such
clerical, legal, actuarial, accounting, medical, advisory or other services as
it deems necessary to perform its duties under this Plan. The cost of such
services and all other expenses incurred by the Administrator in connection
with the administration of the Plan shall be allocated to each Fund pursuant to
the method utilized under Section 3.4 hereof with respect to costs related to
benefit accruals. For purposes of the preceding sentence, if an individual
serves as a Director for more than one Fund, he shall be deemed to be a
separate Director for each such Fund in determining the aggregate number of
Directors of the AIM Funds.
6.6 Allocation of Duties.
---------------------
The duties, powers and responsibilities reserved to the
Administrator may be allocated among its members so long as such allocation is
pursuant to written procedures adopted by the Administrator, in which case no
Administrator shall have any liability, with respect to any duties, powers or
responsibilities not allocated to him, for the acts or omissions of any other
Administrator.
-8-
<PAGE> 13
6.7 Delegation of Duties.
---------------------
The Administrator may delegate any of its duties to employees
of A I M Advisors, Inc. or any of its affiliates or to any other person or
firm, provided that the Administrator shall prudently choose such agents and
rely in good faith on their actions.
6.8 Administrator's Action Conclusive.
----------------------------------
Any action on matters within the discretion of the
Administrator shall be final and conclusive.
6.9 Records and Reports.
--------------------
The Administrator shall maintain adequate records of its
actions and proceedings in administering this Plan and shall file all reports
and take all other actions as it deems appropriate in order to comply with any
federal or state law.
6.10 Information from the AIM Funds.
-------------------------------
The AIM Funds shall promptly furnish all necessary information
to the Administrator to permit it to perform its duties under this Plan. The
Administrator shall be entitled to rely upon the accuracy and completeness of
all information furnished to it by the AIM Funds, unless it knows or should
have known that such information is erroneous.
6.11 Reservation of Rights by Boards of Directors.
---------------------------------------------
When rights are reserved in this plan to the Boards of
Directors, such rights shall be exercised only by Majority Vote of the Boards
of Directors, except where the Boards of Directors, by unanimous written
resolution, delegate any such rights to one or more persons or to the
Administrator. Subject to the rights reserved to the Boards of Directors as
set forth in this Plan, no member of the Boards of Directors shall have any
duties or responsibilities under this Plan, except to the extent he shall be
acting in the capacity of an Administrator.
6.12 Liability and Indemnification.
------------------------------
(a) The Administrator shall perform all duties required
of it under this Plan in a prudent manner. The Administrator shall not be
responsible in any way for any action or omission of the AIM Funds or their
employees in the performance of their duties and obligations as set forth in
this Plan. The Administrator also shall not be responsible for any act or
omission of any of its agents provided that such agents were prudently chosen
by the Administrator and that the Administrator relied in good faith upon the
action of such agents.
(b) Except for its own gross negligence, willful
misconduct or willful breach of the terms of this Plan, the Administrator shall
be indemnified and held harmless by the AIM Funds against any and all
liability, loss, damages, cost and expense which may arise, occur by reason of,
or be based upon, any matter connected with or related to this Plan or its
-9-
<PAGE> 14
administration (including, but not limited to, any and all expenses whatsoever
reasonably incurred in investigating, preparing or defending any litigation,
commenced or threatened, or in settlement of any such claim).
ARTICLE VII
AMENDMENTS AND TERMINATION
--------------------------
7.1 Amendments.
-----------
The Boards of Directors reserve the right at any time and from
time to time, and retroactively if deemed necessary or appropriate by them, to
amend in whole or in part by Majority Vote any or all of the provisions of this
Plan, provided that:
(a) No amendment shall make it possible for any part of a
Participant's or former Participant's Retirement Benefit to be used for, or
diverted to, purposes other than for the exclusive benefit of such Participant
or surviving spouse, except to the extent otherwise provided in this Plan;
(b) No amendment may reduce any Participant's or former
Participant's Retirement Benefit as of the effective date of the amendment;
Amendments may be made in the form of Board of Directors'
resolutions or separate written document.
7.2 Termination.
------------
Except as provided below, the Boards of Directors reserve the
right to terminate this Plan at any time by Majority Vote by giving to the
Administrator notice in writing of such desire to terminate. The Plan shall
terminate upon the date of receipt of such notice and the rights of all
Participants to their Retirement Benefits (determined as of the date the Plan
is terminated) shall become payable upon the effective date of the termination
of the Plan in quarterly installments or in an actuarially equivalent lump sum
as determined by the Administrator.
ARTICLE VIII
MISCELLANEOUS
-------------
8.1 Rights of Creditors.
--------------------
(a) The Plan is unfunded. Neither the Participants nor
any other persons shall have any interest in any fund or in any specific asset
or assets of any of the AIM Funds by
-10-
<PAGE> 15
reason of any Accrued or Retirement Benefit hereunder, nor any rights to
receive distribution of any Retirement Benefit except and as to the extent
expressly provided hereunder.
(b) The Accrued and Retirement Benefits of each
Participant are unsecured and shall be subject to the claims of the general
creditors of the AIM Funds.
8.2 Liability Limited.
------------------
Neither the AIM Funds, the Administrator, nor any agents,
employees, officers, directors or shareholders of any of them, nor any other
person shall have any liability or responsibility with respect to this Plan,
except as expressly provided herein.
8.3 Incapacity.
-----------
If the Administrator shall receive evidence satisfactory to it
that a Participant or surviving spouse entitled to receive any benefit under
the Plan is, at the time when such benefit becomes payable, physically or
mentally incompetent to receive such benefit and to give a valid release
therefor, and that another person or an institution is then maintaining or has
custody of such Participant or surviving spouse and that no guardian, committee
or other representative of the estate of such Participant or surviving spouse
shall have been duly appointed, the Administrator may make payment of such
benefit otherwise payable to such Participant or surviving spouse to such other
person or institution, and the release of such other person or institution
shall be a valid and complete discharge for the payment of such benefit.
8.4 Cooperation of Parties.
-----------------------
All parties to this Plan and any person claiming any interest
hereunder agree to perform any and all acts and execute any and all documents
and papers which are necessary or desirable for carrying out this Plan or any
of its provisions.
8.5 Governing Law.
--------------
All rights under the Plan shall be governed by and construed
in accordance with rules of Federal law applicable to such plans and, to the
extent not preempted, by the laws of the State of Texas without regard to
principles of conflicts of law. No action shall be brought by or on behalf of
any Participant for or with respect to benefits due under this Plan unless the
person bringing such action has timely exhausted the Plan's claim review
procedure. Any such action must be commenced within three years. This
three-year period shall be computed from the earlier of (a) the date a final
determination denying such benefit, in whole or in part, is issued under the
Plan's claim review procedure or (b) the date such individual's cause of action
first accrued. Any dispute, controversy or claim arising out of or in
connection with this Plan (including the applicability of this arbitration
provision) and not resolved pursuant to the Plan's claim review procedure shall
be determined and settled by arbitration conducted by the American Arbitration
Association ("AAA") in the County and State of the Funds' principal place of
business and in accordance with the then existing rules, regulations, practices
and procedures of the AAA. Any award in such arbitration shall be final,
conclusive and binding upon the
-11-
<PAGE> 16
parties to the arbitration and may be enforced by either party in any court of
competent jurisdiction. Each party to the arbitration will bear its own costs
and fees (including attorney's fees).
8.6 Nonguarantee of Directorship.
-----------------------------
Nothing contained in this Plan shall be construed as a
guaranty or right of any Participant to be continued as a Director of one or
more of the AIM Funds (or of a right of a Director to any specific level of
Compensation) or as a limitation of the right of the AIM Funds to remove any of
its directors.
8.7 Counsel.
--------
The Administrator may consult with legal counsel, who may be
counsel for one or more of the Boards of Directors of the AIM Funds and for the
Administrator, with respect to the meaning or construction of this Plan, its
obligations or duties hereunder or with respect to any action or proceeding or
any question of law, and they shall be fully protected with respect to any
action taken or omitted by them in good faith pursuant to the advice of legal
counsel.
8.8 Spendthrift Provision.
----------------------
A Participant's interest in his Accrued Benefit or Retirement
Benefit may not be transferred, alienated, assigned nor become subject to
execution, garnishment or attachment, and any attempt to do so will render
benefits hereunder immediately forfeitable.
8.9 Forfeiture for Cause.
---------------------
Notwithstanding any other provision of this Plan to the
contrary, any benefits to which a Participant (or his surviving spouse) may
otherwise be entitled hereunder will be forfeited in the event the
Administrator, in its sole discretion, determines that a Participant's
termination of Service is due to such Participant's willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Director.
ARTICLE IX
CLAIMS PROCEDURE
----------------
9.1 Notice of Denial.
-----------------
If a Participant is denied any Retirement Benefit (or a
surviving spouse is denied a survivor's benefit) under this Plan, either in
total or in an amount less than the full Retirement Benefit to which he would
normally be entitled, the Administrator shall advise the Participant (or
surviving spouse) in writing of the amount of his Retirement Benefit (or
survivor's benefit), if any, and the specific reasons for the denial. The
Administrator shall also furnish the Participant (or surviving spouse) at that
time with a written notice containing:
-12-
<PAGE> 17
(a) A specific reference to pertinent Plan provisions.
(b) A description of any additional material or
information necessary for the Participant (or surviving spouse) to perfect his
claim, if possible, and an explanation of why such material or information is
needed.
(c) An explanation of the Plan's claim review procedure.
9.2 Right to Reconsideration.
-------------------------
Within 60 days of receipt of the information stated in Section
9.1 above, the Participant (or surviving spouse) shall, if he desires further
review, file a written request for reconsideration with the Administrator.
9.3 Review of Documents.
--------------------
So long as the Participant's (or surviving spouse's) request
for review is pending (including the 60 day period in 9.2 above), the
Participant (or surviving spouse) or his duly authorized representative may
review pertinent Plan documents and may submit issues and comments in writing
to the Administrator.
9.4 Decision by Administrator.
--------------------------
A final and binding decision shall be made by the
Administrator within 60 days of the filing by the Participant (or surviving
spouse) of his request for reconsideration, provided, however, that if the
Administrator, in its discretion, feels that a hearing with the Participant (or
surviving spouse) or his representative present is necessary or desirable, this
period shall be extended an additional 60 days.
9.5 Notice by Administrator.
------------------------
The Administrator's decision shall be conveyed to the
Participant (or surviving spouse) in writing and shall include specific reasons
for the provisions on which the decision is based.
-13-
<PAGE> 1
EXHIBIT 7(d)
THE AIM GROUP OF FUNDS
DEFERRED COMPENSATION PLAN
FOR ELIGIBLE DIRECTORS/TRUSTEES
<PAGE> 2
DEFERRED COMPENSATION AGREEMENT
SUMMARY
Your Deferred Compensation Agreement (the "Agreement") allows
you to defer some or all of your annual trustee's fees otherwise payable by the
Funds. Deferred fees are deemed invested in certain mutual funds selected by
you. The deferral is pre-tax, and the deferred amount and the credited gains,
losses and income are not subject to tax until paid out to you.
Your deferrals (and investment experience) are posted to a
bookkeeping account maintained by the Funds in your name. In order for you to
enjoy the tax deferral, the payments due under the Agreement will be paid from
the Funds' general assets, and you are considered a general unsecured creditor
of the Funds; you may not transfer your right to receive payments under the
Agreement to any other person, nor may you pledge that right to secure any debt
or other obligation; finally, an election to defer must be made in writing
before the first day of the calendar year for which the fees are earned (the
"Election Date") and elections can be changed only prospectively, effective for
the next calendar year.
An important change has been made to your Agreement to give
you greater flexibility to select the time of payment of amounts that you
defer: for amounts previously deferred and for future elections you now
designate a specific Payment Date.
PAYMENT DATE ELECTION
Deferred fees (and the income, gains and losses credited
during the deferral period) will be paid out in a single sum in cash within 30
days of the Payment Date elected for that deferral. (For payments in
connection with your termination of service as a trustee, see below.)
Deferrals must be for a minimum three year period (unless the
your retirement date under the Retirement Plan is earlier). Thus, the Payment
Date may be the first day of any calendar quarter that follows the third
anniversary of the applicable Election Date or your retirement date. For your
first Payment Date election that applies to previously deferred fees, the
Election Date is considered to be January 1, 1996. Thus, fees previously
deferred and fees payable for the calendar year beginning January 1, 1996 may
be deferred to the first day of any calendar quarter in any year from 1999.
EXTENDING A PAYMENT DATE
One year prior to any Payment Date, you will have a one-time
opportunity to extend that Date, provided that the additional period of
deferral satisfies the requirements described above.
<PAGE> 3
TERMINATION OF SERVICE
Upon your death, your account under the Agreement will be paid
out in a single sum in cash as soon as practicable. Payment will be made to
your designated Beneficiary or Beneficiaries or to your estate if there is no
surviving Beneficiary.
Upon termination of your service as trustee for any reason
other than death or your retirement (as defined in the Retirement Plan), your
account will be paid to you as a single sum (or in installments if you had
elected that method) in cash within three months following the end of the
fiscal year in which you terminate, regardless of the Payment Dates you
elected.
<PAGE> 4
ARTICLE Page
------- ----
1. Definitions of Terms and Construction 1
2. Period During Which Compensation Deferrals are Permitted 2
3. Compensation Deferrals 2
4. Distributions from Deferral Account 4
5. Amendments and Termination 5
6. Miscellaneous
<PAGE> 5
DEFERRED COMPENSATION AGREEMENT
-------------------------------
AGREEMENT, made on this __ day of _______, 19__, by and
between the registered open-end investment companies listed on Appendix A
hereto (the "Funds"), and
________________________________________________________________ (the
"Director") residing at ___________________________________________________.
WHEREAS, the Funds and the Director have entered into
agreements pursuant to which the Director will serve as a director/trustee of
the Funds; and
WHEREAS, the Funds and the Director have previously entered
into an additional agreement whereby the Funds will provide to the Director a
vehicle under which the Director can defer receipt of directors' fees payable
by the Funds and now desire to amend and restate such agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations set forth in this Agreement, the Funds and the Director hereby
agree as follows:
1. DEFINITION OF TERMS AND CONSTRUCTION
------------------------------------
1.1 Definitions. Unless a different meaning is plainly implied by
the context, the following terms as used in this Agreement shall have the
following meanings:
(a) "Beneficiary" shall mean such person or persons
designated pursuant to Section 4.3 hereof to receive benefits after the death
of the Director.
(b) "Boards of Directors" shall mean the respective
Boards of Directors of the Funds.
(c) "Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time, or any successor statute.
(d) "Compensation" shall mean the amount of directors'
fees paid by each of the Funds to the Director during a Deferral Year prior to
reduction for Compensation Deferrals made under this Agreement.
(e) "Compensation Deferral" shall mean the amount or
amounts of the Director's Compensation deferred under the provisions of Section
3 of this Agreement.
-1-
<PAGE> 6
(f) "Deferral Accounts" shall mean the accounts
maintained to reflect the Director's Compensation Deferrals made pursuant to
Section 3 hereof and any other credits or debits thereto.
(g) "Deferral Year" shall mean each calendar year during
which the Director makes, or is entitled to make, Compensation Deferrals under
Section 3 hereof.
(h) "Retirement" shall have the same meaning as set forth
under the Retirement Plan.
(i) "Retirement Plan" shall mean the "AIM Funds
Retirement Plan for Eligible Directors/Trustees."
(j) "Valuation Date" shall mean the last business day of
each calendar year and any other day upon which the Funds makes valuations of
the Deferral Accounts.
1.2 Plurals and Gender. Where appearing in this Agreement the
singular shall include the plural and the masculine shall include the feminine,
and vice versa, unless the context clearly indicates a different meaning.
1.3 Directors and Trustees. Where appearing in this Agreement,
"Director" shall also refer to "Trustee" and "Board of Directors" shall also
refer to "Board of Trustees."
1.4 Headings. The headings and sub-headings in this Agreement are
inserted for the convenience of reference only and are to be ignored in any
construction of the provisions hereof.
1.5 Separate Agreement for Each Fund. This Agreement is drafted,
and shall be construed, as a separate agreement between the Director and each
of the Funds.
2. PERIOD DURING WHICH COMPENSATION DEFERRALS ARE PERMITTED
--------------------------------------------------------
2.1 Commencement of Compensation Deferrals. The Director may
elect, on a form provided by, and submitted to, the Presidents of the
respective Funds, to commence Compensation Deferrals under Section 3 hereof for
the period beginning on the later of (i) the date this Agreement is executed or
(ii) the date such form is submitted to the Presidents of the Funds.
2.2 Termination of Deferrals. The Director shall not be eligible
to make Compensation Deferrals after the earliest of the following dates:
(a) The date on which he ceases to serve as a Director of
all of the Funds; or
(b) The effective date of the termination of this
Agreement.
-2-
<PAGE> 7
3. COMPENSATION DEFERRALS
----------------------
3.1 Compensation Deferral Elections.
(a) On or prior to the first day of any Deferral Year,
the Director may elect, on the form described in Section 2.1 hereof, to defer
the receipt of all or a portion of his Compensation for such Deferral Year.
Such writing shall set forth the amount of such Compensation Deferral (in whole
percentage amounts). Such election shall continue in effect for all subsequent
Deferral Years unless it is canceled or modified as provided below.
(b) Compensation Deferrals shall be withheld from each
payment of Compensation by the Funds to the Director based upon the percentage
amount elected by the Director under Section 3.1(a) hereof.
(c) The Director may cancel or modify the amount of his
Compensation Deferrals on a prospective basis by submitting to the Presidents
of the Funds a revised Compensation Deferral election form. Such change will
be effective as of the first day of the Deferral Year following the date such
revision is submitted to the Presidents of the Funds.
3.2 Valuation of Deferral Account.
(a) Each Fund shall establish a bookkeeping Deferral
Account to which will be credited an amount equal to the Director's
Compensation Deferrals under this Agreement made with respect to Compensation
earned from each such Fund. Compensation Deferrals shall be allocated to the
Deferral Accounts on the first business day following the date such
Compensation Deferrals are withheld from the Director's Compensation. As of
the date of this Agreement, the Deferral Accounts also shall be credited with
the amounts credited to the Director under each other outstanding elective
deferred compensation agreement entered into by and between the Funds and the
Director which is superseded by this Agreement pursuant to Section 6.11 hereof.
The Deferral Accounts shall be debited to reflect any distributions from such
Accounts. Such debits shall be allocated to the Deferral Accounts as of the
date such distributions are made.
(b) As of each Valuation Date, income, gain and loss
equivalents (determined as if the Deferral Accounts are invested in the manner
set forth under Section 3.3, below) attributable to the period following the
next preceding Valuation Date shall be credited to and/or deducted from the
Director's Deferral Accounts.
3.3 Investment of Deferral Account Balances.
(a) (1) The Director may select, from various options
made available by the Funds, the investment media in which all or part of his
Deferral Accounts shall be deemed to be invested.
-3-
<PAGE> 8
(2) The Director shall make an investment
designation on a form provided by the Presidents of the Funds which shall
remain effective until another valid direction has been made by the Director as
herein provided. The Director may amend his investment designation as of the
end of each calendar quarter by giving written direction to the Presidents of
the Funds at least thirty (30) days prior to the end of such calendar quarter.
A timely change to a Director's investment designation shall become effective
on the first day of the calendar quarter following receipt by the Presidents of
the Funds.
(3) The investment media deemed to be made
available to the Director, and any limitation on the maximum or minimum
percentages of the Director's Deferral Accounts that may be invested any
particular medium, shall be the same as from time-to-time communicated to the
Director by the Presidents of the Funds.
(b) Except as provided below, the Director's Deferral
Accounts shall be deemed to be invested in accordance with his investment
designations, provided such designations conform to the provisions of this
Section. If -
(1) the Director does not furnish the Presidents
of the Funds with complete, written investment instructions, or
(2) the written investment instructions from the
Director are unclear,
then the Director's election to make Compensation Deferrals hereunder shall be
held in abeyance and have no force or effect until such time as the Director
shall provide the Presidents of the Funds with complete investment
instructions. Notwithstanding the above, the Boards of Directors, in their
sole discretion, may disregard the Director's election and determine that all
Compensation Deferrals shall be deemed to be invested in a fund determined by
the Boards of Directors. In the event that any fund under which any portion of
the Director's Deferral Accounts is deemed to be invested ceases to exist, such
portion of the Deferral Accounts thereafter shall be held in the successor to
such fund, subject to subsequent deemed investment elections.
The Fund shall provide an annual statement to the Director
showing such information as is appropriate, including the aggregate amount in
the Deferral Accounts, as of a reasonably current date.
-4-
<PAGE> 9
4. DISTRIBUTIONS FROM DEFERRAL ACCOUNTS
------------------------------------
4.1 Payment Date and Methods.
(a) Designation of Date. Each deferral direction given
pursuant to Section 3.1 shall include designation of the Payment Date for the
value of the amount deferred. Such Payment Date shall be the first day of any
calendar quarter, subject to the limitation set forth in paragraph 4.1(c).
(b) Extension Date. One year before the Payment Date
initially designated pursuant to paragraph 4.1(a) above, the Participant may
irrevocably elect to extend such Payment Date to the first day of any calendar
quarter, subject to the limitation set forth in paragraph 4.1(c).
(c) Limitation. The Director shall select a Payment Date
(or extended Payment Date) that is no sooner than the earlier of (i) the
January 1 that follows the third anniversary of the Participant's deferral
election made pursuant to paragraph 4.1(a) or (b) or (ii) the January 1 of the
year after the Participant's Retirement.
(d) Methods of Payment. Distributions from the
Director's Deferral Accounts shall be paid in cash. A Participant may elect,
at the time a Payment Date is selected, to receive the amount which will become
payable as of such Payment Date in generally equal quarterly installments over
a period not to exceed ten (10) years. Except as may be elected pursuant to
this paragraph, all amounts becoming payable under this Plan shall be paid in a
single sum.
(e) Irrevocability. Except as provided in paragraph
4.1(b), a designation of a Payment Date and an election of installment payments
shall be irrevocable; provided, however, that payment shall be made or begin on
a different date as follows:
(1) Upon the Director's death, payment shall be
made in accordance with Section 4.2,
(2) Upon the Director's ceasing to serve as a
director of all of the Funds for reasons other than death or Retirement,
payment shall be made or begin within three months after the end of the
calendar year in which such termination occurs in accordance with the method
elected by the Director pursuant to paragraph 4.1(d), except that the Boards of
Directors, in their sole discretion, may accelerate the distribution of such
Deferral Accounts,
(3) Upon termination of this Agreement, payment
shall be made in accordance with Section 5.2, and
(4) In the event of the liquidation, dissolution
or winding up of a Fund or the distribution of all or substantially all of a
Fund's assets and property relating to one or
-5-
<PAGE> 10
more series of its shares to the shareholders of such series (for this purpose
a sale, conveyance or transfer of a Fund's assets to a trust, partnership,
association or corporation in exchange for cash, shares or other securities
with the transfer being made subject to, or with the assumption by the
transferee of, the liabilities of the Fund shall not be deemed a termination of
the Fund or such a distribution), all unpaid balances of the Deferral Accounts
related to such Fund as of the effective date thereof shall be paid in a lump
sum on such effective date.
4.2 Death Prior to Complete Distribution of Deferral Accounts.
Upon the death of the Director prior to the commencement of the distribution of
the amounts credited to his Deferral Accounts, the balance of such Accounts
shall be distributed to his Beneficiary in a lump sum as soon as practicable
after the Director's death. In the event of the death of the Director after
the commencement of such distribution, but prior to the complete distribution
of his Deferral Accounts, the balance of the amounts credited to his Deferral
Accounts shall be distributed to his Beneficiary over the remaining period
during which such amounts were distributable to the Director under Section 4.1
hereof. Notwithstanding the above, the Boards of Directors, in their sole
discretion, may accelerate the distribution of the Deferral Accounts.
4.3 Designation of Beneficiary. For purposes of Section 4.2
hereof, the Director's Beneficiary shall be the person or persons so designated
by the Director in a written instrument submitted to the Presidents of the
Funds. In the event the Director fails to properly designate a Beneficiary,
his Beneficiary shall be the person or persons in the first of the following
classes of successive preference Beneficiaries surviving at the death of the
Director: the Director's (1) surviving spouse or (2) estate.
4.4 Payments Due Missing Persons. The Funds shall make a
reasonable effort to locate all persons entitled to benefits under this
Agreement. However, notwithstanding any provisions of this Agreement to the
contrary, if, after a period of five (5) years from the date such benefit shall
be due, any such persons entitled to benefits have not been located, their
rights under this Agreement shall stand suspended. Before this provision
becomes operative, the Funds shall send a certified letter to all such persons
to their last known address advising them that their benefits under this
Agreement shall be suspended. Any such suspended amounts shall be held by the
Funds for a period of three (3) additional years (or a total of eight (8) years
from the time the benefits first become payable) and thereafter, if unclaimed,
such amounts shall be forfeited.
5. AMENDMENTS AND TERMINATION
--------------------------
5.1 Amendments.
(a) The Funds and the Director may, by a written
instrument signed by, or on behalf of, such parties, amend this Agreement at
any time and in any manner.
-6-
<PAGE> 11
(b) The Funds reserve the right to amend, in whole or in
part, and in any manner, any or all of the provisions of this Agreement by
action of their Boards of Directors for the purposes of complying with any
provision of the Code or any other technical or legal requirements, provided
that:
(1) No such amendment shall make it possible for
any part of the Director's Deferral Accounts to be used for, or diverted to,
purposes other than for the exclusive benefit of the Director or his
Beneficiaries, except to the extent otherwise provided in this Agreement;
and
(2) No such amendment may reduce the amount of
the Director's Deferral Accounts as of the effective date of such amendment.
5.2 Termination. The Director and the Funds may, by written
instrument signed by, or on behalf of, such parties, terminate this Agreement
at any time. In the event of the termination of this Agreement, the Boards of
Directors, in their sole discretion, may choose to pay out the Director's
Deferral Accounts prior to the designated Payment Dates. Otherwise, following
a termination of the Plan, such Accounts shall continue to be maintained in
accordance with the provisions of this Plan until the time they are paid out.
6. MISCELLANEOUS.
--------------
6.1 Rights of Creditors.
(a) This Agreement is unfunded. Neither the Director nor
any other persons shall have any interest in any specific asset or assets of
the Funds by reason of any Deferral Accounts hereunder, nor any rights to
receive distribution of his Deferral Accounts except and as to the extent
expressly provided hereunder. The Funds shall not be required to purchase,
hold or dispose of any investments pursuant to this Agreement; however, if in
order to cover their obligations hereunder the Funds elect to purchase any
investments the same shall continue for all purposes to be a part of the
general assets and property of the Funds, subject to the claims of their
general creditors and no person other than the Funds shall by virtue of the
provisions of this Agreement have any interest in such assets other than an
interest as a general creditor.
(b) The rights of the Director and the Beneficiaries to
the amounts held in the Deferral Accounts are unsecured and shall be subject to
the creditors of the Funds. With respect to the payment of amounts held under
the Deferral Accounts, the Director and his Beneficiaries have the status of
unsecured creditors of the Funds. This Agreement is executed on behalf of the
Funds by an officer, or other representative, of the Funds as such and not
individually. Any obligation of the Funds hereunder shall be an unsecured
obligation of the Funds and not of any other person.
-7-
<PAGE> 12
6.2 Agents. The Funds may employ agents and provide for such
clerical, legal, actuarial, accounting, advisory or other services as it deems
necessary to perform their duties under this Agreement. The Funds shall bear
the cost of such services and all other expenses they incur in connection with
the administration of this Agreement.
6.3 Liability and Indemnification. Except for their own gross
negligence, willful misconduct or willful breach of the terms of this
Agreement, the Funds shall be indemnified and held harmless by the Director
against liability or losses occurring by reason of any act or omission of the
Funds or any other person.
6.4 Incapacity. If the Funds shall receive evidence satisfactory
to them that the Director or any Beneficiary entitled to receive any benefit
under the Agreement is, at the time when such benefit becomes payable, a minor,
or is physically or mentally incompetent to receive such benefit and to give a
valid release therefor, and that another person or an institution is then
maintaining or has custody of the Director or Beneficiary and that no guardian,
committee or other representative of the estate of the Director or Beneficiary
shall have been duly appointed, the Funds may make payment of such benefit
otherwise payable to the Director or Beneficiary to such other person or
institution, including a custodian under a Uniform Gifts to Minors Act, or
corresponding legislation (who shall be an adult, a guardian of the minor or a
trust company), and the release of such other person or institution shall be a
valid and complete discharge for the payment of such benefit.
6.5 Cooperation of Parties. All parties to this Agreement and any
person claiming any interest hereunder agree to perform any and all acts and
execute any and all documents and papers which are necessary or desirable for
carrying out this Agreement or any of its provisions.
6.6 Governing Law. This Agreement is made and entered into in the
State of Texas and all matters concerning its validity, construction and
administration shall be governed by the laws of the State of Texas.
6.7 Nonguarantee of Directorship. Nothing contained in this
Agreement shall be construed as a contract or guarantee of the right of the
Director to be, or remain as, a director of any of the Funds or to receive any,
or any particular rate of, Compensation from any of the Funds.
6.8 Counsel. The Funds may consult with legal counsel with
respect to the meaning or construction of this Agreement, their obligations or
duties hereunder or with respect to any action or proceeding or any question of
law, and they shall be fully protected with respect to any action taken or
omitted by them in good faith pursuant to the advice of legal counsel.
6.9 Spendthrift Provision. The Director's and Beneficiaries'
interests in the Deferral Accounts may not be anticipated, sold, encumbered,
pledged, mortgaged, charged, transferred,
-8-
<PAGE> 13
alienated, assigned nor become subject to execution, garnishment or
attachment and any attempt to do so by any person shall render the Deferral
Accounts immediately forfeitable.
6.10 Notices. For purposes of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered personally or mailed by
United States registered or certified mail, return receipt requested, postage
prepaid, or by nationally recognized overnight delivery service providing for a
signed return receipt, addressed to the Director at the home address set forth
in the Funds' records and to the Funds at the address set forth on the first
page of this Agreement, provided that all notices to the Funds shall be
directed to the attention of the Presidents of the Funds or to such other
address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.
6.11 Entire Agreement. This Agreement contains the entire
understanding between the Funds and the Director with respect to the payment of
non-qualified elective deferred compensation by the Fund to the Director.
Effective as of the date hereof, this Agreement replaces, and supersedes, all
other non-qualified elective deferred compensation agreements by and between
the Director and the Funds.
6.12 Interpretation of Agreement. Interpretations of, and
determinations (including factual determinations) related to, this Agreement
made by the Funds in good faith, including any determinations of the amounts of
the Deferral Accounts, shall be conclusive and binding upon all parties; and
the Funds shall not incur any liability to the Director for any such
interpretation or determination so made or for any other action taken by it in
connection with this Agreement in good faith.
6.13 Successors and Assigns. This Agreement shall be binding upon,
and shall inure to the benefit of, the Funds and their successors and assigns
and to the Director and his heirs, executors, administrators and personal
representatives.
6.14 Severability. In the event any one or more provisions of this
Agreement are held to be invalid or unenforceable, such illegality or
unenforceability shall not affect the validity or enforceability of the other
provisions hereof and such other provisions shall remain in full force and
effect unaffected by such invalidity or unenforceability.
6.15 Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same instrument.
-9-
<PAGE> 14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
The Funds
________________________ By:_________________________
Witness Name:
Title:
________________________ ____________________________
Witness Director
-10-
<PAGE> 15
APPENDIX A
----------
AIM EQUITY FUNDS, INC.
AIMS FUNDS GROUP
AIM INTERNATIONAL FUNDS, INC.
AIM INVESTMENT SECURITIES FUNDS
AIM STRATEGIC INCOME FUND, INC.
AIM SUMMIT FUND, INC.
AIM TAX-EXEMPT FUNDS, INC.
AIM VARIABLE INSURANCE FUNDS, INC.
SHORT-TERM INVESTMENTS CO.
SHORT-TERM INVESTMENTS TRUST
TAX-FREE INVESTMENTS CO.
<PAGE> 16
DEFERRED COMPENSATION AGREEMENT
DEFERRAL ELECTION FORM
-------------------------------
TO: Presidents of the AIM Funds
FROM:
DATE:
With respect to the Deferred Compensation agreement (the
"Agreement") dated as of ________________ by and between the undersigned and
the AIM Funds, I hereby make the following elections:
Deferral of Compensation
------------------------
Starting with Compensation to be paid to me with respect to
services provided by me to the AIM Funds after the date this election Form is
received by the AIM Funds, I hereby elect that ______ percent (_____%) of my
Compensation (as defined under the Agreement) be reduced and that the Fund
establish a bookkeeping account credited with amounts equal to the amount so
reduced (the "Deferral Account"). The Deferral Account shall be further
credited with income equivalents as provided under the Agreement. I understand
that this election will remain in effect with respect to Compensation I earn in
subsequent years unless I modify or revoke it. I further understand that such
modification or revocation will be effective only prospectively and will apply
commencing with the Compensation I earn in the calendar year that begins after
the change is received by you.
Payment Date
------------
I hereby designate ________ 1 (select the first month in any
calendar quarter) in the year ______ (select a year that is at least four years
after the year this election is made) as the Payment Date for the amounts
credited to my Deferral Account pursuant to the election made above. If my
Retirement (as defined in the Agreement) occurs sooner, I o do o do not (check
the appropriate box) want payment of such amounts to commence effective the
January 1 following my Retirement. I understand that amounts credited to my
Deferral Account may be paid to me prior to the Payment Date as provided in the
Agreement.
Payment Method
--------------
I hereby elect to receive the amounts credited to my Deferral
Account in (check one)
o a single payment in cash
o annual installments for a period of ____ (select no more than 10
years)
-12-
<PAGE> 17
beginning within 30 days following the payment date selected above.
I understand that the amounts credited to my Deferral Account
shall remain the general assets of the AIM Funds and that, with respect to the
payment of such amounts, I am merely a general creditor of the AIM Funds. I
may not sell, encumber, pledge, assign or otherwise alienate the amounts
credited to my Deferral Account.
I hereby agree that the terms of the Agreement are
incorporated herein and are made a part hereof. Dated as of the day and year
first above written.
WITNESS: DIRECTOR:
_________________________ ______________________________
WITNESS: RECEIVED:
_________________________ AIM Funds
By:___________________________
Date:_________________________
-13-
<PAGE> 1
EXHIBIT 8(b)
CUSTODIAN CONTRACT
Between
AIM SUMMIT FUND, INC.
and
STATE STREET BANK AND TRUST COMPANY
Global/Corporation 21D
<PAGE> 2
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. Employment of Custodian and Property to be Held By It. . . . . . . . . . . . 1
2. Duties of the Custodian with Respect to Property of the
Fund Held by the Custodian in the United States . . . . . . . . . . . . . . 1
2.1 Holding Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Delivery of Securities . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Registration of Securities . . . . . . . . . . . . . . . . . . . . . . 4
2.4 Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.5 Availability of Federal Funds . . . . . . . . . . . . . . . . . . . . 5
2.6 Collection of Income . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.7 Payment of Fund Monies . . . . . . . . . . . . . . . . . . . . . . . . 6
2.8 Liability for Payment in Advance of Receipt of
Securities Purchased . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.9 Appointment of Agents . . . . . . . . . . . . . . . . . . . . . . . . 7
2.10 Deposit of Funds Asset in Securities System . . . . . . . . . . . . . 7
2.11 Fund Assets Held in the Custodian's Direct Paper System . . . . . . . 9
2.12 Segregated Account . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.13 Ownership Certificates for Tax Purposes . . . . . . . . . . . . . . . 10
2.14 Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.15 Communications Relating to Fund Portfolio Securities . . . . . . . . . 10
3. Duties of the Custodian with Respect to Property of the Fund
Held Outside of the United States . . . . . . . . . . . . . . . . . . . . . 11
3.1 Appointment of Foreign Sub-Custodians . . . . . . . . . . . . . . . . 11
3.2 Assets to be Held . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.3 Foreign Securities Depositories . . . . . . . . . . . . . . . . . . . 11
3.4 Segregation of Securities . . . . . . . . . . . . . . . . . . . . . . 12
3.5 Agreements with Foreign Banking Institutions . . . . . . . . . . . . . 12
3.6 Access of Independent Accountants of the Fund . . . . . . . . . . . . 12
3.7 Reports by Custodian . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.8 Transactions in Foreign Custody Account . . . . . . . . . . . . . . . 13
3.9 Liability of Foreign Sub-Custodians . . . . . . . . . . . . . . . . . 13
3.10 Liability of Custodian . . . . . . . . . . . . . . . . . . . . . . . . 13
3.11 Reimbursement for Advances . . . . . . . . . . . . . . . . . . . . . . 14
3.12 Monitoring Responsibilities . . . . . . . . . . . . . . . . . . . . . 14
3.13 Branches of U.S. Banks . . . . . . . . . . . . . . . . . . . . . . . . 15
3.14 Tax Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4. Payments for Sales or Repurchase or Redemptions of Shares
of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5. Proper Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6. Actions Permitted Without Express Authority . . . . . . . . . . . . . . . . 16
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C>
7. Evidence of Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income . . . . . . . . . . . . . . . 17
9. Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10. Opinion of Fund's Independent Accountants . . . . . . . . . . . . . . . . . 18
11. Reports to Fund by Independent Public Accountants . . . . . . . . . . . . . 18
12. Compensation of Custodian . . . . . . . . . . . . . . . . . . . . . . . . . 18
13. Responsibility of Custodian . . . . . . . . . . . . . . . . . . . . . . . . 18
14. Effective Period, Termination and Amendment . . . . . . . . . . . . . . . . 19
15. Successor Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
16. Interpretive and Additional Provisions . . . . . . . . . . . . . . . . . . . 21
17. Massachusetts Law to Apply . . . . . . . . . . . . . . . . . . . . . . . . . 21
18. Prior Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
<PAGE> 4
CUSTODIAN CONTRACT
--------- --------
This Contract between AIM Summit Fund, Inc., a corporation organized
and existing under the laws of Maryland, having its principal place of business
at Eleven Greenway Plaza, Suite 1919, Houston, Texas, 77046, hereinafter called
the "Fund", and State Street Bank and Trust Company, a Massachusetts trust
company, having its principal place of business at 225 Franklin Street, Boston,
Massachusetts, 02110, hereinafter called the "Custodian",
WITNESSETH: That in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
---------- -- --------- --- -------- -- -- ---- -- --
The Fund hereby employs the Custodian as the custodian of its assets,
including securities it desires to be held in places within the United States
("domestic securities") and securities it desires to be held outside the United
States ("foreign securities") consistent with the provisions of the Articles of
Incorporation. The Fund agrees to deliver to the Conjugating all securities and
cash owned by it, and all payments of income, payments of principal or capital
distributions received by it with respect to all securities owned by the Fund
from time to time, and the cash consideration received by it for such new or
treasury shares of capital stock, ("Shares") of the Fund as may be issued or
sold from time to time. The Custodian shall not be responsible for any property
of the Fund held or received by the Fund and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article
5), the Custodian shall from time to time employ one or more sub-custodians
located in the United States, but only in accordance with an applicable vote by
the Board of Directors of the Fund, and provided that the Custodian shall have
no more or less responsibility or liability to the Fund on account of any
actions or omissions of any sub-custodian so employed than any such
sub-custodian has to the Custodian. The Custodian may employ as sub-custodians
for the Fund's foreign securities and other assets the foreign banking
institutions and foreign securities depositories designated in Schedule "A"
hereto but only in accordance with the provisions of Article 3.
2. Duties of the Custodian with Respect to Property of the Fund Held
------ -- --- --------- ---- ------- -- -------- -- --- ---- ----
By the Custodian in the United States
- -- --- --------- -- --- ------ ------
2.1 Holding Securities. The Custodian shall hold and physically
segregate for the account of the Fund all non-cash property,
1
<PAGE> 5
to be held by it in the United States, including all domestic securities owned
by the Fund, other than (a) securities which are maintained pursuant to Section
2.10 in a clearing agency which acts as a securities depository or in a book-
entry system authorized by the U.S. Department of the Treasury, collectively
referred to herein as "Securities System" and (b) commercial paper of an issuer
for which State Street Bank and Trust Company acts as issuing and paying agent
("Direct Paper") which is deposited and/or maintained in the Direct Paper
System of the Custodian pursuant to Section 2.11.
2.2 Delivery of Securities. The Custodian shall release and deliver
domestic securities owned by the Fund held by the Custodian or in a Securities
System account of the Custodian or in the Custodian's Direct Paper book-entry
system account ("Direct Paper System Account") only upon receipt of Proper
Instructions from the Fund, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Fund and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Fund;
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.10 hereof;
4) To the depository agent in connection with tender or other similar
offers for securities of the Fund;
5) To the issuer thereof or its agent when such securities are called,
redeemed, retired or otherwise become payable; provided that, in any such case,
the cash or other consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the name of
the Fund or into the name of any nominee or nominees of the Custodian or into
the name or nominee name of any agent appointed pursuant to Section 2.9 or into
the name or nominee name of any sub-custodian appointed pursuant to Article 1;
or for exchange for a different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of units; provided that,
in any such case, the new securities are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the Fund, to the
broker or its clearing agent, against a
2
<PAGE> 6
receipt, for examination in accordance with "street delivery" custom; provided
that in any such case, the Custodian shall have no responsibility or liability
for any loss arising from the delivery of such securities prior to receiving
payment for such securities except as may arise from the Custodian's own
negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the
securities of the issuer of such securities, or pursuant to provisions for
conversion contained in such securities, or pursuant to any deposit agreement;
provided that, in any such case, the new securities and cash, if any, are to be
delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or similar
securities or the surrender of interim receipts or temporary securities for
definitive securities; provided that, in any such case, the new securities and
cash, if any, are to be delivered to the Custodian;
10) For delivery in connection with any loans of securities made by
the Fund, but only against receipt of adequate collateral as agreed upon from
time to time by the Custodian and the Fund, which may be in the form of cash or
obligations issued by the United States government, its agencies or
instrumentalities, except that in connection with any loan" for which
collateral is to be credited to the Custodian's account in the book-entry
system authorized by the U.S. Department of the Treasury, the Custodian will
not be held liable or responsible for the delivery of securities owned by the
Fund prior to the receipt of such collateral;
11) For delivery as security in connection with any borrowings by the
Fund requiring a pledge of assets by the Fund, but only against receipt of
amounts borrowed;
12) For delivery in accordance with the provisions of any agreement
among the Fund, the Custodian and a broker-dealer registered under the
Securities Exchange Act of 1934 (the "Exchange Act") and a member of The
National Association of Securities Dealers, Inc. ("NASD"), relating to
compliance with the rules of The Options Clearing Corporation and of any
registered national securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by the Fund;
3
<PAGE> 7
13) For delivery in accordance with the provisions of any agreement
among the Fund, the Custodian, and a Futures Commission Merchant registered
under the Commodity Exchange Act, relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits in connection with
transactions by the Fund;
14) Upon receipt of instructions from the transfer agent ("Transfer
Agent'') for the Fund, for delivery to such Transfer Agent or to the holders of
shares in connection with distributions in kind, as may be described from time
to time in the Fund's currently effective prospectus and statement of
additional information ("Prospectus"), in satisfaction of requests by holders
of Shares for repurchase or redemption; and
15) For any other proper corporate purpose, but only upon receipt of,
in addition to Proper Instructions, a certified copy of a resolution of the
Board of Directors or of the Executive Committee signed by an officer of the
Fund and certified by the Secretary or an Assistant Secretary, specifying the
securities to be delivered, setting forth the purpose for which such delivery
is to be made, declaring such purpose to be a proper corporate purpose, and
naming the person or persons to whom delivery of such securities shall be made.
2.3 Registration of Securities. Domestic securities held by the
Custodian (other than bearer securities) shall be registered in the name of the
Fund or in the name of any nominee of the Fund or of any nominee of the
Custodian which nominee shall be assigned exclusively to the Fund, unless the
Fund has authorized in writing the appointment of a nominee to be used
in common with other registered investment companies having the same investment
adviser as the Fund, or in the name or nominee name of any agent appointed
pursuant to Section 2.9 or in the name or nominee name of any sub-custodian
appointed pursuant to Article 1. All securities accepted by the Custodian on
behalf of the Fund under the terms of this Contract shall be in "street name"
or other good delivery form. If, however, the Fund directs the Custodian to
maintain securities in "street name", the Custodian shall utilize its best
efforts only to timely collect income due the Fund on such securities and to
notify the Fund on a best efforts basis only of relevant corporate actions
including, without limitation, pendency of calls, maturities, tender or
exchange offers.
2.4 Bank Accounts. The Custodian shall open and maintain a separate
bank account or accounts in the United States in the
4
<PAGE> 8
name of the Fund, subject only to draft or order by the Custodian acting
pursuant to the terms of this Contract, and shall hold in such account or
accounts, subject to the provisions hereof, all cash received by it from or for
the account of the Fund, other than cash maintained by the Fund in a bank
account established and used in accordance with Rule 17f-3 under the Investment
Company Act of 1940. Funds held by the Custodian for the Fund may be deposited
by it to its credit as Custodian in the Banking Department of the Custodian or
in such other banks or trust companies as it may in its discretion deem
necessary or desirable; provided, however, that every such bank or trust
company shall be qualified to act as a custodian under the Investment Company
Act of 1940 and that each such bank or trust company and the funds to be
deposited with each such bank or trust company shall be approved by vote of a
majority of the Board of Directors of the Fund. Such funds shall be deposited
by the Custodian in its capacity as Custodian and shall be withdrawable by the
Custodian only in that capacity.
2.5 Availabilitv of Federal Funds. Upon mutual agreement between the
Fund and the Custodian, the Custodian shall, upon the receipt of Proper
Instructions, make federal funds available to the Fund as of specified times
agreed upon from time to time by the Fund and the Custodian in the amount of
checks received in payment for Shares of the Fund which are deposited into the
Fund's account.
2.6 Collection of Income. Subject to the provisions of Section 2.3,
the Custodian shall collect on a timely basis all income and other payments
with respect to United States registered securities held hereunder to which the
Fund shall be entitled either by law or pursuant to custom in the securities
business, and shall collect on a timely basis all income and other payments
with respect to United States bearer securities if, on the date of payment by
the issuer, such securities are held by the Custodian or its agent thereof and
shall credit such income, as collected, to the Fund's custodian account.
Without limiting the generality of the foregoing, the Custodian shall detach
and present for payment all coupons and other income items requiring
presentation as and when they become due and shall collect interest when due on
securities held hereunder. Income due the Fund on United States securities
loaned pursuant to the provisions of Section 2.2 (10) shall be the
responsibility of the Fund. The Custodian will have no duty or responsibility
in connection therewith, other than to provide the Fund with such information
or data as may be necessary to assist the Fund in arranging for the timely
delivery to the Custodian of the income to which the Fund is properly entitled.
5
<PAGE> 9
2.7 Payment of Fund Monies. Upon receipt of Proper Instructions, which
may be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out monies of the Fund in the following cases only:
1) Upon the purchase of domestic securities, options, futures
contracts or options on futures contracts for the account of the Fund but only
(a) against the delivery of such securities, or evidence of title to such
options, futures contracts or options on futures contracts, to the Custodian
(or any bank, banking firm or trust company doing business in the United States
or abroad which is qualified under the Investment Company Act of 1940, as
amended, to act as a custodian and has been designated by the Custodian as its
agent for this purpose) registered in the name of the Fund or in the name of a
nominee of the Custodian referred to in Section 2.3 hereof or in proper form
for transfer; (b) in the case of a purchase effected through a Securities
System, in accordance with the conditions set forth in Section 2.10 hereof; (c)
in the case of a purchase involving the Direct Paper System, in accordance with
the conditions set forth in Section 2.11; (d) in the case of repurchase
agreements entered into between the Fund and the Custodian, or another bank, or
a broker-dealer which is a member of NASD, (i) against delivery of the
securities either in certificate form or through an entry crediting the
Custodian's account at the Federal Reserve Bank with such securities or (ii)
against delivery of the receipt evidencing purchase by the Fund of securities
owned by the Custodian along with written evidence of the agreement by the
Custodian to repurchase such securities from the Fund or (e) for transfer to a
time deposit account of the Fund in any bank, whether domestic or foreign; such
transfer may be effected prior to receipt of a confirmation from a broker
and/or the applicable bank pursuant to Proper Instructions from the Fund as
defined in Article 5;
2) In connection with conversion, exchange or surrender of securities
owned by the Fund as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by the Fund as
set forth in Article 4 hereof;
4) For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the account of the
Fund: interest, taxes, management, accounting, transfer agent and legal fees,
and operating expenses of the Fund whether or not such expenses are to be in
whole or part capitalized or treated as deferred expenses;
6
<PAGE> 10
5) For the payment of any dividends declared pursuant to the governing
documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper purpose, but only upon receipt of, in addition
to Proper Instructions, a certified copy of a resolution of the Board of
Directors or of the Executive Committee of the Fund signed by an officer of the
Fund and certified by its Secretary or an Assistant Secretary, specifying the
amount of such payment, setting forth the purpose for which such payment is to
be made, declaring such purpose to be a proper purpose, and naming the person or
persons to whom such payment is to be made.
2.8 Liability for Payment in Advance of Receipt of Securities
Purchased. Except as specifically stated otherwise in this Contract, in any and
every case where payment for purchase of domestic securities for the account of
the Fund is made by the Custodian in advance of receipt of the securities
purchased in the absence of specific written instructions from the Fund to so
pay in advance, the Custodian shall be absolutely liable to the Fund for such
securities to the same extent as if the securities had been received by the
Custodian.
2.9 Appointment of Agents. The Custodian may at any time or times in
its discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the Investment Company Act of 1940, as
amended, to act as a custodian, as its agent to carry out such of the
provisions of this Article 2 as the Custodian may from time to time direct;
provided, however, that the appointment of any agent shall not relieve the
Custodian of its responsibilities or liabilities hereunder.
2.10 Deposit of Securities in Securities Systems. The Custodian may
deposit and/or maintain domestic securities owned by the Fund in a clearing
agency registered with the Securities and Exchange Commission under Section 17A
of the Securities Exchange Act of 1934, which acts as a securities depository,
or in the book-entry system authorized by the U.S. Department of the Treasury
and certain federal agencies, collectively referred to herein as "Securities
System" in accordance with applicable Federal Reserve Board and Securities and
Exchange Commission rules and regulations, if any, and subject to the following
provisions:
1) The Custodian may keep domestic securities of the Fund in a
Securities System provided that such securities are represented in an account
("Account") of the Custodian in the Securities System which shall not include
any assets
7
<PAGE> 11
of the Custodian other than assets held as a fiduciary, custodian or otherwise
for customers;
2) The records of the Custodian with respect to domestic securities of
the Fund which are maintained in a Securities System shall identify by
book-entry those securities belonging to the Fund;
3) The Custodian shall pay for domestic securities purchased for the
account of the Fund upon (i) receipt of advice from the Securities System that
such securities have been transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such payment and transfer for
the account of the Fund. The Custodian shall transfer domestic securities sold
for the account of the Fund upon (i) receipt of advice from the Securities
System that payment for such securities has been transferred to the Account,
and (ii) the making of an entry on the records of the Custodian to reflect such
transfer and payment for the account of the Fund. Copies of all advices from
the Securities System of transfers of domestic securities for the account of
the Fund shall identify the Fund, be maintained for the Fund by the Custodian
and be provided to the Fund at its request. Upon request, the Custodian shall
furnish the Fund confirmation of each transfer to or from the account of the
Fund in the form of a written advice or notice and shall furnish to the Fund
copies of daily transaction sheets reflecting each day's transactions in the
Securities System for the account of the Fund.
4) The Custodian shall provide the Fund with any report obtained by the
Custodian on the Securities System's accounting system, internal accounting
control and procedures for safeguarding domestic securities deposited in the
Securities System;
5) The Custodian shall have received the initial or annual
certificate, as the case may be, required by Article 13 hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to the Fund
resulting from use of the Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its agents or of any of
its or their employees or from failure of the Custodian or any such agent to
enforce effectively such rights as it may have against the Securities System;
at the election of the Fund, it shall be entitled to be subrogated to the
rights of the Custodian with respect to any claim against the
8
<PAGE> 12
Securities System or any other person which the Custodian may have as a
consequence of any such loss or damage if and to the extent that the Fund has
not been made whole for any such loss or damage.
2.11 Fund Assets Held in the Custodian's Direct Paper System.
The Custodian may deposit and/or maintain securities owned by the Fund
in the Direct Paper System of the Custodian subject to the following
provisions:
1) No transaction relating to securities in the Direct Paper System
will be effected in the absence of Proper Instructions;
2) The Custodian may keep securities of the Fund in the Direct Paper
System only if such securities are represented in an account ("Account") of the
Custodian in the Direct Paper System which shall not include any assets of the
Custodian other than assets held as a fiduciary, custodian or otherwise for
customers;
3) The records of the Custodian with respect to securities of the Fund
which are maintained in the Direct Paper System shall identify by book-entry
those securities belonging to the Fund;
4) The Custodian shall pay for securities purchased for the account of
the Fund upon the making of an entry on the records of the Custodian to reflect
such payment and transfer of securities to the account of the Fund. The
Custodian shall transfer securities sold for the account of the Fund upon the
making of an entry on the records of the Custodian to reflect such transfer and
receipt of payment for the account of the Fund;
5) The Custodian shall furnish the Fund confirmation of each transfer
to or from the account of the Fund, in the form of a written advice or notice,
of Direct Paper on the next business day following such transfer and shall
furnish to the Fund copies of daily transaction sheets reflecting each day's
transaction in the Securities System for the account of the Fund;
6) The Custodian shall provide the Fund with any report on its system
of internal accounting control as the Fund may reasonably request from time to
time;
9
<PAGE> 13
2.12 Segregated Account. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts for and on
behalf of the Fund, into which account or accounts may be transferred cash
and/or securities, including securities maintained in an account by the
Custodian pursuant to Section 2.10 hereof, (i) in accordance with the
provisions of any agreement among the Fund, the Custodian and a broker-dealer
registered under the Exchange Act and a member of the NASD (or any futures
commission merchant registered under the Commodity Exchange Act), relating to
compliance with the rules of The Options Clearing Corporation and of any
registered national securities exchange (or the Commodity Futures Trading
Commission or any registered contract market), or of any similar organization
or organizations, regarding escrow or other arrangements in connection with
transactions by the Fund, (ii) for purposes of segregating cash or government
securities in connection with options purchased, sold or written by the Fund
or commodity futures contracts or options thereon purchased or sold by the
Fund, (iii) for the purposes of compliance by the Fund with the procedures
required by Investment Company Act Release No. 10666, or any subsequent
release or releases of the Securities and Exchange Commission relating to the
maintenance of segregated accounts by registered investment companies and
(iv) for other proper corporate purposes, but only, in the case of clause (iv),
upon receipt of, in addition to Proper Instructions, a certified copy of a
resolution of the Board of Directors or of the Executive Committee signed by an
officer of the Fund and certified by the Secretary or an Assistant Secretary,
setting forth the purpose or purposes of such segregated account and such
declaring purposes to be proper corporate purposes.
2.13 Ownership Certificates for Tax Purposes. The Custodian shall
execute ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other payments with
respect to domestic securities of the Fund held by it and in connection with
transfers of such securities.
2.14 Proxies. The Custodian shall, with respect to the domestic
securities held hereunder, cause to be promptly executed by the registered
holder of such securities, if the securities are registered otherwise than in
the name of the Fund or a nominee of the Fund, all proxies, without indication
of the manner in which such proxies are to be voted, and shall promptly deliver
to the Fund such proxies, all proxy soliciting materials and all notices
relating to such securities.
2.15 Communications Relating to Fund Portfolio Securities. Subject to
the provisions of Section 2.3, the Custodian shall transmit promptly to the
Fund all written information (including,
10
<PAGE> 14
without limitation, pendency of calls and maturities of domestic securities and
expirations of rights in connection therewith and notices of exercise of call
and put options written by the Fund and the maturity of futures contracts
purchased or sold by the Fund) received by the Custodian from issuers of the
domestic securities being held for the Fund. With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Fund all written
information received by the Custodian from issuers of the domestic securities
whose tender or exchange is sought and from the party (or his agents) making
the tender or exchange offer. If the Fund desires to take action with respect
to any tender offer, exchange offer or any other similar transaction, the Fund
shall notify the Custodian at least three business days prior to the date on
which the Custodian is to take such action.
3. Duties of the Custodian with Respect to Property of the Fund Held
------ -- --- --------- ---- ------- -- -------- -- --- ---- ----
Outside of the United States
- ------- -- --- ------ ------
3.1 Appointment of Foreign Sub-Custodians. The Fund hereby authorizes
and instructs the Custodian to employ as sub-custodians for the Fund's
securities and other assets maintained outside the United States the foreign
banking institutions and foreign securities depositories designated on Schedule
A hereto ("foreign sub-custodians"). Upon receipt of "Proper Instructions", as
defined in Section 5 of this Contract, together with a certified resolution of
the Fund's Board of Directors, the Custodian and the Fund may agree to amend
Schedule A hereto from time to time to designate additional foreign banking
institutions and foreign securities depositories to act as sub-custodian. Upon
receipt of Proper Instructions, the Fund may instruct the Custodian to cease
the employment of any one or more such sub-custodians for maintaining custody
of the Fund's assets.
3.2 Assets to be Held. The Custodian shall limit the securities and
other assets maintained in the custody of the foreign sub-custodians to: (a)
"foreign securities", as defined in paragraph (c)(1) of Rule 17f-5 under the
Investment Company Act of 1940, and (b) cash and cash equivalents in such
amounts as the Custodian or the Fund may determine to be reasonably necessary
to effect the Fund's foreign securities transactions. The Custodian shall
identify on its books as belonging to the Fund, the foreign securities of the
Fund held by each foreign sub-custodian.
3.3 Foreign Securities Depositories. Except as may otherwise be agreed
upon in writing by the Custodian and the Fund, assets of the Fund shall be
maintained in foreign securities depositories only through arrangements
implemented by the foreign banking institutions serving as sub-custodians
11
<PAGE> 15
pursuant to the terms hereof. Where possible, such arrangements shall include
entry into agreements containing the provisions set forth in Section 3.5
hereof.
3.4 Segregation of Securities. The Custodian shall identify on its
books as belonging to each applicable Portfolio of the Fund, the foreign
securities of such Portfolios held by each foreign sub-custodian. Each
agreement pursuant to which the Custodian employs a foreign banking institution
shall require that such institution establish a custody account for the
Custodian on behalf of the Fund for each applicable Portfolio of the Fund and
physically segregate in each account, securities and other assets of the
Portfolios, and, in the event that such institution deposits the securities of
one or more of the Portfolios in a foreign securities depository, that it shall
identify on its books as belonging to the Custodian, as agent for each
applicable Portfolio, the securities so deposited.
3.5 Agreements with Foreign Banking Institutions. Each agreement with a
foreign banking institution shall be substantially in the form set forth in
Exhibit 1 hereto and shall provide that: (a) the Fund's assets will not be
subject to any right, charge, security interest, lien or claim of any kind in
favor of the foreign banking institution or its creditors or agent, except a
claim of payment for their safe custody or administration; (b) beneficial
ownership of the Fund's assets will be freely transferable without the payment
of money or value other than for custody or administration; (c) adequate records
will be maintained identifying the assets as belonging to the Fund; (d) officers
of or auditors employed by, or other representatives of the Custodian, including
to the extent permitted under applicable law the independent public accountants
for the Fund, will be given access to the books and records of the foreign
banking institution relating to its actions under its agreement with the
Custodian; and (e) assets of the Fund held by the foreign sub-custodian will be
subject only to the instructions of the Custodian or its agents.
3.6 Access of Independent Accountants of the Fund. Upon request of the
Fund, the Custodian will use its best efforts to arrange for the independent
accountants of the Fund to be afforded access to the books and records of any
foreign banking institution employed as a foreign sub-custodian insofar as such
books and records relate to the performance of such foreign banking institution
under its agreement with the Custodian.
3.7 Reports by Custodian. The Custodian will supply to the Fund from
time to time, as mutually agreed upon, statements in respect of the securities
and other assets of the Fund held by foreign sub-custodians, including but not
limited to an
12
<PAGE> 16
identification of entities having possession of the Fund's securities and other
assets and advices or notifications of any transfers of securities to or from
each custodial account maintained by a foreign banking institution for the
Custodian on behalf of the Fund indicating, as to securities acquired for the
Fund, the identity of the entity having physical possession of such securities.
3.8 Transactions in Foreign Custody Account. (a) Except as otherwise
provided in paragraph (b) of this Section 3.8, the provision of Sections 2.2
and 2.7 of this Contract shall apply, mutatis mutandis to the foreign
securities of the Fund held outside the United States by foreign
sub-custodians. (b) Notwithstanding any provision of this Contract to the
contrary, settlement and payment for securities received for the account of the
Fund and delivery of securities maintained for the account of the Fund may be
effected in accordance with the customary established securities trading or
securities processing practices and procedures in the jurisdiction or market in
which the transaction occurs, including, without limitation, delivering
securities to the purchaser thereof or to a dealer therefor (or an agent for
such purchaser or dealer) against a receipt with the expectation of receiving
later payment for such securities from such purchaser or dealer. (c) Securities
maintained in the custody of a foreign sub-custodian may be maintained in the
name of such entity's nominee to the same extent as set forth in Section 2.3 of
this Contract, and the Fund agrees to hold any such nominee harmless from any
liability as a holder of record of such securities.
3.9 Liabilitv of Foreign Sub-Custodians. Each agreement pursuant to
which the Custodian employs a foreign banking institution as a foreign
sub-custodian shall require the institution to exercise reasonable care in the
performance of its duties and to indemnify, and hold harmless, the Custodian
and each Fund from and against any loss, damage, cost, expense, liability or
claim arising out of or in connection with the institution's performance of
such obligations. At the election of the Fund, it shall be entitled to be
subrogated to the rights of the Custodian with respect to any claims against a
foreign banking institution as a consequence of any such loss, damage, cost,
expense, liability or claim if and to the extent that the Fund has not been
made whole for any such loss, damage, cost, expense, liability or claim.
3.10 Liability of Custodian. The Custodian shall be liable for the
acts or omissions of a foreign banking institution to the same extent as set
forth with respect to sub-custodians generally in this Contract and, regardless
of whether assets are maintained in the custody of a foreign banking
institution, a foreign securities depository or a branch of a U.S. bank as
13
<PAGE> 17
contemplated by paragraph 3.13 hereof, the Custodian shall not be liable for
any loss, damage, cost, expense, liability or claim resulting from
nationalization, expropriation, currency restrictions, or acts of war or
terrorism or any loss where the sub-custodian has otherwise exercised
reasonable care. Notwithstanding the foregoing provisions of this paragraph
3.10, in delegating custody duties to State Street London Ltd., the Custodian
shall not be relieved of any responsibility to the Fund for any loss due to
such delegation, except such loss as may result from (a) political risk
(including, but not limited to, exchange control restrictions, confiscation,
expropriation, nationalization, insurrection, civil strife or armed
hostilities) or (b) other losses (excluding a bankruptcy or insolvency of State
Street London Ltd. not caused by political risk) due to Acts of God, nuclear
incident or other losses under circumstances where the Custodian and State
Street London Ltd. have exercised reasonable care.
3.11 Reimbursement for Advances. If the Fund requires the Custodian to
advance cash or securities for any purpose including the purchase or sale of
foreign exchange or of contracts for foreign exchange, or in the event that the
Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance
of this Contract, except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct, any property
at any time held for the account of the Fund shall be security therefor and
should the Fund fail to repay the Custodian promptly after notice, the
Custodian shall be entitled to utilize available cash and to dispose of the
Fund assets to the extent necessary to obtain reimbursement.
3.12 Monitoring Responsibilities. The Custodian shall furnish annually
to the Fund, during the month of June, information concerning the foreign
sub-custodians employed by the Custodian. Such information shall be similar in
kind and scope to that furnished to the Fund in connection with the initial
approval of this Contract. In addition, the Custodian will promptly inform the
Fund in the event that the Custodian learns of a material adverse change in the
financial condition of a foreign sub-custodian or any material loss of the
assets of the Fund or in the case of any foreign sub-custodian not the subject
of an exemptive order from the Securities and Exchange Commission is notified
by such foreign sub-custodian that there appears to be a substantial likelihood
that its shareholders' equity will decline below $200 million (U.S. dollars or
the equivalent thereof) or that its shareholders' equity has declined below
$200 million (in each case computed in accordance with generally accepted U.S.
accounting principles).
14
<PAGE> 18
3.13 Branches of U.S. Banks. (a) Except as otherwise set forth in this
Contract, the provisions hereof shall not apply where the custody of the Fund
assets are maintained in a foreign branch of a banking institution which is a
"bank" as defined by Section 2(a)(5) of the Investment Company Act of 1940
meeting the qualification set forth in Section 26(a) of said Act. The
appointment of any such branch as a sub-custodian shall be governed by
paragraph 1 of this Contract. (b) Cash held for the Fund in the United Kingdom
shall be maintained in an interest bearing account established for the Fund
with the Custodian's London branch, which account shall be subject to the
direction of the Custodian, State Street London Ltd. or both.
3.14 Tax Law. The Custodian shall have no responsibility or liability
for any obligations now or hereafter imposed on the Fund or the Custodian as
custodian of the Fund by the tax law of the United States of America or any
state or political subdivision thereof. It shall be the responsibility of the
Fund to notify the Custodian of the obligations imposed on the Fund or the
Custodian as custodian of the Fund by the tax law of jurisdictions other than
those mentioned in the above sentence, including responsibility for withholding
and other taxes, assessments or other governmental charges, certifications and
governmental reporting. The sole responsibility of the Custodian with regard to
such tax law shall be to use reasonable efforts to assist the Fund with respect
to any claim for exemption or refund under the tax law of jurisdictions for
which the Fund has provided such information.
4. Payments for Sales or Repurchases or Redemptions of Shares of the Fund
---------------------------------------------------------------------
From such funds as may be available for the purpose but subject to the
limitations of the Articles of Incorporation and any applicable votes of the
Board of Directors of the Fund pursuant thereto, the Custodian shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a request
for redemption or repurchase of their Shares. In connection with the redemption
or repurchase of Shares of the Fund, the Custodian is authorized upon receipt
of instructions from the Transfer Agent to wire funds to or through a
commercial bank designated by the redeeming shareholders. In connection with
the redemption or repurchase of Shares of the Fund, the Custodian shall honor
checks drawn on the Custodian by a holder of Shares, which checks have been
furnished by the Fund to the holder of Shares, when presented to the Custodian
in accordance with such procedures and controls as are mutually agreed upon
from time to time between the Fund and the Custodian.
15
<PAGE> 19
The Custodian shall receive from the distributor for the Fund's Shares
or from the Transfer Agent of the Fund and deposit into the Fund's account such
payments as are received for Shares of the Fund issued or sold from time to
time by the Fund. The Custodian will provide timely notification to the Fund
and the Transfer Agent of any receipt by it of payments for Shares of the Fund.
5. Proper Instructions
-------------------
Proper Instructions as used herein means a writing signed or
initialled by one or more person or persons as the Board of Directors shall
have from time to time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved, including a specific
statement of the purpose for which such action is requested. Oral instructions
will be considered Proper Instructions if the Custodian reasonably believes
them to have been given by a person authorized to give such instructions with
respect to the transaction involved. The Fund shall cause all oral instructions
to be confirmed in writing. Upon receipt of a certificate of the Secretary or
an Assistant Secretary as to the authorization by the Board of Directors of the
Fund accompanied by a detailed description of procedures approved by the Board
of Directors, Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the Board of
Directors and the Custodian are satisfied that such procedures afford adequate
safeguards for the Fund's assets. For purposes of this Section, Proper
Instructions shall include instructions received by the Custodian pursuant to
any three-party agreement which requires a segregated asset account in
accordance with Section 2.12.
6. Actions Permitted without Express Authority
-------------------------------------------
The Custodian may in its discretion, without express authority from
the Fund:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this Contract,
provided that all such payments shall be accounted for to the Fund;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Fund, checks, drafts and
other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase,
16
<PAGE> 20
transfer and other dealings with the securities and property of the Fund except
as otherwise directed by the Board of Directors of the Fund.
7. Evidence of Authority
---------------------
The Custodian shall be protected in acting upon any instructions,
notice, request, consent, certificate or other instrument or paper believed by
it to be genuine and to have been properly executed by or on behalf of the
Fund. The Custodian may receive and accept a certified copy of a vote of the
Board of Directors of the Fund as conclusive evidence (a) of the authority of
any person to act in accordance with such vote or (b) of any determination or
of any action by the Board of Directors pursuant to the Articles of
Incorporation as described in such vote, and such vote may be considered as in
full force and effect until receipt by the Custodian of written notice to the
contrary.
8. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income
- -------------------------------------------------------------------------
The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Board of Directors of the Fund to keep
the books of account of the Fund and/or compute the net asset value per share
of the outstanding shares of the Fund or, if directed in writing to do so by
the Fund, shall itself keep such books of account and/or compute such net asset
value per share. If so directed, the Custodian shall also calculate daily the
net income of the Fund as described in the Fund's currently effective
prospectus and shall advise the Fund and the Transfer Agent daily of the total
amounts of such net income and, if instructed in writing by an officer of the
Fund to do so, shall advise the Transfer Agent periodically of the division of
such net income among its various components. The calculations of the net asset
value per share and the daily income of the Fund shall be made at the time or
times described from time to time in the Fund's currently effective prospectus.
9. Records
-------
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet the
obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2
thereunder. All such records shall be the property of the Fund and shall at all
times during the regular business hours of the Custodian be open for inspection
by duly authorized officers, employees or agents of the Fund and employees and
agents of the Securities and Exchange
17
<PAGE> 21
Commission. The Custodian shall, at the Fund's request, supply the Fund with a
tabulation of securities owned by the Fund and held by the Custodian and shall,
when requested to do so by the Fund and for such compensation as shall be
agreed upon between the Fund and the Custodian, include certificate numbers in
such tabulations.
10. Opinion of Fund's Independent Accountant
----------------------------------------
The Custodian shall take all reasonable action, as the Fund may from
time to time request, to obtain from year to year favorable opinions from the
Fund's independent accountants with respect to its activities hereunder in
connection with the preparation of the Fund's Form N-1A, and Form N-SAR or
other annual reports to the Securities and Exchange Commission and with respect
to any other requirements of such Commission.
11. Reports to Fund by Independent Public Accountants
-------------------------------------------------
The Custodian shall provide the Fund, at such times as the Fund may
reasonably require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for safeguarding
securities, futures contracts and options on futures contracts, including
domestic securities deposited and/or maintained in a Securities System,
relating to the services provided by the Custodian under this Contract; such
reports shall be of sufficient scope and in sufficient detail, as may
reasonably be required by the Fund to provide reasonable assurance that any
material inadequacies would be disclosed by such examination, and, if there are
no such inadequacies, the reports shall so state.
12. Compensation of Custodian
-------------------------
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between
the Fund and the Custodian.
13. Responsibility of Custodian
---------------------------
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. The Custodian shall be held to the
exercise of reasonable care in carrying out the provisions of this Contract,
but shall be kept indemnified by
18
<PAGE> 22
and shall be without liability to the Fund for any action taken or omitted by
it in good faith without negligence. It shall be entitled to rely on and may
act upon advice of counsel (who may be counsel for the Fund) on all matters,
and shall be without liability for any action reasonably taken or omitted
pursuant to such advice.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution appointed pursuant to the provisions of Article 3 to the
same extent as set forth in Article 1 hereof with respect to sub-custodians
located in the United States (except as specifically provided in Article 3.9)
and, regardless of whether assets are maintained in the custody of a foreign
banking institution, a foreign securities depository or a branch of a U.S. bank
as contemplated by paragraph 3.12 hereof, the Custodian shall not be liable for
any loss, damage, cost, expense, liability or claim resulting from, or caused
by, the direction of or authorization by the Fund to maintain custody or any
securities or cash of the Fund in a foreign country including, but not limited
to, losses resulting from nationalization, expropriation, currency
restrictions, or acts of war or terrorism.
If the Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned
to the Fund being liable for the payment of money or incurring liability of
some other form, the Fund, as a prerequisite to requiring the Custodian to take
such action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but not
limited to securities settlements, foreign exchange contracts and assumed
settlement) including the purchase or sale of foreign exchange or of contracts
for foreign exchange or in the event that the Custodian or its nominee shall
incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Contract, except such as
may arise from its or its nominee's own negligent action, negligent failure to
act or willful misconduct, any property at any time held for the account of the
Fund shall be security therefor and should the Fund fail to repay the Custodian
promptly, the Custodian shall be entitled to utilize available cash and to
dispose of the Fund's assets to the extent necessary to obtain reimbursement.
14. Effective Period Termination and Amendment
------------------------------------------
This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as
19
<PAGE> 23
hereinafter provided, may be amended at any time by mutual agreement of the
parties hereto and may be terminated by either party by an instrument in writing
delivered or mailed, postage prepaid to the other party, such termination to
take effect not sooner than thirty (30) days after the date of such delivery or
mailing; provided, however that the Custodian shall not act under Section 2.10
hereof in the absence of receipt of an initial certificate of the Secretary or
an Assistant Secretary that the Board of Directors of the Fund has approved the
initial use of a particular Securities System, as required by Rule 17f-4 under
the Investment Company Act of 1940, as amended and that the Custodian shall not
act under Section 2.11 hereof in the absence of receipt of an initial
certificate of the Secretary or an Assistant Secretary that the Board of
Directors has approved the initial use of the Direct Paper System; provided
further, however, that the Fund shall not amend or terminate this Contract in
contravention of any applicable federal or state regulations, or any provision
of the Articles of Incorporation, and further provided, that the Fund may at any
time by action of its Board of Directors (i) substitute another bank or trust
company for the Custodian by giving notice as described above to the Custodian,
or (ii) immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller of the Currency or
upon the happening of a like event at the direction of an appropriate regulatory
agency or court of competent jurisdiction.
Upon termination of the Contract, the Fund shall pay to the Custodian
such compensation as may be due as of the date of such termination and shall
likewise reimburse the Custodian for its costs, expenses and disbursements.
15. Successor Custodian
-------------------
If a successor custodian shall be appointed by the Board of Directors
of the Fund, the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the form for
transfer, all securities then held by it hereunder and shall transfer to an
account of the successor custodian all of the Fund's securities held in a
Securities System.
If no such successor custodian shall be appointed, the Custodian
shall, in like manner, upon receipt of a certified copy of a vote of the Board
of Directors of the Fund, deliver at the office of the Custodian and transfer
such securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian
or certified copy of a vote of the Board of Directors shall have been delivered
to the Custodian on or before the date when such termination shall become
effective, then the Custodian
20
<PAGE> 24
shall have the right to deliver to a bank or trust company, which is a "bank"
as defined in the Investment Company Act of 1940, doing business in Boston,
Massachusetts, of its own selection, having an aggregate capital, surplus, and
undivided profits, as shown by its last published report, of not less than
$25,000,000, all securities, funds and other properties held by the Custodian
and all instruments held by the Custodian relative thereto and all other
property held by it under this Contract and to transfer to an account of such
successor custodian all of the Fund's securities held in any Securities System.
Thereafter, such bank or trust company shall be the successor of the Custodian
under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Directors to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
16. Interpretive and Additional Provisions
--------------------------------------
In connection with the operation of this Contract, the Custodian and
the Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision
of the Articles of Incorporation of the Fund. No interpretive or additional
provisions made as provided in the preceding sentence shall be deemed to be an
amendment of this Contract.
17. Massachusetts Law to Apply
--------------------------
This Contract shall be construed and the provisions thereof
interpreted under and in accordance with laws of the Commonwealth of
Massachusetts.
18. Prior Contracts
---------------
This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Fund and the Custodian relating to the custody of
the Fund's assets.
21
<PAGE> 25
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative and
its seal to be hereunder affixed dated as of the 7th day of March, 1988.
ATTEST AIM SUMMIT FUND, INC.
/s/ CAROL F. RELIHAN By: /s/ ROBERT H. GRAHAM
- ----------------------------------- -----------------------------------
ATTEST STATE STREET BANK AND TRUST COMPANY
NOT LEGIBLE By: NOT LEGIBLE
- ----------------------------------- -----------------------------------
Executive Vice President
22
<PAGE> 26
Schedule A
----------
TO CUSTODIAN CONTRACT BETWEEN
AIM SUMMIT FUND, INC. AND
STATE STREET BANK AND TRUST COMPANY
The following foreign banking institutions and foreign securities
depositories have been approved by the Board of Directors of AIM Summit Fund,
Inc. for use as sub-custodians for the Fund's securities and other assets:
(Insert banks and securities depositories)
Certified:
- -----------------------------------
Fund's Authorized Officer
Date:
------------------------------
23
<PAGE> 1
EXHIBIT 8(c)
AMENDMENT NO. 1
TO
CUSTODIAN CONTRACT
AMENDMENT No. 1 made as of this 19th day of September, 1995 to that
certain Custodian Contract dated as of March 7, 1988 (the "Custody Agreement")
between State Street Bank and Trust Company, a Massachusetts trust company (the
"Custodian") and AIM Summit Fund, Inc., a Maryland corporation (the "Fund").
WHEREAS, the Custodian and Fund have previously entered into a Custody
Agreement;
WHEREAS, the Fund and the Custodian desire to amend the Custody
Agreement to provide for the implementation of Electronic Trade Delivery
("ETD"), the automated process of notifying the Custodian of trades for
settlement processing; and
WHEREAS, the Board of Directors of the Fund has approved the amendment
of the Custody Agreement as hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises set forth, the
Fund and the Custodian agree to amend the Custody Agreement by replacing
"Section 5. - Proper Instructions" in its entirety with the following:
5. Proper Instructions
-------------------
Proper Instructions as used throughout this Contract includes
the following:
(a) a writing signed or initialled by one or more person or
persons as the Board of Directors shall have from time to time
authorized. Each such writing shall set forth the specific
transaction or type or transaction involved, including a specific
statement of the purpose for which such action is requested;
(b) communications effected directly between
electro-mechanical or electronic devices provided that the Board of
Directors and the Custodian are satisfied that procedures relating to
the use of such electro-mechanical and electronic devices afford
adequate safeguards for the Fund's assets and have been followed. The
Fund shall provide a Certificate of the Secretary or the Assistant
Secretary as to the authorization for use of electro-mechanical or
electronic devices by the Board of Directors of the Fund accompanied
by a detailed description of procedures approved by the Fund's Board
of Directors;
(c) oral instructions will be considered Proper Instructions
if the Custodian reasonably believes them to have been given by a
person authorized to give such instructions with respect to the
transaction involved. The Fund shall cause all oral instructions to
be confirmed in writing or through electro-mechanical or electronic
devices; or
(d) Proper Instructions in connection with a segregated asset
account which has been established pursuant to Section 2.12, hereof,
shall include instructions received by the Custodian in accordance
with the provisions of any three-party agreement, to which the Fund
and the Custodian are each a party, governing such account or
accounts.
IN WITNESS WHEREOF, each of the parties has caused this Amendment to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the day and year first above writen.
<PAGE> 2
ATTEST STATE STREET BANK AND TRUST COMPANY
s/ J. CHAINY By /s/ N. GRADY
- ---------------------------------- --------------------------------
Assistant Secretary Nancy Grady
ATTEST AIM SUMMIT FUND, INC.
/s/ NANCY L. MARTIN By /s/ ROBERT H. GRAHAM
- ---------------------------------- --------------------------------
Assistant Secretary Robert H. Graham
<PAGE> 1
EXHIBIT 9(c)
ADMINISTRATIVE SERVICES AGREEMENT
This ADMINISTRATIVE SERVICES AGREEMENT (the "Agreement") is made this
18th day of October, 1993 by and between A I M ADVISORS, INC., a Delaware
corporation (the "Administrator"), and AIM SUMMIT FUND, INC., a Maryland
corporation (the "Company").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company is an open-end investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Company has retained the Administrator to provide
investment advisory services pursuant to an Investment Advisory Agreement which
provides that the Administrator may perform (or arrange for the performance of)
accounting, shareholder servicing and other administrative services as well as
investment advisory services to the Company, and that the Administrator may
receive reasonable compensation or may be reimbursed for its costs in providing
such additional services, upon the request of the Board of Directors and upon a
finding by the Board of Directors that the provision of such services is in the
best interest of the Company and its shareholders; and
WHEREAS, the Board of Directors has found that the provision of such
administrative services is in the best interest of the Company and its
shareholders, and has requested that the Administrator perform such services;
NOW, THEREFORE, the parties hereby agree as follows:
1. The Administrator hereby agrees to provide, or arrange for the
provision of, any or all of the following services by the Administrator or its
affiliates:
(a) the services of a principal financial officer of the Company
(including related office space, facilities and equipment) whose
normal duties consist of maintaining the financial accounts and books
and records of the Company, including the review of daily net asset
value calculations and the preparation of tax returns; and the
services (including related office space, facilities and equipment) of
any of the personnel operating under the direction of such principal
financial officer;
(b) the services of staff to respond to shareholder inquiries
concerning the status of their accounts; providing assistance to
shareholders in exchanges among the mutual funds managed or advised by
the Administrator (to the extent that an exchange privilege exists);
changing account designations or changing addresses; assisting in the
purchase or redemption of the Company's shares; supervising the
operations of the custodian(s), transfer agent(s) or dividend agent(s)
for the Company; or otherwise providing services to shareholders of
the Company; and
(c) such other administrative services as may be furnished from time
to time by the Administrator to the Company at the request of the
Company's Board of Directors.
-1-
<PAGE> 2
2. The services provided hereunder shall at all times be subject
to the direction and supervision of the Company's Board of Directors.
3. As full compensation for the services performed and the
facilities furnished by or at the direction of the Administrator, the Company
shall reimburse the Administrator for expenses incurred by them or their
affiliates in accordance with the methodologies established from time to time
by the Company's Board of Directors. Such amounts shall be paid to the
Administrator on a quarterly basis.
4. The Administrator shall not be liable for any error of
judgment or for any loss suffered by the Company in connection with any matter
to which this Agreement relates, except a loss resulting from the
Administrator's willful misfeasance, bad faith or gross negligence in the
performance of its duties or from reckless disregard of its obligations and
duties under this Agreement.
5. The Company and the Administrator each hereby represent and
warrant, but only as to themselves, that each has all requisite authority to
enter into, execute, deliver and perform its obligations under this Agreement
and that this Agreement is legal, valid and binding, and enforceable in
accordance with its terms.
6. Nothing in this Agreement shall limit or restrict the rights
of any director, officer or employee of the Administrator who may also be a
director, officer or employee of the Company to engage in any other business or
to devote his time and attention in part to the management or other aspects of
any business, whether of a similar or a dissimilar nature, nor limit or
restrict the right of the Administrator to engage in any other business or to
render services of any kind to any other corporation, firm, individual or
association.
7. This Agreement shall continue in effect until June 30, 1994,
and shall continue in effect from year to year thereafter; provided that such
continuance is specifically approved at least annually:
(a) (i) by the Company's Board of Directors or (ii) by the
vote of a majority of the outstanding voting securities of the Company
(as defined in Section 2(a)(42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the Company's
directors who are not parties to this Agreement or interested persons
of a party to this Agreement, by votes cast in person at a meeting
specifically called for such purpose.
This Agreement shall terminate automatically in the event of its
assignment (as defined in Section 2(a) (4) of the 1940 Act) or in the event of
termination of the Investment Advisory Agreement between the Company and the
Administrator.
8. This Agreement may be amended or modified, but only by a
written instrument signed by both the Company and the Administrator.
9. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (a) to the
-2-
<PAGE> 3
Administrator at Eleven Greenway Plaza, suite 1919, Houston, Texas 77046,
Attention: President with a copy to the General Counsel, or (b) to the
Company at Eleven Greenway Plaza, Suite 1919, Houston, Texas 77046,
Attention: President, with a copy to the General Counsel.
10. This Agreement contains the entire agreement between the
parties hereto and supersedes all prior agreements, understandings and
arrangements with respect to the subject matter hereof.
11. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
A I M ADVISORS, INC.
Attest: /s/ NANCY L. MARTIN By: /s/ ROBERT H. GRAHAM
------------------------- -------------------------
Assistant Secretary President
(SEAL)
AIM SUMMIT FUND, INC.
Attest: /s/ NANCY L. MARTIN By: /s/ CHARLES T. BAUER
------------------------- -------------------------
Assistant Secretary President
(SEAL)
-3-
<PAGE> 1
EXHIBIT 9(d)
ADMINISTRATIVE SERVICES AGREEMENT
ADMINISTRATIVE SERVICES AGREEMENT (the "Agreement"), dated as of the
18th day of October, 1993, by and between A I M ADVISORS, INC., a Delaware
corporation (the "Advisor"), and A I M Fund Services, Inc. (the "Administrator)
on behalf of the Portfolios and Classes of shares of the Funds set forth in
Appendix A to this agreement (the "Portfolios").
W I T N E S S E T H:
- - - - - - - - - --
WHEREAS, each of the Funds listed in Appendix A hereto is an open-end
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, each of the Funds, on behalf of the Portfolios, has retained
the Advisor to provide investment advisory services pursuant to a Master
Investment Advisory Agreement which provides that the Advisor may perform (or
arrange for the performance of) accounting, shareholder servicing and other
administrative services as well as investment advisory services to the
Portfolios, and that the Advisor may receive reasonable compensation or may be
reimbursed for its costs in providing such additional services, upon the
request of the Board of Directors/Trustees and upon a finding by the Board of
Directors/Trustees that the provision of such services is in the best interests
of each Portfolio and its shareholders; and
WHEREAS, the Board of Directors/Trustees has found that the provision
of such administrative services is in the best interests of the Portfolios and
their shareholders, and has requested that the Administrator perform certain of
such services;
NOW, THEREFORE, the parties hereby agree as follows:
1. The Administrator hereby agrees to provide the services of staff
to respond to shareholder inquiries concerning the status of their accounts;
providing assistance to shareholders in exchanges among the mutual funds
managed or advised by the Advisor; changing account designations or changing
addresses; assisting in the purchase or redemption of the Portfolios' shares;
supervising the operations of the custodian(s), transfer agent(s) or dividend
agent(s) for the Portfolios; or otherwise providing services to shareholders of
the Portfolios.
2. The services provided hereunder shall at all times be subject to
the direction and supervision of the Funds' Boards of Directors/Trustees.
3. As full compensation for the services performed and the
facilities furnished by or at the direction of the Administrator, the Advisor
shall reimburse the Administrator for
-1-
<PAGE> 2
expenses incurred by it or its affiliates in accordance with the methodologies
established from time to time by the Funds' Boards of Directors/Trustees with
respect to the Portfolios. Such amounts shall be paid to the Administrator on
a quarterly basis.
4. The Administrator shall not be liable for any error of judgment
or for any loss suffered by the Funds or a Portfolio in connection with any
matter to which this Agreement relates, except a loss resulting from the
Administrator's willful misfeasance, bad faith or gross negligence in the
performance of its duties or from reckless disregard of its obligations and
duties under this Agreement.
5. The Advisor and the Administrator each hereby represent and
warrant, but only as to themselves, that each has all requisite authority to
enter into, execute, deliver and perform its obligations under this Agreement
and that this Agreement is legal, valid and binding, and enforceable in
accordance with its terms.
6. Nothing in this Agreement shall limit or restrict the rights of
any director, officer or employee of the Administrator who may also be a
trustee, officer or employee of the Funds to engage in any other business or to
devote his or her time and attention in part to the management or other aspects
of any business, whether of a similar or a dissimilar nature, nor limit or
restrict the right of the Administrator to engage in any other business or to
render services of any kind to any other corporation, firm, individual or
association.
7. This Agreement shall continue in effect for a period of one (1)
year from the date hereof, and shall continue in effect from year to year
thereafter; provided that such continuance is specifically approved at least
annually:
(a) (i) by each Fund's Board of Directors/Trustees or (ii) by
the vote of a majority of the outstanding voting securities of the
applicable Portfolio (as defined in Section 2(a)(42) of the 1940 Act);
and
(b) by the affirmative vote of a majority of each Fund's
directors/trustees who are not parties to this Agreement or interested
persons of a party to this Agreement, by votes cast in person at a
meeting specifically called for such purpose.
This Agreement shall terminate automatically as to a Portfolio in the
event of its assignment (as defined in Section 2(a) (4) of the 1940 Act) or in
the event of termination of the Master Investment Advisory Agreement relating
to such Portfolio between a Fund and the Advisor.
8. This Agreement may be amended or modified, but only by a written
instrument signed by both the Advisor and the Administrator.
-2-
<PAGE> 3
9. Any notice or other communication required to be given pursuant
to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (a) to the Administrator at 11 Greenway
Plaza, Suite 1919, Houston, Texas 77046, Attention: President, with a copy to
the General Counsel, or (b) to the Advisor at 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046, Attention: President, with a copy to the General Counsel.
10. This Agreement contains the entire agreement between the parties
hereto and supersedes all prior agreements, understandings and arrangements
with respect to the subject matter hereof.
11. This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas.
-3-
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
A I M ADVISORS, INC.
Attest: /s/ NANCY L. MARTIN By: /s/ ROBERT H. GRAHAM
------------------------ ---------------------------
[Assistant] Secretary Robert H. Graham
President
(SEAL)
AIM FUND SERVICES, INC.
Attest: /s/ NANCY L. MARTIN By: /s/ JOHN CALDWELL
------------------------ ---------------------------
[Assistant] Secretary John Caldwell
President
(SEAL)
-4-
<PAGE> 5
APPENDIX A
AIM EQUITY FUNDS, INC.
AIM Aggressive Growth Fund
AIM Charter Fund (Retail Class)
AIM Constellation Fund (Retail Class)
AIM Weingarten Fund (Retail Class)
AIM FUNDS GROUP (All Classes)
AIM Balanced Fund
AIM Government Securities Fund
AIM Growth Fund
AIM High Yield Fund
AIM Income Fund
AIM Municipal Bond Fund
AIM Money Market Fund
AIM Utilities Fund
AIM Value Fund
AIM INTERNATIONAL FUNDS, INC.
AIM International Equity Fund
AIM INVESTMENT SECURITIES FUNDS
AIM Adjustable Rate Government Fund
Limited Maturity Treasury Portfolio (AIM Limited Maturity Treasury
Shares)
AIM SUMMIT FUND, INC.
AIM TAX-EXEMPT FUNDS, INC.
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut
Intermediate Portfolio (AIM Tax-Free Intermediate Shares)
-5-
<PAGE> 1
EXHIBIT 9(d)(i)
AMENDMENT NO. 1
ADMINISTRATIVE SERVICES AGREEMENT
The Administrative Services Agreement (the "Agreement"), dated October
18, 1993, by and between A I M Advisors, Inc., a Delaware corporation and A I M
Fund Services, Inc. on behalf of the Portfolios and Classes of shares of the
Funds set forth in appendix A thereto shall hereby be amended as follows:
Appendix A of the Agreement is hereby deleted in its entirety and
replaced with the following:
"APPENDIX A
AIM EQUITY FUNDS, INC.
AIM Aggressive Growth Fund
AIM Charter Fund (Retail Class)
AIM Constellation Fund (Retail Class)
AIM Weingarten Fund (Retail Class)
AIM FUNDS GROUP (All Classes)
AIM Balanced Fund
AIM Government Securities Fund
AIM Growth Fund
AIM High Yield Fund
AIM Income Fund
AIM Municipal Bond Fund
AIM Money Market Fund
AIM Utilities Fund
AIM Value Fund
AIM INTERNATIONAL FUNDS, INC.
AIM International Equity Fund
AIM INVESTMENT SECURITIES FUNDS
AIM Adjustable Rate Government Fund
Limited Maturity Treasury Portfolio (AIM Limited Maturity Treasury
Shares)
AIM SUMMIT FUND, INC.
AIM TAX-EXEMPT FUNDS, INC.
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut Intermediate Portfolio (AIM
Tax-Free Intermediate Shares)
<PAGE> 2
SHORT-TERM INVESTMENTS CO.
Prime Portfolio (All Classes)
Liquid Assets Portfolio
SHORT-TERM INVESTMENTS TRUST
Treasury Portfolio (All Classes)
Treasury TaxAdvantage Portfolio"
All other terms and provisions of the Agreement not amended herein
shall remain in full force and effect.
Dated: May 11, 1994
A I M ADVISORS, INC.
Attest: /s/ NANCY L. MARTIN By: /s/ ROBERT H. GRAHAM
---------------------------- ------------------------
Assistant Secretary Robert H. Graham
President
(SEAL)
A I M FUND SERVICES, INC.
Attest: /s/ NANCY L. MARTIN By: /s/ JOHN CALDWELL
---------------------------- ------------------------
Assistant Secretary John Caldwell
President
(SEAL)
<PAGE> 1
EXHIBIT 9(d)(ii)
AMENDMENT NO. 2
ADMINISTRATIVE SERVICES AGREEMENT
The Administrative Services Agreement (the "Agreement"), dated October
18, 1993, by and between A I M Advisors, Inc., a Delaware corporation and A I M
Fund Services, Inc. on behalf of the Portfolios and Classes of shares of the
Funds set forth in appendix A thereto shall hereby be amended as follows:
Appendix A of the Agreement is hereby deleted in its entirety and
replaced with the following:
APPENDIX A
AIM EQUITY FUNDS, INC.
AIM Aggressive Growth Fund
AIM Charter Fund (Retail Class)
AIM Constellation Fund (Retail Class)
AIM Weingarten Fund (Retail Class)
AIM FUNDS GROUP (All Classes)
AIM Balanced Fund
AIM Government Securities Fund
AIM Growth Fund
AIM High Yield Fund
AIM Income Fund
AIM Municipal Bond Fund
AIM Money Market Fund
AIM Utilities Fund
AIM Value Fund
AIM INTERNATIONAL FUNDS, INC. (All Classes)
AIM International Equity Fund
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Global Income Fund
AIM INVESTMENT SECURITIES FUNDS
AIM Adjustable Rate Government Fund
Limited Maturity Treasury Portfolio (AIM Limited Maturity Treasury
Shares)
AIM SUMMIT FUND, INC.
<PAGE> 2
AIM TAX-EXEMPT FUNDS, INC.
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut
Intermediate Portfolio (AIM
Tax-Free Intermediate Shares)
SHORT-TERM INVESTMENTS CO.
Prime Portfolio (All Classes)
Liquid Assets Portfolio
SHORT-TERM INVESTMENTS TRUST
Treasury Portfolio (All Classes)
Treasury TaxAdvantage Portfolio
All other terms and provisions of the Agreement not amended herein
shall remain in full force and effect.
Dated: July 1, 1994
A I M ADVISORS, INC.
Attest: /s/ NANCY L. MARTIN By: /s/ ROBERT H. GRAHAM
---------------------------- ------------------------
Assistant Secretary Robert H. Graham
President
(SEAL)
A I M FUND SERVICES, INC.
Attest: /s/ NANCY L. MARTIN By: /s/ J. ABBOTT SPRAGUE
---------------------------- ------------------------
Assistant Secretary J. Abbott Sprague
Senior Vice President
(SEAL)
<PAGE> 1
EXHIBIT 9(d)(iii)
AMENDMENT NO. 3
ADMINISTRATIVE SERVICES AGREEMENT
The Administrative Services Agreement (the "Agreement"), dated October
18, 1993, by and between A I M Advisors, Inc., a Delaware corporation and A I M
Fund Services, Inc. on behalf of the Portfolios and Classes of shares of the
Funds set forth in appendix A thereto is hereby amended as follows:
Appendix A of the Agreement is hereby deleted in its entirety and
replaced with the following:
APPENDIX A
AIM EQUITY FUNDS, INC.
AIM Aggressive Growth Fund
AIM Charter Fund (Retail Class)
AIM Constellation Fund (Retail Class)
AIM Weingarten Fund (Retail Class)
AIM FUNDS GROUP (All Classes)
AIM Balanced Fund
AIM Government Securities Fund
AIM Growth Fund
AIM High Yield Fund
AIM Income Fund
AIM Money Market Fund
AIM Municipal Bond Fund
AIM Utilities Fund
AIM Value Fund
AIM INTERNATIONAL FUNDS, INC. (All Classes)
AIM International Equity Fund
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Global Income Fund
AIM INVESTMENT SECURITIES FUNDS
AIM Adjustable Rate Government Fund
Limited Maturity Treasury Portfolio (AIM Limited Maturity Treasury
Shares)
AIM SUMMIT FUND, INC.
<PAGE> 2
AIM TAX-EXEMPT FUNDS, INC.
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut
Intermediate Portfolio (AIM
Tax-Free Intermediate Shares)
All other terms and provisions of the Agreement not amended herein
shall remain in full force and effect.
Dated: September 16, 1994
A I M ADVISORS, INC.
Attest: /s/ STEPHEN I. WINER By: /s/ ROBERT H. GRAHAM
---------------------------- ------------------------
Assistant Secretary Robert H. Graham
President
(SEAL)
A I M FUND SERVICES, INC.
Attest: /s/ STEPHEN I. WINER By: /s/ JOHN CALDWELL
---------------------------- ------------------------
Assistant Secretary John Caldwell
President
(SEAL)
<PAGE> 1
EXHIBIT 9(d)(iv)
AMENDMENT NO. 4
ADMINISTRATIVE SERVICES AGREEMENT
The Administrative Services Agreement (the "Agreement"), dated October
18, 1993, as amended, by and between A I M Advisors, Inc., a Delaware
corporation and A I M Fund Services, Inc., a Delaware corporation, on behalf of
the Portfolios and Classes of shares of the Funds set forth in Appendix A
thereto is hereby amended as follows:
Appendix A of the Agreement is hereby deleted in its entirety and
replaced with the following:
"APPENDIX A
AIM SUMMIT FUND, INC."
All other terms and provisions of the Agreement not amended herein
shall remain in full force and effect.
Dated: November 1, 1994
A I M ADVISORS, INC.
Attest: /s/ STEPHEN I. WINER By: /s/ ROBERT H. GRAHAM
---------------------------- ------------------------
Assistant Secretary Robert H. Graham
President
(SEAL)
A I M FUND SERVICES, INC.
Attest: /s/ STEPHEN I. WINER By: /s/ JOHN CALDWELL
---------------------------- ------------------------
Assistant Secretary John Caldwell
President
(SEAL)
<PAGE> 1
EXHIBIT 10
SPENGLER CARLSON GUBAR BRODSKY & FRISCHLING
ATTORNEYS AT LAW
280 PARK AVENUE, NEW YORK, N.Y. 10017
EDWARD BRODSKY TELEPHONE
ROBERT S. CARLSON
EDMOND M. COLLER (212) 286-4000
CARL FRISCHLING
LEONARD GUBAR ---------
HOWARD S. JACOBS
GREGORY KATZ CABLE "ROCKSCOURT"
CHARLES E. MATTHEWS, JR.
WILLIAM J. McSHERRY, JR. TELEX 12-7596
J. EDWARD MEYER, III
JOHN J. NOVAK, JR. ---------
SUSAN J. PENRY-WILLIAMS
BRUCE A. RICH TELECOPIER
LEONARD SCHNEIDMAN
THOMAS H. SEAR (212) 682-4583
SILAS SPENGLER
March 5, 1984
Summit Investors Fund, Inc.
11 Greenway Plaza
Suite 1919
Houston, Texas 77046
Re: Summit Investors Fund, Inc.
Registration No. 2-76909
Gentlemen:
We have acted as counsel for Summit Investors Fund, Inc., a Maryland
corporation (the "Company"), in connection with the public offering of shares of
the Company's Common Stock, par value $.01 per share (the "Shares"), pursuant to
Post-Effective Amendment No. 3 to the Company's Registration Statement on Form
N-1A (File No. 2-76909) (the "Registration Statement"), filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended.
We have reviewed the Articles of Incorporation, as amended, of the Company,
its By-Laws, form of stock certificate, resolutions of the Board of Directors of
the Company reflecting certain corporate proceedings of the Company, and the
registration Statement (including exhibits thereto). We have also made such
inquiries and have examined originals, certified copies or copies otherwise
identified to our satisfaction of such documents, corporate records and other
instruments as we have deemed necessary or appropriate for the purposes of this
opinion. We have assumed, without independent verification, the genuineness of
the signatures and the authenticity of all documents furnished to us.
<PAGE> 2
SPENGLER CARLSON GUBAR BRODSKY & FRISCHLING
Summit Investors Fund, Inc.
March 5, 1984
Page Two
The opinions expressed herein are limited to matters of law which govern
the procedures for the authorization and issuance of the Shares. We are members
of the Bar of the State of New York and do not hold ourselves out as experts as
to the law of any other state or jurisdiction.
Based upon and subject to the foregoing, we are of the opinion, and so
advise you, that the issuance of the Shares has been duly and validly
authorized and that, when duly sold, issued and paid for in the manner
contemplated by the Registration Statement and the Prospectus contained
therein and assuming that the consideration received therefor is not less than
the par value thereof, the Shares will be validly issued, fully paid and
non-assessable.
"We consent to the filing of this opinion as of exhibit to the Registration
Statement and to the references therein to the firm under the caption "General
Information-Legal Matters."
Very truly yours,
/s/ SPENGLER CARLSON GUBAR BRODSKY & FRISCHLING
<PAGE> 1
EXHIBIT 11(a)
INDEPENDENT AUDITORS' CONSENT
-----------------------------
The Board of Directors
AIM Summit Fund, Inc.
We consent to the use of our report on AIM Summit Fund, Inc. dated December 8,
1995 included herein.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Houston, Texas
February 16, 1996
<PAGE> 1
EXHIBIT 11(b)
CONSENT OF COUNSEL
AIM SUMMIT FUND, INC.
---------------------
We hereby consent to the use of our name and to the reference
to our firm under the caption "General Information -- Legal Matters" in the
Prospectus which is included in Post-Effective Amendment No. 19 to the
Registration Statement under the Securities Act of 1933 and Amendment No. 20 to
the Registration Statement under the Investment Company Act of 1940 (No.
2-76909) on Form N-1A of AIM Summit Fund, Inc.
/s/ BALLARD SPAHR ANDREWS & INGERSOLL
---------------------------------------
Ballard Spahr Andrews & Ingersoll
Philadelphia, Pennsylvania
February 21, 1996
<PAGE> 1
EXHIBIT 13
AIM DISTRIBUTORS, INC.
September 24, 1982
Summit Investors Fund, Inc.
11 Greenway Plaza
Suite 1919
Houston, TX 77046
Gentlemen:
We have this day purchased a One Hundred Thousand Dollar ($100,000) Summit
Investors Plans Systematic Investment Plan (the "Plan"), and as Sponsor to
Summit Investors Plans we have waived all Creation and Sales Charges in
connection with the purchase of the Plan. In accordance with the terms of the
Plan, the Custodian has invested on our behalf the sum of $100,000 to purchase
20,000 shares (the "Shares") of the Common Stock, $.01 par value, of Summit
Investors Fund, Inc. (the "Company"). We hereby represent that we have
purchased the Plan and the underlying Shares for investment purposes and not
with a view to or for sale in connection with any distribution thereof,
provided, however, that the disposition of the Plan, and of the Shares in
accordance with the terms of the Plan, shall at all times be and remain within
our control.
Sincerely,
AIM DISTRIBUTORS, INC.
By /s/ ROBERT L. FIELD
------------------------------------
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary information of the AIM Summit Fund, Inc.
October 31, 1995 annual report.
</LEGEND>
<CIK> 0000701748
<NAME> AIM SUMMIT FUND, INC.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 793642038
<INVESTMENTS-AT-VALUE> 1050843653
<RECEIVABLES> 5718560
<ASSETS-OTHER> 19039
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1056581251
<PAYABLE-FOR-SECURITIES> 5596600
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 974026
<TOTAL-LIABILITIES> 6570626
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 700176586
<SHARES-COMMON-STOCK> 86480005
<SHARES-COMMON-PRIOR> 78222581
<ACCUMULATED-NII-CURRENT> 19000287
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 73632137
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 257201615
<NET-ASSETS> 1050010625
<DIVIDEND-INCOME> 8058735
<INTEREST-INCOME> 1150005
<OTHER-INCOME> 0
<EXPENSES-NET> 6279702
<NET-INVESTMENT-INCOME> 2929038
<REALIZED-GAINS-CURRENT> 74322239
<APPREC-INCREASE-CURRENT> 169626929
<NET-CHANGE-FROM-OPS> 246878206
<EQUALIZATION> 1739780
<DISTRIBUTIONS-OF-INCOME> (7935485)
<DISTRIBUTIONS-OF-GAINS> (30550717)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10287176
<NUMBER-OF-SHARES-REDEEMED> (6354529)
<SHARES-REINVESTED> 4324777
<NET-CHANGE-IN-ASSETS> 284937937
<ACCUMULATED-NII-PRIOR> 22226954
<ACCUMULATED-GAINS-PRIOR> 29860615
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5719169
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6279702
<AVERAGE-NET-ASSETS> 881067069
<PER-SHARE-NAV-BEGIN> 9.78
<PER-SHARE-NII> 0.04
<PER-SHARE-GAIN-APPREC> 2.81
<PER-SHARE-DIVIDEND> (0.10)
<PER-SHARE-DISTRIBUTIONS> (0.39)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.14
<EXPENSE-RATIO> 0.71
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
