AIM SUMMIT FUND INC, 485BPOS, 1997-02-24

AIM SUMMIT FUND INC
485BPOS, 1997-02-24

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<PAGE> 1

As filed with the Securities and Exchange Commission on February 24, 1997

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. 20 X
------ ----

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 21 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 77046-1173

----------------------------------------------------------
(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 77046-1173

----------------------------
(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: February 27, 1997
-------------------

It is proposed that this filing will become effective:

immediately upon filing pursuant to paragraph (b)
---

X on February 27, 1997 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,
1996 on or about December 20, 1996.

<PAGE> 3

AIM SUMMIT FUND, INC.
FORM N-1A CROSS REFERENCE SHEET
(AS REQUIRED BY RULE 495)

N-1A ITEM NUMBER PROSPECTUS LOCATION
- ---------------- -------------------
PART A
Item 1. Cover Page . . . . . . . . . . . . . . . . . . . . Cover Page
Item 2. Synopsis . . . . . . . . . Summary; Table of Fees and Expenses
Item 3. Condensed Financial Information . . . . . Financial Highlights
Item 4. General Description of . . . . 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 . . . . . .(included in Annual
Performance 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 Practice. . . 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.
<PAGE> 4

PROSPECTUS

FEBRUARY 27, 1997

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 FEBRUARY 27, 1997 HAS
BEEN FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE "SEC")
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>
<S> <C>
PAGE PAGE
Summary............................... A-2 Determining Net Asset Value........... A-11
Table of Fees and Expenses............ A-4 Sales of Shares....................... A-12
Financial Highlights.................. A-5 Redemption of Shares.................. A-12
Investment Program.................... A-6 Open Account.......................... A-14
Dividends, Distributions and Management of the Fund................ A-14
Tax Matters........................... A-10 General Information................... A-18
</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 and La Familia AIM de Fondos, La Familia AIM de Fondos and Design
and aimfunds.com are service marks of A I M Management Group Inc.

A-1
<PAGE> 5

SUMMARY

INVESTMENT OBJECTIVE

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
77046-1173, 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 TradeStreet Investment
Associates, Inc. ("TradeStreet"), which furnishes AIM with investment research
and advisory services concerning a portion of the Fund's investment program.
TradeStreet is a wholly owned subsidiary of NationsBank, N.A. and a registered
investment advisor.

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
investment when the market value of his accumulated shares is less than his
cost, including creation

A-2
<PAGE> 6

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.

MATERIAL EVENTS

MERGER. On November 4, 1996, A I M Management Group Inc. ("AIM Management")
announced that it had entered into an Agreement and Plan of Merger with INVESCO
plc ("INVESCO") and INVESCO Group Services Inc., pursuant to which AIM
Management will be merged with a subsidiary of INVESCO. Subject to a number of
conditions being met, it is anticipated that the transaction will occur in the
early part of 1997. The Fund's investment advisor, AIM, is a wholly owned
subsidiary of AIM Management.

APPROVAL OF NEW ADVISORY, SUB-ADVISORY, ADMINISTRATIVE SERVICES AND
DISTRIBUTION AGREEMENTS. On December 11, 1996, the Board of Directors (the
"Board") of the Fund approved, subject to shareholder approval, a new investment
advisory agreement between AIM and the Fund. The Board also approved a new
sub-advisory agreement, between AIM and TradeStreet. Shareholders approved the
proposed advisory agreement and sub-advisory agreement at an annual meeting of
shareholders on February 7, 1997 (the "Annual Meeting"). The Board has also
approved a new administrative services agreement with AIM, a new administrative
services agreement with respect to shareholder services between AIM and A I M
Fund Services, Inc., ("AFS"), a wholly owned subsidiary of AIM, and a new
distribution agreement with AIM Distributors. There have been no material
changes to the terms of the new agreements, including the fees payable by the
Funds. No change is anticipated in the investment advisory or other personnel
responsible for the Funds as a result of these new agreements or the merger.

The Board approved these new agreements because the Fund's corresponding
existing agreements will terminate upon the consummation of the proposed merger
of AIM Management, the parent of AIM, into a subsidiary of INVESCO. INVESCO and
its subsidiaries are an independent investment management group engaged in
institutional investment management and retail mutual fund businesses in the
United States, Europe and the Pacific region. Provided that the merger is
consummated, the new advisory agreement with respect to the Fund, as well as the
new administrative services and distribution agreements, will automatically
become effective as of the closing of the merger.

CHANGES TO FUNDAMENTAL INVESTMENT POLICIES. The Board has unanimously
approved changes to the fundamental investment policies of the Fund described
below. Shareholders approved these changes at the Annual Meeting and they will
become effective on March 1, 1997.

Investment in Other Investment Companies

The Fund is currently prohibited from investing more than 5% of its assets
in securities of a single issuer or holding more than 10% of the outstanding
voting securities of any issuer. The Board

A-3
<PAGE> 7

and Shareholders have approved the amendment of these fundamental investment
policies to permit investment in other investment companies in excess of those
limits to the extent permitted by the Investment Company Act of 1940, and rules
and regulations thereunder, and, if applicable, exemptive orders granted by the
SEC.

For additional information regarding the proposed changes described above,
see the Fund's Statement of Additional Information dated February 27, 1997.

CHANGES TO SALES OF SHARES. Upon consummation of the proposed merger of AIM
Management, the following additional persons may purchase shares of the Fund
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,
children, parents and parents of spouse) of any such person, of INVESCO or its
affiliates; or of any investment company managed or advised by INVESCO; or (b)
any employee benefit plan established for employees of INVESCO or its
affiliates.

TABLE OF FEES AND EXPENSES

<TABLE>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets):
Management Fees........................................... .64%
Other Expenses............................................ .06%
Total Fund Operating Expenses............................. .70%
</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 $22 $39 $87
</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-4
<PAGE> 8
FINANCIAL HIGHLIGHTS

Shown below are the condensed financial highlights for a share of the Fund
outstanding during each of the years in the three-year period ended October 31,
1996, the ten months ended October 31, 1993 and each of the years in the
six-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,
----------------------------------------- ----------------------------------------------
1996 1995 1994 1993 1992 1991 1990
----------- ----------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 12.14 $ 9.78 $ 10.46 $ 9.64 $ 10.09 $ 7.56 $ 7.79
---------- ---------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment income 0.04 0.04 0.10 0.09 0.11 0.14 0.15
---------- ---------- ------- ------- ------- ------- -------
Net gains (losses) on
securities (both realized
and unrealized) 1.69 2.81 (0.04) 0.73 0.35 3.16 (0.08)
---------- ---------- ------- ------- ------- ------- -------
Total from investment
operations 1.73 2.85 0.06 0.82 0.46 3.30 0.07
---------- ---------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income (0.03) (0.10) (0.10) -- (0.11) (0.13) (0.16)
---------- ---------- ------- ------- ------- ------- -------
Distributions from capital
gains (0.85) (0.39) (0.64) -- (0.80) (0.64) (0.14)
---------- ---------- ------- ------- ------- ------- -------
Total distributions (0.88) (0.49) (0.74) -- (0.91) (0.77) (0.30)
---------- ---------- ------- ------- ------- ------- -------
Net asset value, end of
period $ 12.99 $ 12.14 $ 9.78 $ 10.46 $ 9.64 $ 10.09 $ 7.56
---------- ---------- ------- ------- ------- ------- -------
Total return(b) 15.61% 31.03% 0.61% 8.51% 4.50% 43.64% 0.93%
---------- ---------- ------- ------- ------- ------- -------
Ratios/supplemental data:
Net assets, end of period
(000s omitted) $1,261,008 $1,050,011 $765,073 $705,580 $604,329 $517,835 $316,043
---------- ---------- ------- ------- ------- ------- -------
Ratio of expenses to average
net assets 0.70%(c)(d) 0.71%(c) 0.72% 0.79%(e) 0.76% 0.75% 0.80%
---------- ---------- ------- ------- ------- ------- -------
Ratio of net investment
income to average net assets 0.29(c) 0.33%(c) 1.04% 1.13%(e) 1.09% 1.48% 2.02%
---------- ---------- ------- ------- ------- ------- -------
Portfolio turnover rate 118.34% 126.00% 121.69% 115.76% 97.41% 109.04% 142.60%
---------- ---------- ------- ------- ------- ------- -------
Average commission rate
paid(f) $ 0.0643 N/A N/A N/A N/A N/A N/A
---------- ---------- ------- ------- ------- ------- -------

<CAPTION>
DECEMBER 31,
---------------------------------
1989 1988(a) 1987
--------- --------- ---------
<S> <C> <C> <C>
Net asset value, beginning of
period $ 6.57 $ 5.70 $ 6.68
------- ------- -------
Income from investment
operations:
Net investment income 0.16 0.16 0.09
------- ------- -------
Net gains (losses) on
securities (both realized
and unrealized) 1.86 0.84 (0.40)
------- ------- -------
Total from investment
operations 2.02 1.00 (0.31)
------- ------- -------
Less distributions:
Dividends from net
investment income (0.16) (0.13) (0.10)
------- ------- -------
Distributions from capital
gains (0.64) -- (0.57)
------- ------- -------
Total distributions (0.80) (0.13) (0.67)
------- ------- -------
Net asset value, end of
period $ 7.79 $ 6.57 $ 5.70
------- ------- -------
Total return(b) 30.92% 17.65% (4.66)%
------- ------- -------
Ratios/supplemental data:
Net assets, end of period
(000s omitted) $262,655 $164,996 $101,541
------- ------- -------
Ratio of expenses to average
net assets 0.82% 1.04% 0.98%
------- ------- -------
Ratio of net investment
income to average net assets 2.14% 2.57% 1.06%
------- ------- -------
Portfolio turnover rate 97.26% 114.94% 81.99%
------- ------- -------
Average commission rate
paid(f) N/A N/A N/A
------- ------- -------
</TABLE>

(a) The Fund changed investment advisers on October 5, 1988.

(b) For periods less than one year, total return is not annualized.

(d)Ratio includes indirectly paid expenses. Excluding indirectly paid expenses,
the ratio of expenses to average net assets would have been the same.

(e) Annualized.

(f) Disclosure requirement beginning with the Fund's fiscal year ending October
31, 1996.

A-5
<PAGE> 9

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-6
<PAGE> 10

consist of obligations of, or guaranteed by, the United States Government or its
agencies or instrumentalities; certificates of deposit, bankers' acceptances,
time deposits, master notes 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-7
<PAGE> 11

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 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 securities of some foreign companies may
be less liquid and experience more price volatility than

A-8
<PAGE> 12

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 in order to hedge the value of the portfolio against
changes in market conditions. 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-5. 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.

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

A-9
<PAGE> 13

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.

See "Summary -- Material Events" for changes in the Fund's investment
restrictions effective March 1, 1997.

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, some of which may be changed by the Board without shareholder approval, 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-10
<PAGE> 14

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 (the "NYSE") (generally 4:00 p.m. Eastern
Time) on each business day of the Fund (defined as any day on which the NYSE 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 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
value. Additional information

A-11
<PAGE> 15

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, children, parents and parents of spouse) of any such
person, of AIM Management or its subsidiaries, 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. See "Summary -- Material Events" for changes to who
may purchase shares of the Fund at net asset value.

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,
either by a written request to BFDS, or beginning on or about May 1, 1997, by
calling BFDS at (617) 328-5000. Upon receipt by BFDS of a proper request, the
Fund will redeem shares in cash at the next determined net asset value. All
written redemption requests must be 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.

Written 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

A-12
<PAGE> 16

additional documents required for redemption by corporations, partnerships,
trusts or other fiduciaries.

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.

Beginning on or about May 1, 1997, shareholders may also request
redemptions by telephone by calling BFDS at (617) 328-5000. If a shareholder
does not wish to allow redemptions by telephone by any person in his account, he
should decline that option on the account application. The telephone redemption
feature can be used only if: (a) the proceeds are made payable to the
shareholder of record and mailed to the address of record; (b) there has been no
change of address of record on the account within the preceding 30 days; (c) the
shares to be redeemed are not in certificate form; (d) the person requesting
withdrawal can provide proper identification information; and (e) the proceeds
of the withdrawal do not exceed $50,000.

Shares held in retirement plans (such as IRA and IRA/SEP) or 403(b) plans
may not be redeemed by telephone. AIM Distributors has made arrangements with
certain dealers to accept telephone instructions for the redemption of shares.
AIM Distributors reserves the right to impose conditions on these dealers,
including the condition that they enter into agreements (which contain
additional conditions with respect to the redemption of shares) with AIM
Distributors. The Fund,

A-13
<PAGE> 17

AIM Distributors, the Custodian, and BFDS will not be liable for any loss,
expense or cost arising out of any telephone redemption request effected in
accordance with the authorization set forth at that item of the account
application if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions if they do not follow reasonable procedures for verification of
telephone transactions. Such reasonable procedures may include recording of
telephone transactions, requests for confirmation of the shareholder's Social
Security Number and current address, and mailings of confirmations promptly
after the transaction.

Shares redeemed by telephone are redeemed at their net asset value next
determined after a request for redemption in proper form (including signature
guarantees and other documentation, if applicable) is received by BFDS. Orders
for the redemption of shares received in proper form prior to the NYSE close on
any business day of the Fund will be confirmed at the price determined as of the
close of that day. Any resulting loss from the dealer's failure to submit a
request for redemption within the prescribed time frame will be borne by that
dealer. Telephone redemption requests must be made by NYSE close on any business
day of the Fund and will be confirmed at the price determined as of the close of
that day. No telephone redemption request will be accepted which specifies a
particular date for redemption or which specify and special conditions.

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.

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.

A-14
<PAGE> 18

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 subsidiaries, manages or advises 43
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 January 31, 1997, the
total assets of such investment company portfolios advised or managed by AIM and
its subsidiaries were approximately $66.5 billion. See "Summary -- Material
Events."

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 entered into a sub-advisory agreement with NationsBank of Texas, N.A.
("NationsBank Texas"). Effective April 1, 1996, TradeStreet assumed the
sub-advisory agreement 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 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. See "Summary -- Material Events for a
description of AIM Management's proposed merger with a subsidiary of INVESCO."

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 reimburse-

A-15
<PAGE> 19

ments, 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, 1996, AIM received fees from the Fund
that amounted to 0.64% of the Fund's average daily net assets. For the fiscal
year ended October 31, 1996, NationsBank Texas and its successor, TradeStreet,
received fees from AIM that amounted to 0.08% and 0.13%, respectively, of the
Fund's average daily net assets for sub-advisory services. For the fiscal year
ended October 31, 1996, the Fund paid 0.006% of its average daily net assets to
AIM for reimbursement for administrative services.

THE SUB-ADVISOR

NationsBank of Texas, N.A. ("NationsBank Texas"), served as the Fund's
sub-advisor pursuant to a Sub-Advisory Agreement dated October 31, 1993, (the
"Sub-Advisory Agreement"). NationsBank Corp., a bank holding company
("NationsBank, N.A."), indirectly holds 100% of the voting stock of NationsBank
Texas. TradeStreet Investment Associates, Inc. ("TradeStreet"), 101 South Tryon
Street, Suite 1000, Charlotte, North Carolina 28255, is a wholly-owned
subsidiary of NationsBank, N.A. and a registered investment advisor. Effective
April 1, 1996, the Sub-Advisory Agreement was assumed by TradeStreet.
TradeStreet receives the same sub-advisory fees previously payable to, and
performs the same services as, NationsBank Texas.

Pursuant to the terms of the Sub-Advisory Agreement, AIM has appointed
TradeStreet 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 TradeStreet,
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, 1996, the expenses of the Fund borne
by the Fund, including the fees paid under the Advisory Agreement, amounted to
0.70% 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.

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 approximately 117 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 responsibil-

A-16
<PAGE> 20

ity for the Fund since March 1, 1995. Jeffrey C. Moser is Senior Vice President
of NationsBank Texas, formerly the Fund's sub-advisor. Mr. Moser is 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 23 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 eight 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 14 years experience as an investment
professional.

Mr. Moser, who has been associated with NationsBank Texas since 1990, and
TradeStreet since 1996 has ten 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-17
<PAGE> 21

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 passes 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 by calling (800) 995-4246.

A-18
<PAGE> 22

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-19
<PAGE> 23

[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 24

[AIM LOGO APPEARS HERE]

- --------------------------------------------------------------------------------

SPONSOR

A I M DISTRIBUTORS, INC.
P.O. BOX 4264
HOUSTON, TEXAS 77210-4264
(800) 995-4246

CUSTODIAN

STATE STREET BANK AND TRUST COMPANY
225 FRANKLIN STREET
BOSTON, MASSACHUSETTS 02110

CUSTODIAN'S AGENT

BOSTON FINANCIAL DATA SERVICES, INC.
P.O. BOX 8300
BOSTON, MASSACHUSETTS 02266-8300
(617) 328-5000

AUDITORS

KPMG PEAT MARWICK LLP
700 LOUISIANA
NATIONSBANK BUILDING
HOUSTON, TEXAS 77002
<PAGE> 25
STATEMENT OF
ADDITIONAL INFORMATION

AIM SUMMIT FUND, INC.

11 Greenway Plaza
Suite 1919
Houston, Texas 77046-1173
(713) 626-1919

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT
A PROSPECTUS, AND IT SHOULD BE READ IN CONJUNCTION
WITH A PROSPECTUS OF THE ABOVE-NAMED FUND,
A COPY OF WHICH MAY BE OBTAINED FREE OF CHARGE FROM
AUTHORIZED DEALERS OR BY WRITING
A I M DISTRIBUTORS, INC., P.O. BOX 4264,
HOUSTON, TEXAS 77210-4264 OR BY
CALLING (800) 995-4246.

-------------------

STATEMENT OF ADDITIONAL INFORMATION DATED FEBRUARY 27, 1997
RELATING TO THE PROSPECTUS DATED FEBRUARY 27, 1997

<PAGE> 26

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......................................................9
Expenses ...........................................................10
Transfer Agent and Custodian........................................10
Reports ...........................................................10

TAX AND DIVIDEND INFORMATION.................................................10
Qualification as a Regulated Investment Company.....................11
Excise Tax on Regulated Investment Companies........................12
Fund Distributions..................................................12
Sale or Redemption of Fund Shares...................................13
Foreign Shareholders................................................14
Effect of Future Legislation; Local Tax Considerations..............14

SHARE PURCHASES, REDEMPTIONS AND REPURCHASES.................................14
Purchases and Redemptions...........................................14
Suspension of Right of Redemption...................................15
Valuation of Shares.................................................15
The Distribution Agreement..........................................15

INVESTMENT PROGRAM AND RESTRICTIONS..........................................16
Investment Program..................................................16
Common Stocks.......................................................16
Preferred Stocks....................................................16
Convertible Securities..............................................16
Corporate Debt Securities...........................................17
U.S. Government Securities..........................................17
Warrants ...........................................................17
Foreign Securities..................................................17
Foreign Exchange Transactions.......................................18
Repurchase Agreements...............................................18
Rule 144A Securities................................................18
Futures Contracts...................................................18
Risks as to Futures Contracts and Related Call Options..............19
Portfolio Transactions and Brokerage................................20
Material Changes to Investment Restrictions.........................22
Investment Restrictions.............................................23

FINANCIAL STATEMENTS.........................................................FS
</TABLE>

<PAGE> 27

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 February 27, 1997, which may be obtained without charge by
written request to A I M Distributors, Inc. ("AIM Distributors"). Investors may
also call AIM Distributors at (800) 995-4246 or dealers authorized by AIM
Distributors to distribute the Fund's shares. Investors must receive a
Prospectus before they invest.

This Statement of Additional Information is intended to furnish
prospective investors with additional information concerning the Fund. Some of
the information required to be in this Statement of Additional Information is
also included in the 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 January 31,
1997, 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 77046-1173.

<PAGE> 28

<TABLE>
<CAPTION>
====================================================================================================================================
Position(s) Held
Name, Address and Age with Registrant Principal Occupation(s) During Past 5 years
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
*Charles T. Bauer (77) Chairman and Director, Chairman and Chief Executive Officer,
11 Greenway Plaza Director A I M Management Group Inc.; Chairman of the
Suite 1919 Board of Directors, A I M Advisors, Inc., A I M
Houston, TX 77046-1173 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.
- ------------------------------------------------------------------------------------------------------------------------------------
Bruce L. Crockett, (52) Director Formerly Director, President and Chief Executive
906 Frome Lane Officer, COMSAT Corporation (includes COMSAT
McLean, VA 22102 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 (72) Director Director, Cortland Trust Inc.(investment company).
Six Blythewood Road Formerly, Director, CF & I Steel Corp., Monumental
Baltimore, MD 21210 Life Insurance Company and Monumental General Insurance
Company; and Chairman of the Board of Equitable Bancorporation
- ------------------------------------------------------------------------------------------------------------------------------------
**Carl Frischling (60) Director Partner, Kramer, Levin, Naftalis & Frankel (law firm). Formerly, Partner,
919 Third Avenue Reid & Priest (law firm); and, prior thereto, Partner, Spengler
New York,NY 10022 Carlson Gubar Brodsky & Frischling (law firm).
- ------------------------------------------------------------------------------------------------------------------------------------
*Robert H. Graham (50) Director and Director, President and Chief Operating Officer,
11 Greenway Plaza President A I M Management Group Inc.; Director and President,
Suite 1919 A I M Advisors, Inc.; Director and Senior Vice President,
Houston, TX 77046-1173 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.
====================================================================================================================================
</TABLE>

- --------
* 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.

<PAGE> 29

<TABLE>
<CAPTION>
=========================================================================================================================
Position(s) Held
Name, Address and Age with Registrant Principal Occupation(s) During Past 5 years
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
John F. Kroeger (72) Director Director, Flag Investors International Fund, Inc.,
37 Pippins Way Flag Investors Emerging Growth Fund, Inc., Flag
Morristown, NJ 07960 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 (54) Director Attorney, private practice in Houston, Texas.
6363 Woodway, Suite 825
Houston, Texas 77057
- -------------------------------------------------------------------------------------------------------------------------
Ian W. Robinson (73) Director Formerly, Executive Vice President and Chief
183 River Drive Financial Officer, Bell Atlantic Management
Tequesta, Florida 33469 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 (57) Director Executive Vice President, Development and
Transco Tower, 50th Floor Operations, Hines Interests Limited Partnership
2800 Post Oak Road (real estate development).
Houston, Texas 77056
- -------------------------------------------------------------------------------------------------------------------------
***John J. Arthur (52) Senior Vice Senior Vice President and Treasurer, A I M
11 Greenway Plaza President and Advisors, Inc.; and Vice President and Treasurer,
Suite 1919 Treasurer A I M Management Group Inc., A I M Capital
Houston, TX 77046-1173 Management, Inc., A I M Distributors, Inc., A I M
Fund Services, Inc., A I M Institutional Fund Services, Inc.
and Fund Management Company.
- -------------------------------------------------------------------------------------------------------------------------
Gary T. Crum (49) Senior Vice Director and President, A I M Capital Management,
11 Greenway Plaza President Inc.; Director and Senior Vice President, A I M
Suite 1919 Management Group Inc., and A I M Advisors, Inc.;
Houston, TX 77046-1173 and Director, A I M Distributors, Inc.
=========================================================================================================================
</TABLE>

- --------
*** Mr. Arthur and Ms. Relihan are married to each other.

<PAGE> 30

<TABLE>
<CAPTION>
==============================================================================================================
Position(s) Held
Name, Address and Age with Registrant Principal Occupation(s) During Past 5 years
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Scott G. Lucas (37) Senior Vice Director and Senior Vice President, A I M Capital
11 Greenway Plaza President Management, Inc.; and Vice President, A I M
Suite 1919 Management Group Inc. and A I M Advisors, Inc.
Houston, TX 77046-1173
- --------------------------------------------------------------------------------------------------------------
***Carol F. Relihan (42) Senior Vice Senior Vice President, General Counsel and
11 Greenway Plaza President and Secretary, A I M Advisors, Inc.; Vice President,
Suite 1919 Secretary General Counsel and Secretary,
Houston, TX 77046-1173 A I M Management Group Inc.; Vice President and
General Counsel, Fund Management Company;
and Vice President, A I M Capital Management,
Inc., A I M Distributors, Inc., A I M Fund Services,
Inc. and A I M Institutional Fund Services, Inc.
- --------------------------------------------------------------------------------------------------------------
Dana R. Sutton (38) Vice President and Vice President and Fund Controller, A I M Advisors,
11 Greenway Plaza Assistant Inc.; and Assistant Vice President and Assistant
Suite 1919 Treasurer Treasurer, Fund Management Company.
Houston, TX 77046-1173
- --------------------------------------------------------------------------------------------------------------
Melville B. Cox (53) Vice President Vice President and Chief Compliance Officer, A I M
11 Greenway Plaza Advisors, Inc., A I M Capital Management, Inc.,
Suite 1919 A I M Distributors, Inc., A I M Fund Services, Inc.,
Houston, TX 77046-1173 A I M Institutional Fund Services, 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 (35) Vice President Director and Senior Vice President, A I M Capital
11 Greenway Plaza Management, Inc.; and Vice President,
Suite 1919 A I M Advisors, Inc.
Houston, TX 77046-1173
===============================================================================================================
</TABLE>

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

- --------
*** Mr. Arthur and Ms. Relihan are married to each other.

<PAGE> 31

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.

Remuneration of Directors

Each director is reimbursed for expenses incurred in connection with
each meeting of the Board of Directors or any Committee attended. Each director
of the Fund is compensated for his or her services according to a fee schedule
which recognizes the fact that such director also serves as a director or
trustee of certain other AIM Funds. Each such director receives a fee,
allocated among the AIM Funds for which he or she 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 1,695.00 38,621.00 68,000.00
- -----------------------------------------------------------------------------------------------------
Owen Daly II 1,677.00 82,607.00 68,000.00
- -----------------------------------------------------------------------------------------------------
Carl Frischling 1,681.00 56,683.00 68,000.00
- -----------------------------------------------------------------------------------------------------
Robert H. Graham 0 0 0
- -----------------------------------------------------------------------------------------------------
John F. Kroeger 1,626.00 83,654.00 66,000.00
- -----------------------------------------------------------------------------------------------------
Lewis F. Pennock 1,652.00 33,702.00 67,000.00
- -----------------------------------------------------------------------------------------------------
Ian Robinson 1,681.00 64,973.00 68,000.00
- -----------------------------------------------------------------------------------------------------
Louis S. Sklar 1,683.00 47,593.00 66,500.00
=====================================================================================================
</TABLE>

(1) The total amount of compensation deferred by all Directors of the Fund
during the fiscal year ended October 31, 1996, including interest earned
thereon, was $6,866.

(2) During the fiscal year ended October 31, 1996, the total amount of expenses
allocated to the Fund in respect of such retirement benefits was $8,118. Data
reflects compensation for the calendar year ended December 31, 1996.

<PAGE> 32

(3) Messrs. Bauer, Crockett, Daly, Frischling, Graham, Kroeger, Pennock,
Robinson and Sklar each serves as Director or Trustee of a total of 10 AIM
Funds. Data reflects compensation for the calendar year ended December 31,
1996.

(4) See also page 7 regarding fees earned by Mr. Frischling's law firm.

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 an employee of any
of the AIM Funds, A I M Management Group Inc., or any of its subsidiaries) 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 five years of
continuous service with one or more of the regulated investment companies
managed, administered or distributed by AIM or its subsidiaries (the
"Applicable AIM Funds"). Each eligible director is entitled to receive an
annual benefit from the Applicable 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 Applicable 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
Applicable 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
as of February 27, 1997, for Messrs. Crockett, Daly, Frischling, Kroeger,
Pennock, Robinson and Sklar are 9, 10, 19, 19, 15, 9 and 7 years, respectively.

ESTIMATED BENEFITS UPON RETIREMENT

Annual Compensation Paid
By All AIM Funds

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
$60,000 $65,000 $70,000
============================================================================
10 $45,000 $48,750 $52,500
Number of ----------------------------------------------------------------------------
Years of 9 $40,500 $43,875 $47,250
Service With ----------------------------------------------------------------------------
the AIM 8 $36,000 $39,000 $42,000
Funds ----------------------------------------------------------------------------
7 $31,500 $34,125 $36,750
----------------------------------------------------------------------------
6 $27,000 $29,250 $31,500
----------------------------------------------------------------------------
5 $22,500 $24,375 $26,250
============================================================================
</TABLE>

<PAGE> 33

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 five
(5) or ten (10) years (depending on the Agreement) 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. See "Summary - Material Events" in the Prospectus
for information regarding AIM Management's proposed merger with a subsidiary of
INVESCO plc.

During the fiscal year ended October 31, 1996, the Fund paid $6,421 in
legal fees for services rendered by Kramer, Levin, Naftalis & Frankel; Carl
Frischling, a director of the Fund, is a partner of this law firm.

As of January 31, 1997, 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 77046-1143. Certain
of the directors and officers of AIM are also executive officers of the Fund
and their affiliations are shown under "Directors and Officers." See "Summary -
Material Events" in the Prospectus for information regarding approval of a new
investment advisory agreement.

AIM and the Fund have adopted a Code of Ethics which requires
investment personnel and certain other employees (a) to pre-clear all personal
securities transactions subject to the Code of Ethics; (b) to file reports or
duplicate confirmations regarding such transactions; (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; and (d) to abide by certain other provisions under
the Code of Ethics. 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 quarterly and annual reports (including information
on any substantial violations of the Code of Ethics). Sanctions for violations
of the Code of Ethics may include 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.

<PAGE> 34

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
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.

AIM may from to time waive or reduce its fee. Fee waivers or
reductions, other than those set forth in the Advisory Agreement, may be
rescinded, however, at any time without further notice to investors, provided,
however, that the discontinuance of each fee waiver will be approved by the
Board of Directors of AIM.

The Advisory Agreement became effective on October 18, 1993, and will
continue in effect until June 30, 1997, 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

<PAGE> 35

to various shareholder inquiries. The Administrative Services Agreement became
effective on October 18, 1993, and will continue in effect until June 30, 1997,
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, 1996, 1995 and 1994, AIM
received management and advisory fees from the Fund of $7,360,028, $5,719,169
and $4,712,695, respectively. See "Expenses."

For the fiscal years ended October 31, 1996, 1995 and 1994, AIM was
reimbursed $63,439, $60,994 and $45,256, respectively, for costs associated
with performing administrative services.

THE SUB-ADVISOR

NationsBank of Texas, N.A. ("NationsBank Texas"), served 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
("NationsBank, N.A."), indirectly holds 100% of the voting stock of NationsBank
Texas. TradeStreet Investment Associates, Inc. ("TradeStreet"), 101 South Tryon
Street, Suite 1000, Charlotte, North Carolina 28255, is a wholly owned
subsidiary of NationsBank, N.A. and a registered investment advisor. Effective
April 1, 1996, the Sub-Advisory Agreement was assumed by TradeStreet.
TradeStreet receives the same sub-advisory fees previously payable to, and
performs the same services as, NationsBank Texas.

Pursuant to the terms of the Sub-Advisory Agreement, AIM has appointed
TradeStreet 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, TradeStreet 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, TradeStreet,
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 TradeStreet 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. TradeStreet 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 TradeStreet
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, 1997, 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.

<PAGE> 36

For the period November 1, 1995 through March 31, 1996, and for the
fiscal years ended October 31, 1995 and 1994, NationsBank Texas received fees
from AIM of $958,342, $2,049,101 and $1,807,547, respectively. For the period
April 1, 1996 through the fiscal year ended October 31, 1996, TradeStreet
received fees from AIM of $1,454,982. 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.

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.

<PAGE> 37

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 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

<PAGE> 38

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 (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.

<PAGE> 39

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."

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.

<PAGE> 40

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.

Foreign persons who file a United States tax return after December 31,
1996, for a U.S. Tax refund and who are not eligible to obtain a social
security number must apply to the Internal Revenue Service ("IRS") for an
individual taxpayer identification number, using IRS Form W-7. For a copy of
the IRS Form W-7 and accompanying instructions, please contact your tax
advisor.

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 the date of this Statement of Additional Information. Future
legislative or administrative 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.

<PAGE> 41

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 (the "NYSE") is
restricted, as determined by applicable rules and regulations of the SEC; (b)
the NYSE is closed for other than customary weekend and holiday closings; (c)
the SEC has by order permitted such suspension; or (d) an emergency as
determined by the SEC exists making 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
NYSE (generally 4:00 p.m. Eastern Time) on each day in which 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
are 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. 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.
See "Summary - Material Events" in the Prospectus.

<PAGE> 42

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.

COMMON STOCKS

The Fund may invest in common stocks. Common stocks represent the
residual ownership interest in the issuer and are entitled to the income and
increase in the value of the assets and business of the entity after all of its
obligations and preferred stocks are satisfied. Common stocks generally have
voting rights. Common stocks fluctuate in price in response to many factors
including historical and prospective earnings of the issuer, the value of its
assets, general economic conditions, interest rates, investor perceptions and
market liquidity.

PREFERRED STOCKS

The Fund may invest in preferred stocks. Preferred stock has a
preference over common stock in liquidation (and generally dividends as well)
but is subordinated to the liabilities of the issuer in all respects. As a
general rule the market value of preferred stock with a fixed dividend rate and
no conversion element varies inversely with interest rates and perceived credit
risk, while the market price of convertible preferred stock generally also
reflects some element of conversion value. Because preferred stock is junior to
debt securities and other obligations of the issuer, deterioration in the
credit quality of the issuer will cause greater changes in the value of a
preferred stock than in a more senior debt security with similar stated yield
characteristics. Unlike interest payments on debt securities, preferred stock
dividends are payable only if declared by the issuer's board of directors.
Preferred stock also may be subject to optional or mandatory redemption
provisions.

CONVERTIBLE SECURITIES

The Fund may invest in convertible securities. A convertible security
is a bond, debenture, note, preferred stock or other security that may be
converted into or exchanged for a prescribed amount of common stock or other
equity security of the same or a different issuer within a particular period of
time at a specified price or formula. A convertible security entitles the
holder to receive interest paid or accrued on debt or the dividend paid on
preferred stock until the convertible security matures or is redeemed,
converted or exchanged. Before conversion, convertible securities have
characteristics similar to nonconvertible income securities in that they
ordinarily provide a stable stream of income with generally higher yields than
those of common stocks of the same or similar issuers. Convertible securities
rank senior to common stock in a corporation's capital structure but are
usually subordinated to comparable nonconvertible securities. Convertible
securities may be subject to redemption at the option of the issuer at a price
established in the convertible security's governing instrument. Although the
Fund will only purchase convertible securities that AIM considers to have
adequate protection parameters, including an adequate capacity to pay interest
and repay principal in a timely manner, it invests without regard to corporate
bond ratings.

<PAGE> 43

CORPORATE DEBT SECURITIES

The Fund may invest in corporate debt securities. Corporations issue
debt securities of various types, including bonds and debentures (which are
long-term), notes (which may be short- or long-term), bankers acceptances
(indirectly secured borrowings to facilitate commercial transactions) and
commercial paper (short-term unsecured notes). These securities typically
provide for periodic payments of interest, at a rate which may be fixed or
adjustable, with payment of principal upon maturity and are generally not
secured by assets of the issuer or otherwise guaranteed. The values of fixed
rate income securities tend to vary inversely with changes in interest rates,
with longer-term securities generally being more volatile than shorter-term
securities. Corporate securities frequently are subject to call provisions that
entitle the issuer to repurchase such securities at a predetermined price prior
to their stated maturity. In the event that a security is called during a
period of declining interest rates, the Fund may be required to reinvest the
proceeds in securities having a lower yield. In addition, in the event that a
security was purchased at a premium over the call price, the Fund will
experience a capital loss if the security is called. Adjustable rate corporate
debt securities may have interest rate caps and floors.

U.S. GOVERNMENT SECURITIES

The Fund may invest in securities issued or guaranteed by the United
States government or its agencies or instrumentalities. These include Treasury
securities (bills, notes, bonds and other debt securities) which differ only in
their interest rates, maturities and times of issuance. U.S. Government agency
and instrumentality securities include securities which are supported by the
full faith and credit of the U.S., securities that are supported by the right
of the agency to borrow from the U.S. Treasury, securities that are supported
by the discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality and securities that are supported
only by the credit of such agencies. While the U.S. Government may provide
financial support to such U.S. government-sponsored agencies or
instrumentalities, no assurance can be given that it always will do so. The
U.S. government, its' agencies and instrumentalities do not guarantee the
market value of their securities and consequently the values of such securities
fluctuate.

WARRANTS

The Fund may, from time to time, invest in warrants. Warrants are, in
effect, longer-term call options. They give the holder the right to purchase a
given number of shares of a particular company at specified prices within
certain periods of time. The purchaser of a warrant expects that the market
price of the security will exceed the purchase price of the warrant plus the
exercise price of the warrant, thus giving him a profit. Of course, since the
market price may never exceed the exercise price before the expiration date of
the warrant, the purchaser of the warrant risks the loss of the entire purchase
price of the warrant. Warrants generally trade in the open market and may be
sold rather than exercised. Warrants are sometimes sold in unit form with other
securities of an issuer. Units of warrants and common stock may be employed in
financing young, unseasoned companies. The purchase price of a warrant varies
with the exercise price of a warrant, the current market value of the
underlying security, the life of the warrant and various other investment
factors. The investment in warrants by the Fund, valued at the lower of cost or
market, may not exceed 5% of the value of their net assets and not more than 2%
of such value may be warrants which are not listed on the New York or American
Stock Exchanges.

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

<PAGE> 44

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.

FOREIGN EXCHANGE TRANSACTIONS

Purchases and sales of foreign securities are usually made with
foreign currencies, and consequently the Fund may from time to time hold cash
balances in the form of foreign currencies and multinational currency units.
Such foreign currencies and multinational currency units will usually be
acquired on a spot (i.e. cash) basis at the spot rate prevailing in foreign
exchange markets and will result in currency conversion costs to the Fund. The
Fund attempts to purchase and sell foreign currencies on as favorable a basis
as practicable; however, some price spread on foreign exchange transactions (to
cover service charges) may be incurred, particularly when the Fund changes
investments from one country to another, or when U.S. dollars are used to
purchase foreign securities. Certain countries could adopt policies which would
prevent the Fund from transferring cash out of such countries, and the Fund may
be affected either favorably or unfavorably by fluctuations in relative
exchange rates while the Fund holds foreign currencies.

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 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 and sell stock index futures contracts in order
to hedge the value of its portfolio against changes in market conditions. In
cases of purchases of stock index futures contracts, an

<PAGE> 45

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.

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.

<PAGE> 46

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.

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,
subsidiaries of AIM or any sub-advisor 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.

<PAGE> 47

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 own 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.

As of October 31, 1996, the Fund held an amount of common stock issued
by Merrill Lynch & Co. and Morgan Stanley Group, Inc. having market values of
$3,512,500 and $6,984,750, respectively. As of October 31, 1996, the Fund
entered into repurchase agreements with Daiwa Securities America, Inc. And SBC
Capital Markets, Inc., having market values of $518,937 and $51,000,000,
respectively. Merrill Lynch & Co., Morgan Stanley Group, Inc., Daiwa Securities
America, Inc., and SBC Capital Markets, Inc. are regular brokers of the Fund,
as defined in Rule 10b-1 under the 1940 Act.

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 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,
subsidiaries 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' Conduct Rules, 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. In such cases, Fund trades may be executed by selling dealers or by
other broker-dealers with which selling dealers have clearing arrangements. 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, 1996, 1995 and 1994, the Fund
paid brokerage commissions of $3,138,280, $3,896,038 and $2,549,248,
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 $187,946,004 and the related brokerage commissions
were $224,310. 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

<PAGE> 48

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 subsidiaries 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.

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.

MATERIAL CHANGES TO INVESTMENT RESTRICTIONS

On December 11, 1996, the Board of Directors of the Fund approved the
elimination of and changes to certain fundamental investment policies of the
Fund related to investment in other investment companies. Shareholders approved
these changes at the Annual Meeting of shareholders held on February 7, 1997.
These changes will become effective as of March 1, 1997.

Reference is made to Investment Restriction Nos. 9 and 10 of the Fund,
set forth below. The Board of Directors and the shareholders have approved the
elimination of Investment Restriction No. 10 and a change to Investment
Restriction No. 9. Investment Restriction No. 10 will no longer apply and
Investment Restriction No. 9 will read in full as follows:

<PAGE> 49

"(9) invest in companies for the purpose of exercising control or
management, except that the Fund may purchase securities of other
investment companies to the extent permitted by applicable law or
exemptive order."

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.

(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. See "Material Changes to Investment Restrictions" above.

(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

<PAGE> 50

than 3% of the outstanding voting stock of any investment company.
See "Material Changes to Investment Restrictions" above.

(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.

24
<PAGE> 51

FINANCIAL STATEMENTS

FS
<PAGE> 52

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 AIM
Summit Fund, Inc., including the schedule of investments, as of October 31,
1996, 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 financial highlights for each of the years in the three-year period
then ended, the ten months ended October 31, 1993, and each of the years in the
six-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, 1996, 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, 1996, 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 three-year period then ended, the ten month period ended October 31,
1993, and each of the years in the six-year period ended December 31, 1992, in
conformity with generally accepted accounting principles.

/s/ KPMG PEAT MARWICK LLP
-----------------------------
KPMG Peat Marwick LLP

Houston, Texas
December 6, 1996

FS-1
<PAGE> 53

SCHEDULE OF INVESTMENTS

October 31, 1996
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS-96.17%

ADVERTISING/BROADCASTING-0.93%

American Radio Systems Corp.(a) 30,000 $ 915,000
- ----------------------------------------------------------------
Chancellor Corp.-Class A(a) 30,000 967,500
- ----------------------------------------------------------------
Clear Channel Communications,
Inc.(a) 40,400 2,949,200
- ----------------------------------------------------------------
Infinity Broadcasting Corp.-Class
A(a) 78,750 2,283,750
- ----------------------------------------------------------------
Interpublic Group of Companies,
Inc. 65,000 3,152,500
- ----------------------------------------------------------------
Jacor Communications, Inc.(a) 55,000 1,540,000
- ----------------------------------------------------------------
11,807,950
- ----------------------------------------------------------------

AEROSPACE/DEFENSE-2.39%

Boeing Co. (The) 32,000 3,052,000
- ----------------------------------------------------------------
Gulfstream Aerospace Corp.(a) 100,000 2,362,500
- ----------------------------------------------------------------
McDonnell Douglas Corp. 185,000 10,082,500
- ----------------------------------------------------------------
Northrop Grumman Corp. 55,000 4,441,250
- ----------------------------------------------------------------
United Technologies Corp. 79,000 10,171,250
- ----------------------------------------------------------------
30,109,500
- ----------------------------------------------------------------

AIRLINES-0.70%

UAL Corp.(a) 186,000 8,811,750
- ----------------------------------------------------------------

AUTOMOBILE (MANUFACTURERS)-0.27%

Chrysler Corp. 100,000 3,362,500
- ----------------------------------------------------------------

BANKING-1.99%

BankAmerica Corp. 50,000 4,575,000
- ----------------------------------------------------------------
Bank of Boston Corp. 35,000 2,240,000
- ----------------------------------------------------------------
Chase Manhattan Corp. 87,152 7,473,284
- ----------------------------------------------------------------
Citicorp 30,000 2,970,000
- ----------------------------------------------------------------
Southtrust Corp. 175,000 5,796,875
- ----------------------------------------------------------------
Washington Mutual, Inc. 50,000 2,112,500
- ----------------------------------------------------------------
25,167,659
- ----------------------------------------------------------------

BEVERAGES-0.21%

PepsiCo Inc. 90,000 2,666,250
- ----------------------------------------------------------------

BIOTECHNOLOGY-1.11%

AMGEN, Inc.(a) 100,200 6,143,512
- ----------------------------------------------------------------
Guidant Corp. 170,000 7,841,250
- ----------------------------------------------------------------
13,984,762
- ----------------------------------------------------------------

BUILDING MATERIALS-0.24%

Georgia-Pacific Corp. 40,000 3,000,000
- ----------------------------------------------------------------

BUSINESS SERVICES-1.28%

AccuStaff Inc.(a) 61,300 1,639,775
- ----------------------------------------------------------------
APAC Teleservices, Inc.(a) 25,000 1,153,125
- ----------------------------------------------------------------
Career Horizons, Inc.(a) 18,000 731,250
- ----------------------------------------------------------------
CUC International, Inc.(a) 56,400 1,381,800
- ----------------------------------------------------------------
Diebold, Inc. 60,500 3,478,750
- ----------------------------------------------------------------
Equifax, Inc. 125,400 3,730,650
- ----------------------------------------------------------------
Healthcare COMPARE Corp.(a) 60,500 2,662,000
- ----------------------------------------------------------------

<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
BUSINESS SERVICES-(CONTINUED)
Olsten Corp. 66,100 $ 1,322,000
- ----------------------------------------------------------------
16,099,350
- ----------------------------------------------------------------

CHEMICALS-0.73%

Agrium Inc. (Canada) 53,100 710,212
- ----------------------------------------------------------------
Goodrich (B.F.) Co. (The) 200,000 8,475,000
- ----------------------------------------------------------------
9,185,212
- ----------------------------------------------------------------

CHEMICALS (SPECIALTY)-0.54%

Airgas, Inc.(a) 110,200 2,493,275
- ----------------------------------------------------------------
Cytec Industries Inc.(a) 120,000 4,290,000
- ----------------------------------------------------------------
6,783,275
- ----------------------------------------------------------------

COMPUTER MINI/PCS-2.97%

COMPAQ Computer Corp.(a) 140,000 9,747,500
- ----------------------------------------------------------------
Dell Computer Corp.(a) 101,200 8,235,150
- ----------------------------------------------------------------
Gateway 2000, Inc.(a) 110,000 5,176,875
- ----------------------------------------------------------------
Rational Software Corp.(a) 78,000 2,993,250
- ----------------------------------------------------------------
Sun Microsystems, Inc.(a) 185,000 11,285,000
- ----------------------------------------------------------------
37,437,775
- ----------------------------------------------------------------

COMPUTER NETWORKING-5.20%

Ascend Communications, Inc.(a) 121,800 7,962,675
- ----------------------------------------------------------------
Cabletron Systems, Inc.(a) 130,000 8,108,750
- ----------------------------------------------------------------
Cascade Communications Corp.(a) 110,100 7,996,012
- ----------------------------------------------------------------
Cisco Systems, Inc.(a) 250,000 15,468,750
- ----------------------------------------------------------------
FORE Systems, Inc.(a) 150,000 5,962,500
- ----------------------------------------------------------------
Newbridge Networks Corp.(a)
(Canada) 219,400 6,938,525
- ----------------------------------------------------------------
3Com Corp.(a) 195,000 13,186,875
- ----------------------------------------------------------------
65,624,087
- ----------------------------------------------------------------

COMPUTER PERIPHERALS-0.96%

American Power Conversion Corp.(a) 28,200 602,775
- ----------------------------------------------------------------
Microchip Technology, Inc.(a) 54,200 1,964,750
- ----------------------------------------------------------------
Storage Technology Corp.(a) 121,800 5,191,725
- ----------------------------------------------------------------
U.S. Robotics Corp.(a) 69,900 4,394,962
- ----------------------------------------------------------------
12,154,212
- ----------------------------------------------------------------

COMPUTER SOFTWARE/SERVICES-8.65%

Affiliated Computer Services,
Inc.(a) 13,100 720,500
- ----------------------------------------------------------------
Baan Co., N.V.(a) (Netherlands) 43,500 1,609,500
- ----------------------------------------------------------------
BISYS Group, Inc. (The)(a) 30,000 1,117,500
- ----------------------------------------------------------------
BMC Software, Inc.(a) 100,000 8,300,000
- ----------------------------------------------------------------
Cadence Design Systems, Inc.(a) 100,075 3,652,737
- ----------------------------------------------------------------
CBT Group PLC-ADR(a) (Ireland) 1,100 60,500
- ----------------------------------------------------------------
Ceridian Corp.(a) 100,000 4,962,500
- ----------------------------------------------------------------
Computer Associates International,
Inc. 172,000 10,169,500
- ----------------------------------------------------------------
Computer Sciences Corp.(a) 40,000 2,970,000
- ----------------------------------------------------------------
Compuware Corp.(a) 140,000 7,385,000
- ----------------------------------------------------------------
CSG Systems International, Inc.(a) 35,300 591,275
- ----------------------------------------------------------------
DST Systems, Inc.(a) 67,500 2,075,625
- ----------------------------------------------------------------
</TABLE>

FS-2
<PAGE> 54
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTER SOFTWARE/SERVICES-(CONTINUED)

Electronic Arts, Inc.(a) 47,600 $ 1,785,000
- ----------------------------------------------------------------
First Data Corp. 28,900 2,304,775
- ----------------------------------------------------------------
HBO & Co. 52,900 3,180,613
- ----------------------------------------------------------------
HPR, Inc.(a) 33,000 462,000
- ----------------------------------------------------------------
Integrated Systems, Inc.(a) 25,300 683,100
- ----------------------------------------------------------------
McAfee Associates, Inc.(a) 90,900 4,135,950
- ----------------------------------------------------------------
Microsoft Corp.(a) 140,800 19,324,800
- ----------------------------------------------------------------
National Data Corp. 35,000 1,439,375
- ----------------------------------------------------------------
Network General Corp.(a) 137,800 3,324,425
- ----------------------------------------------------------------
Oracle Corp.(a) 189,300 8,009,756
- ----------------------------------------------------------------
Parametric Technology Corp.(a) 165,400 8,083,925
- ----------------------------------------------------------------
Physician Computer Network,
Inc.(a) 60,000 536,250
- ----------------------------------------------------------------
Pure Atria Corp.(a) 6,900 188,025
- ----------------------------------------------------------------
Sterling Commerce, Inc.(a) 128,311 3,608,747
- ----------------------------------------------------------------
Sterling Software, Inc.(a) 39,000 1,267,500
- ----------------------------------------------------------------
SunGard Data Systems, Inc.(a) 33,900 1,449,225
- ----------------------------------------------------------------
Synopsys, Inc.(a) 100,000 4,500,000
- ----------------------------------------------------------------
Systemsoft Corp.(a) 12,400 350,300
- ----------------------------------------------------------------
Transition Systems, Inc.(a) 1,400 13,300
- ----------------------------------------------------------------
Wind River Systems(a) 20,000 850,000
- ----------------------------------------------------------------
109,111,703
- ----------------------------------------------------------------

CONGLOMERATES-1.36%

Allied Signal Inc. 40,000 2,620,000
- ----------------------------------------------------------------
Johnson Controls, Inc. 55,000 4,015,000
- ----------------------------------------------------------------
Textron Inc. 38,000 3,372,500
- ----------------------------------------------------------------
Tyco International Ltd. 99,000 4,912,875
- ----------------------------------------------------------------
U.S. Industries, Inc.(a) 83,700 2,259,900
- ----------------------------------------------------------------
17,180,275
- ----------------------------------------------------------------

COSMETICS & TOILETRIES-0.64%

Avon Products, Inc. 75,000 4,068,750
- ----------------------------------------------------------------
Gillette Co. (The) 54,100 4,043,975
- ----------------------------------------------------------------
8,112,725
- ----------------------------------------------------------------

ELECTRIC POWER-0.62%

CMS Energy Corp. 120,000 3,795,000
- ----------------------------------------------------------------
Texas Utilities Co. 100,000 4,050,000
- ----------------------------------------------------------------
7,845,000
- ----------------------------------------------------------------

ELECTRONIC COMPONENTS/MISCELLANEOUS-0.74%

Berg Electronics Corp.(a) 31,400 887,050
- ----------------------------------------------------------------
BMC Industries, Inc. 29,800 882,825
- ----------------------------------------------------------------
Checkpoint Systems, Inc.(a) 101,000 2,259,875
- ----------------------------------------------------------------
SCI Systems, Inc.(a) 27,000 1,343,250
- ----------------------------------------------------------------
Symbol Technologies, Inc.(a) 39,200 1,759,100
- ----------------------------------------------------------------
Thermo Instrument Systems, Inc.(a) 71,900 2,174,975
- ----------------------------------------------------------------
9,307,075
- ----------------------------------------------------------------

FINANCE (ASSET MANAGEMENT)-1.64%

Bear Stearns Companies, Inc. 58,820 1,389,623
- ----------------------------------------------------------------
Franklin Resources, Inc. 44,600 3,144,300
- ----------------------------------------------------------------
Imperial Credit Industries,
Inc.(a) 100,000 1,812,500
- ----------------------------------------------------------------

<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FINANCE (ASSET MANAGEMENT)-(CONTINUED)

Merrill Lynch & Co., Inc. 50,000 $ 3,512,500
- ----------------------------------------------------------------
Morgan Stanley Group, Inc. 139,000 6,984,750
- ----------------------------------------------------------------
Salomon Inc. 59,300 2,675,913
- ----------------------------------------------------------------
Schwab (Charles) Corp. 45,500 1,137,500
- ----------------------------------------------------------------
20,657,086
- ----------------------------------------------------------------

FINANCE (CONSUMER CREDIT)-4.15%

Aames Financial Corp. 7,300 325,762
- ----------------------------------------------------------------
Beneficial Corp. 49,400 2,889,900
- ----------------------------------------------------------------
Capital One Financial Corp. 84,400 2,626,950
- ----------------------------------------------------------------
Cityscape Financial Corp.(a) 24,500 630,875
- ----------------------------------------------------------------
Concord EFS, Inc.(a) 5,500 159,500
- ----------------------------------------------------------------
Credit Acceptance Corp.(a) 60,400 1,630,800
- ----------------------------------------------------------------
Federal Home Loan Mortgage Corp. 27,000 2,727,000
- ----------------------------------------------------------------
Federal National Mortgage
Association 91,000 3,560,375
- ----------------------------------------------------------------
First USA, Inc. 20,000 1,150,000
- ----------------------------------------------------------------
Green Tree Financial Corp. 200,000 7,925,000
- ----------------------------------------------------------------
Household International, Inc. 55,000 4,867,500
- ----------------------------------------------------------------
MBNA Corp. 81,300 3,069,075
- ----------------------------------------------------------------
Money Store, Inc. (The) 70,200 1,807,650
- ----------------------------------------------------------------
Olympic Financial Ltd.(a) 74,400 1,181,100
- ----------------------------------------------------------------
PMI Group, Inc. (The) 76,800 4,387,200
- ----------------------------------------------------------------
PMT Services, Inc.(a) 45,000 900,000
- ----------------------------------------------------------------
Student Loan Marketing Association 129,200 10,691,300
- ----------------------------------------------------------------
SunAmerica, Inc. 50,000 1,875,000
- ----------------------------------------------------------------
52,404,987
- ----------------------------------------------------------------

FINANCE (SAVINGS & LOAN)-0.37%

GreenPoint Financial Corp. 100,000 4,650,000
- ----------------------------------------------------------------

FOOD/PROCESSING-0.56%

ConAgra, Inc. 50,900 2,538,637
- ----------------------------------------------------------------
Dean Foods Co. 100,000 2,900,000
- ----------------------------------------------------------------
Richfood Holdings, Inc. 66,850 1,612,756
- ----------------------------------------------------------------
7,051,393
- ----------------------------------------------------------------

FUNERAL SERVICES-0.59%

Service Corp. International 260,000 7,410,000
- ----------------------------------------------------------------

GAS DISTRIBUTION-0.28%

NICOR, Inc. 100,000 3,487,500
- ----------------------------------------------------------------

HOMEBUILDING-0.37%

Fleetwood Enterprises, Inc. 140,000 4,725,000
- ----------------------------------------------------------------

HOTELS/MOTELS-1.18%

HFS, Inc.(a) 150,000 10,987,500
- ----------------------------------------------------------------
Marriott International, Inc. 50,000 2,843,750
- ----------------------------------------------------------------
Promus Hotel Corp.(a) 35,000 1,111,250
- ----------------------------------------------------------------
14,942,500
- ----------------------------------------------------------------

INSURANCE (LIFE & HEALTH)-1.07%

Compdent Corp.(a) 33,700 1,158,437
- ----------------------------------------------------------------
Conseco Inc. 162,000 8,667,000
- ----------------------------------------------------------------
Equitable Companies, Inc. 92,000 2,162,000
- ----------------------------------------------------------------
</TABLE>

FS-3
<PAGE> 55
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
INSURANCE (LIFE &
HEALTH)-(CONTINUED)

United Companies Financial Corp. 50,000 $ 1,493,750
- ----------------------------------------------------------------
13,481,187
- ----------------------------------------------------------------

INSURANCE (MULTI-LINE
PROPERTY)-3.02%

Allstate Corp. 59,200 3,322,600
- ----------------------------------------------------------------
American International Group, Inc. 33,000 3,584,625
- ----------------------------------------------------------------
CapMAC Holdings Inc. 48,100 1,605,338
- ----------------------------------------------------------------
CIGNA Corp. 50,000 6,525,000
- ----------------------------------------------------------------
Everest Reinsurance Holdings, Inc. 106,800 2,723,400
- ----------------------------------------------------------------
ITT Hartford Group, Inc. 43,000 2,709,000
- ----------------------------------------------------------------
MGIC Investment Corp. 130,000 8,921,250
- ----------------------------------------------------------------
Progressive Corp. 3,200 220,000
- ----------------------------------------------------------------
TIG Holdings, Inc. 37,600 1,085,700
- ----------------------------------------------------------------
Travelers Group, Inc. 135,450 7,348,163
- ----------------------------------------------------------------
38,045,076
- ----------------------------------------------------------------

LEISURE & RECREATION-1.91%

Callaway Golf Co. 97,000 2,970,625
- ----------------------------------------------------------------
Carnival Cruise Lines, Inc.-Class A 127,200 3,831,900
- ----------------------------------------------------------------
Eastman Kodak Co. 130,000 10,367,500
- ----------------------------------------------------------------
Harley-Davidson, Inc. 101,000 4,557,625
- ----------------------------------------------------------------
Mattel, Inc. 62,500 1,804,688
- ----------------------------------------------------------------
Speedway Motorsports, Inc.(a) 21,700 496,388
- ----------------------------------------------------------------
24,028,726
- ----------------------------------------------------------------

MACHINERY (HEAVY)-1.46%

Caterpillar Inc. 55,000 3,774,375
- ----------------------------------------------------------------
Dover Corp. 213,000 10,942,875
- ----------------------------------------------------------------
Ingersoll-Rand Co. 90,000 3,746,250
- ----------------------------------------------------------------
18,463,500
- ----------------------------------------------------------------

MACHINERY (MISCELLANEOUS)-0.59%

Pentair, Inc. 19,200 484,800
- ----------------------------------------------------------------
Thermo Electron Corp.(a) 191,250 6,980,625
- ----------------------------------------------------------------
7,465,425
- ----------------------------------------------------------------

MEDICAL (DRUGS)-3.95%

Abbott Laboratories 75,000 3,796,875
- ----------------------------------------------------------------
American Home Products Corp. 58,000 3,552,500
- ----------------------------------------------------------------
Amerisource Healthcorp(a) 53,000 2,245,875
- ----------------------------------------------------------------
Cardinal Health, Inc. 105,000 8,242,500
- ----------------------------------------------------------------
Dura Pharmaceuticals, Inc.(a) 25,000 862,500
- ----------------------------------------------------------------
Elan Corp., PLC-ADR(a) (Ireland) 172,000 4,773,000
- ----------------------------------------------------------------
ICN Pharmaceuticals, Inc. 132,700 2,521,300
- ----------------------------------------------------------------
Johnson & Johnson 70,000 3,447,500
- ----------------------------------------------------------------
Jones Medical Industries, Inc. 21,250 924,375
- ----------------------------------------------------------------
Merck & Co., Inc. 63,000 4,669,875
- ----------------------------------------------------------------
Parexel International Corp.(a) 13,600 666,400
- ----------------------------------------------------------------
Pfizer, Inc. 25,000 2,068,750
- ----------------------------------------------------------------
Pharmacia & Upjohn, Inc. 60,000 2,160,000
- ----------------------------------------------------------------
Rhone-Poulenc Rorer, Inc. 10,800 724,950
- ----------------------------------------------------------------
SmithKline Beecham PLC-ADR
(United Kingdom) 100,000 6,262,500
- ----------------------------------------------------------------

<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
MEDICAL (DRUGS)-(CONTINUED)

Teva Pharmaceutical Industries
Ltd. (Israel) 70,000 $ 2,931,250
- ----------------------------------------------------------------
49,850,150
- ----------------------------------------------------------------

MEDICAL (PATIENT SERVICES)-4.63%

ClinTrials Inc.(a) 13,700 508,612
- ----------------------------------------------------------------
Columbia/HCA Healthcare Corp. 250,500 8,955,375
- ----------------------------------------------------------------
Genesis Health Ventures, Inc.(a) 54,800 1,253,550
- ----------------------------------------------------------------
Health Care & Retirement Corp.(a) 100,000 2,462,500
- ----------------------------------------------------------------
Health Management Associates,
Inc.-Class A(a) 180,000 3,960,000
- ----------------------------------------------------------------
HEALTHSOUTH Corp.(a) 253,400 9,502,500
- ----------------------------------------------------------------
Lincare Holdings Inc.(a) 120,000 4,500,000
- ----------------------------------------------------------------
Manor Care, Inc. 51,000 2,001,750
- ----------------------------------------------------------------
MedPartners, Inc.(a) 107,800 2,277,275
- ----------------------------------------------------------------
OccuSystems, Inc.(a) 25,000 684,375
- ----------------------------------------------------------------
OrNda HealthCorp(a) 70,000 1,907,500
- ----------------------------------------------------------------
Orthodontic Centers of America,
Inc.(a) 52,400 753,250
- ----------------------------------------------------------------
Oxford Health Plans, Inc.(a) 142,500 6,483,750
- ----------------------------------------------------------------
PhyCor, Inc.(a) 46,050 1,427,550
- ----------------------------------------------------------------
Tenet Healthcare Corp.(a) 260,000 5,427,500
- ----------------------------------------------------------------
Total Renal Care Holdings, Inc.(a) 34,300 1,337,700
- ----------------------------------------------------------------
Universal Health Services, Inc.(a) 77,100 1,927,500
- ----------------------------------------------------------------
Vencor, Inc.(a) 100,000 2,962,500
- ----------------------------------------------------------------
58,333,187
- ----------------------------------------------------------------

MEDICAL INSTRUMENTS/PRODUCTS-3.50%

Baxter International Inc. 83,800 3,488,175
- ----------------------------------------------------------------
Becton, Dickinson & Co. 112,000 4,872,000
- ----------------------------------------------------------------
Boston Scientific Corp.(a) 60,000 3,262,500
- ----------------------------------------------------------------
Cardiothoracic Systems, Inc.(a) 20,000 380,000
- ----------------------------------------------------------------
Dentsply International, Inc. 35,500 1,495,438
- ----------------------------------------------------------------
IDEXX Laboratories, Inc.(a) 52,900 2,076,325
- ----------------------------------------------------------------
Invacare Corp. 37,000 1,036,000
- ----------------------------------------------------------------
Medtronic, Inc. 75,300 4,847,438
- ----------------------------------------------------------------
Omnicare, Inc. 105,200 2,866,700
- ----------------------------------------------------------------
Physician Sales & Services, Inc.(a) 40,000 850,000
- ----------------------------------------------------------------
Quintiles Transnational Corp.(a) 29,000 1,906,750
- ----------------------------------------------------------------
Spine-Tech, Inc.(a) 4,500 113,625
- ----------------------------------------------------------------
St. Jude Medical, Inc.(a) 74,200 2,930,900
- ----------------------------------------------------------------
Stryker Corp.(a) 100,000 2,975,000
- ----------------------------------------------------------------
Sybron International Corp.(a) 206,900 6,025,963
- ----------------------------------------------------------------
US Surgical Corp. 120000 5,025,000
- ----------------------------------------------------------------
44,151,814
- ----------------------------------------------------------------

NATURAL GAS PIPELINE-0.10%

Columbia Gas Systems, Inc. 20,700 1,257,525
- ----------------------------------------------------------------

OFFICE AUTOMATION-0.35%

Danka Business Systems PLC-ADR
(United Kingdom) 110,600 4,382,525
- ----------------------------------------------------------------

OFFICE PRODUCTS-0.55%

Avery-Dennison Corp. 31,000 2,042,125
- ----------------------------------------------------------------
</TABLE>

FS-4
<PAGE> 56
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
OFFICE PRODUCTS-(CONTINUED)

Reynolds & Reynolds Co.-Class A 183,600 $ 4,842,450
- ----------------------------------------------------------------
6,884,575
- ----------------------------------------------------------------

OIL & GAS (DRILLING)-1.23%

Global Marine, Inc.(a) 100,000 1,837,500
- ----------------------------------------------------------------
Marine Drilling Co., Inc.(a) 75,000 1,040,625
- ----------------------------------------------------------------
Reading & Bates Corp.(a) 220,000 6,325,000
- ----------------------------------------------------------------
Transocean Offshore Inc. 100,000 6,325,000
- ----------------------------------------------------------------
15,528,125
- ----------------------------------------------------------------

OIL & GAS (EXPLORATION & PRODUCTION)-0.60%

Burlington Resources, Inc. 41,100 2,070,412
- ----------------------------------------------------------------
USX-Marathon Group 250,000 5,468,750
- ----------------------------------------------------------------
7,539,162
- ----------------------------------------------------------------

OIL & GAS (SERVICES)-3.01%

British Petroleum Co. PLC-ADR
(United Kingdom) 70,000 9,003,750
- ----------------------------------------------------------------
Camco International, Inc. 75,000 2,906,250
- ----------------------------------------------------------------
Consolidated Natural Gas Co. 75,000 3,984,375
- ----------------------------------------------------------------
Louisiana Land & Exploration Co. 44,800 2,548,000
- ----------------------------------------------------------------
NorAm Energy Corp. 105,300 1,618,987
- ----------------------------------------------------------------
Pennzoil Co. 109,000 5,559,000
- ----------------------------------------------------------------
Phillips Petroleum Co. 50,000 2,050,000
- ----------------------------------------------------------------
Pride Petroleum Services, Inc.(a) 145,000 2,537,500
- ----------------------------------------------------------------
Texaco Inc. 55,000 5,589,375
- ----------------------------------------------------------------
Unocal Corp. 60,000 2,197,500
- ----------------------------------------------------------------
37,994,737
- ----------------------------------------------------------------

OIL EQUIPMENT & SUPPLIES-3.57%

Baker Hughes, Inc. 125,000 4,453,125
- ----------------------------------------------------------------
Cooper Cameron Corp.(a) 70,000 4,471,250
- ----------------------------------------------------------------
Diamond Offshore Drilling, Inc.(a) 185,000 11,261,875
- ----------------------------------------------------------------
Dresser Industries, Inc. 100,000 3,287,500
- ----------------------------------------------------------------
ENSCO International, Inc.(a) 70,000 3,027,500
- ----------------------------------------------------------------
Rowan Companies, Inc.(a) 247,000 5,526,625
- ----------------------------------------------------------------
Schlumberger Ltd. 55,000 5,451,875
- ----------------------------------------------------------------
Smith International, Inc.(a) 85,000 3,230,000
- ----------------------------------------------------------------
Tidewater, Inc. 70,000 3,062,500
- ----------------------------------------------------------------
Varco International, Inc.(a) 62,100 1,226,475
- ----------------------------------------------------------------
44,998,725
- ----------------------------------------------------------------

PAPER & FOREST PRODUCTS-0.50%

Mead Corp. 110,000 6,242,500
- ----------------------------------------------------------------

POLLUTION CONTROL-0.35%

United Waste Systems, Inc.(a) 33,500 1,151,562
- ----------------------------------------------------------------
USA Waste Services, Inc.(a) 100,000 3,200,000
- ----------------------------------------------------------------
4,351,562
- ----------------------------------------------------------------

PUBLISHING-0.34%

Gannett Co., Inc. 50,000 3,793,750
- ----------------------------------------------------------------
Gartner Group, Inc.(a) 16,400 504,300
- ----------------------------------------------------------------
4,298,050
- ----------------------------------------------------------------

<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RESTAURANTS-0.38%

Brinker International, Inc.(a) 135,000 $ 2,295,000
- ----------------------------------------------------------------
Cracker Barrel Old Country Store,
Inc 25,900 527,712
- ----------------------------------------------------------------
Lone Star Steakhouse & Saloon(a) 76,700 1,965,437
- ----------------------------------------------------------------
4,788,149
- ----------------------------------------------------------------

RETAIL (FOOD & DRUG)-2.94%

American Stores Co. 164,000 6,785,500
- ----------------------------------------------------------------
Eckerd Corp.(a) 80,000 2,220,000
- ----------------------------------------------------------------
Kroger Co. (The)(a) 66,000 2,945,250
- ----------------------------------------------------------------
Revco D.S., Inc.(a) 60,200 1,813,525
- ----------------------------------------------------------------
Safeway, Inc.(a) 280,000 12,005,000
- ----------------------------------------------------------------
Starbucks Corp.(a) 110,000 3,575,000
- ----------------------------------------------------------------
Thrifty PayLess Holdings, Inc.(a) 7,000 149,625
- ----------------------------------------------------------------
Vons Companies, Inc. (The)(a) 135,900 7,525,462
- ----------------------------------------------------------------
37,019,362
- ----------------------------------------------------------------

RETAIL (STORES)-10.04%

AutoZone, Inc.(a) 130,000 3,331,250
- ----------------------------------------------------------------
Bed, Bath & Beyond, Inc.(a) 65,100 1,643,775
- ----------------------------------------------------------------
CDW Computer Centers, Inc.(a) 34,750 2,187,078
- ----------------------------------------------------------------
CompUSA, Inc.(a) 43,600 2,016,500
- ----------------------------------------------------------------
Consolidated Stores Corp.(a) 139,800 5,399,775
- ----------------------------------------------------------------
Corporate Express, Inc.(a) 57,100 1,862,888
- ----------------------------------------------------------------
Dayton-Hudson Corp. 214,500 7,427,063
- ----------------------------------------------------------------
Dollar General Corp. 42,375 1,175,906
- ----------------------------------------------------------------
Dollar Tree Stores, Inc.(a) 30,000 1,132,500
- ----------------------------------------------------------------
Federated Department Stores, Inc. 85,000 2,805,000
- ----------------------------------------------------------------
Fila Holding S.p.A.-ADR (Italy) 70,000 5,040,000
- ----------------------------------------------------------------
Finish Line, Inc. (The)-Class A(a) 30,000 1,275,000
- ----------------------------------------------------------------
Gap, Inc. (The) 135,000 3,915,000
- ----------------------------------------------------------------
Global DirectMail Corp.(a) 6,500 320,125
- ----------------------------------------------------------------
Home Depot, Inc. 125,000 6,843,750
- ----------------------------------------------------------------
Jones Apparel Group, Inc.(a) 30,000 937,500
- ----------------------------------------------------------------
Kohl's Corp.(a) 50,000 1,800,000
- ----------------------------------------------------------------
Lowe's Companies, Inc. 184,700 7,457,263
- ----------------------------------------------------------------
Meyer (Fred), Inc.(a) 40,500 1,422,563
- ----------------------------------------------------------------
Micro Warehouse, Inc.(a) 68,900 1,584,700
- ----------------------------------------------------------------
Neiman-Marcus Group, Inc. (The)(a) 18,000 587,250
- ----------------------------------------------------------------
Oakley, Inc.(a) 240,000 3,570,000
- ----------------------------------------------------------------
Pep Boys-Manny Moe & Jack 352,000 12,320,000
- ----------------------------------------------------------------
Petco Animal Supplies, Inc.(a) 40,000 940,000
- ----------------------------------------------------------------
PETsMART, Inc.(a) 109,300 2,951,100
- ----------------------------------------------------------------
Saks Holdings, Inc.(a) 15,000 525,000
- ----------------------------------------------------------------
Sports Authority, Inc. (The)(a) 145,650 3,532,012
- ----------------------------------------------------------------
Staples, Inc.(a) 450,000 8,381,250
- ----------------------------------------------------------------
Sysco Corp. 100,000 3,400,000
- ----------------------------------------------------------------
Tech Data Corp.(a) 89,200 2,296,900
- ----------------------------------------------------------------
Tiffany & Co. 40,000 1,480,000
- ----------------------------------------------------------------
TJX Companies, Inc. 120,000 4,800,000
- ----------------------------------------------------------------
Toys "R" Us, Inc.(a) 300,000 10,162,500
- ----------------------------------------------------------------
Viking Office Products, Inc.(a) 259,800 7,566,675
- ----------------------------------------------------------------
</TABLE>

FS-5
<PAGE> 57
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RETAIL (STORES)-(CONTINUED)

Williams-Sonoma, Inc.(a) 28,000 $ 770,000
- ----------------------------------------------------------------
Woolworth Corp.(a) 180,000 3,780,000
- ----------------------------------------------------------------
126,640,323
- ----------------------------------------------------------------

SEMICONDUCTORS-2.58%

Altera Corp.(a) 70,000 4,340,000
- ----------------------------------------------------------------
Intel Corp. 225,000 24,721,875
- ----------------------------------------------------------------
Solectron Corp.(a) 16,500 882,750
- ----------------------------------------------------------------
Texas Instruments, Inc. 45,000 2,165,625
- ----------------------------------------------------------------
Vitesse Semiconductor Corp.(a) 15,000 478,125
- ----------------------------------------------------------------
32,588,375
- ----------------------------------------------------------------

SHOES & RELATED APPAREL-1.15%

NIKE, Inc.-Class B 194,000 11,421,750
- ----------------------------------------------------------------
Nine West Group, Inc.(a) 61,200 3,052,350
- ----------------------------------------------------------------
14,474,100
- ----------------------------------------------------------------

TELECOMMUNICATIONS-4.94%

ADC Telecommunications, Inc.(a) 175,000 11,965,625
- ----------------------------------------------------------------
Allen Group, Inc. 3,400 53,975
- ----------------------------------------------------------------
Andrew Corp.(a) 134,550 6,559,313
- ----------------------------------------------------------------
Lucent Technologies, Inc. 125,000 5,875,000
- ----------------------------------------------------------------
MFS Communications Co., Inc.(a) 125,000 6,265,625
- ----------------------------------------------------------------
Northern Telecom Ltd. (Canada) 34,000 2,214,250
- ----------------------------------------------------------------
PairGain Technologies, Inc.(a) 99,600 6,859,950
- ----------------------------------------------------------------
Premiere Technologies Inc.(a) 10,100 164,125
- ----------------------------------------------------------------
Premisys Communications, Inc.(a) 28,400 1,420,000
- ----------------------------------------------------------------
Telefonaktiebolaget LM
Ericsson-ADR (Sweden) 330,000 9,116,250
- ----------------------------------------------------------------
Tellabs, Inc.(a) 132,000 11,236,500
- ----------------------------------------------------------------
360 Communications Co.(a) 23,333 527,909
- ----------------------------------------------------------------
62,258,522
- ----------------------------------------------------------------

TELEPHONE-0.63%

Cincinnati Bell, Inc. 161,600 7,979,000
- ----------------------------------------------------------------

<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
TEXTILES-2.02%

Designer Holdings Ltd.(a) 13,600 $ 260,100
- ----------------------------------------------------------------
Fruit Of The Loom, Inc.-Class A(a) 125,000 4,546,875
- ----------------------------------------------------------------
Liz Claiborne, Inc. 245,000 10,351,250
- ----------------------------------------------------------------
Nautica Enterprises, Inc.(a) 83,000 2,552,250
- ----------------------------------------------------------------
Russell Corp. 53,600 1,520,900
- ----------------------------------------------------------------
Tommy Hilfiger Corp.(a) 90,000 4,680,000
- ----------------------------------------------------------------
Unifi, Inc. 50,500 1,571,813
- ----------------------------------------------------------------
25,483,188
- ----------------------------------------------------------------

TRANSPORTATION (MISCELLANEOUS)-0.09%

Rural/Metro Corp.(a) 30,000 1,095,000
- ----------------------------------------------------------------
Total Common Stocks 1,212,702,096
- ----------------------------------------------------------------
PRINCIPAL
AMOUNT
CONVERTIBLE CORPORATE BONDS-0.57%

FINANCE (CONSUMER CREDIT)-0.04%

Cityscape Financial Corp.,
Conv. Sub. Deb., 6.00%, 05/01/06
(Acquired 08/06/96-08/29/96;
Cost $645,939)(b) $ 475,000 501,577
- ----------------------------------------------------------------

RESTAURANTS-0.53%

Boston Chicken, Inc.,
Conv. Liquid Yield Option
Notes, 8.00%, 06/01/15(c) 20,830,000 6,743,713
- ----------------------------------------------------------------
Total Convertible Corporate
Bonds 7,245,290
- ----------------------------------------------------------------

REPURCHASE AGREEMENTS-4.09%(d)

Daiwa Securities America Inc.,
5.53%, 11/01/96(e) 518,937 518,937
- ----------------------------------------------------------------
SBC Capital Markets, Inc.,
5.55%, 11/01/96(f) 51,000,000 51,000,000
- ----------------------------------------------------------------
Total Repurchase Agreements 51,518,937
- ----------------------------------------------------------------
TOTAL INVESTMENTS-100.83% 1,271,466,323
- ----------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-(0.83)% (10,458,079)
- ----------------------------------------------------------------
NET ASSETS-100.00% $1,261,008,244
================================================================
</TABLE>

Abbreviations:

ADR - American Depository Receipts
Conv. - Convertible
Deb. - Debenture
Sub. - Subordinate

NOTES TO SCHEDULE OF INVESTMENTS:

(a) Non-income producing security.
(b) Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The valuation of these securities has been determined in
accordance with procedures established by the Board of Directors. The market
value of this security at October 31, 1996 was $501,577 which represented
0.04% of the Fund's net assets.
(c) Zero coupon bond. The interest rate shown represents the rate of the
original issue discount.
(d) 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 insure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(e) Joint repurchase agreement entered into 10/31/96 with a maturing value of
$750,115,208. Collateralized by $733,115,000 U.S. Treasury obligations, 0%
to 10.375% due 11/15/96 to 08/15/23.
(f) Joint repurchase agreement entered into 10/31/96 with a maturing value of
$700,107,917. Collateralized by $691,506,000 U.S. Treasury obligations, 0%
to 9.125% due 11/30/96 to 10/31/01.

See Notes to Financial Statements.

FS-6
<PAGE> 58

STATEMENT OF ASSETS AND LIABILITIES

October 31, 1996

<TABLE>
<S> <C>
ASSETS:

Investments, at market value (cost
$963,750,659) $1,271,466,323
- ---------------------------------------------------------
Receivables for:
Investments sold 373,934
- ---------------------------------------------------------
Capital stock sold 29,195
- ---------------------------------------------------------
Dividends and interest 530,954
- ---------------------------------------------------------
Investment for deferred compensation
plan 19,335
- ---------------------------------------------------------
Other assets 25,619
Total assets 1,272,445,360
- ---------------------------------------------------------

LIABILITIES:

Payables for:
Investments purchased 10,337,638
- ---------------------------------------------------------
Capital stock reacquired 114,117
- ---------------------------------------------------------
Deferred compensation 19,335
- ---------------------------------------------------------
Accrued advisory fees 694,965
- ---------------------------------------------------------
Accrued accounting service fees 5,450
- ---------------------------------------------------------
Accrued directors' fees 933
- ---------------------------------------------------------
Accrued operating expenses 264,678
- ---------------------------------------------------------
Total liabilities 11,437,116
- ---------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES
OUTSTANDING $1,261,008,244
=========================================================
Capital stock, $.01 par value per share:
Authorized 1,000,000,000
- ---------------------------------------------------------
Outstanding 97,070,057
=========================================================
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE $ 12.99
=========================================================
</TABLE>

STATEMENT OF OPERATIONS
For the year ended October 31, 1996

<TABLE>
<S> <C>
INVESTMENT INCOME:

Dividends (net of $73,997 foreign
withholding tax) $ 9,131,189
- --------------------------------------------------------
Interest 2,131,750
- --------------------------------------------------------
Total investment income 11,262,939
- --------------------------------------------------------
EXPENSES:

Advisory fees 7,360,028
- --------------------------------------------------------
Custodian fees 173,520
- --------------------------------------------------------
Transfer agent fees 23,774
- --------------------------------------------------------
Accounting service fees 63,439
- --------------------------------------------------------
Directors' fees 11,952
- --------------------------------------------------------
Other 339,878
- --------------------------------------------------------
Total expenses 7,972,591
- --------------------------------------------------------
Less: Expenses paid indirectly (1,368)
- --------------------------------------------------------
Net expenses 7,971,223
- --------------------------------------------------------
Net investment income 3,291,716
- --------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENT
SECURITIES AND FUTURES CONTRACTS:

Net realized gain on sales of:
Investment securities 113,288,006
- --------------------------------------------------------
Futures contracts 853,326
- --------------------------------------------------------
114,141,332
- --------------------------------------------------------
Net unrealized appreciation of investment
securities 50,514,049
- --------------------------------------------------------
Net gain on investment securities and
futures contracts 164,655,381
- --------------------------------------------------------
Net increase in net assets resulting from
operations $167,947,097
========================================================
</TABLE>

See Notes to Financial Statements.

FS-7
<PAGE> 59

STATEMENT OF CHANGES IN NET ASSETS

For the years ended October 31, 1996 and 1995

<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
OPERATIONS:

Net investment income $ 3,291,716 $ 2,929,038
- ---------------------------------------------------------------------------------------------------------------------------
Net realized gain on sales of investment securities and futures contracts 114,141,332 74,322,239
- ---------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities 50,514,049 169,626,929
- ---------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 167,947,097 246,878,206
- ---------------------------------------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (2,276,042) (7,935,485)
- ---------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains (74,181,022) (30,550,717)
- ---------------------------------------------------------------------------------------------------------------------------
Net equalization credits 2,660,812 1,739,780
- ---------------------------------------------------------------------------------------------------------------------------
Net increase from capital stock transactions 116,846,774 74,806,153
- ---------------------------------------------------------------------------------------------------------------------------
Net increase in net assets 210,997,619 284,937,937
- ---------------------------------------------------------------------------------------------------------------------------

NET ASSETS:

Beginning of period 1,050,010,625 765,072,688
- ---------------------------------------------------------------------------------------------------------------------------
End of period $1,261,008,244 $1,050,010,625
===========================================================================================================================

NET ASSETS CONSIST OF:

Capital (par value and additional paid-in) $ 817,023,360 $ 700,176,586
- ---------------------------------------------------------------------------------------------------------------------------
Undistributed net investment income 22,676,773 19,000,287
- ---------------------------------------------------------------------------------------------------------------------------
Undistributed net realized gain on sales of investment securities and futures
contracts 113,592,447 73,632,137
- ---------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities 307,715,664 257,201,615
- ---------------------------------------------------------------------------------------------------------------------------
$1,261,008,244 $1,050,010,625
===========================================================================================================================
</TABLE>

See Notes to Financial Statements.

NOTES TO FINANCIAL STATEMENTS

October 31, 1996

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 Fund's investment objective is capital
growth.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
A. Security Valuations -- Common stocks listed or traded on an exchange are
valued at the last sales price on the exchange on which 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 bonds are valued at the mean between the closing
bid and asked prices obtained from a broker-dealer. 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 or are questionable 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

FS-8
<PAGE> 60

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.
E. Stock Index Futures Contracts -- The Fund may purchase or sell stock index
futures contracts as a hedge against changes in market conditions. Initial
margin deposits required upon entering into futures contracts are satisfied
by the segregation of specific securities as collateral for the account of
the broker (the Fund's agent in acquiring the futures position). During the
period the futures contracts are open, changes in the value of the contracts
are recognized as unrealized gains or losses by "marking to market" on a
daily basis to reflect the market value of the contracts at the end of each
day's trading. Variation margin payments are made or received depending upon
whether unrealized gains or losses are incurred. When the contracts are
closed, the Fund recognizes a realized gain or loss equal to the difference
between the proceeds from, or cost of, the closing transaction and the Fund's
basis in the contract. Risks include the possibility of an illiquid market
and that a change in the value of contracts may not correlate with changes in
the value of the securities being hedged.

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 the 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 restated sub-advisory agreement dated April 1,
1996 between AIM and Trade Street Investment Associates, Inc. ("TradeStreet"), a
new subsidiary of NationsBank, N.A. and a registered investment advisor, AIM
pays TradeStreet 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.
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, 1996, the Fund
reimbursed AIM $63,439 for such services.
The Fund incurred expenses of $1,368 for pricing services which are paid
through directed brokerage commissions. The effect of the above arrangement
resulted in a reduction in the Fund's total expenses of $1,368 during the year
ended October 31, 1996.
During the year ended October 31, 1996, the Fund paid legal fees of $6,421 for
services rendered by Kramer, Levin, Naftalis & 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.

NOTE 4-BANK BORROWINGS

The Fund is a participant in a committed line of credit facility with a
syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to
the lesser of (i) $325,000,000 or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
line of credit may borrow on a first come, first served basis. Interest on
borrowings under the line of credit is payable on maturity or prepayment date.
Prior to an amendment of the line of credit on July 19, 1996, the Fund was
limited to borrowing $14,700,000. During the year, the Fund did not borrow under
the line of credit agreement. The funds which are party to the line of credit
are charged a commitment fee of 0.08% on the unused balance of the committed
line. The commitment fee is allocated among the funds based on their respective
average net assets for the period.

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, 1996, was
$1,365,656,432 and $1,312,780,236, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
as of October 31, 1996, on a tax basis, is as follows:

Aggregate unrealized appreciation of
investment securities $319,252,345
- ----------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (12,148,699)
- ----------------------------------------------------------
Net unrealized appreciation of investment
securities $307,103,646
==========================================================

Cost of investments for tax purposes is $964,362,677.

NOTE 6-CAPITAL STOCK

Changes in capital stock outstanding for the years ended October 31, 1996 and
1995 were as follows:

<TABLE>
<CAPTION>
1996 1995
----------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ---------- --------- ------------
<S> <C> <C> <C> <C>
Sold 9,230,433 $108,559,927 10,287,176 $101,899,889
- ------------- --------- ------------ ---------- ------------
Issued as
reinvestment
of dividends 6,936,341 74,080,187 4,324,777 36,847,100
- ------------- ---------- ------------ ---------- ------------
Reacquired (5,576,722) (65,793,340) (6,354,529) (63,940,836)
- ------------- ---------- ------------ ---------- ------------
10,590,052 $116,846,774 8,257,424 $ 74,806,153
========== ============ ========== ============
</TABLE>

FS-9
<PAGE> 61

NOTE 7-FINANCIAL HIGHLIGHTS

Shown below are the financial highlights for a share of capital stock
outstanding during each of the years in the three-year period ended October 31,
1996, the ten months ended October 31, 1993 and each of the years in the
six-year period ended December 31, 1992.

<TABLE>
<CAPTION>
OCTOBER 31, DECEMBER 31,
----------------------------------------------- --------------------------------
1996 1995 1994 1993 1992 1991 1990
---------- ---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 12.14 $ 9.78 $ 10.46 $ 9.64 $ 10.09 $ 7.56 $ 7.79
- --------------------------------------------- ---------- ---------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.04 0.04 0.10 0.09 0.11 0.14 0.15
- --------------------------------------------- ---------- ---------- -------- -------- -------- -------- --------
Net gains (losses) on securities (both
realized and unrealized) 1.69 2.81 (0.04) 0.73 0.35 3.16 (0.08)
- --------------------------------------------- ---------- ---------- -------- -------- -------- -------- --------
Total from investment operations 1.73 2.85 0.06 0.82 0.46 3.30 0.07
- --------------------------------------------- ---------- ---------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.03) (0.10) (0.10) -- (0.11) (0.13) (0.16)
- --------------------------------------------- ---------- ---------- -------- -------- -------- -------- --------
Distributions from capital gains (0.85) (0.39) (0.64) -- (0.80) (0.64) (0.14)
- --------------------------------------------- ---------- ---------- -------- -------- -------- -------- --------
Total distributions (0.88) (0.49) (0.74) -- (0.91) (0.77) (0.30)
- --------------------------------------------- ---------- ---------- -------- -------- -------- -------- --------
Net asset value, end of period $ 12.99 $ 12.14 $ 9.78 $ 10.46 $ 9.64 $ 10.09 $ 7.56
============================================= ========== ========== ======== ======== ======== ======== ========
Total return(b) 15.61% 31.03% 0.61% 8.51% 4.50% 43.64% 0.93%
============================================= ========== ========== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,261,008 $1,050,011 $765,073 $705,580 $604,329 $517,835 $316,043
============================================= ========== ========== ======== ======== ======== ======== ========
Ratio of expenses to average net assets 0.70(c)(d) 0.71% 0.72% 0.79%(e) 0.76% 0.75% 0.80%
============================================= ========== ========== ======== ======== ======== ======== ========
Ratio of net investment income to average net
assets 0.29%(c) 0.33% 1.04% 1.13%(e) 1.09% 1.48% 2.02%
============================================= ========== ========== ======== ======== ======== ======== ========
Portfolio turnover rate 118.34% 126.00% 121.69% 115.76% 97.41% 109.04% 142.60%
============================================= ========== ========== ======== ======== ======== ======== ========
Average brokerage commission rate(f) $ 0.0643 N/A N/A N/A N/A N/A N/A
============================================= ========== ========== ======== ======== ======== ======== ========

<CAPTION>
DECEMBER 31,
------------------------------------
1989 1988(a) 1987
------- ------- --------
<S> <C> <C> <C>
Net asset value, beginning of period $ 6.57 $ 5.70 $ 6.68
- --------------------------------------------- -------- -------- --------
Income from investment operations:
Net investment income 0.16 0.16 0.09
- --------------------------------------------- -------- -------- --------
Net gains (losses) on securities (both
realized and unrealized) 1.86 0.84 (0.40)
- --------------------------------------------- -------- -------- --------
Total from investment operations 2.02 1.00 (0.31)
- --------------------------------------------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.16) (0.13) (0.10)
- --------------------------------------------- -------- -------- --------
Distributions from capital gains (0.64) -- (0.57)
- --------------------------------------------- -------- -------- --------
Total distributions (0.80) (0.13) (0.67)
- --------------------------------------------- -------- -------- --------
Net asset value, end of period $ 7.79 $ 6.57 $ 5.70
============================================= ======== ======== ========
Total return(b) 30.92% 17.65% (4.66)%
============================================= ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $262,655 $164,996 $101,541
============================================= ======== ======== ========
Ratio of expenses to average net assets 0.82% 1.04% 0.98%
============================================= ======== ======== ========
Ratio of net investment income to average net
assets 2.14% 2.57% 1.06%
============================================= ======== ======== ========
Portfolio turnover rate 97.26% 114.94% 81.99%
============================================= ======== ======== ========
Average brokerage commission rate(f) N/A N/A N/A
============================================= ======== ======== ========
</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 $1,143,534,605.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid expenses,
the ratio of expenses to average net assets would have been the same.
(e) Annualized.
(f) Disclosure requirement beginning with the Fund's fiscal year ending October
31, 1996.

NOTE 8-SUBSEQUENT EVENT

On November 4, 1996, A I M Management Group Inc. ("AIM Management") and INVESCO
PLC announced the execution of an agreement and plan of merger pursuant to which
AIM Management will be merged with and into a direct wholly-owned subsidiary of
INVESCO PLC. AIM Management is the parent company of the Fund's advisor. The
merger is conditional on, among other things, approval by the shareholders of
INVESCO PLC and AIM Management and the shareholders of the AIM funds and the
mutual funds managed by INVESCO PLC, and is expected to take place during the
first quarter of 1997.

FS-10
<PAGE> 62

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, 1996

(3) Statement of Assets and Liabilities as of October 31,
1996

(4) Statement of Operations for the fiscal year ended
October 31, 1996

(5) Statement of Changes in Net Assets for the fiscal
years ended October 31, 1996 and October 31, 1995

(b) Exhibits

Exhibit
Number Description
- ------- -----------

(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 were filed electronically as an Exhibit
with the Registrant's Post-Effective Amendment No. 19 on February
27, 1996, and are incorporated by reference herein.

(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 were filed electronically as an
Exhibit with the Registrant's Post-Effective Amendment No. 19 on
February 27, 1996, and are incorporated by reference herein.

(c) - Articles of Amendment to the Articles of Incorporation, as filed
with the State of Maryland on September 30, 1982, were filed
electronically as an Exhibit with the Registrant's Post-Effective
Amendment No. 19 on February 27, 1996, and are incorporated by
reference herein.

(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 were filed electronically as
an Exhibit with the Registrant's Post-Effective Amendment No. 19
on February 27, 1996, and are incorporated by reference herein.

1
<PAGE> 63
(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.

(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 were
filed electronically as an Exhibit with the Registrant's
Post-Effective Amendment No. 19 on February 27, 1996, and are
incorporated by reference herein.

(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 was filed electronically as an Exhibit with
the Registrant's Post-Effective Amendment No. 19 on February 27,
1996, and is incorporated by reference herein.

(f) - Second Amendment to the Amended and Restated By-Laws of the
Registrant as adopted on March 14, 1995 was filed electronically
as an Exhibit with the Registrant's Post-Effective Amendment No.
19 on February 27, 1996, and is incorporated by reference herein.

(g) - Amended and Restated By-Laws of the Registrant as adopted on
December 11, 1996, are 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 was filed electronically as an Exhibit with
the Registrant's Post-Effective Amendment No. 19 on February 27,
1996, and is incorporated by reference herein.

(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.

2
<PAGE> 64

(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 was filed electronically as
an Exhibit with the Registrant's Post-Effective Amendment No. 19
on February 27, 1996, and is incorporated by reference herein.

(g) Sub-Advisory Agreement, dated October 18, 1993, between A I M
Advisors, Inc. and NationsBank of Texas, N.A., as assumed by
TradeStreet Investment Associates, Inc., as of April 1, 1996, is
filed electronically herewith.

(h) Assumption Agreement, dated April 1, 1996, between AIM Advisors,
Inc. and Tradestreet Investment Associates, Inc. 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 was filed electronically as an Exhibit with
the Registrant's Post-Effective Amendment No. 19 on February 27,
1996, and is incorporated by reference herein.

(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.

(b) - Retirement Plan for Registrant's Non-Affiliated Directors,
effective as of March 8, 1994, as restated September 18, 1995, was
filed electronically as an Exhibit with the Registrant's
Post-Effective Amendment No. 19 on February 27, 1996, and is
incorporated by reference herein.

(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, was filed
electronically as an Exhibit with the Registrant's Post-Effective
Amendment No. 19 on February 27, 1996, and is incorporated by
reference herein.

(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 was filed electronically as an
Exhibit with the Registrant's Post-Effective Amendment No. 19 on
February 27, 1996, and is incorporated by reference herein.

(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 was filed electronically as an Exhibit with
the Registrant's Post-Effective Amendment No. 19 on February 27,
1996, and is incorporated by reference herein.

3
<PAGE> 65
(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 was filed electronically as an Exhibit with the
Registrant's Post-Effective Amendment No. 19 on February
27, 1996, and is incorporated by reference herein.

(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 was filed electronically as an
Exhibit with the Registrant's Post-Effective Amendment
No. 19 on February 27, 1996, and is incorporated by
reference herein.

(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 was filed
electronically as an Exhibit with the Registrant's
Post-Effective Amendment No. 19 on February 27, 1996, and
is incorporated by reference herein.

(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 was filed electronically as an
Exhibit with the Registrant's Post-Effective Amendment
No. 19 on February 27, 1996, and is incorporated by
reference herein.

(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 was filed electronically as an
Exhibit with the Registrant's Post-Effective Amendment
No. 19 on February 27, 1996, and is incorporated by
reference herein.

(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. was filed electronically as an Exhibit with the
Registrant's Post-Effective Amendment No. 19 on February
27, 1996, and is incorporated by reference herein.

(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 was filed electronically
as an Exhibit with the Registrant's Post-Effective
Amendment No. 19 on February 27, 1996, and is
incorporated by reference herein.

(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, 1996 on December 17, 1996.

4
<PAGE> 66
(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 was filed electronically
as an Exhibit with the Registrant's Post-Effective
Amendment No. 19 on February 27, 1996, and is incorporated
by reference herein.

(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) - Rule 18f-3 Plan - None.

(27) - Financial Data Schedule is filed electronically herewith.

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, 1997
----------- -------------------------

Common Stock 208

Item 27. Indemnification

State the general effect of any contract, arrangements or statute
under which any director, officer, underwriter or affiliated person of the
Registrant is insured or indemnified in any manner against any liability which
may be incurred in such capacity, other than insurance provided by any
director, officer, affiliated person or underwriter for their own protection.

5
<PAGE> 67
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.

TradeStreet Investment Associates, Inc.

The names and principal occupations of the chief executive officer
and each director of TradeStreet Investment Associates, Inc.
("TradeStreet") are as follows:

Andrew M. Silton President and Chief Executive Officer,
TradeStreet; Senior Vice President,
NationsBank Trust and Investments

James B. Sommers Executive Vice President, NationsBank,
N.A.; President, NationsBank Trust
(1984-1996)

John W. Munce Executive Vice President, NationsBank,
N.A.

Stuart A. Sachs President, Sovran Capital Management
Corp.

All of the foregoing persons may be reached c/o TradeStreet
Investment Associates, Inc., 101 South Tryon Street, Suite 1000, Charlotte,
North Carolina 28255.

6
<PAGE> 68
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.

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

John Caldwell Senior Vice President None

W. Gary Littlepage Senior Vice President & Director None

James L. Salners Senior Vice President & Director None

Gordon J. Sprague Senior Vice President None

Michael C. Vessels Senior Vice President None

Marilyn M. Miller First Vice President None

John J. Arthur Vice President & Treasurer Senior Vice
President & Treasurer

Mary K. Coleman Vice President None

Charles R. Dewey Vice President None

Sidney M. Dilgren Vice President None

William H. Kleh Vice President None

Ofelia M. Mayo Vice President, General Counsel Assistant Secretary
& Assistant Secretary

Carol F. Relihan Vice President Senior Vice
President &
Secretary

Kamala C. Sachidanandan Vice President None

Frank V. Serebrin Vice President None

</TABLE>

_______________________________
* P.O. Box 4333
Houston, TX 77210-4333

7
<PAGE> 69

Robert D. Van Sant Vice President None

Melville B. Cox Vice President & Chief Compliance Vice President
Officer

David E. Hessel Assistant Vice President, None
Assistant Treasurer & Controller

Tisha Christopher Assistant Vice President None

Glenda Dayton Assistant Vice President None

Mary E. Gentempo Assistant Vice President None

Jeffrey L. Horne Assistant Vice President None

Kim T. Lankford Assistant Vice President None

Wayne W. LaPlante Assistant Vice President None

Ivy B. McLemore Assistant Vice President None

David B. O'Neil Assistant Vice President None

Terri L. Ransdell Assistant Vice President None

Christopher T. Simutis Assistant Vice President None

Gary K. Wendler Assistant Vice President None

Nicholas D. White Assistant Vice President None

David L. Kite Assistant General Counsel & Assistant Secretary
Assistant Secretary

Nancy L. Martin Assistant General Counsel & Assistant Secretary
Assistant Secretary

Samuel D. Sirko Assistant General Counsel & Assistant Secretary
Assistant Secretary

Kathleen J. Pflueger Secretary Assistant Secretary

Stephen I. Winer Assistant Secretary Assistant Secretary

</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.

_______________________________
* P.O. Box 4333
Houston, TX 77210-4333

8
<PAGE> 70
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.

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.

9
<PAGE> 71

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, 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 24th day of
February, 1997.

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>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ CHARLES T. BAUER Chairman & Director February 24, 1997
-----------------------------
(Charles T. Bauer)

/s/ ROBERT H. GRAHAM Director & President February 24, 1997
----------------------------- (Principal Executive Officer)
(Robert H. Graham)

/s/ BRUCE L. CROCKETT Director February 24, 1997
-----------------------------
(Bruce L. Crockett)

/s/ OWEN DALY II Director February 24, 1997
-----------------------------
(Owen Daly II)

/s/ CARL FRISCHLING Director February 24, 1997
-----------------------------
(Carl Frischling)

/s/ JOHN F. KROEGER Director February 24, 1997
-----------------------------
(John F. Kroeger)

/s/ LEWIS F. PENNOCK Director February 24, 1997
-----------------------------
(Lewis F. Pennock)

/s/ IAN W. ROBINSON Director February 24, 1997
-----------------------------
(Ian W. Robinson)

/s/ LOUIS S. SKLAR Director February 24, 1997
-----------------------------
(Louis S. Sklar)

/s/ John J. Arthur Senior Vice President and Treasurer February 24, 1997
---------------------------- (Principal Financial and
(John J. Arthur) Accounting Officer)
</TABLE>

<PAGE> 72
INDEX TO EXHIBITS

Exhibit
Number
- -------

2(g) Amended and Restated By-Laws of the Registrant as adopted on
December 11, 1996

5(g) Sub-Advisory Agreement, dated October 18, 1993, between A I M
Advisors, Inc. and NationsBank Texas, N.A., as assumed by Trade
Street Investment Associates, Inc., as of April 1, 1996.

5(h) Assumption Agreement, dated April 1, 1996, between A I M Advisors,
Inc. and Tradestreet Investment Associates, Inc.

11(a) Consent of KPMG Peat Marwick LLP

11(b) Consent of Ballard Spahr Andrews & Ingersoll

27 Financial Data Schedule

<PAGE> 1
EXHIBIT 2(g)

AMENDED AND RESTATED BYLAWS

AIM SUMMIT FUND, INC.,
A MARYLAND CORPORATION

ADOPTED EFFECTIVE DECEMBER 11, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>

ARTICLE I
STOCKHOLDERS . . . . . . . . . . . . . . - 1 -
Section 1. Time and Place of Meetings . . . . . . . . . . . . . - 1 -
Section 2. Annual Meetings . . . . . . . . . . . . . . . . . . - 1 -
Section 3. Special Meetings . . . . . . . . . . . . . . . . . . - 1 -
Section 4. Notice of Meeting of Stockholders . . . . . . . . . - 1 -
Section 5. Closing of Transfer Books, Record Dates . . . . . . - 2 -
Section 6. Quorum, Adjournment of Meeting . . . . . . . . . . . - 2 -
Section 7. Voting and Inspectors . . . . . . . . . . . . . . . - 2 -
Section 8. Conduct of Stockholders Meetings . . . . . . . . . . - 3 -
Section 9. Validity of Proxies and Ballots . . . . . . . . . . - 3 -
Section 10. Nominations and Stockholder Business . . . . . . . . - 3 -

ARTICLE II
BOARD OF DIRECTORS . . . . . . . . . . . . . - 4 -
Section 1. Number and Term of Office . . . . . . . . . . . . . - 4 -
Section 2. Increase or Decrease in Number of Directors . . . . - 4 -
Section 3. Place of Meetings . . . . . . . . . . . . . . . . . - 4 -
Section 4. Regular Meetings . . . . . . . . . . . . . . . . . . - 4 -
Section 5. Special Meetings . . . . . . . . . . . . . . . . . . - 5 -
Section 6. Quorum . . . . . . . . . . . . . . . . . . . . . . . - 5 -
Section 7. Telephonic Meetings . . . . . . . . . . . . . . . . - 5 -
Section 8. Executive Committee . . . . . . . . . . . . . . . . - 5 -
Section 9. Other Committees . . . . . . . . . . . . . . . . . . - 5 -
Section 10. Informal Action by Directors . . . . . . . . . . . . - 5 -
Section 11. Compensation of Directors . . . . . . . . . . . . . - 6 -

ARTICLE III
OFFICERS . . . . . . . . . . . . . . . - 6 -
Section 1. Executive Officers . . . . . . . . . . . . . . . . . - 6 -
Section 2. Term of Office . . . . . . . . . . . . . . . . . . . - 6 -
Section 3. President . . . . . . . . . . . . . . . . . . . . . - 6 -
Section 4. Chairman of the Board . . . . . . . . . . . . . . . - 6 -
Section 5. Other Officers . . . . . . . . . . . . . . . . . . . - 6 -
Section 6. Secretary . . . . . . . . . . . . . . . . . . . . . - 7 -
Section 7. Treasurer . . . . . . . . . . . . . . . . . . . . . - 7 -

ARTICLE IV
STOCK . . . . . . . . . . . . . . . . - 7 -
Section 1. Stock Certificates . . . . . . . . . . . . . . . . . - 7 -
Section 2. Transfer of Shares . . . . . . . . . . . . . . . . . - 7 -
Section 3. Stock Ledgers . . . . . . . . . . . . . . . . . . . - 7 -
Section 4. Lost, Stolen or Destroyed Certificates . . . . . . . - 7 -

ARTICLE V
CORPORATE SEAL . . . . . . . . . . . . . - 8 -

</TABLE>

- i -
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>

ARTICLE VI
FISCAL YEAR . . . . . . . . . . . . . . . - 8 -

ARTICLE VII
INDEMNIFICATION AND ADVANCES FOR EXPENSES . . . . . . - 8 -
Section 1. Indemnification of Directors and Officers . . . . . - 8 -
Section 2. Advances . . . . . . . . . . . . . . . . . . . . . . - 8 -
Section 3. Procedure . . . . . . . . . . . . . . . . . . . . . - 9 -
Section 4. Indemnification of Employees and Agents . . . . . . - 9 -
Section 5. Other Rights . . . . . . . . . . . . . . . . . . . . - 9 -
Section 6. Subsequent Changes to Law . . . . . . . . . . . . . - 9 -

ARTICLE VIII
AMENDMENT OF BYLAWS . . . . . . . . . . . . - 9 -
</TABLE>

- ii -

<PAGE> 4

AMENDED AND RESTATED BYLAWS

AIM SUMMIT FUND, INC.,
A MARYLAND CORPORATION

ARTICLE I

STOCKHOLDERS

Section 1. Time and Place of Meetings. Meetings of the
stockholders of the Corporation 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. Meetings of the stockholders shall be held at places within the United
States designated by the Board of Directors and set forth 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 with respect to the election of directors, then such
matter shall be submitted to the stockholders at a special meeting called for
such purpose, which shall be deemed the annual meeting of stockholders for that
year. In years in which no such action by stockholders is so required, no
annual meeting of stockholders need be held.

Section 3. Special Meetings. Special meetings of the
stockholders for any purpose or purposes may be called by the Chairman of the
Board of Directors, if any, by the President or by a majority of the Board of
Directors. In addition, such special meetings shall be called by the Secretary
upon receipt of a request in writing, signed by stockholders entitled to cast
at least ten percent (10%) of all the votes entitled to be cast at the meeting,
which states the purpose of the meeting and the matters proposed to be acted on
at the meeting. Unless requested by stockholders entitled to cast a majority
of all 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
twelve (12) months.

Section 4. Notice of Meeting of Stockholders. Written or
printed notice of every meeting of stockholders, stating the time and place
thereof (and the purpose of any special meeting), shall be given, not less than
ten (10) days nor more than ninety (90) days before the date of the meeting, to
each stockholder entitled to vote at the meeting and each other stockholder
entitled to notice, by delivering such notice personally, or leaving such
notice at each stockholder's residence or usual place of business, or by
mailing such notice, postage prepaid, addressed to each stockholder at such
stockholder's address as it appears upon the books of the Corporation. Each
person who is entitled to notice of any meeting shall be deemed to have waived
notice if present at the meeting in person or by proxy or if such person signs
a waiver of notice (either before or after the meeting) which is filed with the
records of stockholders meetings.

-1-
<PAGE> 5
Section 5. Closing of Transfer Books, Record Dates. The
Board of Directors may set a record date for the purpose of making any proper
determination with respect to stockholders, including determining which
stockholders are entitled to notice of and to vote at a meeting, receive a
dividend or be allotted other rights. The record date may not be prior to the
close of business on the day the record date is fixed and shall be not more
than ninety (90) days before the date on which the action requiring the
determination is taken. In the case of a meeting of stockholders, the record
date shall be at least ten (10) days before the date of the meeting. 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 Meeting. The presence in
person or by proxy of stockholders entitled to cast thirty percent (30%) of all
votes entitled to be cast at the meeting shall constitute a quorum at all
meetings of the stockholders, except with respect to any matter which by law or
the charter of the Corporation requires the separate approval of one or more
classes or series of the capital stock of the Corporation, in which case the
holders of one-third of the shares of each such class or series (or of such
classes or series voting together as a single class) entitled to vote on the
matter shall constitute a quorum; and a majority, or with respect to the
election of Directors, a plurality, of all votes cast at a meeting (or cast by
the holders of shares of any such classes or series whose separate approval on
a matter is required) at which a quorum is present shall be sufficient to
approve any matter which properly comes before the meeting, unless otherwise
provided by applicable law, the Charter of the Corporation or these Bylaws. If
at any meeting of the stockholders there shall be less than a quorum present,
the stockholders present at such meeting may, by a majority of all votes cast
and 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 business which might have been lawfully transacted had the meeting not
been adjourned.

Section 7. Voting and Inspectors.

(a) 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 shall not be
valid more than eleven (11) months after its date.

(b) At any meeting of stockholders considering the
election of directors, the Board of Directors prior to the convening of such
meeting may, or, if the Board has not so acted, the Chairman of the meeting
may, appoint two (2) inspectors of election, who shall first subscribe an oath
or affirmation to execute faithfully the duties of inspectors at such election
in strict impartiality and according to the best of their ability, and shall
after the election certify the result of the vote taken. No candidate for
election as a director shall be appointed to act as an inspector of election.

- 2 -
<PAGE> 6
Section 8. Conduct of Stockholders Meetings.

(a) The meetings of the stockholders shall be
presided over by the Chairman of the Board, or if the Chairman shall not be
present or if there is no Chairman, by the President, or if the President shall
not be present, by a Vice President, or if no Vice President is present, by a
chairman elected for such purpose at the meeting. The Secretary of the
Corporation, if present, shall act as Secretary of such meetings, or if the
Secretary is not present, an Assistant Secretary of the Corporation shall so
act, and if no Assistant Secretary is present, then a person designated by the
Secretary of the Corporation shall so act, and if the Secretary has not
designated a person, then the meeting shall elect a secretary for the meeting.

(b) The Board of Directors of the Corporation shall
be entitled to make such rules and regulations for the conduct of meetings of
stockholders as it shall deem necessary, appropriate or convenient. Subject to
such rules and regulations of the Board of Directors, if any, the chairman of
the meeting shall have the right and authority to prescribe such rules,
regulations and procedures and to do all such acts as, in the judgment of such
chairman, are necessary, appropriate or convenient for the proper conduct of
the meeting, including, without limitation, establishing: an agenda or order of
business for the meeting; rules and procedures for maintaining order at the
meeting and the safety of those present; limitations on participation in such
meeting to stockholders of record of the corporation and their duly authorized
and constituted proxies, and such other persons as the chairman shall permit;
restrictions on entry to the meeting after the time fixed for the commencement
thereof; limitations on the time allotted to questions or comments by
participants; and regulation of the opening and closing of the polls for
balloting on matters which are to be voted on by ballot, unless and to the
extent the Board of Directors or the chairman of the meeting determines that
meetings of stockholders shall not be required to be held in accordance with
the rules of parliamentary procedure.

Section 9. Validity of Proxies and Ballots. At every meeting
of the stockholders, all proxies shall be received and maintained by, and all
ballots shall be received and canvassed by, the secretary of the meeting, who
shall decide all questions concerning the qualification of voters, the validity
of proxies, and the acceptance or rejection of votes, unless inspectors of
election shall have been appointed, in which case the inspectors of election
shall decide all such questions.

Section 10. Nominations and Stockholder Business.

(a) Annual Meetings of Stockholders.

(1) Nominations of individuals for election
to the board of directors shall be made by the Board of Directors or a
nominating committee of the Board of Directors, if one has been established
(the "Nominating Committee"). Any stockholder of the Corporation may submit
names of individuals to be considered by the Nominating Committee or the Board
of Directors, as applicable, provided, however, (i) that such person was a
stockholder of record at the time of submission of such names and is entitled
to vote at the meeting, and (ii) that the Nominating Committee or the Board of
Directors, as applicable, shall make the final determination of persons to be
nominated.

(2) The business to be considered by the
stockholders at an annual meeting shall be determined by the Board of Directors
of the Corporation.

- 3 -
<PAGE> 7
(b) Special Meetings of Stockholders. Only such
business shall be conducted at a special meeting of stockholders as shall have
been brought before the meeting pursuant to the corporation's notice of
meeting.

(1) Only such persons who are nominated in
accordance with the provisions of this Section 10 shall be eligible to serve as
directors and only such business shall be conducted at a meeting of
stockholders as shall have been brought before the meeting in accordance with
the provisions of this Section 10. The presiding officer of the meeting shall
have the power and duty to determine whether a nomination or any business
proposed to be brought before the meeting was made in accordance with the
provisions of this Section 10 and, if any proposed nomination or business is
not in compliance with this Section 10, to declare that such defective
nomination or proposal be disregarded.

(2) Notwithstanding the foregoing provisions
of this Section 10, a stockholder shall also comply with all applicable
requirements of state law and of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and the rules and regulations thereunder with
respect to the matters set forth in this Section 10. Nothing in this Section
10 shall be deemed to affect any rights of stockholders to request inclusion of
proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the
Exchange Act.

ARTICLE II

BOARD OF DIRECTORS

Section 1. Number and Term of Office. The business and
affairs of the Corporation shall be managed under the direction of a Board of
Directors initially consisting of three (3) directors, which number may be
increased or decreased as herein provided. Directors shall hold office until
their respective successors have been duly elected and qualify. 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 (15), and may appoint
directors to fill the vacancies created by any increase in the number of
directors, and such appointed directors shall hold office until their
successors have been 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 (3) 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 increase in the
number of directors shall be filled as provided by the Maryland General
Corporation Law.

Section 3. Place of Meetings. The directors may hold their
meetings 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 shall be specified
in the respective notices of such meetings.

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.

- 4 -
<PAGE> 8
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 any two (2) or more of the
directors, by oral, telegraphic, telephonic or written notice duly given to
each director not less than one (1) business day before such meeting or, sent
or mailed to each director, not less than three (3) business days before such
meeting. Each director who is entitled to notice shall be deemed to have
waived notice if such director is present at the meeting or, either before or
after the meeting, such director signs a waiver of notice which is filed with
the minutes of the meeting. Such notice or waiver of notice need not state the
purpose or purposes of such meeting.

Section 6. Quorum. One third (1/3) of the directors then in
office (but in no event less than two (2) directors) shall constitute a quorum
of the Board of Directors for the transaction of business. If at any meeting
of the Board there shall be less than a quorum present, a majority of those
directors present may adjourn the meeting from time to time until a quorum
shall have been attained. The action of a majority of the directors present at
any meeting at which there is a quorum shall be the action of the Board of
Directors, except as may be otherwise specifically provided by applicable law,
the Charter or these Bylaws.

Section 7. Telephonic Meetings. 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 call or similar communications
equipment if all persons participating in such meeting can simultaneously hear
each other, and participation in a meeting by these means constitutes presence
in person at such meeting.

Section 8. Executive Committee. The Board of Directors may
appoint an Executive Committee consisting of two (2) or more directors.
Between meetings of the Board of Directors, the Executive Committee, if any,
shall have and may exercise any or all of the powers of the Board of Directors
with respect to the management of the business and affairs of the Corporation,
except (a) as otherwise provided by law, and (b) the power to increase or
decrease the size of, or fill vacancies on, the Board of Directors. The
Executive Committee may determine its own rules of procedure, and may meet when
and as the Executive Committee determines, or when directed by resolution of
the Board of Directors. The presence of a majority of the Executive Committee
shall constitute a quorum. The Board of Directors shall have the power at any
time to change the members and powers of, to fill vacancies on, and to dissolve
the Executive Committee. In the absence of any member of the Executive
Committee, the members present at any meeting, whether or not they constitute a
quorum, may appoint a director to act in the place of such absent member.

Section 9. Other Committees. The Board of Directors may
appoint other nominees which shall in each case consist of such number of
directors (not less than two (2)), which shall have and may exercise such
powers as the Board may from time to time determine, subject to applicable law.
A majority of all members of any such committee may determine its action, and
the time and place of its meetings, unless the Board of Directors shall provide
otherwise. The Board of Directors shall have the power at any time to change
the members and powers of, to fill vacancies on, and to dissolve any such
committee. In the absence of any member of such committee, the members present
at any meeting, whether or not they constitute a quorum, may appoint a director
to act in the place of such absent member.

Section 10. Informal Action by Directors. Except to the
extent otherwise specifically prohibited by applicable law, any action required
or permitted to be taken at any

- 5 -
<PAGE> 9
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 such committee, and such consent is filed with the minutes of
proceedings of the Board or such committee.

Section 11. Compensation of Directors. Directors shall be
entitled to receive such compensation from the Corporation for their services
as directors as the Board of Directors may from time to time determine.

ARTICLE III

OFFICERS

Section 1. Executive Officers. The initial executive
officers of the Corporation shall be elected by the Board of Directors as soon
as practicable after the incorporation of the Corporation. The executive
officers may include a Chairman of the Board, and shall include a President,
one or more Vice Presidents (the number thereof to be determined by the Board
of 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 (2)
offices, except those of President and Vice President, may be held by the same
person, but no officer shall execute, acknowledge or verify any instrument on
behalf of the Corporation in more than one (1) capacity, if such instrument is
required by law or by these Bylaws to be executed, acknowledged or verified by
two (2) 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.

Section 3. President. The President shall be the chief
executive officer of the Corporation and, subject to the Board of Directors,
shall generally manage the business and affairs of the Corporation. If there
is no Chairman of the Board, or if the Chairman of the Board has been appointed
but is absent, the President shall, if present, preside at all meetings of the
stockholders and the Board of Directors.

Section 4. Chairman of the Board. The Chairman of the Board,
if any, shall preside at all meetings of the stockholders and the Board of
Directors, if the Chairman of the Board is present. The Chairman of the Board
shall have such other powers and duties as shall be determined by the Board of
Directors, and shall undertake such other assignments as may be requested by
the President.

Section 5. Other Officers. The Chairman of the Board or one
or more Vice Presidents shall have and exercise such powers and duties of the
President in the absence or inability to act of the President, as may be
assigned to them, respectively, by the Board of Directors or, to the extent not
so assigned, by the President. In the absence or inability to act of the
President, the powers and duties of the President not otherwise assigned by the
Board of

- 6 -
<PAGE> 10
Directors or the President shall devolve upon the Chairman of the Board, or in
the Chairman's absence, the Vice Presidents in the order of their election.

Section 6. Secretary. The Secretary shall have custody of
the seal of the Corporation, and shall keep the minutes of the meetings of the
stockholders, Board of Directors and any committees thereof, and shall issue
all notices of the Corporation. The Secretary shall have charge of the stock
records and such other books and papers as the Board may direct, and shall
perform such other duties as may be incidental to the office or which are
assigned by the Board of Directors. The Secretary 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 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 became the record owners thereof, and such book shall
be open 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, subject to withdrawal in such manner as these Bylaws or the Board
of Directors may determine. The Treasurer shall, if required by the Board of
Directors, give such bond for the faithful discharge of duties in such form as
the Board of Directors may require.

ARTICLE IV

STOCK

Section 1. Stock Certificates. Each stockholder of the
Corporation shall be entitled to a certificate or certificates for the full
number of shares of each class or series of stock of the Corporation owned by
such stockholder, in such form as the Board of Directors may from time to time
determine, subject to applicable law.

Section 2. Transfer of Shares. Shares of the Corporation
shall be transferable on the books of the Corporation by the holder(s) thereof,
in person or by such holder's 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(s) as the
Corporation or its agents may reasonably require. In the case of shares not
represented 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 has appointed a transfer
agent, at the offices of such transfer agent.

Section 4. Lost, Stolen or Destroyed Certificates. The Board
of Directors may determine the conditions upon which a new stock certificate of
any class or series may be issued in place of a certificate which is alleged to
have been lost, stolen or destroyed. The Board of Directors may in its
discretion require the owner of such certificate to give bond, with sufficient
surety to the Corporation and the transfer agent, if any, to indemnify the
Corporation and such

- 7 -
<PAGE> 11
transfer agent against any and all losses or claims which may arise by reason
of the issuance of a replacement certificate.

ARTICLE V

CORPORATE SEAL

The Board of Directors may provide for 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.

ARTICLE VI

FISCAL YEAR

The fiscal year of the Corporation shall be determined by the
Board of Directors.

ARTICLE VII

INDEMNIFICATION AND ADVANCES FOR EXPENSES

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 for 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, gross negligence or reckless disregard of
the duties involved in the conduct of such person's office ("disabling
conduct").

Section 2. Advances. The Corporation shall advance payment
to any current or former director or officer of the Corporation for reasonable
expenses incurred in connection with any proceeding in which the individual is
made a party by reason of service as a director or officer in the manner and to
the fullest extent permissible under the Maryland General Corporation Law.
Upon receipt by the Corporation of a written affirmation of his or her 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 requisite standard of conduct has
not been met. In addition, at least one of the following

- 8 -
<PAGE> 12
conditions must be satisfied: (a) the individual shall provide security in form
and amount acceptable to the Corporation for the foregoing undertaking, (b) the
Corporation shall be 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 meet the requisite standard of conduct.

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 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, as
amended.

Section 5. Other Rights. The Board of Directors may make
further provision consistent with law for indemnification and advancement of
expenses to directors, officers, employees and agents by resolution, agreement
or otherwise. The indemnification provided for 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, other agreement, resolution of stockholders or disinterested
directors, or otherwise.

Section 6. Subsequent Changes to Law. 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 Bylaws
shall affect any right of any person under this Article based on any event,
omission or proceeding occurring prior to such amendment.

ARTICLE VIII

AMENDMENT OF BYLAWS

These Bylaws may be altered, amended or repealed at any
meeting of the Board of Directors without prior notice that such alteration,
amendment or repeal will be considered at such meeting.

- 9 -

<PAGE> 1
EXHIBIT 5(g)

RESTATED
AIM SUMMIT FUND, INC.
SUB-ADVISORY AGREEMENT

THIS AGREEMENT originally made the 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 ("NationsBank Texas"), and assumed as of April 1, 1996, by
TradeStreet Investment Associates, Inc., a Maryland corporation (the
"Sub-Advisor"), is hereby restated as assumed, as of April 1, 1996.

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
dated October 18, 1993 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
purposes 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.
<PAGE> 2

2. Investment Analysis. The duties 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 securities 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 purchases 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;

(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 and federal law.

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:

2
<PAGE> 3
<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

3
<PAGE> 4
other person, or from serving as partners, officers, directors or trustees of
any other firm or trust, including other investment advisory companies.

9. Terms 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 the 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, 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.

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 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,

4
<PAGE> 5
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/ STEPHEN I. WINER By: /S/ ROBERT H. GRAHAM
- ----------------------------------- ------------------------------
Assistant Secretary Robert H. Graham
President

(SEAL)

Attest: TRADESTREET INVESTMENT
ASSOCIATES, INC.

/s/ MARY ANN LUCAS By: /s/ ANDREW SILTON
- ----------------------------- -----------------------------
Secretary Andrew Silton
President

(SEAL)

<PAGE> 1
EXHIBIT 5(h)

ASSUMPTION AGREEMENT

This ASSUMPTION AGREEMENT is dated as of April 1, 1996, and is among A
I M ADVISORS, INC., a Delaware corporation and an investment advisor registered
under the Investment Advisers Act of 1940 ("AIM Advisors"), TRADESTREET
INVESTMENT ASSOCIATES, INC., a Maryland corporation and an investment advisor
registered under the Investment Advisers Act of 1940 ("TradeStreet"), and
NATIONSBANK OF TEXAS, N.A., a bank organized under the laws of the United
States of America ("NationsBank Texas").

RECITALS

WHEREAS, TradeStreet is a newly-formed investment advisory
company and a wholly-owned subsidiary of NationsBank, N.A.;

WHEREAS, NationsBank, N.A., NationsBank Texas and TradeStreet
are all indirect wholly-owned subsidiaries of NationsBank Corporation;

WHEREAS, TradeStreet provides investment management services
to advisory clients, including clients who had heretofore been provided such
services by NationsBank Texas, specifically through the officers or employees
of the NationsBank investment management group located in Charlotte, North
Carolina (the "Investment Management Group");

WHEREAS, such officers or employees of the Investment
Management Group are now providing investment management services as officers
or employees of TradeStreet;

WHEREAS, AIM Advisors acts as an investment advisor to AIM
SUMMIT FUND, INC., an open-end investment company, organized and incorporated
under the laws of the State of Maryland (the "Fund");

WHEREAS, NationsBank Texas heretofore acted as a sub-advisor
to AIM Advisors for the Fund pursuant to a sub-advisory agreement, dated
October 18, 1993, as supplemented by a letter agreement dated December 9, 1993
between AIM Advisors and NationsBank Texas (the "Sub-Advisory Agreement");

WHEREAS, the services rendered to AIM Advisors under the
Sub-Advisory Agreement were performed by NationsBank Texas through the
Investment Management Group;

WHEREAS, the officers or employees of the Investment
Management Group who heretofore provided investment management services to AIM
Advisors on behalf of NationsBank Texas have become officers or employees of
TradeStreet;

WHEREAS, AIM Advisors, NationsBank Texas and TradeStreet wish
to enter into an agreement whereby TradeStreet will assume responsibility for
performing the investment management duties and services heretofore performed
by NationsBank Texas under the Sub-Advisory Agreement;
<PAGE> 2

NOW, THEREFORE, AIM Advisors, TradeStreet and NationsBank
Texas agree as follows:

ARTICLE I
ASSUMPTION

SECTION 1.1. ASSUMPTION BY TRADESTREET. Subject to the
limitations in this Article I, and pursuant to the terms and conditions of this
Agreement, TradeStreet hereby assumes the investment advisory obligations and
duties of NationsBank Texas as described in the Sub-Advisory Agreement as of
the date hereof (the "Effective Date").

SECTION 1.2. REPRESENTATIONS AND WARRANTIES OF AIM ADVISORS. AIM
Advisors hereby represents and warrants to NationsBank Texas and TradeStreet
that the execution, delivery and performance of this Agreement has been
approved by (a) the directors of the Fund, including 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 Investment Company Act of 1940)
of a party to this Agreement (other than as Fund directors), by votes cast in
person at a meeting specifically called for such purpose, and (b) by the
directors of AIM Advisors.

ARTICLE II
INDEMNIFICATION

SECTION 2.1. INDEMNIFICATION BY TRADESTREET. In the absence of
willful misfeasance, bad faith, negligence or reckless disregard of duties
hereunder on the part of AIM Advisors or the Fund or any of their respective
officers, directors, employers or agents, TradeStreet hereby agrees to
indemnify and hold harmless AIM Advisors, the Fund, and the Fund's directors
against all claims, actions, suits or proceedings at law or in equity whether
brought by a private party or governmental department, commission, board,
bureau, agency or instrumentality of any kind, arising from the Assumption by
TradeStreet of the rights and obligations of NationsBank Texas under the
Sub-Advisory Agreement, from and after the Effective Date.

SECTION 2.2. LIMITATIONS ON ASSUMPTION. It is expressly
understood that TradeStreet is not assuming any liability for any claims,
actions, proceedings, suits at law or in equity, whether brought by a private
party or governmental department, commission, board, bureau, agency or
instrumentality of any kind against NationsBank Texas, AIM Advisors or the Fund
or any officer, director or employee thereof arising from or in connection with
the Sub-Advisory Agreement prior to the Effective Date.

ARTICLE III
MISCELLANEOUS

SECTION 3.1. ENTIRE AGREEMENT. This Agreement states the entire
agreement of the parties with respect to the subject matter hereof and may not
be amended, supplemented or modified except by a writing signed by the parties
hereto.

2
<PAGE> 3
SECTION 3.2. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and assigns; provided, however, that neither party may assign its
rights hereunder without the prior written consent of the other party.

SECTION 3.3. RESTATED AGREEMENT. The parties hereby restate the
Sub-Advisory Agreement, as assumed, in accordance with the terms of the
Restated AIM Summit Fund, Inc. Sub-Advisory Agreement, attached hereto as
Exhibit A.

SECTION 3.4. NOTICES. Except as otherwise provided herein, any
notice required or permitted by this Agreement must be sent by registered mail
(postage prepaid, return receipt requested) addressed to the applicable address
set forth on the signature page of this Agreement or to such other address as
may at any time or from time to time be specified in a notice given in
accordance with this Section 3.4.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in triplicate by their respective officers on the day and year
first written above.

AIM ADVISORS, INC.

By: /s/ ROBERT H. GRAHAM
--------------------------------
Robert H. Graham, President

11 Greenway Plaza, Suite 1919
Houston, Texas 77046
Telecopy # (713) 993-9185

TRADESTREET INVESTMENT ASSOCIATES, INC.

By: /s/ ANDREW M. SILTON
-------------------
Andrew M. Silton, President

101 South Tryon Street, Suite 1000
Charlotte, North Carolina 28255
Telecopy # (704) 386-0433

3
<PAGE> 4

NATIONSBANK OF TEXAS, N.A.

By: /s/ ANDREW M. SILTON
---------------------------------------
Andrew M. Silton, Senior Vice President

101 South Tryon Street, Suite 1000
Charlotte, North Carolina 28255
Telecopy # (704) 386-0433

<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 6,
1996 included herein and to the references to our firm under the headings
"Financial Highlights" in the Prospectus and "Reports" in the Statement of
Additional Information.

/s/ KPMG PEAT MARWICK LLP

KPMG Peat Marwick LLP

Houston, Texas
February 14, 1997

<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. 20 to the
Registration Statement under the Securities Act of 1933 and Amendment No. 21 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 13, 1997

<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information for the AIM Summit Fund,
Inc. for the annual period ended October 31, 1996.
</LEGEND>
<CIK> 0000701748
<NAME> AIM SUMMIT FUND, INC.

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 963,750,659
<INVESTMENTS-AT-VALUE> 1,271,466,323
<RECEIVABLES> 934,083
<ASSETS-OTHER> 44,954
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,272,445,360
<PAYABLE-FOR-SECURITIES> 10,337,638
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,099,478
<TOTAL-LIABILITIES> 11,437,116
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 817,023,360
<SHARES-COMMON-STOCK> 97,070,057
<SHARES-COMMON-PRIOR> 86,480,005
<ACCUMULATED-NII-CURRENT> 22,676,773
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 113,592,447
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 307,715,664
<NET-ASSETS> 1,261,008,244
<DIVIDEND-INCOME> 9,131,189
<INTEREST-INCOME> 2,131,750
<OTHER-INCOME> 0
<EXPENSES-NET> (7,971,223)
<NET-INVESTMENT-INCOME> 3,291,716
<REALIZED-GAINS-CURRENT> 114,141,332
<APPREC-INCREASE-CURRENT> 50,514,049
<NET-CHANGE-FROM-OPS> 167,947,097
<EQUALIZATION> 2,660,812
<DISTRIBUTIONS-OF-INCOME> 2,276,042
<DISTRIBUTIONS-OF-GAINS> 74,181,022
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9,230,433
<NUMBER-OF-SHARES-REDEEMED> (5,576,722)
<SHARES-REINVESTED> 6,936,341
<NET-CHANGE-IN-ASSETS> 210,997,619
<ACCUMULATED-NII-PRIOR> 19,000,287
<ACCUMULATED-GAINS-PRIOR> 73,632,137
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,360,028
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7,972,591
<AVERAGE-NET-ASSETS> 1,143,534,605
<PER-SHARE-NAV-BEGIN> 12.14
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> 1.69
<PER-SHARE-DIVIDEND> (.03)
<PER-SHARE-DISTRIBUTIONS> (.85)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.99
<EXPENSE-RATIO> .70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>