AIM SUMMIT FUND INC, 485BPOS, 1998-02-27

AIM SUMMIT FUND INC
485BPOS, 1998-02-27

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<PAGE> 1

As filed with the Securities and Exchange Commission on February 27, 1998

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. 21 X
-----
and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 22 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 100, 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 100, 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 100 1735 Market Street, 51st Floor
Houston, Texas 77046-1173 Philadelphia, Pennsylvania 19103-7599

Approximate Date of Proposed Public Offering: February 27, 1998

It is proposed that this filing will become effective:

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

X on February 27, 1998 pursuant to paragraph (b)
----

60 days after filing pursuant to paragraph (a)(1)
----
on (date) pursuant to paragraph (a)(1)
----
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.

Title of Securities Being Registered: Common Stock

<PAGE> 3
AIM SUMMIT FUND, INC.
FORM N-1A CROSS REFERENCE SHEET
(AS REQUIRED BY RULE 495)

N-1A ITEM NUMBER PROSPECTUS LOCATION
- ---------------- -------------------
<S> <C> <C> <C>
PART A
Item 1. Cover Page..................................................................Cover Page
Item 2. Synopsis...........................................Summary; Table of Fees and Expenses
Item 3. Condensed Financial Information...................................Financial Highlights
Item 4. General Description of.................................Cover Page; Summary; Investment
Registrant Program; General Information
Item 5. Management of the Fund..........................................Management of the Fund
Item 5a. Management's Discussion of Fund Performance................(included in Annual Report)
Item 6. Capital Stock and Other..............................Summary; Dividends, Distributions
Securities and Tax Matters; General Information
Item 7. Purchase of Securities....................................Sales of Shares; Determining
Being Offered Net Asset Value
Item 8. Redemption or Repurchase..........................................Redemption of Shares
Item 9. Pending Legal Proceedings...............................................Not Applicable
</TABLE>

N-1A ITEM NUMBER SAI LOCATION
- ---------------- ------------
<S> <C> <C> <C>
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..............General Information About the Fund
Item 17. Brokerage Allocation and Other Practices........................Investment Program and
Other Restrictions
Item 18. Capital Stock and Other Securities.................................General Information
About the Fund
Item 19. Purchase, Redemption and..................................Share Purchases, Redemptions
Pricing of Securities Being Offered and Repurchases
Item 20. Tax Status................................................Tax and Dividend Information
Item 21. Underwriters..............................................Share Purchases, Redemptions
and Repurchases
Item 22. Calculations of Performance Data........................................Not Applicable
Item 23. Financial Statements..............................................Financial Statements
</TABLE>

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, 1998

AIM SUMMIT FUND, INC.
11 GREENWAY PLAZA

SUITE 100

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, NOR HAS THE SECURITIES AND EXCHANGE
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, 1998 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.
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION ("SEC") MAINTAINS A WEB
SITE AT HTTP://WWW.SEC.GOV THAT CONTAINS THE STATEMENT OF ADDITIONAL INFORMATION
MATERIAL INCORPORATED BY REFERENCE AND OTHER INFORMATION REGARDING THE FUND.

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

TABLE OF CONTENTS

<TABLE>
<S> <C> <C> <C>
PAGE PAGE
Summary............................... A-2 Determining Net Asset Value........... A-11
Table of Fees and Expenses............ A-3 Sales of Shares....................... A-11
Financial Highlights.................. A-4 Redemption of Shares.................. A-12
Performance Information............... A-5 Open Account.......................... A-14
Investment Program.................... A-5 Management of the Fund................ A-14
Dividends, Distributions and General Information................... A-17
Tax Matters......................... A-10
</TABLE>

The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM
logo), AIM and Design, AIM, AIM LINK, AIM Institutional Funds, aimfunds.com, La
Familia AIM de Fondos and La Familia AIM de Fondos and Design are registered
service marks, and Invest With Discipline and AIM Bank Connection 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 qualify to 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 100, 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.

TABLE OF FEES AND EXPENSES

<TABLE>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets):
Management Fees........................................... .64%
Other Expenses............................................ .04%
Total Fund Operating Expenses............................. .68%
</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 $38 $85
</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," herein.) The fees and
expenses of the Fund are based on the average net assets of the Fund for its
1997 fiscal year. The information in the foregoing Table of Fees and Expenses
should be read in conjunction with the information appearing elsewhere in the
prospectus of Summit Investors Plans, particularly with respect to the Creation
and Sales Charges imposed in connection with the purchase of Summit Investors
Plans. These and other charges relating to the purchase of Summit Investors
Plans are in addition to the expenses shown in the foregoing Table of Fees and
Expenses. (See "Allocation of Investments and Deductions," "Rights and
Privileges of Planholders" and "Custodian and Sponsor Charges" sections of the
attached Summit Investors Plans prospectus immediately preceding the Fund
prospectus.)

THE EXAMPLE SHOWN IN THE TABLE ABOVE SHOULD NOT BE CONSIDERED TO BE A
REPRESENTATION OF PAST OR FUTURE EXPENSES; ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN.

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

A-3
<PAGE> 7

FINANCIAL HIGHLIGHTS

Shown below are the condensed financial highlights for a share of the Fund
outstanding during each of the years in the four-year period ended October 31,
1997, the ten months ended October 31, 1993 and each of the years in the
five-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,
--------------------------------------------------------------------- ----------------------
1997 1996 1995 1994 1993 1992 1991
----------- ----------- ----------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $ 12.99 $ 12.14 $ 9.78 $ 10.46 $ 9.64 $ 10.09 $ 7.56
---------- ---------- ---------- -------- -------- -------- --------
Income from investment
operations:
Net investment income 0.02 0.04 0.04 0.10 0.09 0.11 0.14
---------- ---------- ---------- -------- -------- -------- --------
Net gains (losses) on
securities (both
realized and
unrealized) 3.34 1.69 2.81 (0.04) 0.73 0.35 3.16
---------- ---------- ---------- -------- -------- -------- --------
Total from investment
operations 3.36 1.73 2.85 0.06 0.82 0.46 3.30
---------- ---------- ---------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income (0.03) (0.03) (0.10) (0.10) -- (0.11) (0.13)
---------- ---------- ---------- -------- -------- -------- --------
Distributions from
capital gains (1.17) (0.85) (0.39) (0.64) -- (0.80) (0.64)
---------- ---------- ---------- -------- -------- -------- --------
Total distributions (1.20) (0.88) (0.49) (0.74) -- (0.91) (0.77)
---------- ---------- ---------- -------- -------- -------- --------
Net asset value, end of
period $ 15.15 $ 12.99 $ 12.14 $ 9.78 $ 10.46 $ 9.64 $ 10.09
---------- ---------- ---------- -------- -------- -------- --------
Total return(b) 28.53% 15.61% 31.03% 0.61% 8.51% 4.50% 43.64%
---------- ---------- ---------- -------- -------- -------- --------
Ratios/supplemental data:
Net assets, end of period
(000s omitted) $1,650,234 $1,261,008 $1,050,011 $765,073 $705,580 $604,329 $517,835
---------- ---------- ---------- -------- -------- -------- --------
Ratio of expenses to
average net assets 0.68%(c)(d) 0.70% 0.71% 0.72% 0.79%(e) 0.76% 0.75%
---------- ---------- ---------- -------- -------- -------- --------
Ratio of net investment
income to average net
assets 0.11%(c) 0.29% 0.33% 1.04% 1.13%(e) 1.09% 1.48%
---------- ---------- ---------- -------- -------- -------- --------
Portfolio turnover rate 88.23% 118.34% 126.00% 121.69% 115.76% 97.41% 109.04%
---------- ---------- ---------- -------- -------- -------- --------
Average brokerage
commission rate paid(f) $ 0.0608 $ 0.0643 N/A N/A N/A N/A N/A
---------- ---------- ---------- -------- -------- -------- --------

<CAPTION>
DECEMBER 31,
-----------------------------------
1990 1989 1988(a)
--------- --------- ---------
<S> <C> <C> <C>
Net asset value, beginning
of period $ 7.79 $ 6.57 $ 5.70
-------- -------- --------
Income from investment
operations:
Net investment income 0.15 0.16 0.16
-------- -------- --------
Net gains (losses) on
securities (both
realized and
unrealized) (0.08) 1.86 0.84
-------- -------- --------
Total from investment
operations 0.07 2.02 1.00
-------- -------- --------
Less distributions:
Dividends from net
investment income (0.16) (0.16) (0.13)
-------- -------- --------
Distributions from
capital gains (0.14) (0.64) --
-------- -------- --------
Total distributions (0.30) (0.80) (0.13)
-------- -------- --------
Net asset value, end of
period $ 7.56 $ 7.79 $ 6.57
-------- -------- --------
Total return(b) 0.93% 30.92% 17.65%
-------- -------- --------
Ratios/supplemental data:
Net assets, end of period
(000s omitted) $316,043 $262,655 $164,996
-------- -------- --------
Ratio of expenses to
average net assets 0.80% 0.82% 1.04%
-------- -------- --------
Ratio of net investment
income to average net
assets 2.02% 2.14% 2.57%
-------- -------- --------
Portfolio turnover rate 142.60% 97.26% 114.94%
-------- -------- --------
Average brokerage
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) The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased and sold, which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.

A-4
<PAGE> 8

PERFORMANCE

All advertisements of the Fund will disclose the maximum sales and creation
charge and other fees (collectively, the "Sales Charges") imposed on purchases
of the Fund's shares. If any advertised performance data does not reflect the
maximum Sales Charges, such advertisement will disclose that the Sales Charges
have not been deducted in computing the performance data, and that, if
reflected, the maximum Sales Charges would reduce the performance quoted. See
the Statement of Additional Information for further details concerning
performance comparisons used in advertisements by the Fund. Further information
regarding the Fund's performance is contained in the Fund's annual report to
shareholders, which is available upon request and without charge.

Total return is calculated in accordance with a standardized formula for
computation of annualized total return. Standardized total return for the Fund's
shares reflects the deduction of the Fund's maximum Sales Charges at the time of
purchase.

The Fund's total return shows its overall change in value, including
changes in share price and assuming all dividends and capital gain distributions
are reinvested. A cumulative total return reflects the Fund's performance over a
stated period of time. An average annual total return reflects the hypothetical
compounded annual rate of return that would have produced the same cumulative
total return if the Fund's performance had been constant over the entire period.
BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT VARIATIONS IN THE FUND'S RETURN,
INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS ARE NOT THE SAME AS ACTUAL
YEAR-BY-YEAR RESULTS. To illustrate the components of overall performance, the
Fund may separate its cumulative and average annual returns into income results
and capital gains or losses.

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

A-5
<PAGE> 9

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 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 at no
added cost 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.

A-6
<PAGE> 10

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 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.

A-7
<PAGE> 11

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 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

A-8
<PAGE> 12

exercised on the last trading date prior to the expiration date of the option,
the settlement of the option will be made entirely in cash equal to the
difference between the exercise price of the option and the closing price of the
underlying futures contract on the expiration date. See the Statement of
Additional Information for a description of the Fund's investments in futures
contracts including certain related risks. The Fund may purchase or sell futures
contracts if, immediately thereafter, the sum of the amount of margin deposits
and premiums on open positions with respect to futures contracts and related
call options would not exceed 5% of the market value of the Fund's total assets.

PORTFOLIO TURNOVER

Consistent with its objective of capital growth, the Fund does not intend
to engage in substantial short-term trading. However, the Fund reserves the
right to dispose of any security without regard to the period of time it has
been held and to take short-term or long-term profits when such action is
consistent with its investment program. The Fund's historical portfolio turnover
rates are included in the Financial Highlights table on page A-4. A higher rate
of portfolio turnover may result in higher transaction costs, including
brokerage commissions. The Fund's turnover may vary greatly from year to year
and may exceed 100% during years when the Fund has taken a significant defensive
position or otherwise makes changes in the investment strategies which it
pursues consistent with its overall investment objective. Also, to the extent
that higher portfolio turnover results in a higher rate of net realized capital
gains to a Fund, the portion of the Fund's distributions constituting taxable
capital gains may increase.

INVESTMENT RESTRICTIONS

The Fund's investment program is subject to a number of investment
restrictions which reflect self-imposed standards as well as federal regulatory
limitations. These restrictions are designed to minimize (but cannot eliminate)
certain risks associated with investing in specified types of securities or
engaging in certain transactions and to limit the amount of the Fund's assets
which may be invested in any specific industry or issuer. The most significant
of these restrictions provide that the Fund will not purchase a security if as a
result of such purchase:

(1) More than 25% of the value of the Fund's total assets would
be invested in the securities of issuers primarily engaged in the same
industry, except that this restriction does not apply to obligations
issued or guaranteed by the United States Government or its agencies
or instrumentalities;

(2) More than 5% of the value of the Fund's total assets would be
invested in the securities of a single issuer, except that this
restriction does not apply to obligations issued or guaranteed by the
United States Government or its agencies or instrumentalities, or
repurchase agreements pertaining to such securities, and except that
the Fund may purchase securities of other investment companies to the
extent permitted by applicable law or exemptive order; 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

A-9
<PAGE> 13

purpose, except that the Fund may purchase securities of other
investment companies to the extent permitted by applicable law or
exemptive order.

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 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. With respect to tax-exempt shareholders,
distributions from the Fund will not be subject to federal income taxation to
the extent permitted under the applicable tax-exemption. Shareholders are
notified annually of the federal income tax status of dividends and capital
gains distributions. To avoid being subject to a 31%

A-10
<PAGE> 14

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
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. Notwithstanding the above, short-term
obligations with maturities of 60 days or less are valued at amortized cost as
reflecting fair value. Additional information concerning the valuation of the
Fund's shares is contained in the Statement of Additional Information.

SALES OF SHARES

The Fund has entered into a Distribution Agreement (the "Distribution
Agreement") with A I M Distributors, Inc. ("AIM Distributors"), a registered
broker-dealer and a wholly owned subsidiary of AIM, which in turn is a wholly
owned subsidiary of A I M Management Group Inc. ("AIM Management"), under which
the Fund will issue shares at net asset value to State Street Bank and Trust
Company, as custodian for Summit Investors Plans ("State Street Bank" or the
"Custodian"). The address of AIM Distributors is P.O. Box 4264, Houston, Texas
77210-4264. AIM Distributors acts as sponsor and principal underwriter of Summit
Investors Plans. The terms of offering of Summit Investors Plans are contained
in the Prospectus of Summit Investors Plans. AIM Distributors does not receive
any fee from the Fund pursuant to the Distribution Agreement. Certain directors
and officers of the Fund are affiliated with AIM Distributors and AIM
Management. More information concerning the directors and officers of the Fund
and their affiliation may be found in the Statement of Additional Information.

A-11
<PAGE> 15

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 subsidiaries. The Fund reserves the right to
reject any purchase order.

REDEMPTION OF SHARES

THE FOLLOWING DISCUSSION RELATES ONLY TO THOSE INVESTORS WHO HOLD SHARES OF
THE FUND DIRECTLY. PLANHOLDERS SHOULD CONSULT THEIR SUMMIT INVESTORS PLANS
PROSPECTUS FOR THE REQUIREMENTS FOR REDEMPTION OF FUND SHARES HELD IN A SUMMIT
INVESTORS PLAN.

A shareholder may redeem his shares of the Fund at any time without charge,
either by a written request to BFDS, or by calling BFDS at (617) 328-5000,
subject to the restrictions specified below. 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 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 $50,000
or less unless the proceeds are to be paid to a person other than the record
owner or are to be sent to an address other than the one of record. Upon notice
to the shareholders, this policy may be changed. Currently, in addition to these
requirements, if a shareholder 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

A-12
<PAGE> 16

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 shareholder 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.

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, 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 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

A-13
<PAGE> 17

order. However, in the event of a redemption of shares purchased by check,
redemption proceeds will not be mailed until the check has cleared.

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.

For a discussion of AIM Management and its subsidiaries' Year 2000
Compliance Project, see "General Information -- Year 2000 Compliance Project."

THE INVESTMENT ADVISOR

A I M Advisors, Inc. ("AIM"), 11 Greenway Plaza, Suite 100, Houston, Texas
77046, serves as the Fund's investment advisor pursuant to an Investment
Advisory Agreement, dated February 28, 1997 (the "Advisory Agreement"). AIM,
organized in 1976, together with its subsidiaries, manages or advises over 50
investment company portfolios encompassing a broad range of investment
objectives. AIM is a wholly owned subsidiary of AIM Management, the parent
corporation of AIM. AIM Management is a holding company engaged in the financial
services business and is an indirect wholly owned subsidiary of AMVESCAP PLC, a
publicly-traded holding company that, through its subsidiaries, engages in the
business of investment management on an international basis. 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.

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

A-14
<PAGE> 18

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 TradeStreet 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 February 28, 1997 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.

AIM may in its discretion from time to time agree to waive voluntarily all
or any portion of its advisory fee and/or assume certain expenses of the Fund
but will retain its ability to be reimbursed prior to the end of the fiscal
year. Fee waivers or reductions and waivers of expense reimbursements, other
than those set forth in the Advisory Agreement, may be rescinded at any time
without notice to investors.

For the fiscal year ended October 31, 1997, 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, 1997, TradeStreet received fees from AIM that amounted to
0.20% of the Fund's average daily net assets for sub-advisory services. For the
fiscal year ended October 31, 1997, the Fund paid 0.005% of its average daily
net assets to AIM for reimbursement for administrative services.

THE SUB-ADVISOR

TradeStreet Investment Associates, Inc. ("TradeStreet"), 101 South Tryon
Street, Suite 1000, Charlotte, North Carolina 28255, serves as the Fund's
sub-advisor pursuant to a Sub-Advisory Agreement dated February 28, 1997, (the
"Sub-Advisory Agreement"). TradeStreet is a wholly owned subsidiary of
NationsBank, N.A. Prior to April 1, 1996, NationsBank Texas served as
sub-advisor to the Fund. TradeStreet assumed the role of sub-advisor to the Fund
on that date.

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
A-15
<PAGE> 19

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, 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, 1997, the expenses of the Fund borne
by the Fund, including the fees paid under the Advisory Agreement, amounted to
0.68% 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 135 individuals. While individual
members of AIM's investment staff are assigned primary responsibility for the
day-to-day management of each of AIM's accounts, all accounts are reviewed on a
regular basis by AIM's Investment Policy Committee to ensure that they are being
invested in accordance with the accounts' and AIM's investment policies. The
individuals on the investment team primarily responsible for the day-to-day
management of the Fund are David P. Barnard, Robert M. Kippes and Jonathan C.
Schoolar. Messrs. Barnard, Kippes and Schoolar have had responsibility for the
Fund since March 1, 1995. Jeffrey C. Moser is Senior Product Manager with
TradeStreet, and has been responsible for the Fund since 1995.

Mr. Barnard is Vice President of A I M Capital Management, Inc. ("AIM
Capital") a wholly owned subsidiary of AIM. He has been associated with AIM
and/or its subsidiaries since 1982 and became an investment professional in
1973.

Mr. Kippes is Vice President of AIM Capital. He has been associated with
AIM and/or its subsidiaries since he began working as an investment professional
in 1989.

Mr. Schoolar is Senior Vice President and Director of AIM Capital and is
Vice President of AIM and the Fund. He has been associated with AIM and/or its
subsidiaries since 1986 and became an investment professional in 1983.

Mr. Moser, who has been associated with NationsBank Texas since 1990, and
TradeStreet since 1996, began working as an investment professional in 1983.

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

A-16
<PAGE> 20

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.

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.

A-17
<PAGE> 21

LEGAL MATTERS

The law firm of Ballard Spahr Andrews & Ingersoll, Philadelphia,
Pennsylvania, serves as counsel to the Fund.

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.

YEAR 2000 COMPLIANCE PROJECT. In providing services to the Fund, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish between the year 2000 from the year 1900.
This defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers provide to the Fund and
its shareholders.

To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm Year 2000 compliance
upon installation.

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-18
<PAGE> 22

[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 23
STATEMENT OF ADDITIONAL INFORMATION

AIM SUMMIT FUND, INC.

11 Greenway Plaza

Suite 100

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.

STATEMENT OF ADDITIONAL INFORMATION DATED FEBRUARY 27, 1998
RELATING TO THE PROSPECTUS DATED FEBRUARY 27, 1998

<PAGE> 24

TABLE OF CONTENTS

INTRODUCTION..............................................................1

PERFORMANCE INFORMATION...................................................1
Total Return Quotations..........................................2

GENERAL INFORMATION ABOUT THE FUND........................................3
The Fund and its Capital Stock...................................3
Directors and Officers...........................................3
The Investment Advisor...........................................9
The Sub-Advisor.................................................11
Expenses .......................................................12
Transfer Agent and Custodian....................................12
Reports .......................................................12

TAX AND DIVIDEND INFORMATION.............................................12
Qualification as a Regulated Investment Company.................13
Excise Tax on Regulated Investment Companies....................14
Fund Distributions..............................................14
Sale or Redemption of Fund Shares...............................15
Foreign Shareholders............................................15
Effect of Future Legislation; Local Tax Considerations..........16

SHARE PURCHASES, REDEMPTIONS AND REPURCHASES.............................16
Purchases and Redemptions.......................................16
Suspension of Right of Redemption...............................16
Valuation of Shares.............................................16
The Distribution Agreement......................................17

INVESTMENT PROGRAM AND RESTRICTIONS......................................17
Investment Program..............................................17
Common Stocks...................................................18
Preferred Stocks................................................18
Convertible Securities..........................................18
Corporate Debt Securities.......................................18
U.S. Government Securities......................................19
Warrants .......................................................19
Foreign Securities..............................................19
Foreign Exchange Transactions...................................19
Repurchase Agreements...........................................20
Rule 144A Securities............................................20
Futures Contracts...............................................20
Risks as to Futures Contracts and Related Call Options..........21
Portfolio Transactions and Brokerage............................22
Investment Restrictions.........................................24

FINANCIAL STATEMENTS.....................................................FS

<PAGE> 25

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, 1998, 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.

PERFORMANCE INFORMATION

Total return figures for the Fund are neither fixed nor guaranteed, and
no principal is insured. Performance quotations reflect historical information
and should not be considered representative of the Fund's performance for any
period in the future. Performance is a function of a number of factors which can
be expected to fluctuate. The Fund may provide performance information in
reports, sales literature and advertisements. The Fund may also, from time to
time, quote information published or aired by publications or other media
entities which contain articles or segments relating to investment results or
other data. The following is a list of such publications or media entities:

Advertising Age Forbes Nation's Business
Barron's Fortune New York Times
Best's Review Hartford Courant Inc. Pension World
Broker World Institutional Investor Pensions & Investments
Business Week Inssurance Forum Personal Investor
Changing Times Insurance Week Philadelphia Inquirer
Christian Science Monitor Investor's Daily USA Today
Consumer Reports Journal of the American U.S. News & World Report
Economist Society of CLU & ChFC Wall Street Journal
FACS of the Week Kiplinger Letter Washington Post
Financial Planning Money CNN
Financial Product News Mutual Fund Forecaster CNBC
Financial Services Week PBS
Financial World

The Fund may also compare its performance to performance data of
similar mutual funds as published by the following services:

Bank Rate Monitor Stanger
Donoghue's Weisenberger
Mutual Fund Values (Morningstar) Lipper Analytical Services

<PAGE> 26

The Fund's performance may also be compared in advertising to the
performance of comparative benchmarks such as the following:

Standard & Poor's 400 Index
Standard & Poor's 500 Stock Index Bond Buyer Index
Dow Jones Industrial Average NASDAQ
EAFE Index COFI
Consumer Price Index First Boston High Yield Index
Lehman Bond Indices

The Fund may also compare its performance to rates on Certificates of
Deposit and other fixed rate investments such as the following:

10 year Treasuries
30 year Treasuries
90 day Treasury Bills

Advertising for the Fund may from time to time include discussions of
general economic conditions and interest rates, and may also include references
to the use of the Fund as part of an individual's overall retirement investment
program. From time to time, sales literature and/or advertisements may disclose
(i) the largest holdings in the Fund's portfolio, (ii) certain selling group
members and/or (iii) certain institutional shareholders.

From time to time, the Fund's sales literature and/or advertisements
may discuss generic topics pertaining to the mutual fund industry. This
includes, but is not limited to, literature addressing general information about
mutual funds, variable annuities, dollar-cost averaging, stocks, bonds, money
markets, certificates of deposit, retirement, retirement plans, asset
allocation, tax-free investing, college planning, inflation.

Although performance data may be useful to prospective investors when
comparing the Fund's performance with other funds and other potential
investments, investors should note that the methods of computing performance of
other potential investments are not necessarily comparable to the methods
employed by the Fund.

TOTAL RETURN QUOTATIONS

The standard formula for calculating total return, as described in the
Prospectus, is as follows:
n
P(1+T) =ERV

Where P = a hypothetical initial payment of $1,000.
T = average annual total return (assuming the applicable
maximum sales load is deducted at the beginning of the
1, 5, or 10 year periods).
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000
payment at the end of the 1, 5, or 10 year periods (or
fractional portion of such period).

The average annual total return for the Fund, for the one, five and ten
year periods ended October 31, 1997, was _____%, _____% and _____%,
respectively. These average annual total returns do not include the effect of
paying the separate Creation and Sales Charges and Custodian Fees associated
with the purchase of shares of the Fund through Summit Investors Plans. Total
returns would be lower if Creation and Sales Charges and Custodian Fees were
taken into account. Shares of the Fund may be acquired by the general public
only through Summit Investors Plans. Investors should consult the Summit
Investors Plans' Prospectus for complete information regarding Creation and
Sales Charges and Custodian Fees.

The average annual total return for the Fund, for the one, five and ten
year periods ended October 31, 1997, was _____%, _____% and _____%,
respectively. These average annual total returns include change in share price,
reinvestment of dividends and capital gains, and the effects of the separate
Creation and Sales Charges and Custodian Fees assessed through Summit Investors
Plans. The average annual total returns assume an initial $_____ lump sum
investment at the beginning of each period shown with no subsequent Plan
invesments. Because the illustrations assume lump sum investments, they do not
reflect what investors would have earned only had they made regular monthly
investments over the period. Consult the Summit Investors Plans' Prospectus for
more complete information on applicable charges and fees.

Standard total return quotes may be accompanied by total return figures
calculated by alternative methods. For example, average annual total return may
be calculated without assuming payment of the full sales load according to the
following formula:

<PAGE> 27

n
P(1+U) =ERV

Where P = a hypothetical initial payment of $1,000.
U = average annual total return assuming payment of only
a stated portion of, or none of, the applicable maximum
sales load at the beginning of the stated period.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000
payment at the end of the stated period.

Cumulative total return across a stated period may be calculated as
follows:
n
P(1+V) =ERV

Where P = a hypothetical initial payment of $1,000.
V = cumulative total return assuming payment of all of, a
stated portion of, or none of, the applicable maximum
sales load at the beginning of the stated period.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000
payment at the end of the stated period.

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, 1998, 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. As of January 31, 1998, the directors and officers of the
Fund as a group owned beneficially less than 1% of the Fund's outstanding
shares.

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 laws of the State of
Maryland and 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 100, Houston, Texas 77046-1173.

3
<PAGE> 28

<TABLE>
<CAPTION>
Position(s) Held Principal Occupation(s) During,
Name, Address and Age with Registrant At Least, the Past 5 years
- --------------------- --------------- --------------------------
<S> <C> <C>
*Charles T. Bauer (78) Chairman and Chairman of the Board of Directors, A I M
Director Management Group Inc., A I M Advisors, Inc.,
A I M Capital Management, Inc., A I M Distributors,
Inc., A I M Fund Services, Inc. and Fund
Management Company; and Director and Vice
Chairman of AMVESCAP PLC.

Bruce L. Crockett, (53) Director Director, ACE Limited (insurance company).
906 Frome Lane Formerly Director, President and Chief Executive
McLean, VA 22102 Officer, COMSAT Corporation; and Chairman,
Board of Governors of INTELSAT (international communications
company).

Owen Daly II (73) 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

Jack Fields (46) Director Chief Executive Officer, Texana Global, Inc.
Texana Global, Inc. Formerly, Member of the U.S. House of
Jetero Plaza, Suite E Representatives.
8810 Will Clayton Parkway
Humble, TX 77338

**Carl Frischling (61) Director Partner, Kramer, Levin, Naftalis & Frankel (law
919 Third Avenue firm). Director, ERD Waster, Inc. (waste
New York, NY 10022 management), Aegis Consumer Finance (auto leasing
company) and Lazard Funds, Inc. (investment companies).
Formerly, Partner, Reid & Priest (law firm); and,
prior thereto, Partner, Spengler Carlson Gubar Brodsky
& Frischling (law firm).
</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.

4
<PAGE> 29

<TABLE>
<CAPTION>
Position(s) Held Principal Occupation(s) During,
Name, Address and Age with Registrant At Least, the Past 5 years
- --------------------- --------------- --------------------------
<S> <C> <C>
*Robert H. Graham (51) Director and Director, President and Chief Executive Officer,
President A I M Management Group Inc.; Director and
President, A I M Advisors, Inc.; Director and Senior
Vice President, A I M Capital Management, Inc.,
A I M Distributors, Inc., A I M Fund Services, Inc.
and Fund Management Company; Director,
AMVESCAP PLC.

John F. Kroeger (73) 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 (55) Director Attorney, private practice in Houston, Texas.
6363 Woodway, Suite 825
Houston, Texas 77057

Ian W. Robinson (74) 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 (58) Director Executive Vice President, Development and
Transco Tower, 50th Floor Operations, Hines Interests Limited Partnership
2800 Post Oak Blvd. (real estate development).
Houston, Texas 77056
</TABLE>

- --------
* A director who is an "interested person" of the Fund and A I M Advisors,
Inc. as defined in the 1940 Act.

5
<PAGE> 30

<TABLE>
<CAPTION>
Position(s) Held Principal Occupation(s) During,
Name, Address and Age with Registrant At Least, the Past 5 years
- --------------------- --------------- --------------------------
<S> <C> <C>
***John J. Arthur (53) Senior Vice Director, Senior Vice President and Treasurer,
President and A I M Advisors, Inc.; and Vice President and
Treasurer Treasurer, A I M Management Group Inc., A I M
Capital Management, Inc., A I M Distributors, Inc.,
A I M Fund Services, Inc. and Fund Management
Company.

Gary T. Crum (50) Senior Vice Director and President, A I M Capital Management,
President Inc.; Director and Senior Vice President, A I M
Management Group Inc. and A I M Advisors, Inc.;
and Director, A I M Distributors, Inc. and AMVESCAP PLC.

***Carol F. Relihan (43) Senior Vice Director, Senior Vice President, General Counsel
President and and Secretary, A I M Advisors, Inc.; Vice President,
. Secretary General Counsel and Secretary,
A I M Management Group Inc.; Director, Vice
President and General Counsel, Fund
Management Company; General Counsel and Vice
President, A I M Fund Services, Inc.; and Vice
President A I M Capital Management, Inc. and
A I M Distributors, Inc.

Dana R. Sutton (39) Vice President and Vice President and Fund Controller, A I M
Assistant Advisors, Inc.; and Assistant Vice President and
Treasurer Assistant Treasurer, Fund Management Company.

Melville B. Cox (54) Vice President Vice President and Chief Compliance Officer, A I M
Advisors, Inc., A I M Capital Management, Inc.,
A I M Distributors, Inc., A I M Fund Services, Inc.
and Fund Management Company.

Jonathan C. Schoolar (36) Vice President Senior Vice President, A I M Capital Management,
Inc.; and Vice President, A I M Advisors, Inc.
</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. Crockett, Daly, Fields,
Frischling, Kroeger (Chairman), Pennock, Robinson and Sklar. 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.

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

6
<PAGE> 31

The members of the Investments Committee are Messrs. Bauer, Crockett,
Daly (Chairman), Fields, Frischling, Kroeger, Pennock, Robinson and Sklar. The
Investments Committee is responsible for reviewing portfolio compliance,
brokerage allocation, portfolio investment pricing issues, interim dividend and
distribution issues, or considering such matters as may from time to time be set
forth in a charter adopted by the Board of Directors and such committee.

The members of the Nominating and Compensation Committee are Messrs.
Crockett, Daly, Fields, Kroeger, Pennock (Chairman), Robinson 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:

================================================================================
DIRECTOR ESTIMATED RETIREMENT TOTAL
COMPENSATION BENEFITS COMPENSATION
FROM FUND(1) ACCRUED FROM ALL AIM
BY ALL AIM FUNDS(3)
FUNDS(2)

- --------------------------------------------------------------------------------
Charles T. Bauer $ 0 $ 0 $ 0
- --------------------------------------------------------------------------------
Bruce L. Crockett 1,869 67,774 84,000
- --------------------------------------------------------------------------------
Owen Daly II 1,869 103,543 84,000
- --------------------------------------------------------------------------------
Jack Fields 1,240 0 71,000
- --------------------------------------------------------------------------------
Carl Frischling(4) 1,869 96,520 84,000
- --------------------------------------------------------------------------------
Robert H. Graham 0 0 0
- --------------------------------------------------------------------------------
John F. Kroeger 1,869 94,132 82,500
- --------------------------------------------------------------------------------
Lewis F. Pennock 1,869 55,777 84,000
- --------------------------------------------------------------------------------
Ian Robinson 1,869 85,912 84,000
- --------------------------------------------------------------------------------
Louis S. Sklar 1,845 84,370 83,500
================================================================================

(1) The total amount of compensation deferred by all Directors of the Fund
during the fiscal year ended October 31, 1997, including interest earned
thereon, was $8,390.

<PAGE> 32

(2) During the fiscal year ended October 31, 1997, the total amount of expenses
allocated to the Fund in respect of such retirement benefits was $8,812. Data
reflects compensation for the calendar year ended December 31, 1997.

(3) Each Director serves as director or trustee of a total of 11 registered
investment companies advised by AIM (comprised of over 50 portfolios). Data
reflects compensation earned during the calendar year ended December 31, 1997.

(4) During the fiscal year ended October 31, 1997, the Fund paid $6,842 in legal
fees for services rendered by Kramer, Levin, Naftalis & Frankel. Mr. Frischling
is a partner in such 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 A I M Advisors, Inc. ("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 the retainer amount
reflected below and various years of service. The estimated credited years of
service for Messrs. Crockett, Daly, Fields, Frischling, Kroeger, Pennock,
Robinson and Sklar are 10, 10, 0, 20, 19, 16, 10 and 8 years, respectively.

ESTIMATED BENEFITS UPON RETIREMENT

Annual Compensation Paid
By All AIM Funds

$80,000
==============================
Number of 10 $60,000
Years of 9 $54,000
Service with 8 $48,000
the AIM 7 $42,000
Funds 6 $36,000
5 $30,000
==============================

<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.

THE INVESTMENT ADVISOR

The Fund has entered into an Investment Advisory Agreement dated as of
February 28, 1997, (the "Advisory Agreement") with AIM. AIM is a wholly owned
subsidiary of A I M Management Group Inc. ("AIM Management"), 11 Greenway Plaza,
Suite 100, Houston, Texas 77046-1173. AIM Management is an indirect wholly owned
subsidiary of AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are an independent
investment management group engaged in institutional investment management and
retail mutual fund business in the United States, Europe and the Pacific Region.
Certain of the directors and officers of AIM are also executive officers of the
Fund and their affiliations are shown under "Directors and Officers."

AIM and the Fund have adopted a Code of Ethics which requires investment
personnel 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.

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

<PAGE> 34

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 February 28, 1997, and will
continue in effect until June 30, 1998, 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 February 28, 1997, with
AIM (the "Administrative Services Agreement"). Under the Administrative Services
Agreement, AIM currently provides the services of a principal financial officer
and his staff, who maintain the financial accounts and books and records of the
Fund, including the calculation of the daily net asset value of the Fund, and
prepare tax returns and financial statements for the Fund and also is reimbursed
for any expenses related to providing such services, as well as the services of
staff responding to various shareholder inquiries. The Administrative Services
Agreement became effective on February 28, 1997, and will continue in effect
until June 30, 1998, 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

<PAGE> 35

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, 1997, 1996 and 1995, AIM
received management and advisory fees from the Fund of $9,353,715,
$7,360,028 and $5,719,169, respectively. See "Expenses."

For the fiscal years ended October 31, 1997, 1996 and 1995, AIM was
reimbursed $67,450, $63,439 and $60,994, 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.
NationsBank Corp., a bank holding company ("NationsBank, Corp."), 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, Corp. and a
registered investment advisor. Effective April 1, 1996, TradeStreet assumed the
obligations of NationsBank Texas under its sub-advisory agreement with the Fund.
TradeStreet subsequently entered into a sub-advisory agreement with the Fund
dated February 28, 1997 (the "Sub-Advisory Agreement").

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 February 28, 1997, and
will continue in effect until June 30, 1998, and from year to year thereafter
only if such continuance is specifically approved at least annually by (i) the
Fund's Board of Directors or a vote of "a majority of the outstanding voting
securities" of the Fund (as defined by the 1940 Act), and (ii) by the
affirmative vote of a majority of the Non-Interested Directors by votes cast in
person at a meeting called for such purpose.

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

<PAGE> 36

year ended October 31, 1997 and for the period April 1, 1996 through the fiscal
year ended October 31, 1996, TradeStreet received fees from AIM of $2,921,391
and $1,454,982, respectively. See "Expenses."

EXPENSES

All of the ordinary business expenses incurred in the operations of the
Fund and the offering of its shares shall be borne by the Fund unless
specifically provided otherwise in the Advisory Agreement. These expenses borne
by the Fund include but are not limited to brokerage commissions, taxes, legal,
auditing, or governmental fees, the cost of preparing share certificates,
custodian, transfer and shareholder service agent costs, expenses of issue,
sale, redemption and repurchase of shares, expenses of registering and
qualifying shares for sale, expenses relating to directors' and shareholders'
meetings, the cost of preparing and distributing reports and notices to
shareholders, the fees and other expenses incurred by the Fund in reports and
notices to shareholders, the fees and other expenses incurred by the Fund in
connection with membership in investment company organizations and the cost of
pricing copies of prospectuses and statements of additional information
distributed to the Fund's shareholders.

If, for any fiscal year, the total of all ordinary business expenses of
the Fund, including all investment advisory fees, but excluding brokerage
commissions and fees, taxes, interest and extraordinary expenses, such as
litigation, would exceed the applicable expense limitations imposed by state
securities regulations in any state in which the Fund's shares are qualified for
sale, as such limitations may be raised or lowered from time to time, the
aggregate of all such investment advisory fees shall be reduced by the amount of
such excess.

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, 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 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").

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.
The Fund may be required to defer the recognition of a loss on the disposition
of an asset held as part of a straddle to the extent of any unrecognized gain on
the offsetting position.

In addition to satisfying the requirements described above, the Fund
must satisfy an asset diversification test in order to qualify as a regulated
investment company. Under this test, at the close of each quarter of the Fund's
taxable year, at least 50% of the value of the Fund's assets must consist of
cash and cash items, U.S. Government securities, securities of other regulated
investment companies, and securities of other issuers (as to which the Fund has
not invested more than 5% of the value of the Fund's total assets in securities
of such issuer and as to which the Fund does not hold more than 10% of the
outstanding voting securities of such issuer), and no more than 25% of the value
of its total assets may be invested in the securities of any one issuer (other
than U.S. Government securities and securities of other regulated investment
companies), or in two or more issuers which the Fund controls and which are
engaged in the same or similar trades or businesses.

If for any taxable year the Fund does not qualify as a regulated
investment company, all of its taxable income (including its net capital gain)
will be subject to tax at regular corporate rates without any deduction for
distributions to shareholders, and such distributions will be taxable as
ordinary dividends to the extent of the Fund's current and accumulated earnings
and profits.

13
<PAGE> 38

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.

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.

14
<PAGE> 39

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
in accordance with the guidance that has been provided by the Internal Revenue
Service ("IRS").

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. Under the Taxpayer Relief Act of 1997, the IRS is
authorized to issue appropriate regulations to determine the tax rates
applicable to such recognized long-term capital gain. 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 that in some cases
may be 19.6% lower than the maximum rate applicable to ordinary income. Capital
losses in any year are deductible only to the extent of capital gains plus, in
the case of a noncorporate taxpayer, $3,000 of ordinary income.

If a shareholder (i) incurs a sales load in acquiring shares of the
Fund, (ii) disposes of such shares less than 91 days after they are acquired and
(iii) subsequently acquires shares of the same or another Fund at a reduced
sales load pursuant to a right to reinvest at such reduced sales load acquired
in connection with the acquisition of the shares disposed of, then the sales
load on the shares disposed of (to the extent of the reduction in the sales load
on the shares subsequently acquired) shall not be taken into account in
determining gain or loss on the shares disposed of but shall be treated as
incurred on the acquisition of the shares subsequently acquired.

FOREIGN SHAREHOLDERS

Taxation of a shareholder who, as to the United States, is a nonresident
alien individual, foreign trust or estate ("foreign shareholder"), depends on
whether the income from the Fund is "effectively connected" with a U.S. trade or
business carried on by such shareholder.

If the income from the Fund is not effectively connected with a U.S.
trade or business carried on by a foreign shareholder, ordinary income dividends
will be subject to U.S. withholding tax at the rate of 30% (or lower treaty
rate) upon the gross amount of the dividend. Such a foreign shareholder would
generally be exempt from U.S. federal income tax on gains realized on the sale
of shares of the Fund, capital gain dividends and amounts retained by the Fund
that are designated as undistributed capital gains.

15
<PAGE> 40

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 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.

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,

16
<PAGE> 41

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.

A security listed or traded on an exchange (except convertible bonds) 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. 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. Debt obligations
(including convertible bonds) are valued on the basis of prices provided by an
independent pricing service. Prices provided by the independent pricing service
may be determined without exclusive reliance on quoted prices, and may reflect
appropriate factors such as yield, type of issue, coupon rate and maturity.
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. Notwithstanding the above, short-term
obligations with maturities of 60 days or less are valued at amortized cost
which approximates market value.

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, P.O.
Box 4264, Houston, Texas 77210-4264, and the continuous offering of the Fund's
shares is set forth in the Prospectus under the caption "Sales of Shares." The
Distribution Agreement provides that AIM Distributors will pay promotional
expenses, including the incremental costs of printing prospectuses, statements
of additional information, annual reports and other periodic reports for
distribution to persons who are not shareholders of the Fund and the costs of
preparing and distributing any other supplemental sales literature. AIM
Distributors has not undertaken to sell any specified number of shares of the
Fund. The Fund or AIM Distributors may terminate the Distribution Agreement on
60 days' written notice without penalty. The Distribution Agreement will
terminate automatically in the event of assignment.

INVESTMENT PROGRAM AND RESTRICTIONS

INVESTMENT PROGRAM

The Fund's investment objective and the methods by which the Fund seeks
to achieve that objective is set forth in the Prospectus under the caption
"Investment Program." It is the current policy of the Fund not to purchase or
own the common stock of any company which, in the opinion of AIM, derives a
substantial portion of its revenues from the manufacture of alcoholic beverages
or tobacco products or the operation of

17
<PAGE> 42

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.

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

18
<PAGE> 43

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.

FOREIGN SECURITIES

The Fund has reserved the investment flexibility to invest up to 20% of
its total assets in foreign securities. For purposes of computing such
limitation American Depository Receipts, European Depository Receipts and other
securities representing underlying securities of foreign issuers shall be
treated as foreign securities. Investments by the Fund in securities of foreign
corporations may involve considerations and risks that are different in certain
respects from an investment in securities of U.S. companies. Such risks include
possible imposition of withholding taxes on interest or dividends, possible
adoption of foreign governmental restrictions on repatriation of income or
capital invested, or other adverse political or economic developments.
Additionally, it may be more difficult to enforce the rights of a security
holder against a foreign corporation, and information about the operations of
foreign corporations may be more difficult to obtain and evaluate.

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

19
<PAGE> 44

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 amount of liquid assets, 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

20
<PAGE> 45

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.

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.

21
<PAGE> 46

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

General Brokerage Policy

AIM makes decisions to buy and sell securities for the Fund, selects
broker-dealers, effects the Fund's investment portfolio transactions, allocates
brokerage fees in such transactions, and where applicable, negotiates
commissions and spreads on transactions. AIM's primary consideration in
effecting a security transaction is to obtain the most favorable execution of
the order, which includes the best price on the security and a low commission
rate. While AIM seeks reasonably competitive commission rates, the Fund may not
pay the lowest commission or spread available. See "Section 28(e) Standards"
below.

Some of the securities in which the Fund invests are traded in
over-the-counter markets. In such transactions, the Fund deals directly with
dealers who make markets in the securities involved, except when better prices
are available elsewhere. Portfolio transactions placed through dealers who are
primary market makers are effected at net prices without commissions, but which
include compensation in the form of a mark up or mark down.

Traditionally, commission rates have not been negotiated on stock
markets outside the United States. Although in recent years many overseas stock
markets have adopted a system of negotiated rates, a number of markets maintain
an established schedule of minimum commission rates.

AIM may determine target levels of commission business with various
brokers on behalf of its clients (including the Fund) over a certain time
period. The target levels will be 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 interest in mutual funds
in general and in the Fund and other mutual funds advised by AIM or AIM Capital
(collectively, the "AIM Funds") in particular, including sales of the Fund and
of the other AIM Funds. In connection with (3) above, the Fund's trades may be
executed directly by dealers that sell shares of the AIM Funds or by other
broker-dealers with which such dealers have clearing arrangements. AIM will not
use a specific formula in connection with any of these considerations to
determine the target levels.

AIM will seek, whenever possible, to recapture for the benefit of the
Fund any commissions, fees, brokerage or similar payments paid by the Fund on
portfolio transactions. Normally, the only fees which AIM can recapture are the
soliciting dealer fees on the tender of a Fund's portfolio securities in a
tender or exchange offer.

The Fund may engage in certain principal and agency transactions with
banks and their affiliates that own 5% or more of the outstanding voting
securities of the Fund, provided the conditions of an exemptive order received
by the Fund from the SEC are met. In addition, the Fund may purchase or sell a
security from or to another AIM Fund provided the Fund follows procedures
adopted by the Boards of Directors/Trustees

<PAGE> 47

of the various AIM Funds, including the Fund. These inter-fund transactions do
not generate brokerage commissions but may result in custodial fees or taxes or
other related expenses.

Allocation of Portfolio Transactions

AIM and its affiliates manage several other investment accounts. Some
of these accounts may have investment objectives similar to the Fund.
Occasionally, identical securities will be appropriate for investment by the
Fund and by another AIM Fund or one or more of these investment accounts.
However, the position of each account in the same securities and the length of
time that each account may hold its investment in the same securities may 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 is consistent with the
investment policies of the Fund(s) and one or more of these accounts, and is
considered at or about the same time, AIM will fairly allocate transactions in
such securities among the Fund(s) and these accounts. AIM may combine such
transactions, in accordance with applicable laws and regulations, to obtain the
most favorable execution. Simultaneous transactions could, however, adversely
affect a Fund's ability to obtain or dispose of the full amount of a security
which it seeks to purchase or sell.

Sometimes the procedure for allocating portfolio transactions among the
various investment accounts advised by AIM could have an adverse effect on the
price or amount of securities available to a Fund. In making such allocations,
AIM considers the investment objectives and policies of its advisory clients,
the relative size of portfolio holdings of the same or comparable securities,
the availability of cash for investment, the size of investment commitments
generally held, and the judgments of the persons responsible for recommending
the investment.

Section 28(e) Standards

Section 28(e) of the Securities Exchange Act of 1934 provides that AIM,
under certain circumstances, lawfully may cause an account to pay a higher
commission than the lowest available. Under 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 [AIM's] overall responsibilities with
respect to the accounts as to which it exercises investment discretion." The
services provided by the broker also must lawfully and appropriately assist AIM
in the performance of its investment decision-making responsibilities.
Accordingly, in recognition of research services provided to it, the Fund may
pay a broker higher commissions than those available from another broker.

Research services received from broker-dealers supplement AIM's own
research (and the research of its affiliates), and may include the following
types of information: statistical and background information on the U.S. and
foreign economies, industry groups and individual companies; forecasts and
interpretations with respect to the U.S. and foreign economies, securities,
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; and information supplied
by specialized services to AIM and to the Fund's directors with respect to the
performance, investment activities, and fees and expenses of other mutual funds.
Broker-dealers may communicate such information electronically, orally or in
written form. Research services may also include the providing of custody
services, as well as the providing of equipment used to communicate research
information, the providing of specialized consultations with AIM personnel with
respect to computerized systems and data furnished to AIM as a component of
other research services, the arranging of meetings with management of
companies, and the providing of access to consultants who supply research
information.

The outside research assistance is useful to AIM since the broker-
dealers used by AIM tend to follow a broader universe of securities and other
matters than AIM's staff can follow. In addition, the research provides AIM
with a diverse perspective on financial markets. Research services provided to
AIM by broker-

23
<PAGE> 48

dealers are available for the benefit of all accounts managed or advised by AIM
or by its affiliates. 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 clients, including the
Fund. However, the Fund is not under any obligation to deal with any
broker-dealer in the execution of transactions in portfolio securities.

In some cases, the research services are available only from the
broker-dealer providing them. In other cases, the research services may be
obtainable from alternative sources in return for cash payments. AIM believes
that the research services are beneficial in supplementing AIM's research and
analysis and that they improve the quality of AIM's investment advice. The
advisory fee paid by the Fund is not reduced because AIM receives such services.
However, to the extent that AIM would have purchased research services had they
not been provided by broker-dealers, the expenses to AIM could be considered to
have been reduced accordingly.

As of October 31, 1997, the Fund held an amount of common stock issued
by Merrill Lynch & Co., Inc. and PaineWebber Group having a market value of
$9,647,500 and $7,865,375, respectively. As of October 31, 1997, the Fund was a
party to a repurchase agreement, having a market value of $77,247,953, with SBC
Warburg Inc., a regular broker of the Fund, as that term is defined in Rule
10b-1 under the 1940 Act.

Brokerage Commissions Paid

For the fiscal years ended October 31, 1997, 1996 and 1995, the Fund
paid brokerage commissions of $2,573,656, $3,138,280 and $3,896,038,
respectively. For the fiscal year ended October 31, 1997, AIM allocated certain
of the Fund's brokerage transactions to certain broker-dealers that provided AIM
with certain research, statistical and other information. Such transactions
amounted to $169,739,779 and the related brokerage commissions were $153,830.

No brokerage commissions were paid by the Fund to any broker who is an
affiliated person of the Fund, an affiliated person of such person or an
affiliated person of the Fund, the Fund's principal underwriter, or AIM.

Portfolio Turnover

The decrease in portfolio turnover rate from 1996 to 1997 resulted from
strong corporate earnings and thus a reduced need to restructure the Fund's
portfolio holdings.

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

24
<PAGE> 49
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 except that the Fund may purchase securities of other
investment companies to the extent permited by applicable law or
exemptive order.

(10) 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 and subject to amendment by the Board of Directors of the Fund, the
Fund may not invest more than 5% of its total assets in financial futures
contracts or related call options.

25
<PAGE> 50

FINANCIAL STATEMENTS

<PAGE> 51

INDEPENDENT AUDITORS' REPORT

To the Shareholders and Board of Directors
AIM Summit Fund, Inc:

We have audited the accompanying statement of assets and
liabilities of the AIM Summit Fund, Inc., including the
schedule of investments, as of October 31, 1997, 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 four-year period
then ended, the ten months ended October 31, 1993, and
the year 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, 1997, 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, 1997, and 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 four-year period then ended, the ten months
ended October 31, 1993, and the year ended December 31,
1992, in conformity with generally accepted accounting
principles.

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

Houston, Texas
December 5, 1997

FS-1
<PAGE> 52
SCHEDULE OF INVESTMENTS

October 31, 1997

<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS-94.82%

AEROSPACE/DEFENSE-0.05%

Precision Castparts Corp. 13,000 $ 764,563
- ---------------------------------------------------------------

AIR FREIGHT-0.71%

CNF Transportation Inc. 57,300 2,557,012
- ---------------------------------------------------------------
Federal Express Corp.(a) 137,000 9,144,750
- ---------------------------------------------------------------
11,701,762
- ---------------------------------------------------------------

AIRLINES-1.01%

Southwest Airlines Co. 49,000 1,598,625
- ---------------------------------------------------------------
UAL Corp.(a) 173,000 15,159,125
- ---------------------------------------------------------------
16,757,750
- ---------------------------------------------------------------

AUTOMOBILES-0.60%

Ford Motor Co. 225,000 9,829,688
- ---------------------------------------------------------------

BANKS (MAJOR REGIONAL)-0.25%

First Union Corp. 84,000 4,121,250
- ---------------------------------------------------------------

BANKS (MONEY CENTER)-1.58%

BankAmerica Corp. 140,000 10,010,000
- ---------------------------------------------------------------
Chase Manhattan Corp. 107,152 12,362,662
- ---------------------------------------------------------------
Citicorp 30,000 3,751,875
- ---------------------------------------------------------------
26,124,537
- ---------------------------------------------------------------

BANKS (REGIONAL)-0.10%

AmSouth Bancorporation 35,000 1,682,188
- ---------------------------------------------------------------

BEVERAGES (NON-ALCOHOLIC)-0.17%

Panamerican Beverages, Inc.-Class A
(Mexico) 5,200 161,200
- ---------------------------------------------------------------
PepsiCo, Inc. 70,000 2,576,875
- ---------------------------------------------------------------
2,738,075
- ---------------------------------------------------------------

BROADCASTING (TELEVISION, RADIO & CABLE)-0.31%

Clear Channel Communications, Inc.(a) 41,800 2,758,800
- ---------------------------------------------------------------
Jacor Communications, Inc.(a) 55,000 2,303,125
- ---------------------------------------------------------------
5,061,925
- ---------------------------------------------------------------

CHEMICALS-0.39%

Rohm & Haas Co. 77,200 6,431,725
- ---------------------------------------------------------------

CHEMICALS (SPECIALTY)-0.52%

Cytec Industries Inc.(a) 175,000 8,531,250
- ---------------------------------------------------------------

COMMUNICATIONS EQUIPMENT-4.05%

ADC Telecommunications, Inc.(a) 200,000 6,625,000
- ---------------------------------------------------------------
Brightpoint, Inc.(a) 50,000 1,650,000
- ---------------------------------------------------------------
DSC Communications Corp.(a) 310,000 7,556,250
- ---------------------------------------------------------------
ECI Telecommunications Ltd. (Israel) 100,000 2,762,500
- ---------------------------------------------------------------
Lucent Technologies, Inc. 140,000 11,541,250
- ---------------------------------------------------------------

MARKET
SHARES VALUE

COMMUNICATIONS EQUIPMENT-(CONTINUED)

MasTech, Inc.(a) 14,300 $ 463,856
- ---------------------------------------------------------------
Nokia Oy A.B.-Class A-ADR (Finland) 110,000 9,707,500
- ---------------------------------------------------------------
Northern Telecom Ltd. (Canada) 60,000 5,381,250
- ---------------------------------------------------------------
PairGain Technologies, Inc.(a) 85,000 2,401,250
- ---------------------------------------------------------------
Telefonaktiebolaget LM
Ericsson-ADR (Sweden) 190,900 8,447,325
- ---------------------------------------------------------------
Tellabs, Inc.(a) 190,800 10,303,200
- ---------------------------------------------------------------
66,839,381
- ---------------------------------------------------------------

COMPUTERS (HARDWARE)-4.33%

Comdisco, Inc. 72,500 2,288,281
- ---------------------------------------------------------------
Compaq Computer Corp. 350,000 22,312,500
- ---------------------------------------------------------------
Concord EFS, Inc.(a) 123,700 3,672,344
- ---------------------------------------------------------------
Dell Computer Corp.(a) 404,800 32,434,600
- ---------------------------------------------------------------
Digital Equipment Corp.(a) 50,000 2,503,125
- ---------------------------------------------------------------
International Business Machines
Corp. 83,500 8,188,219
- ---------------------------------------------------------------
71,399,069
- ---------------------------------------------------------------

COMPUTERS (NETWORKING)-1.46%

3Com Corp.(a) 70,000 2,900,625
- ---------------------------------------------------------------
Bay Networks, Inc.(a) 278,600 8,810,725
- ---------------------------------------------------------------
Cisco Systems, Inc.(a) 70,800 5,807,813
- ---------------------------------------------------------------
Newbridge Networks Corp.(a) (Canada) 125,000 6,625,000
- ---------------------------------------------------------------
24,144,163
- ---------------------------------------------------------------

COMPUTERS (PERIPHERALS)-1.98%

Adaptec, Inc.(a) 109,000 5,279,687
- ---------------------------------------------------------------
EMC Corp.(a) 163,000 9,128,000
- ---------------------------------------------------------------
Iomega Corp.(a) 326,300 8,748,918
- ---------------------------------------------------------------
Quantum Corp.(a) 58,000 1,834,250
- ---------------------------------------------------------------
SMART Modular Technologies, Inc.(a) 25,000 1,243,750
- ---------------------------------------------------------------
Storage Technology Corp.(a) 110,000 6,455,625
- ---------------------------------------------------------------
32,690,230
- ---------------------------------------------------------------

COMPUTERS (SOFTWARE & SERVICES)-6.35%

America Online, Inc.(a) 150,000 11,550,000
- ---------------------------------------------------------------
Avant! Corp.(a) 50,000 1,312,500
- ---------------------------------------------------------------
BMC Software, Inc.(a) 140,000 8,452,500
- ---------------------------------------------------------------
Cadence Design Systems, Inc.(a) 125,000 6,656,250
- ---------------------------------------------------------------
Computer Associates International,
Inc. 120,000 8,947,500
- ---------------------------------------------------------------
Computer Sciences Corp.(a) 21,000 1,489,687
- ---------------------------------------------------------------
Compuware Corp.(a) 280,000 18,515,000
- ---------------------------------------------------------------
Electronic Arts, Inc.(a) 50,000 1,693,750
- ---------------------------------------------------------------
HBO & Co. 294,200 12,797,700
- ---------------------------------------------------------------
McAfee Associates, Inc.(a) 30,000 1,492,500
- ---------------------------------------------------------------
Microsoft Corp.(a) 130,000 16,900,000
- ---------------------------------------------------------------
</TABLE>

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<PAGE> 53
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTERS (SOFTWARE & SERVICES)-(CONTINUED)

Parametric Technology Co.(a) 80,000 $ 3,530,000
- ---------------------------------------------------------------
Security Dynamics Technologies,
Inc.(a) 70,000 2,371,250
- ---------------------------------------------------------------
Sterling Commerce, Inc.(a) 109,211 3,624,440
- ---------------------------------------------------------------
Sterling Software, Inc.(a) 39,000 1,330,875
- ---------------------------------------------------------------
Symantec Corp.(a) 50,000 1,093,750
- ---------------------------------------------------------------
Tecnomatix Technologies Ltd.(a)
(Israel) 25,000 771,875
- ---------------------------------------------------------------
Wind River Systems(a) 60,000 2,302,500
- ---------------------------------------------------------------
104,832,077
- ---------------------------------------------------------------

CONSUMER (JEWELRY, NOVELTIES & GIFTS)-0.04%

Blyth Industries, Inc.(a) 28,650 712,669
- ---------------------------------------------------------------

CONSUMER FINANCE-2.57%

FIRSTPLUS Financial Group, Inc.(a) 50,000 2,750,000
- ---------------------------------------------------------------
Green Tree Financial Corp. 200,000 8,425,000
- ---------------------------------------------------------------
Household International, Inc. 54,000 6,115,500
- ---------------------------------------------------------------
IMC Mortgage Co.(a) 82,500 1,433,437
- ---------------------------------------------------------------
MBNA Corp. 260,700 6,859,669
- ---------------------------------------------------------------
SLM Holding Corp. 120,200 16,873,075
- ---------------------------------------------------------------
42,456,681
- ---------------------------------------------------------------

DISTRIBUTORS (FOOD & HEALTH)-0.93%

AmeriSource Health Corp.-Class A(a) 53,000 3,146,875
- ---------------------------------------------------------------
Cardinal Health, Inc. 81,000 6,014,250
- ---------------------------------------------------------------
McKesson Corp. 30,000 3,219,375
- ---------------------------------------------------------------
Sysco Corp. 75,000 3,000,000
- ---------------------------------------------------------------
15,380,500
- ---------------------------------------------------------------

ELECTRICAL EQUIPMENT-2.22%

American Power Conversion Corp.(a) 66,000 1,798,500
- ---------------------------------------------------------------
Berg Electronics Corp.(a) 62,800 1,467,950
- ---------------------------------------------------------------
General Electric Co. 163,700 10,568,881
- ---------------------------------------------------------------
Kemet Corp.(a) 57,400 1,248,450
- ---------------------------------------------------------------
Philips Electronics N.V.-ADR-New
York Shares (Netherlands) 70,400 5,517,600
- ---------------------------------------------------------------
Sanmina Corp.(a) 30,000 2,242,500
- ---------------------------------------------------------------
SCI Systems, Inc.(a) 145,000 6,380,000
- ---------------------------------------------------------------
Solectron Corp.(a) 129,200 5,071,100
- ---------------------------------------------------------------
Symbol Technologies, Inc. 58,800 2,337,300
- ---------------------------------------------------------------
36,632,281
- ---------------------------------------------------------------

ELECTRONICS (INSTRUMENTATION)-0.31%

Perkin-Elmer Corp. 59,000 3,687,500
- ---------------------------------------------------------------
Tektronix, Inc. 24,600 1,454,475
- ---------------------------------------------------------------
5,141,975
- ---------------------------------------------------------------

ELECTRONICS (SEMICONDUCTORS)-4.28%

ANADIGICS, Inc.(a) 50,000 1,850,000
- ---------------------------------------------------------------
Analog Devices, Inc.(a) 125,000 3,820,312
- ---------------------------------------------------------------
ASE Test Ltd.(a) (Taiwan) 10,000 547,500
- ---------------------------------------------------------------

MARKET
SHARES VALUE

ELECTRONICS (SEMICONDUCTORS)-(CONTINUED)

ASM Lithography Holding N.V.(a)
(Netherlands) 17,000 $ 1,245,250
- ---------------------------------------------------------------
Atmel Corp.(a) 100,000 2,587,500
- ---------------------------------------------------------------
Dallas Semiconductor Corp. 50,000 2,443,750
- ---------------------------------------------------------------
Intel Corp. 140,000 10,780,000
- ---------------------------------------------------------------
Linear Technology Corp. 129,000 8,110,875
- ---------------------------------------------------------------
Maxim Integrated Products,
Inc.(a) 100,000 6,625,000
- ---------------------------------------------------------------
Microchip Technology, Inc.(a) 166,100 6,623,237
- ---------------------------------------------------------------
National Semiconductor Corp.(a) 204,600 7,365,600
- ---------------------------------------------------------------
PMC-Sierra, Inc.(a) 50,000 1,318,750
- ---------------------------------------------------------------
Taiwan Semiconductor Manufacturing Co.
Ltd.-ADR(a) (Taiwan 25,000 495,313
- ---------------------------------------------------------------
Texas Instruments, Inc. 110,000 11,735,625
- ---------------------------------------------------------------
Vitesse Semiconductor Corp.(a) 50,000 2,168,750
- ---------------------------------------------------------------
Xilinx, Inc.(a) 85,100 2,904,038
- ---------------------------------------------------------------
70,621,500
- ---------------------------------------------------------------

EQUIPMENT (SEMICONDUCTORS)-1.57%

Applied Materials, Inc.(a) 298,400 9,959,100
- ---------------------------------------------------------------
BMC Industries, Inc. 29,800 959,187
- ---------------------------------------------------------------
KLA-Tencor Corp.(a) 150,000 6,590,625
- ---------------------------------------------------------------
Novellus Systems, Inc.(a) 50,000 2,225,000
- ---------------------------------------------------------------
Teradyne, Inc.(a) 165,100 6,180,931
- ---------------------------------------------------------------
25,914,843
- ---------------------------------------------------------------

FINANCIAL (DIVERSIFIED)-2.24%

American Express Co. 50,000 3,900,000
- ---------------------------------------------------------------
Federal Home Loan Mortgage Corp. 156,000 5,908,500
- ---------------------------------------------------------------
Federal National Mortgage Association 104,600 5,066,562
- ---------------------------------------------------------------
MBIA, Inc. 14,000 836,500
- ---------------------------------------------------------------
MGIC Investment Corp. 260,000 15,681,250
- ---------------------------------------------------------------
Morgan Stanley, Dean Witter,
Discover & Co. 43,200 2,116,800
- ---------------------------------------------------------------
Newcourt Credit Group, Inc. (Canada) 20,000 696,250
- ---------------------------------------------------------------
SunAmerica, Inc. 75,000 2,695,312
- ---------------------------------------------------------------
36,901,174
- ---------------------------------------------------------------

FOODS-0.24%

ConAgra, Inc. 132,000 3,976,500
- ---------------------------------------------------------------

FOOTWEAR-0.14%

Nike, Inc.-Class B 50,000 2,350,000
- ---------------------------------------------------------------

HEALTH CARE (DIVERSIFIED)-1.73%

Abbott Laboratories 61,500 3,770,719
- ---------------------------------------------------------------
American Home Products Corp. 65,000 4,818,125
- ---------------------------------------------------------------
Bristol-Myers Squibb Co. 77,000 6,756,750
- ---------------------------------------------------------------
Johnson & Johnson 94,600 5,427,675
- ---------------------------------------------------------------
Warner-Lambert Co. 54,700 7,832,356
- ---------------------------------------------------------------
28,605,625
- ---------------------------------------------------------------
</TABLE>

FS-3
<PAGE> 54
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>

HEALTH CARE (DRUGS-GENERIC & OTHER)-1.31%

Dura Pharmaceuticals, Inc.(a) 100,000 $ 4,837,500
- ---------------------------------------------------------------
Elan Corp. PLC-ADR(a) (Ireland) 102,300 5,102,212
- ---------------------------------------------------------------
Mylan Laboratories, Inc. 80,000 1,755,000
- ---------------------------------------------------------------
Parexel International Corp.(a) 19,800 715,275
- ---------------------------------------------------------------
Teva Pharmaceutical Industries
Ltd.-ADR (Israel) 45,000 2,103,750
- ---------------------------------------------------------------
Watson Pharmaceuticals, Inc.(a) 224,600 7,131,050
- ---------------------------------------------------------------
21,644,787
- ---------------------------------------------------------------

HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)-1.45%

Lilly (Eli) & Co. 50,000 3,343,750
- ---------------------------------------------------------------
Merck & Co., Inc. 90,000 8,032,500
- ---------------------------------------------------------------
Pfizer, Inc. 19,300 1,365,475
- ---------------------------------------------------------------
Schering-Plough Corp. 80,000 4,485,000
- ---------------------------------------------------------------
SmithKline Beecham PLC-ADR
(United Kingdom) 140,000 6,667,500
- ---------------------------------------------------------------
23,894,225
- ---------------------------------------------------------------

HEALTH CARE (HOSPITAL MANAGEMENT)-1.11%

Health Management Associates,
Inc.-Class A(a) 300,000 7,312,500
- ---------------------------------------------------------------
Tenet Health Care Corp.(a) 249,700 7,631,456
- ---------------------------------------------------------------
Universal Health Services,
Inc.-Class B(a) 77,100 3,397,219
- ---------------------------------------------------------------
18,341,175
- ---------------------------------------------------------------

HEALTH CARE (LONG TERM CARE)-1.09%

Beverly Enterprises, Inc.(a) 100,000 1,493,750
- ---------------------------------------------------------------
Health Care and Retirement Corp.(a) 167,800 6,344,938
- ---------------------------------------------------------------
HEALTHSOUTH Corp.(a) 400,000 10,225,000
- ---------------------------------------------------------------
18,063,688
- ---------------------------------------------------------------

HEALTH CARE (MANAGED CARE)-0.44%

Concentra Managed Care, Inc.(a) 90,000 2,936,250
- ---------------------------------------------------------------
PhyCor, Inc.(a) 105,000 2,421,563
- ---------------------------------------------------------------
Wellpoint Health Networks, Inc.(a) 40,000 1,830,000
- ---------------------------------------------------------------
7,187,813
- ---------------------------------------------------------------

HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)-2.65%

Arterial Vascular Engineering, Inc.(a) 59,200 3,145,000
- ---------------------------------------------------------------
Baxter International Inc. 81,700 3,778,625
- ---------------------------------------------------------------
Becton, Dickinson & Co. 50,000 2,303,125
- ---------------------------------------------------------------
Dentsply International, Inc. 47,200 1,339,300
- ---------------------------------------------------------------
Guidant Corp. 340,000 19,550,000
- ---------------------------------------------------------------
Quintiles Transnational Corp.(a) 26,700 1,935,750
- ---------------------------------------------------------------
Sofamor Danek Group, Inc.(a) 11,400 785,175
- ---------------------------------------------------------------
Stryker Corp. 100,000 3,718,750
- ---------------------------------------------------------------
Sybron International Corp.(a) 100,000 4,012,500
- ---------------------------------------------------------------
US Surgical Corp. 120,000 3,232,500
- ---------------------------------------------------------------
43,800,725
- ---------------------------------------------------------------

MARKET
SHARES VALUE

HEALTH CARE (SPECIALIZED SERVICES)-1.03%

FPA Medical Management, Inc.(a) 70,500 $ 1,700,812
- ---------------------------------------------------------------
Lincare Holdings, Inc.(a) 120,000 6,435,000
- ---------------------------------------------------------------
Omnicare, Inc. 159,900 4,447,219
- ---------------------------------------------------------------
Orthodontic Centers of America,
Inc.(a) 52,400 907,175
- ---------------------------------------------------------------
Total Renal Care Holdings, Inc.(a) 112,667 3,471,542
- ---------------------------------------------------------------
16,961,748
- ---------------------------------------------------------------

HOMEBUILDING-0.05%

Clayton Homes, Inc. 46,300 761,056
- ---------------------------------------------------------------

HOUSEHOLD PRODUCTS (NON-DURABLES)-0.70%

Fort James Corp. 197,225 7,827,367
- ---------------------------------------------------------------
Procter & Gamble Co. (The) 54,000 3,672,000
- ---------------------------------------------------------------
11,499,367
- ---------------------------------------------------------------

HOUSEWARES-0.09%

Central Garden and Pet Co.(a) 55,000 1,443,750
- ---------------------------------------------------------------

INSURANCE (LIFE/HEALTH)-1.09%

AFLAC Inc. 31,200 1,587,300
- ---------------------------------------------------------------
Conseco Inc. 79,600 3,472,550
- ---------------------------------------------------------------
Equitable Companies, Inc. 254,000 10,461,625
- ---------------------------------------------------------------
Nationwide Financial Services,
Inc.-Class A 80,000 2,435,000
- ---------------------------------------------------------------
17,956,475
- ---------------------------------------------------------------

INSURANCE (MULTI-LINE)-1.55%

American International Group, Inc. 51,100 5,215,394
- ---------------------------------------------------------------
CIGNA Corp. 50,000 7,762,500
- ---------------------------------------------------------------
Travelers Group, Inc. 180,600 12,642,000
- ---------------------------------------------------------------
25,619,894
- ---------------------------------------------------------------

INSURANCE (PROPERTY-CASUALTY)-0.73%

Allstate Corp. 72,900 6,046,144
- ---------------------------------------------------------------
CapMAC Holdings, Inc. 24,100 723,000
- ---------------------------------------------------------------
Everest Reinsurance Holdings, Inc. 141,800 5,335,225
- ---------------------------------------------------------------
12,104,369
- ---------------------------------------------------------------

INVESTMENT BANKING/BROKERAGE-1.05%

Merrill Lynch & Co., Inc. 140,000 9,467,500
- ---------------------------------------------------------------
PaineWebber Group Inc. 178,000 7,865,375
- ---------------------------------------------------------------
17,332,875
- ---------------------------------------------------------------

INVESTMENT MANAGEMENT-1.22%

Franklin Resources, Inc. 77,000 6,920,375
- ---------------------------------------------------------------
T. Rowe Price Associates 200,000 13,250,000
- ---------------------------------------------------------------
20,170,375
- ---------------------------------------------------------------

IRON & STEEL-0.50%

USX-US Steel Group, Inc. 244,000 8,296,000
- ---------------------------------------------------------------
</TABLE>

FS-4
<PAGE> 55
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
LEISURE TIME (PRODUCTS)-0.13%

Harley-Davidson, Inc. 78,400 $ 2,175,600
- ---------------------------------------------------------------

LODGING-HOTELS-0.63%

Carnival Corp. -- Class A 80,000 3,880,000
- ---------------------------------------------------------------
Choice Hotels International, Inc.(a) 54,000 948,375
- ---------------------------------------------------------------
Host Marriott Corp.(a) 195,200 4,074,800
- ---------------------------------------------------------------
Promus Hotel Corp.(a) 35,000 1,373,750
- ---------------------------------------------------------------
Sunburst Hospitality Corp.(a) 18,000 182,250
- ---------------------------------------------------------------
10,459,175
- ---------------------------------------------------------------

MACHINERY (DIVERSIFIED)-1.13%

Caterpillar Inc. 110,000 5,637,500
- ---------------------------------------------------------------
Deere & Co. 72,000 3,789,000
- ---------------------------------------------------------------
Dover Corp. 37,600 2,538,000
- ---------------------------------------------------------------
Ingersoll-Rand Co. 172,500 6,716,719
- ---------------------------------------------------------------
18,681,219
- ---------------------------------------------------------------

MANUFACTURING (DIVERSIFIED)-2.60%

Eaton Corp. 95,000 9,179,375
- ---------------------------------------------------------------
Hillenbrand Industries, Inc. 41,800 1,786,950
- ---------------------------------------------------------------
Pentair, Inc. 19,200 741,600
- ---------------------------------------------------------------
Premark International, Inc. 285,000 7,712,813
- ---------------------------------------------------------------
Thermo Electron Corp.(a) 230,250 8,591,203
- ---------------------------------------------------------------
Tyco International Ltd. 100,000 3,775,000
- ---------------------------------------------------------------
United Technologies Corp. 158,000 11,060,000
- ---------------------------------------------------------------
42,846,941
- ---------------------------------------------------------------

MANUFACTURING (SPECIALIZED)-0.32%

Cognex Corp.(a) 55,000 1,471,250
- ---------------------------------------------------------------
Diebold, Inc. 84,750 3,734,297
- ---------------------------------------------------------------
5,205,547
- ---------------------------------------------------------------

NATURAL GAS-0.74%

Columbia Gas System, Inc. 114,600 8,279,850
- ---------------------------------------------------------------
NICOR, Inc. 100,000 3,856,250
- ---------------------------------------------------------------
12,136,100
- ---------------------------------------------------------------

OFFICE EQUIPMENT & SUPPLIES-0.28%

Danka Business Systems PLC-ADR
(United Kingdom) 125,000 4,625,000
- ---------------------------------------------------------------

OIL (DOMESTIC INTEGRATED)-1.03%

Pennzoil Co. 109,000 8,066,000
- ---------------------------------------------------------------
USX-Marathon Group 250,000 8,937,500
- ---------------------------------------------------------------
17,003,500
- ---------------------------------------------------------------

OIL (INTERNATIONAL INTEGRATED)-1.37%

British Petroleum Co. PLC-ADR
(United Kingdom) 140,000 12,285,000
- ---------------------------------------------------------------
Exxon Corp. 65,000 3,993,438
- ---------------------------------------------------------------

MARKET
SHARES VALUE

OIL (INTERNATIONAL INTEGRATED)-(CONTINUED)

Texaco, Inc. 110,000 $ 6,263,125
- ---------------------------------------------------------------
22,541,563
- ---------------------------------------------------------------

OIL & GAS (DRILLING & EQUIPMENT)-9.23%

Baker Hughes, Inc. 200,000 9,187,500
- ---------------------------------------------------------------
BJ Services Co.(a) 120,000 10,170,000
- ---------------------------------------------------------------
Camco International, Inc. 135,000 9,753,750
- ---------------------------------------------------------------
Cooper Cameron Corp.(a) 100,000 7,225,000
- ---------------------------------------------------------------
Diamond Offshore Drilling, Inc. 200,000 12,450,000
- ---------------------------------------------------------------
ENSCO International, Inc. 140,000 5,888,750
- ---------------------------------------------------------------
EVI, Inc.(a) 149,100 9,570,356
- ---------------------------------------------------------------
Falcon Drilling Company, Inc.(a) 350,000 12,731,250
- ---------------------------------------------------------------
Global Industries Ltd.(a) 95,000 1,911,875
- ---------------------------------------------------------------
Global Marine, Inc.(a) 60,000 1,867,500
- ---------------------------------------------------------------
Halliburton Co. 65,000 3,875,625
- ---------------------------------------------------------------
Input/Output, Inc.(a) 176,800 4,740,450
- ---------------------------------------------------------------
Marine Drilling Companies, Inc.(a) 150,000 4,443,750
- ---------------------------------------------------------------
Nabors Industries, Inc.(a) 170,000 6,991,250
- ---------------------------------------------------------------
Precision Drilling Corp.(a)
(Canada) 85,000 2,613,750
- ---------------------------------------------------------------
Pride International, Inc.(a) 200,000 6,600,000
- ---------------------------------------------------------------
Rowan Companies, Inc.(a) 132,300 5,143,162
- ---------------------------------------------------------------
Schlumberger Ltd. 110,000 9,625,000
- ---------------------------------------------------------------
Smith International, Inc.(a) 140,800 10,736,000
- ---------------------------------------------------------------
Varco International, Inc.(a) 275,000 16,757,813
- ---------------------------------------------------------------
152,282,781
- ---------------------------------------------------------------

OIL & GAS (EXPLORATION & PRODUCTION)-0.66%

Apache Corp. 150,000 6,300,000
- ---------------------------------------------------------------
Burlington Resources, Inc. 41,100 2,011,331
- ---------------------------------------------------------------
Santa Fe Energy Resources, Inc.(a) 200,000 2,612,500
- ---------------------------------------------------------------
10,923,831
- ---------------------------------------------------------------

OIL & GAS (REFINING & MARKETING)-0.37%

Valero Energy Corp. 200,000 6,025,000
- ---------------------------------------------------------------

PERSONAL CARE-0.79%

Avon Products, Inc. 77,400 5,069,700
- ---------------------------------------------------------------
Gillette Co. 55,000 4,898,438
- ---------------------------------------------------------------
Perrigo Co.(a) 64,800 996,300
- ---------------------------------------------------------------
Rexall Sundown, Inc.(a) 96,200 2,104,375
- ---------------------------------------------------------------
13,068,813
- ---------------------------------------------------------------

PHOTOGRAPH/IMAGING-0.35%

Xerox Corp. 73,000 5,789,812
- ---------------------------------------------------------------

POWER PRODUCERS (INDEPENDENT)-0.14%

AES Corp.(a) 60,000 2,377,500
- ---------------------------------------------------------------

RESTAURANTS-0.55%

CKE Restaurants, Inc. 75,000 2,995,312
- ---------------------------------------------------------------
</TABLE>

FS-5
<PAGE> 56
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RESTAURANTS-(CONTINUED)

Cracker Barrel Old Country Store, Inc. 60,000 $ 1,770,000
- ---------------------------------------------------------------
Starbucks Corp.(a) 130,000 4,290,000
- ---------------------------------------------------------------
9,055,312
- ---------------------------------------------------------------

RETAIL (COMPUTERS & ELECTRONICS)-0.87%

CompUSA, Inc.(a) 208,000 6,812,000
- ---------------------------------------------------------------
Ingram Micro, Inc.-Class A(a) 121,300 3,616,256
- ---------------------------------------------------------------
Tech Data Corp.(a) 89,200 3,969,400
- ---------------------------------------------------------------
14,397,656
- ---------------------------------------------------------------

RETAIL (DEPARTMENT STORES)-0.71%

Federated Department Stores, Inc.(a) 33,600 1,478,400
- ---------------------------------------------------------------
Fred Meyer, Inc.(a) 140,000 3,998,750
- ---------------------------------------------------------------
Kohl's Corp.(a) 25,000 1,678,125
- ---------------------------------------------------------------
Nordstrom, Inc. 75,000 4,593,750
- ---------------------------------------------------------------
11,749,025
- ---------------------------------------------------------------

RETAIL (DISCOUNTERS)-0.93%

Consolidated Stores Corp.(a) 223,187 8,899,582
- ---------------------------------------------------------------
Dollar General Corp. 47,460 1,569,146
- ---------------------------------------------------------------
Dollar Tree Stores, Inc.(a) 45,000 1,822,500
- ---------------------------------------------------------------
Men's Wearhouse, Inc. (The)(a) 80,000 3,100,000
- ---------------------------------------------------------------
15,391,228
- ---------------------------------------------------------------

RETAIL (DRUG STORES)-0.69%

CVS Corp. 65,580 4,020,874
- ---------------------------------------------------------------
Rite Aid Corp. 124,000 7,362,500
- ---------------------------------------------------------------
11,383,374
- ---------------------------------------------------------------

RETAIL (FOOD CHAINS)-1.66%

Kroger Co.(a) 302,600 9,872,325
- ---------------------------------------------------------------
Safeway, Inc.(a) 300,657 17,475,688
- ---------------------------------------------------------------
27,348,013
- ---------------------------------------------------------------

RETAIL (GENERAL MERCHANDISE)-1.56%

Costco Companies, Inc.(a) 250,000 9,625,000
- ---------------------------------------------------------------
Dayton Hudson Corp. 214,500 13,473,281
- ---------------------------------------------------------------
Wal-Mart Stores, Inc. 74,900 2,630,863
- ---------------------------------------------------------------
25,729,144
- ---------------------------------------------------------------

RETAIL (HOME SHOPPING)-0.26%

CDW Computer Centers, Inc.(a) 68,000 4,216,000
- ---------------------------------------------------------------

RETAIL (SPECIALTY)-1.74%

Michaels Stores, Inc.(a) 70,000 2,104,375
- ---------------------------------------------------------------
Office Depot, Inc.(a) 297,400 6,133,875
- ---------------------------------------------------------------
Polo Ralph Lauren Corp.(a) 44,000 1,144,000
- ---------------------------------------------------------------
Staples, Inc.(a) 248,600 6,525,750
- ---------------------------------------------------------------
Tiffany & Co. 38,700 1,528,650
- ---------------------------------------------------------------
Toys "R" Us, Inc.(a) 100,000 3,406,250
- ---------------------------------------------------------------
Viking Office Products, Inc.(a) 140,000 3,351,250
- ---------------------------------------------------------------

MARKET
SHARES VALUE

RETAIL (SPECIALTY)-(CONTINUED)

Williams-Sonoma, Inc.(a) 28,000 $ 1,123,500
- ---------------------------------------------------------------
Woolworth Corp.(a) 180,000 3,420,000
- ---------------------------------------------------------------
28,737,650
- ---------------------------------------------------------------

RETAIL (SPECIALTY-APPAREL)-0.64%

Gap, Inc. 41,000 2,180,688
- ---------------------------------------------------------------
TJX Companies, Inc. 284,000 8,413,500
- ---------------------------------------------------------------
10,594,188
- ---------------------------------------------------------------

SAVINGS & LOAN COMPANIES-1.59%

Ahmanson (H.F.) & Co. 325,000 19,175,000
- ---------------------------------------------------------------
Dime Bancorp, Inc. 25,000 600,000
- ---------------------------------------------------------------
GreenPoint Financial Corp. 100,000 6,437,500
- ---------------------------------------------------------------
26,212,500
- ---------------------------------------------------------------

SERVICES (ADVERTISING/MARKETING)-0.28%

Interpublic Group of Companies,
Inc. 58,500 2,778,750
- ---------------------------------------------------------------
Omnicom Group, Inc. 25,000 1,765,625
- ---------------------------------------------------------------
4,544,375
- ---------------------------------------------------------------

SERVICES (COMMERCIAL & CONSUMER)-1.65%

Cerner Corp.(a) 170,000 4,122,500
- ---------------------------------------------------------------
HFS, Inc.(a) 100,000 7,050,000
- ---------------------------------------------------------------
Service Corp. International 460,000 14,001,250
- ---------------------------------------------------------------
Stewart Enterprises, Inc.- Class A 49,900 2,070,850
- ---------------------------------------------------------------
27,244,600
- ---------------------------------------------------------------

SERVICES (COMPUTER SYSTEMS)-0.10%

SunGard Data Systems Inc.(a) 67,800 1,601,775
- ---------------------------------------------------------------

SERVICES (DATA PROCESSING)-1.18%

CSG Systems International, Inc.(a) 44,400 1,739,925
- ---------------------------------------------------------------
DST Systems, Inc.(a) 67,500 2,383,594
- ---------------------------------------------------------------
Equifax, Inc. 177,000 5,498,062
- ---------------------------------------------------------------
Fiserv, Inc.(a) 88,500 3,960,375
- ---------------------------------------------------------------
National Data Corp. 70,000 2,585,625
- ---------------------------------------------------------------
Paychex, Inc. 55,350 2,110,219
- ---------------------------------------------------------------
PMT Services, Inc.(a) 70,000 1,128,750
- ---------------------------------------------------------------
19,406,550
- ---------------------------------------------------------------

SERVICES (EMPLOYMENT)-0.24%

AccuStaff, Inc.(a) 135,440 3,868,505
- ---------------------------------------------------------------
Kelly Services, Inc.-Class A 2,700 95,850
- ---------------------------------------------------------------
3,964,355
- ---------------------------------------------------------------

SERVICES (FACILITIES & ENVIRONMENTAL)-0.11%

Corrections Corp. of America(a) 60,000 1,830,000
- ---------------------------------------------------------------

SPECIALTY PRINTING-0.09%

Gartner Group, Inc.(a) 50,000 1,412,500
- ---------------------------------------------------------------

TELECOMMUNICATIONS (LONG DISTANCE)-0.91%

LCI International, Inc.(a) 100,000 2,587,500
- ---------------------------------------------------------------
</TABLE>

FS-6
<PAGE> 57
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
TELECOMMUNICATIONS (LONG DISTANCE)-(CONTINUED)

MCI Communications Corp. 125,000 $ 4,437,500
- ---------------------------------------------------------------
WorldCom, Inc.(a) 238,700 8,026,288
- ---------------------------------------------------------------
15,051,288
- ---------------------------------------------------------------

TELEPHONE-0.67%

Bell Atlantic Corp. 30,100 2,404,238
- ---------------------------------------------------------------
Cincinnati Bell, Inc. 323,200 8,726,400
- ---------------------------------------------------------------
11,130,638
- ---------------------------------------------------------------

TEXTILES (APPAREL)-1.23%

Jones Apparel Group, Inc.(a) 103,700 5,275,737
- ---------------------------------------------------------------
Liz Claiborne, Inc. 245,000 12,418,438
- ---------------------------------------------------------------
Nautica Enterprises, Inc.(a) 100,000 2,662,500
- ---------------------------------------------------------------
20,356,675
- ---------------------------------------------------------------

TEXTILES (SPECIALTY)-0.15%

Unifi, Inc. 62,300 2,394,656
- ---------------------------------------------------------------

TRUCKS & PARTS-0.48%

Cummins Engine Co., Inc. 131,500 8,013,281
- ---------------------------------------------------------------

WASTE MANAGEMENT-0.57%

Browning-Ferris Industries, Inc. 108,000 3,510,000
- ---------------------------------------------------------------

WASTE MANAGEMENT-(CONTINUED)

USA Waste Services, Inc.(a) 159,125 $ 5,887,625
- ---------------------------------------------------------------
9,397,625
- ---------------------------------------------------------------
Total Common Stocks 1,564,726,493
- ---------------------------------------------------------------

PRINCIPAL
AMOUNT
CONVERTIBLE CORPORATE BONDS-0.22%

COMPUTER (PERIPHERALS)-0.12%

EMC Corp., Conv. Sub. Notes,
3.25%, 03/15/02 (Acquired
09/12/97; Cost $1,963,721)(b) $ 1,450,000 2,012,383
- ---------------------------------------------------------------

INSURANCE (MULTI-LINE)-0.10%

Loews Corp., Conv. Sub. Deb.,
3.125%, 09/15/07 1,400,000 1,597,610
- ---------------------------------------------------------------
Total Convertible Corporate
Bonds 3,609,993
- ---------------------------------------------------------------

REPURCHASE AGREEMENT-4.68%(c)

SBC Warburg Inc.,
5.65%, 11/03/97(d) 77,247,953 77,247,953
- ---------------------------------------------------------------
TOTAL INVESTMENTS-99.72% 1,645,584,439
- ---------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-0.28% 4,649,597
- ---------------------------------------------------------------
NET ASSETS-100.00% $1,650,234,036
===============================================================
</TABLE>

Abbreviations:

ADR - American Depository Receipt
Conv. - Convertible
Deb. - Debentures
Sub. - Subordinated

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 this security has been determined in
accordance with procedures established by the Board of Directors. The market
value of this security at 10/31/97 was $2,012,383 which represented 0.12% of
the Fund's net assets.
(c) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% 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
investments advisor or its affiliates.
(d) Joint repurchase agreement entered into 10/31/97 with a maturing value of
$350,164,792. Collateralized by $355,329,000 U.S. Government agency
obligations, 7.00% to 9.875% due 11/15/15 to 10/01/27 with an aggregate
market value at 10/31/97 of $359,463,470.

See Notes to Financial Statements.

FS-7

<PAGE> 58
STATEMENT OF ASSETS AND LIABILITIES

October 31, 1997

<TABLE>
<S> <C>
ASSETS:

Investments, at market value (cost
$1,125,824,040) $1,645,584,439
- -------------------------------------------------------------
Receivables for:
Investments sold 7,416,232
- -------------------------------------------------------------
Capital stock sold 124,990
- -------------------------------------------------------------
Dividends and interest 647,554
- -------------------------------------------------------------
Investment for deferred compensation plan 27,503
- -------------------------------------------------------------
Other assets 21,985
- -------------------------------------------------------------
Total assets 1,653,822,703
- -------------------------------------------------------------

LIABILITIES:

Payables for:
Investments purchased 2,270,696
- -------------------------------------------------------------
Capital stock reacquired 118,988
- -------------------------------------------------------------
Deferred compensation 27,503
- -------------------------------------------------------------
Accrued advisory fees 940,205
- -------------------------------------------------------------
Accrued administrative service fees 5,088
- -------------------------------------------------------------
Accrued directors' fees 5,680
- -------------------------------------------------------------
Accrued operating expenses 220,507
- -------------------------------------------------------------
Total liabilities 3,588,667
- -------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $1,650,234,036
=============================================================
Capital stock, $.01 par value per share:
Authorized 1,000,000,000
- -------------------------------------------------------------
Outstanding 108,895,887
- -------------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE $ 15.15
=============================================================
</TABLE>

STATEMENT OF OPERATIONS

For the year ended October 31, 1997

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

Dividends (net of $106,713 foreign withholding
tax) $ 9,871,106
- ------------------------------------------------------------
Interest 1,733,705
- ------------------------------------------------------------
Total investment income 11,604,811
- ------------------------------------------------------------

EXPENSES:

Advisory fees 9,353,715
- ------------------------------------------------------------
Administrative service fees 67,450
- ------------------------------------------------------------
Custodian fees 163,248
- ------------------------------------------------------------
Transfer agent fees 46,321
- ------------------------------------------------------------
Directors' fees 16,639
- ------------------------------------------------------------
Other 365,045
- ------------------------------------------------------------
Total expenses 10,012,418
- ------------------------------------------------------------
Less: Expenses paid indirectly (16,363)
- ------------------------------------------------------------
Net expenses 9,996,055
- ------------------------------------------------------------
Net investment income 1,608,756
- ------------------------------------------------------------

REALIZED AND UNREALIZED GAIN ON INVESTMENT
SECURITIES:

Net realized gain on sales of investment
securities 151,798,786
- ------------------------------------------------------------
Net unrealized appreciation of investment
securities 212,044,735
- ------------------------------------------------------------
Net gain on investment securities 363,843,521
- ------------------------------------------------------------
Net increase in net assets resulting from
operations $365,452,277
============================================================
</TABLE>

See Notes to Financial Statements.

FS-8

<PAGE> 59

STATEMENT OF CHANGES IN NET ASSETS

For the years ended October 31, 1997 and 1996

<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
OPERATIONS:

Net investment income $ 1,608,756 $ 3,291,716
- ----------------------------------------------------------------------------------------------
Net realized gain on sales of investment securities and
futures contracts 151,798,786 114,141,332
- ----------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities 212,044,735 50,514,049
- ----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 365,452,277 167,947,097
- ----------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (3,131,614) (2,276,042)
- ----------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains (114,611,563) (74,181,022)
- ----------------------------------------------------------------------------------------------
Net equalization credits 2,437,968 2,660,812
- ----------------------------------------------------------------------------------------------
Net increase from capital stock transactions 139,078,724 116,846,774
- ----------------------------------------------------------------------------------------------
Net increase in net assets 389,225,792 210,997,619
- ----------------------------------------------------------------------------------------------

NET ASSETS:

Beginning of period 1,261,008,244 1,050,010,625
- ----------------------------------------------------------------------------------------------
End of period $1,650,234,036 $1,261,008,244
==============================================================================================

NET ASSETS CONSIST OF:

Capital (par value and additional paid-in) $ 956,102,084 $ 817,023,360
- ----------------------------------------------------------------------------------------------
Undistributed net investment income 23,591,883 22,676,773
- ----------------------------------------------------------------------------------------------
Undistributed net realized gain on sales of investment
securities and futures contracts 150,779,670 113,592,447
- ----------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities 519,760,399 307,715,664
- ----------------------------------------------------------------------------------------------
$1,650,234,036 $1,261,008,244
==============================================================================================
</TABLE>

NOTES TO FINANCIAL STATEMENTS

October 31, 1997

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 -- A security listed or traded on an exchange (except
convertible bonds) is 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. 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. Debt obligations (including convertible bonds) are valued on the
basis of prices provided by an independent pricing service. Prices provided
by an independent pricing service may be determined without exclusive
reliance on quoted prices, and may reflect appropriate factors such as yield,
type of issue, coupon rate and maturity date. 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

FS-9
<PAGE> 60

shareholders. Therefore, no provision for federal income taxes is recorded in
the financial statements.
D. Equalization -- The Fund follows the accounting practice known as
equalization by which a portion of the proceeds from sales and costs of
repurchases of Fund shares, equivalent on a per share basis to the amount of
undistributed net investment income, is credited or charged to undistributed
income when the transaction is recorded so that the undistributed net
investment income per share is unaffected by sales or redemptions of Fund
shares.
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 sub-advisory agreement between AIM and TradeStreet
Investment Associates, Inc. ("TradeStreet"), 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, 1997, the Fund
reimbursed AIM $67,450 for such services.
During the year ended October 31, 1997, the Fund paid legal fees of $6,842 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-INDIRECT EXPENSES

AIM has directed certain portfolio trades to brokers who paid a portion of the
Fund's expenses related to pricing services used by the Fund. For the year ended
October 31, 1997, the Fund's expenses were reduced by $5,684. The Fund received
reductions in custodian fees of $10,679 under an expense offset arrangement. The
effect of the above arrangements resulted in reductions of the Fund's total
expenses of $16,363 during the year ended October 31, 1997.

NOTE 4-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 5-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) $500,000,000 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 15, 1997, the Fund was
limited to borrowing up to the lesser of i) $325,000,000 or ii) the limit set by
its prospectus for borrowings. During the year ended October 31, 1997, 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 0.05% 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 6-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, 1997 was
$1,250,840,627 and $1,266,091,305, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
as of October 31, 1997, on a tax basis, is as follows:

<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $534,245,225
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (17,810,567)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities $516,434,658
=========================================================
</TABLE>

* Cost of investments for tax purposes is $1,129,149,781.

FS-10
<PAGE> 61
NOTE 7-CAPITAL STOCK

Changes in capital stock outstanding for the year ended October 31, 1997 and
1996 were as follows:

<TABLE>
<CAPTION>
1997 1996
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold 8,716,348 $114,553,393 9,230,433 $108,559,927
- ----------------------------------------------------------- ---------- ------------ ---------- ------------
Issued as reinvestment of dividends 9,816,281 113,770,753 6,936,341 74,080,187
- ----------------------------------------------------------- ---------- ------------ ---------- ------------
Reacquired (6,706,799) (89,245,422) (5,576,722) (65,793,340)
- ----------------------------------------------------------- ---------- ------------ ---------- ------------
11,825,830 $139,078,724 10,590,052 $116,846,774
========== ============ ========== ============
</TABLE>

NOTE 8-FINANCIAL HIGHLIGHTS

Shown below are the financial highlights for a share of capital stock
outstanding during each of the years in the four-year period ended October 31,
1997, the ten months ended October 31, 1993 and the year ended December 31,
1992.

<TABLE>
<CAPTION>
OCTOBER 31, DECEMBER 31,
------------------------------------------------------------- ------------
1997 1996 1995 1994 1993 1992
---------- --------- --------- -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 12.99 $ 12.14 $ 9.78 $ 10.46 $ 9.64 $ 10.09
- --------------------------------------------- ---------- --------- --------- -------- -------- --------
Income from investment operations:
Net investment income 0.02 0.04 0.04 0.10 0.09 0.11
- --------------------------------------------- ---------- --------- --------- -------- -------- --------
Net gains (losses) on securities (both
realized and unrealized) 3.34 1.69 2.81 (0.04) 0.73 0.35
- --------------------------------------------- ---------- --------- --------- -------- -------- --------
Total from investment operations 3.36 1.73 2.85 0.06 0.82 0.46
- --------------------------------------------- ---------- --------- --------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.03) (0.03) (0.10) (0.10) -- (0.11)
- --------------------------------------------- ---------- --------- --------- -------- -------- --------
Distributions from net realized gains (1.17) (0.85) (0.39) (0.64) -- (0.80)
- --------------------------------------------- ---------- --------- --------- -------- -------- --------
Total distributions (1.20) (0.88) (0.49) (0.74) -- (0.91)
- --------------------------------------------- ---------- --------- --------- -------- -------- --------
Net asset value, end of period $ 15.15 $ 12.99 $ 12.14 $ 9.78 $ 10.46 $ 9.64
============================================ ========== ========== ========== ======== ======== ========
Total return(a) 28.53% 15.61% 31.03% 0.61% 8.51% 4.50%
============================================ ========== ========== ========== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,650,234 $1,261,008 $1,050,011 $765,073 $705,580 $604,329
============================================ ========== ========== ========== ======== ======== ========
Ratio of expenses to average net assets 0.68%(b)(c) 0.70% 0.71% 0.72% 0.79%(d) 0.76%
============================================ ========== ========== ========== ======== ======== ========
Ratio of net investment income to average
net assets 0.11%(b) 0.29% 0.33% 1.04% 1.13%(d) 1.09%
============================================ ========== ========== ========== ======== ======== ========
Portfolio turnover rate 88.23% 118.34% 126.00% 121.69% 115.76% 97.41%
============================================ ========== ========== ========== ======== ======== ========
Average brokerage commission rate paid(e) $ 0.0608 $ 0.0643 N/A N/A N/A N/A
============================================ ========== ========== ========== ======== ======== ========
</TABLE>

(a) For periods less than one year, total return is not annualized.
(b) Ratios are based on average net assets of $1,462,594,326.
(c) Ratio includes indirectly paid expenses. Excluding indirectly paid
expenses, the ratio of expenses to average net assets would have been the
same.
(d) Annualized.
(e) The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased and sold, which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.

FS-11
<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, 1997

(3) Statement of Assets and Liabilities as of October 31, 1997

(4) Statement of Operations for the year ended October 31, 1997

(5) Statement of Changes in Net Assets for the years ended
October 31, 1997 and October 31, 1996

(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.

<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.

(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.

(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.

(g) - Amended and Restated By-Laws of the Registrant as adopted on
December 11, 1996, were filed electronically as an Exhibit with
Registrant's Post-Effective Amendment No. 20 on February 24, 1997,
and are incorporated by reference herein.

(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.

(d) - Master Investment Advisory Agreement, dated February 28, 1997,
between Registrant and A I M Advisors, Inc., is filed
electronically herewith.

(e) - 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.

<PAGE> 64

(f) - 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.

(g) - 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.

(h) 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.

(i) Assumption Agreement, dated April 1, 1996, between A I M Advisors,
Inc. and Tradestreet Investment Associates, Inc. was filed
electronically as an Exhibit with Registrant's Post- Effective
Amendment No. 20, on February 24, 1997.

(j) Sub-Advisory Agreement, dated February 28, 1997, between A I M
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.

(c) - Distribution Agreement, dated February 28, 1997, between
Registrant and A I M Distributors, Inc. is filed electronically
herewith.

(7) (a) - Retirement Plan for Registrant's Non-Affiliated Directors was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 17
on Form N-1A filed on December 23, 1994.

(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.

(c) - Retirement Plan for Registrant's Non-Affiliated Directors
effective as of March 8, 1994, as restated September 18, 1997, is
filed electronically herewith.

(d) - 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.

(e) - 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.

(f) - Form of Deferred Compensation Agreement for Registrant's
Non-Affiliated Directors for Non-Interested Directors and Trustees,
as approved March 12, 1997, is filed electronically herewith.

<PAGE> 65

(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.

(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.

(d) - Administrative Services Agreement, dated February 28, 1997,
between the Registrant and A I M Distributors, Inc. is filed
electronically herewith.

(e) - 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.

(f) - 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.

(g) - 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.

(h) - 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.

(i) - 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

<PAGE> 66

filed electronically as an Exhibit with the Registrant's
Post-Effective Amendment No. 19 on February 27, 1996.

(j) - Administrative Services Agreement, dated February 28, 1997,
between A I M Advisors, Inc. and A I M Fund Services, Inc. is filed
electronically herewith.

(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.

(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.

<PAGE> 67

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.

Title Class Number of Record Holders
January 31, 1998

Common Stock 243

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.

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 $25,000,000 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.

<PAGE> 68

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:

Holly D. Deem President and Chief Executive Officer,
TradeStreet; Senior Vice
President, NationsBank, N.A.

Martin E. Galt III Senior Executive Vice President,
Asset Management Group

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

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 Advisor Funds, Inc.
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

Marilyn M. Miller Senior Vice President None

James L. Salners Senior Vice President None

Gordon J. Sprague Senior Vice President None
</TABLE>

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

* 11 Greenway Plaza, Suite 100
Houston, TX 77046-1173

<PAGE> 69

B. J. Thompson First Vice President None

James R. Anderson Vice President None

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

Mary K. Coleman Vice President None

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

Charles R. Dewey Vice President None

Sidney M. Dilgren Vice President None

Tony D. Green Vice President None

William H. Kleh Vice President None

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

Terri L. Ransdell Vice President None

Carol F. Relihan Vice President Senior Vice President & Secretary

Kamala C. Sachidanandan Vice President None

Frank V. Serebrin Vice President None

Christopher T. Simutis Vice President None

Robert D. Van Sant, Jr. Vice President None

Gary K. Wendler Vice President None

Luke P. Beausoleil Assistant Vice President None

Tisha B. Christopher Assistant Vice President None

Glenda A. Dayton Assistant Vice President None

Kathleen M. Douglas Assistant Vice President None

Terri N. Fiedler Assistant Vice President None

Mary E. Gentempo Assistant Vice President None

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

Jeffrey L. Horne Assistant Vice President None

Melissa E. Hudson Assistant Vice President None

Jodie L. Johnson Assistant Vice President None
</TABLE>

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

* 11 Greenway Plaza, Suite 100
Houston, TX 77046-1173

<PAGE> 70

Wayne W. LaPlante Assistant Vice President None

Kim T. Lankford Assistant Vice President None

Ivy B. McLemore Assistant Vice President None

David B. O'Neil Assistant Vice President None

Patricia M. Shyman Assistant Vice President None

Nicholas D. White Assistant Vice President None

Norman W. Woodson Assistant Vice President None

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

Kathleen J. Pflueger Secretary Assistant Secretary

Stephen I. Winer Assistant Secretary Assistant Secretary
</TABLE>

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

* 11 Greenway Plaza, Suite 100
Houston, TX 77046-1173

Item 30. Location of Accounts and Records

With respect to each account, book or other document required to
be maintained by Section 31(a) of the 1940 Act and the Rules (17 CFR 270.31a-1
to 31a-3) promulgated thereunder, furnish the name and address of each person
maintaining physical possession of each such account, book or other document.

A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, 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.

<PAGE> 71

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.

<PAGE> 72
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 27th day of
February, 1998.

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:

SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Charles T. Bauer Chairman & Director February 27, 1998
-------------------------
(Charles T. Bauer)

/s/ Robert H. Graham Director & President February 27, 1998
------------------------- (Principal Executive Officer)
(Robert H. Graham)

/s/ Bruce L. Crockett Director February 27, 1998
-------------------------
(Bruce L. Crockett)

/s/ Owen Daly II Director February 27, 1998
-------------------------
(Owen Daly II)

/s/ Jack Fields Director February 27, 1998
-------------------------
(Jack Fields)

/s/ Carl Frischling Director February 27, 1998
-------------------------
(Carl Frischling)

/s/ John F. Kroeger Director February 27, 1998
-------------------------
(John F. Kroeger)

/s/ Lewis F. Pennock Director February 27, 1998
-------------------------
(Lewis F. Pennock)

/s/ Ian W. Robinson Director February 27, 1998
-------------------------
(Ian W. Robinson)

/s/ Louis S. Sklar Director February 27, 1998
-------------------------
(Louis S. Sklar)
Senior Vice President &
/s/ John J. Arthur Treasurer (Principal Financial February 27, 1998
------------------------- and Accounting Officer)
(John J. Arthur)

</TABLE>

<PAGE> 73

INDEX TO EXHIBITS

Exhibit
Number
- ------
5(d) Master Investment Advisory Agreement, dated February 28, 1997, between
Registrant and A I M Advisors, Inc.

5(j) Sub-Advisory Agreement, dated February 28, 1997, between A I M
Advisors, Inc. and TradeStreet Investment Associates, Inc.

6(c) Distribution Agreement, dated February 28, 1997, between Registrant
and A I M Distributors, Inc.

7(c) Retirement Plan for Registrant's Non-Affiliated Directors effective as
of March 8, 1994, as restated September 18, 1997

7(f) Form of Deferred Compensation Agreement for Registrant's Non-Affiliated
Directors for Non-Interested Directors and Trustees, as approved March
12, 1997

9(d) Administrative Services Agreement, dated February 28, 1997, between the
Registrant and A I M Distributors, Inc.

9(j) Administrative Services Agreement, dated February 28, 1997, between
A I M Advisors, Inc. and A I M Fund Services, Inc.

11(a) Consent of KPMG Peat Marwick LLP

11(b) Consent of Ballard Spahr Andrews & Ingersoll

27 Financial Data Schedule

<PAGE> 1
EXHIBIT 5(d)

AIM SUMMIT FUND, INC.

MASTER INVESTMENT ADVISORY AGREEMENT

THIS AGREEMENT is made this 28th day of February, 1997, by and between
AIM Summit Fund, Inc., a Maryland corporation (the "Company"), with respect to
its series of shares shown on the Appendix A attached hereto, as the same may
be amended from time to time, and A I M Advisors, Inc., a Delaware corporation
(the "Advisor").

RECITALS

WHEREAS, the Company 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 Company's charter does not currently provide for the
issuance of separate series of shares of the Company representing separate
investment portfolios, but such charter may in the future be amended to provide
for such series of shares and portfolios (the current portfolio of the Company
and any other portfolios hereafter added to the Company being referred to
individually herein as a "Fund," collectively as the "Funds"); and

WHEREAS, the Company and the Advisor desire to enter into an agreement
to provide for investment advisory services to the Funds upon the terms and
conditions hereinafter set forth;

NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:

1. Advisory Services. The Advisor shall act as investment advisor
for the Funds and shall, in such capacity, supervise all aspects of the Funds'
operations, including the investment and reinvestment of cash, securities or
other properties comprising the Funds' assets, subject at all times to the
policies and control of the Company's Board of Directors. The Advisor shall
give the Company and the Funds the benefit of its best judgment, efforts and
facilities in rendering its services as investment advisor.

2. Investment Analysis and Implementation. In carrying out its
obligations under Section 1 hereof, the Advisor shall:

(a) supervise all aspects of the operations of the Funds;

(b) obtain and evaluate pertinent information about
significant developments and economic, statistical and financial data,
domestic, foreign or otherwise, whether affecting the economy
generally or the Funds, and whether concerning the individual issuers
whose securities are included in the assets of the Funds or the
activities in which such issuers engage, or with respect to securities
which the Advisor considers desirable for inclusion in the Funds'
assets;

<PAGE> 2
(c) determine which issuers and securities shall be
represented in the Funds' investment portfolios and regularly report
thereon to the Company's Board of Directors; and

(d) formulate and implement continuing programs for the
purchases and sales of the securities of such issuers and regularly
report thereon to the Company's Board of Directors;

and take, on behalf of the Company and the Funds, all actions which appear to
the Company and the Funds 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 Funds.

3. Delegation of Responsibilities. Subject to the approval of the
Board of Directors and the shareholders of the Funds, the Advisor may delegate
to a sub-advisor certain of its duties enumerated in Section 2 hereof, provided
that the Advisor shall continue to supervise the performance of any such
sub-advisor.

4. Control by Board of Directors. Any investment program undertaken
by the Advisor pursuant to this Agreement, as well as any other activities
undertaken by the Advisor on behalf of the Funds, shall at all times be subject
to any directives of the Board of Directors of the Company.

5. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Advisor shall at all times conform to:

(a) all applicable provisions of the 1940 Act and the
Advisers Act and any rules and regulations adopted thereunder;

(b) the provisions of the registration statement of the
Company, 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 Company, as the same
may be amended from time to time; and

(e) any other applicable provisions of state, federal or
foreign law.

6. Broker-Dealer Relationships. The Advisor is responsible for
decisions to buy and sell securities for the Funds, broker-dealer selection,
and negotiation of brokerage commission rates. The Advisor's primary
consideration in effecting a security transaction will be to obtain execution
at the most favorable price. In selecting a broker-dealer to execute each
particular transaction, the Advisor 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 the difficulty in executing the
order; and the value of the expected contribution of the broker-dealer to the
investment performance of the Funds on a continuing basis. Accordingly, the
price to the Funds in any transaction may be less favorable than that available
from another broker-dealer if the difference is reasonably justified by other
aspects of the portfolio execution services offered. Subject to such policies
as the Board of Directors may from time to time determine, the Advisor shall not
be deemed to have acted unlawfully or to have breached any duty created by this
Agreement or otherwise solely by reason of its having caused the Funds to pay a
broker or dealer that provides brokerage and research services to the Advisor an
amount of commission for effecting a portfolio investment transaction in excess
of the

2
<PAGE> 3
amount of commission another broker or dealer would have charged for effecting
that transaction, if the Advisor determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of either
that particular transaction or the Advisor's overall responsibilities with
respect to a particular Fund, other Funds of the Company, and to other clients
of the Advisor as to which the Advisor exercises investment discretion. The
Advisor is further authorized to allocate the orders placed by it on behalf of
the Funds to such brokers and dealers who also provide research or statistical
material, or other services to the Funds, to the Advisor, or to any
sub-advisor. Such allocation shall be in such amounts and proportions as the
Advisor shall determine and the Advisor will report on said allocations
regularly to the Board of Directors of the Company indicating the brokers to
whom such allocations have been made and the basis therefor. In making
decisions regarding broker-dealer relationships, the Advisor may take into
consideration the recommendations of any sub-advisor appointed to provide
investment research or advisory services in connection with the Funds, and may
take into consideration any research services provided to such sub-advisor by
broker-dealers.

7. Compensation. The Company shall pay the Advisor as compensation
for services rendered to a Fund hereunder an annual fee, payable monthly, based
upon the average daily net assets of such Fund as the same is set forth in
Appendix A attached hereto. Such compensation shall be paid solely from the
assets of such Fund. The average daily net asset value of the Funds shall be
determined in the manner set forth in the corporate charter and registration
statement of the Company, as amended from time to time.

8. Additional Services. Upon the request of the Company's Board of
Directors, the Advisor may perform certain accounting, shareholder servicing or
other administrative services on behalf of the Funds which are not required by
this Agreement. Such services will be performed on behalf of the Funds and the
Advisor may receive from the Funds such reimbursement for costs or reasonable
compensation for such services as may be agreed upon between the Advisor and
the Company's Board of Directors based on a finding by the Board of Directors
that the provision of such services by the Advisor is in the best interests of
the Company and its shareholders. Payment or assumption by the Advisor of any
Fund expense that the Advisor is not otherwise required to pay or assume under
this Agreement shall not relieve the Advisor of any of its obligations to the
Funds nor obligate the Advisor to pay or assume any similar Fund expense on any
subsequent occasions. Such services may include, but are not limited to:

(a) the services of a principal financial officer of the
Company (including applicable office space, facilities and equipment)
whose normal duties consist of maintaining the financial accounts and
books and records of the Company and the Funds, including the review
and calculation of daily net asset value and the preparation of tax
returns; and the services (including applicable office space,
facilities and equipment) of any of the personnel operating under the
direction of such principal financial officer;

(b) the services of staff to respond to shareholder inquiries
concerning the status of their accounts; providing assistance to
shareholders in exchanges among the mutual funds managed or advised by
the Advisor; changing account designations or changing addresses;
assisting in the purchase or redemption of shares; supervising the
operations of the custodian, transfer agent(s) or dividend disbursing
agent(s) for the Funds; or otherwise providing services to shareholders
of the Funds; and

(c) such other administrative services as may be furnished
from time to time by the Advisor to the Company or the Funds at the
request of the Company's Board of Directors.

3
<PAGE> 4

9. Expenses of the Funds. All of the ordinary business expenses
incurred in the operations of the Funds and the offering of their shares shall
be borne by the Funds unless specifically provided otherwise in this Agreement.
These expenses borne by the Funds include but are not limited to brokerage
commissions, taxes, legal, accounting, 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 Company on behalf of the Funds in connection with membership in investment
company organizations and the cost of printing copies of prospectuses and
statements of additional information distributed to the Funds' shareholders.

10. Expense Limitation. If, for any fiscal year of the Company, the
total of all ordinary business expenses of the Funds, including all investment
advisory fees, but excluding brokerage commissions and fees, taxes, interest
and extraordinary expenses, such as litigation costs, would exceed the
applicable expense limitations imposed by state securities regulations in any
state in which the Funds' shares are qualified for sale, as such limitations
may be raised or lowered from time to time, the aggregate of all such
investment advisory fees shall be reduced by the amount of such excess. The
amount of any such reduction to be borne by the Advisor shall be deducted from
the monthly investment advisory fee otherwise payable to the Advisor during
such fiscal year. If required pursuant to such state securities regulations,
the Advisor will, not later than the last day of the first month of the next
succeeding fiscal year, reimburse the Funds for any such annual operating
expenses (after reduction of all investment advisory fees in excess of such
limitation). For the purposes of this paragraph, the term "fiscal year" shall
exclude the portion of the current fiscal year which shall have elapsed prior
to the date hereof and shall include the portion of the then current fiscal
year which shall have elapsed at the date of termination of this Agreement.
The application of expense limitations shall be applied to each Fund of the
Company separately unless the laws or regulations of any state shall require
that the expense limitations be imposed with respect to the Company as a whole.

11. Non-Exclusivity. The services of the Advisor to the Company and
the Funds are not to be deemed to be exclusive, and the Advisor shall be free
to render investment advisory and administrative or other services to others
(including other investment companies) and to engage in other activities. It
is understood and agreed that officers or directors of the Advisor may serve as
officers or directors of the Company, and that officers or directors of the
Company may serve as officers or directors of the Advisor to the extent
permitted by law; and that the officers and directors of the Advisor are not
prohibited from engaging in any other business activity or from rendering
services to any other person, or from serving as partners, officers, directors
or trustees of any other firm or trust, including other investment advisory
companies.

12. Term and Approval. This Agreement shall become effective with
respect to a Fund if approved by the shareholders of such Fund, and if so
approved, this Agreement shall thereafter continue in force and effect until
February 28, 1999, 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 Company's Board of Directors or (ii) by the
vote of "a majority of the outstanding voting securities" of such 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

4
<PAGE> 5
(other than as Company directors), by votes cast in person at a meeting
specifically called for such purpose.

13. Termination. This Agreement may be terminated as to the Company
or as to any one or more of the Funds at any time, without the payment of any
penalty, by vote of the Company's Board of Directors or by vote of a majority
of the outstanding voting securities of the applicable Fund, or by the Advisor,
on sixty (60) days' written notice to the other party. The notice provided for
herein may be waived by the party entitled to receipt thereof. 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.

14. Liability of Advisor and Indemnification. In the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Advisor or any of its
officers, directors or employees, the Advisor shall not be subject to liability
to the Company or to the Funds or to any shareholder of the Funds 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. In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties hereunder on the part of the
Advisor or any officer, director or employee of the Advisor, the Company hereby
agrees to indemnify and hold the Advisor harmless from and against all claims,
actions, suits, and proceedings at law or in equity, whether brought or
asserted by a private party or a governmental agency, instrumentality or entity
of any kind, relating to the sale, purchase, pledge of, advertisement of, or
solicitation of sales or purchases of any security (whether of a Fund or
otherwise) by the Company, its officers, directors, employees or agents in
alleged violation of applicable federal, state or foreign laws, rules or
regulations.

15. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered, telecopied or mailed postage paid, to the party
entitled to receipt thereof at such address as such party may designate for the
receipt of such notice. Until further notice to the other party, it is agreed
that the address of the Company shall be and that of the Advisor shall be
Eleven Greenway Plaza, Suite 1919, Houston, Texas 77046.

16. Questions of Interpretation. 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, 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. Subject to the foregoing, this Agreement shall be governed by and
construed in accordance with the laws (without reference to conflicts of law
provisions) of the State of Texas.

17. License Agreement. The Company shall have the non-exclusive
right to use the name "AIM" to designate any current or future series of shares
only so long as A I M Advisors, Inc. serves as investment manager or advisor to
the Company with respect to such series of shares.

5
<PAGE> 6

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.

AIM SUMMIT FUND, INC.
(a Maryland corporation)
Attest:

/S/ DAVID L. KITE By: /S/ ROBERT H. GRAHAM
- ---------------------------- -------------------------
Assistant Secretary President

(SEAL)

A I M ADVISORS, INC.
Attest:

/S/ OFELIA M. MAYO By: /S/ ROBERT H. GRAHAM
- ---------------------------- -------------------------
Assistant Secretary President

(SEAL)

6
<PAGE> 7
APPENDIX A
TO
MASTER INVESTMENT ADVISORY AGREEMENT
OF
AIM SUMMIT FUND, INC.

The Company shall pay the Advisor, out of the assets of a Fund, as
full compensation for all services rendered and all facilities furnished
hereunder, a management fee for such Fund set forth below. Such fee shall be
calculated by applying the following annual rates to the average daily net
assets of such Fund for the calendar year computed in the manner used for the
determination of the net asset value of shares of such Fund.

<TABLE>
<CAPTION>
NET ASSETS ANNUAL RATE
- ---------- -----------
<S> <C>
First $10 million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.00%
Over $10 million up to and including $150 million . . . . . . . . . . . . . . . . . . . 0.75%
Over $150 million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.625%
</TABLE>

<PAGE> 1
EXHIBIT 5(j)

AIM SUMMIT FUND, INC.

SUB-ADVISORY AGREEMENT

THIS AGREEMENT originally made the 28th day of February, 1997, by and
between A I M Advisors, Inc., a Delaware corporation (the "Advisor"), and
TradeStreet Investment Associates, Inc., a Maryland corporation (the
"Sub-Advisor").

RECITALS

WHEREAS, AIM Summit Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "1940 Act") as an open-end,
diversified management investment company;

WHEREAS, the Advisor is registered under the Investment Advisers Act
of 1940 as amended (the "Advisers Act"), as an investment advisor and engages
in the business of acting as an investment advisor;

WHEREAS, the Sub-Advisor is registered under the Advisers Act, as an
investment advisor and engages in the business of acting as an investment
advisor;

WHEREAS, the Advisor has entered into an investment advisory agreement
of even date herewith with the Fund (the "Investment Advisory Agreement"),
pursuant to which the Advisor shall act as investment advisor with respect to
the Fund; and

WHEREAS, pursuant to Section 3 (Delegation of Responsibilities) of the
Investment Advisory Agreement, the Advisor wishes to retain the Sub-Advisor for
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.

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

<PAGE> 2
(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:

<TABLE>
<CAPTION>
NET ASSETS ANNUAL RATE
---------- -----------
<S> <C>
First $10 million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.50%
Over $10 million to and including $150 million . . . . . . . . . . . . . . . . . . . . . . . . . . 0.35%
Over $150 million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.225%
Over $700 million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.15%
</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.

2
<PAGE> 3

7. Expense Limitation. If, for any fiscal year of the Fund, the
amount of the fee which the Advisor would otherwise receive from the Fund
pursuant to the Investment Advisory Agreement is reduced pursuant to expense
limitation provisions of the Investment Advisory Agreement, the fee which the
Sub-Advisor would otherwise receive from the Advisor pursuant to Section 5 of
this Agreement shall also be reduced proportionately. For example, if the
Advisor's fee from the Fund is reduced by 1/3, the Sub-Advisor's fee from the
Advisor will also be reduced by 1/3. Such reduction shall be deducted from the
monthly fee otherwise payable to the Sub-Advisor by the Advisor, and, if such
amount should exceed such monthly fee, the Sub-Advisor agrees to repay the
Advisor such amount of its fee previously received with respect to such fiscal
year as may be required to make up the deficiency no later than the last day of
the following month. In no event will the Sub-Advisor be required to reimburse
the Advisor for any amount in excess of the fee it receives pursuant to this
Agreement during the fiscal year of the Fund in which reimbursement is
required.

8. Non-Exclusivity. The services of the Sub-Advisor to the Advisor
with respect to the Fund are not to be deemed to be exclusive, and the
Sub-Advisor shall be free to render investment advisory and administrative or
other services to others (including other investment companies) and to engage
in other activities. It is understood and agreed that officers or directors of
the Sub-Advisor may serve as officers or directors of the Advisor or of the
Fund, and that officers or directors of the Fund or of the Advisor may serve as
officers or directors of the Sub-Advisor to the extent permitted by law; and
that the officers and directors of the Sub-Advisor are not prohibited from
engaging in any other business activity or from rendering services to any other
person, or from serving as partners, officers, directors or trustees of any
other firm or trust, including other investment advisory companies.

9. Term and Approval. This Agreement shall become effective if
approved by the shareholders of the Fund, and if so approved, this Agreement
shall thereafter continue in force and effect until February 28, 1999, 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.

3
<PAGE> 4

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 101 South Tryon Street, Suite 1000, Charlotte,
NC 28255.

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, 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 President

(SEAL)

TRADESTREET INVESTMENT ASSOCIATES, INC.
Attest:

/S/ MARY-ANN LUCAS By: ILLEGIBLE
- ------------------------- ------------------------
Assistant Secretary President

(SEAL)

<PAGE> 1
EXHIBIT 6(c)

DISTRIBUTION AGREEMENT

AGREEMENT, made as of the 28th day of February 1997, by and between
AIM SUMMIT FUND, INC., a Maryland corporation (the "Company), and A I M
DISTRIBUTORS, INC., a Delaware corporation (the "Distributor").

WITNESSETH

WHEREAS, the Company is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended; and

WHEREAS, the Distributor sponsors systematic investment plans (the
"Plans") based upon shares of the common stock of the Company, and the
Distributor desires to arrange for the acquisition of Company shares for
deposit and use under the Plans; and

WHEREAS, the Company and the Distributor desire to enter into a new
agreement appointing the Distributor as the principal distributor of the shares
of common stock of the Company.

NOW, THEREFORE, in consideration of the premises and of other good and
valuable consideration by each of the parties hereto to the other party paid
and of the agreements, covenants and obligations herein contained:

1. The Company appoints the Distributor as the principal
distributor of Company shares for a term of two years commencing upon the date
first above written and continuing thereafter for consecutive periods of one
year provided the continuance of this Agreement is approved at least annually
(a) by the Company's Board of Directors, including a majority of the members of
the Board of Directors who are not parties to the Agreement or interested
persons of any such party (other than as a Company director), in person at a
meeting called for such purpose or (b) by the affirmative vote of the holders
of either: (i) 67% or more of the Company shares voting (if more than 50% of
the outstanding Company shares are voted) or (ii) more than 50% of the
outstanding Company shares. Notwithstanding the termination of this Agreement,
the Company agrees to sell sufficient Company shares to the Distributor or any
bank or banks acting as custodian for the Plans to permit completion of all
Plans begun prior to such termination. The Distributor represents and agrees
that it will use its best efforts to sell Plans based upon Company shares
throughout the term of this Agreement.

2. The Company shall use its best efforts in maintaining
registration of itself and its securities under the Investment Company Act of
1940, as amended (the "Act"), and the Securities Act of 1933, as amended, and
shall bear all expenses in connection therewith. The Company shall

-1-

<PAGE> 2
provide to the Distributor or the bank or banks acting as custodian for the
Plans sold by the Distributor a sufficient number of copies of any and all
general mailings, together with the necessary envelopes, including, without
limitation, proxy material, proxies, annual, semi-annual and quarterly reports,
sent from time to time to the holders of Company shares so as to provide a
single copy, together with the necessary envelope and postage, to each holder of
a Plan. The Company agrees to furnish all the above-mentioned material at no
cost to the Distributor. The Distributor agrees that it will furnish the
Company for its files two copies of all material supplied to holders of Plans by
the Distributor. The Company shall provide to the Distributor, at printer's
over-run costs, such additional copies of its prospectus and its annual,
semi-annual and other reports and communications to shareholders as the
Distributor may reasonably require for sales purposes. It is understood that
the Distributor is a wholly-owned subsidiary of A I M Advisors, Inc., the
investment adviser to the Company ("AIM"), and that AIM is a wholly-owned
subsidiary of A I M Management Group Inc., and that the Company's agreement to
supply information and printed material described in this Agreement may be
fulfilled by AIM.

3. The Company shall cooperate in the qualification of Company
shares under the laws of the various states of the United States and shall
execute and deliver such documents as may reasonably be required for such
purpose, but the Company shall not be required to qualify as a foreign
corporation in any jurisdiction, nor effect any modification of its policies or
practices without prior approval of the Company's officers. The officers of
the Company shall determine whether it is desirable to qualify or continue to
offer Company shares in any jurisdiction.

4. The Distributor agrees that all solicitations for
subscriptions to Company shares shall be made in accordance with the Company's
Articles of Incorporation and By-laws, Registration Statement and Prospectus,
and shall not at any time or in any manner violate any provisions of the laws
of the United States or of any state or other jurisdiction in which
solicitations are then being made. The Distributor may enter into sales
agreements with dealers to sell Company shares.

5. The Distributor shall purchase from the Company as principal,
and the Company agrees to sell to the Distributor at the net asset value
thereof, Company shares sufficient to meet the requirements of all such Plans
as are sold, distributed and/or issued by the Distributor. Such shares will be
sold to the Distributor at net asset value computed in the manner set forth in
the Company prospectus in effect at the time of sale of such shares. The
Distributor shall not maintain a long or short position in Company shares for
its own account, except as may incidentally result from cancellation or by-in
of orders made by it or its dealers for customers because of such customer's
failure to pay.

-2-
<PAGE> 3
6. The agreement on the part of the Company to sell Company
shares upon demand, at net asset value as set forth in paragraph 5 hereof, is
subject to the following limitations:

(a) that the Plans are maintained in good standing as
unit investment trusts under the Federal Securities Laws;

(b) that the membership of the Distributor in the
National Association of Securities Dealers, Inc. and its
registration as broker-dealer under the Securities Exchange
Act of 1934, as amended, have not been cancelled, revoked or
suspended; and

(c) that the Distributor is not in violation of any of
the federal or state laws and regulations relating to the
registration and sale of said Plans.

If the Distributor shall, within 30 days after a default under any of the
provisions of this paragraph, cure such default to the reasonable satisfaction
of the Company, then the agreement of the Company to sell at the net asset
value Company shares in accordance with paragraph 5 hereof shall remain
unimpaired, anything in this paragraph 6 to the contrary notwithstanding.

7. The Distributor's right to purchase Company shares at net
asset value for resale shall be exclusive, except that:

(a) the Company may issue its shares at their net asset
value to any shareholder of the Company purchasing such shares
with dividends or other distributions received from the
Company pursuant to an offer made to all shareholders;

(b) the Company may issue its shares at their net asset
value in connection with certain classes of transactions or to
certain classes of persons as set forth in the then current
prospectus of the Company;

-3-
<PAGE> 4
(c) the Distributor may, and when requested by the
Company shall, suspend its efforts to effectuate sales of
Company shares at any time when in the opinion of the
Distributor or of the Company no sales should be made because
of market or other economic considerations or abnormal
circumstances of any kind; and

(d) the Company may withdraw the offering of its common
stock (i) at any time with the consent of the Distributor, or
(ii) without such consent when so required by the provisions
of any statute or of any order, rule or regulation of any
governmental body having jurisdiction.

It is mutually understood and agreed that the
Distributor does not undertake to sell all or any specific
portion of the shares of common stock of the Company.

8. The Distributor may from time to time, whenever it is in the
best interest of holders of Plans, substitute a new investment medium for the
Company shares theretofore employed (such substitution to be made as to the
Company shares already purchased and to be purchased, or only as to Company
shares to be purchased), provided that no substitution shall result in a direct
or indirect payment, commission or other compensation to the Distributor or any
subsidiary or affiliate of the Distributor, and provided, further, that such
substituted shares are generally comparable in character and quality to the
Company shares theretofore purchased under the Plans and meet with the approval
of the custodian of the Plans and are shares registered with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, so long as
that statute remains in force; and further provided, that before any
substitution may be made, the Distributor shall:

(a) Give notice of the proposed substitution to the
Company and the custodian of the Plans and first satisfy the
custodian that arrangements have been entered into by the
Distributor which reasonably assure that the new shares will be
available for purchase by the custodian and subject to
redemption on terms generally as

-4-
<PAGE> 5
favorable as those applicable to the Company shares currently
employed as the investment medium;

(b) Give written notice to each holder of a Plan of the
proposed substitution giving a reasonable description of the
new shares and notifying each holder of a Plan that unless he
surrenders his Plan to the custodian for termination within 30
days of the date of such notice, he will be conclusively
deemed to have authorized the substitution, and to have agreed
to bear his pro rata share of the actual expenses including
tax liability incurred by the custodian and the Distributor in
connection therewith;

(c) In the case of substitution of new shares for Company
shares already purchased, arrange that the custodian will be
furnished, without payment of sales commission or fees, with
new shares having an aggregate value on the basis of their net
asset value at lease equal to the aggregate value of the old
Company shares similarly computed, or computed on the basis of
the best available bid price the custodian is able to obtain
for such old Company shares in the event the issuer thereof
does not quote the net asset value at the time in question;

(d) Furnish the custodian with a certificate signed by
the President or Secretary of the Distributor, showing that
the Distributor has given notice to each holder of a Plan as
above provided; and

(e) File an application with the Securities and Exchange
Commission.

9. The Company agrees to indemnify and hold the Distributor and
each person (if any) who controls the Distributor within the meaning of Section
15 of the Securities Act of 1933 harmless from and against any and all losses,
claims, damages and liabilities caused by or alleged to exist by reason of any
untrue statement or alleged untrue statement of a material fact contained in
the

-5-
<PAGE> 6
Company's Registration Statement or Prospectus (as amended or supplemented
if the Company shall have made any amendments or supplements thereto) or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading if
such statement or omission or alleged untrue statement or omission shall have
been furnished by the Company for use in the Registration Statement or
Prospectus.

The Distributor agrees that, promptly upon its receipt of notice of
the commencement of any action against the Distributor or against any person so
controlling the Distributor, in respect of which indemnity or reimbursement may
be sought from the Company on account of its agreement in the preceding
paragraph, notice in writing will be given to the Company of the commencement
thereof. Thereupon, the Company shall be entitled to participate, to the
extent that it shall wish (including the selection of counsel), in the defense
thereof. The Distributor or any such controlling person shall have the right,
at its or his own expense, to employ separate counsel in any such case.

In the event that any such claim for indemnification is made by any
officer, director or person in control of the Distributor within the meaning of
Section 15 of the Securities Act of 1933 who is also an officer or director of
the Company, the Company will submit to a court of appropriate jurisdiction the
question of whether or not indemnification by it is against public policy as
expressed in the Securities Act of 1933, the Securities Exchange Act of 1934,
and the Act, and will be governed by the final adjudication of such question.

Notwithstanding anything to the contrary contained herein, the
foregoing indemnity does not protect or purport to protect or indemnity the
Distributor for any liability to the Company or to holders of Company shares to
which it would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement.

10. The Distributor agrees to indemnify and hold harmless the Company,
its officers, directors or agents to the same extent as in the foregoing
indemnity from the Company to the Distributor, arising by reason of the
sponsorship or distribution by the Distributor of Plans based upon Company
shares, but only with respect to any untrue statement or omission or alleged
untrue statement or omission based upon information furnished in writing to the
Company by the Distributor or by any person on behalf of or at the request of
the Distributor, excluding the Company, expressly for use in the Registration
Statement or Prospectus. The Distributor also agrees to indemnify and hold
harmless the Company, its officers, agents and directors from and against any
and all losses, claims damages and liabilities caused by or alleged to exist by
reason of sales activities by it or its authorized agents, in violation of the
laws of the United States or of any state or other jurisdiction

-6-
<PAGE> 7
in which solicitations are made or any rule or regulation promulgated by any
lawfully constituted authority.

In case any action shall be brought against the Company, its officers,
directors or agents, in respect of which it may seek indemnity or reimbursement
from the Distributor on account of the agreement of the Distributor contained
in the preceding paragraph, the Distributor shall have the rights and duties
given to the Company, and the Company, its directors, officers or agents shall
have the rights and duties given to the Distributor, in the second, third and
fourth paragraphs of paragraph 9.

11. This Agreement may be terminated at any time, without the
payment of any penalty, by vote of the Board of Directors of the Company or by
vote of a majority of the outstanding voting securities of the Company, or by
the Distributor, on sixty (60) days' written notice to the other party. This
Agreement shall automatically terminate in the event of its assignment, as
defined in the Act, by the Distributor.

IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto the day and year first above written.

AIM SUMMIT FUND, INC.

ATTEST:
By: /S/ ROBERT H. GRAHAM
--------------------------
Name: Robert H. Graham
Title: President
/S/ DAVID L. KITE
- ----------------------------
Name: DAVID L. KITE
Title: ASSISTANT SECRETARY

A I M DISTRIBUTORS, INC.

ATTEST:

By: /S/ MICHAEL J. CEMO
--------------------------
Name: Michael J. Cemo
Title: President
/S/ OFELIA M. MAYO
- ----------------------------
Name: OFELIA M. MAYO
Title: ASSISTANT SECRETARY

-7-

<PAGE> 1
EXHIBIT 7(f)

DEFERRED COMPENSATION AGREEMENT

SUMMARY

Your Deferred Compensation Agreement (the "Agreement") allows
you to defer some or all of your annual trustee's fees otherwise payable by the
Funds. Deferred fees are deemed invested in certain mutual funds selected by
you. The deferral is pre-tax, and the deferred amount and the credited gains,
losses and income are not subject to tax until paid out to you.

Your deferrals (and investment experience) are posted to a
bookkeeping account maintained by the Funds in your name. In order for you to
enjoy the tax deferral, the payments due under the Agreement will be paid from
the Funds' general assets, and you are considered a general unsecured creditor
of the Funds; you may not transfer your right to receive payments under the
Agreement to any other person, nor may you pledge that right to secure any debt
or other obligation; finally, an election to defer must be made in writing
before the first day of the calendar year for which the fees are earned (the
"Election Date") and elections can be changed only prospectively, effective for
the next calendar year.

An important change has been made to your Agreement to give
you greater flexibility to select the time and method of payment of amounts
that you defer: for amounts previously deferred and for future elections you
now designate a specific Payment Date and payment method which generally may be
changed with at least one year's advance notice.

PAYMENT DATE ELECTION

Deferred fees (and the income, gains and losses credited
during the deferral period) generally will be paid out as elected by you in
installments or a single sum in cash within 30 days of the Payment Date
elected. (For payments in connection with your termination of service as a
trustee, see below.)

Deferrals must be for a minimum two year period (unless your
retirement date under the Retirement Plan is earlier). Thus, the Payment Date
may be the first day of any calendar quarter that follows the second
anniversary of the applicable Election Date or your retirement date. Thus, fees
previously deferred and fees payable for the calendar year beginning January 1,
1997 may be deferred to the first day of any calendar quarter in any year from
1999.

EXTENDING A PAYMENT DATE

At least one year prior to any Payment Date, you may extend
that Date, provided that the additional period of deferral is at least two
years. You may make this change in Payment Date only once.

-1-

<PAGE> 2
PAYMENT METHOD

The value of your deferrals (based on your election as to how
your deferral account is to be considered invested) will be paid in cash, in
one lump sum or in annual installments (over a period not to exceed 10 years)
as you select at the time you select your Payment Date. You may change this
election, but the change will not be given effect unless it is made at least
one year before your Payment Date or your ceasing to be a trustee (whichever
occurs first). This one year requirement is waived in the case of your death
(see Termination of Service, below).

TERMINATION OF SERVICE

Upon your death, your account under the Agreement will be paid
out as elected by you in installments or in a single sum in cash as soon as
practicable. Payment will be made to your designated Beneficiary or
Beneficiaries or to your estate if there is no surviving Beneficiary.

Upon termination of your service as trustee for any reason
other than death or your retirement (as defined in the Retirement Plan), your
account will be paid to you as a single sum (or in installments if you had
timely elected that method) in cash within three months following the end of
the fiscal year in which you terminate, regardless of the Payment Dates you
elected.

-2-

<PAGE> 3
DEFERRED COMPENSATION AGREEMENT
-------------------------------

AGREEMENT, made on this __ day of _______, 19__, by and
between the registered open-end investment companies listed on Appendix A
hereto (the "Funds"), and
________________________________________________________________ (the
"Director") residing at ___________________________________________________.

WHEREAS, the Funds and the Director have entered into
agreements pursuant to which the Director will serve as a director/trustee of
the Funds; and

WHEREAS, if the Funds and the Director have previously entered
into an additional agreement whereby the Funds will provide to the Director a
vehicle under which the Director can defer receipt of directors' fees payable
by the Funds and now desire to amend and restate such agreement.

NOW, THEREFORE, in consideration of the mutual covenants and
obligations set forth in this Agreement, the Funds and the Director hereby
agree as follows:

1. DEFINITION OF TERMS AND CONSTRUCTION
------------------------------------
1.1 Definitions. Unless a different meaning is plainly implied by
the context, the following terms as used in this Agreement shall have the
following meanings:

(a) "Beneficiary" shall mean such person or persons
designated pursuant to Section 4.3 hereof to receive benefits after the death
of the Director.

(b) "Boards of Directors" shall mean the respective
Boards of Directors of the Funds.

(d) "Compensation" shall mean the amount of directors'
fees paid by each of the Funds to the Director during a Deferral Year prior to
reduction for Compensation Deferrals made under this Agreement.

(e) "Compensation Deferral" shall mean the amount or
amounts of the Director's Compensation deferred under the provisions of Section
3 of this Agreement.

-1-

<PAGE> 4
(f) "Deferral Accounts" shall mean the accounts
maintained to reflect the Director's Compensation Deferrals made pursuant to
Section 3 hereof (or pursuant to any prior agreement) and any other credits or
debits thereto.

(g) "Deferral Year" shall mean each calendar year during
which the Director makes, or is entitled to make, Compensation Deferrals under
Section 3 hereof.

(h) "Retirement" shall have the same meaning as set forth
under the Retirement Plan.

(i) "Retirement Plan" shall mean the "AIM Funds
Retirement Plan for Eligible Directors/Trustees."

(j) "Valuation Date" shall mean the last business day of
each calendar year and any other day upon which the Funds makes valuations of
the Deferral Accounts.

1.2 Plurals and Gender. Where appearing in this Agreement the
singular shall include the plural and the masculine shall include the feminine,
and vice versa, unless the context clearly indicates a different meaning.

1.3 Directors and Trustees. Where appearing in this Agreement,
"Director" shall also refer to "Trustee" and "Board of Directors" shall also
refer to "Board of Trustees."

1.4 Headings. The headings and sub-headings in this Agreement are
inserted for the convenience of reference only and are to be ignored in any
construction of the provisions hereof.

1.5 Separate Agreement for Each Fund. This Agreement is drafted,
and shall be construed, as a separate agreement between the Director and each
of the Funds.

2. PERIOD DURING WHICH COMPENSATION DEFERRALS ARE PERMITTED
--------------------------------------------------------
2.1 Commencement of Compensation Deferrals. The Director may
elect, on a form provided by, and submitted to, the Presidents of the
respective Funds, to commence Compensation Deferrals under Section 3 hereof for
the period beginning on the later of (i) the date this Agreement is executed or
(ii) the date such form is submitted to the Presidents of the Funds.

2.2 Termination of Deferrals. The Director shall not be eligible
to make Compensation Deferrals after the earliest of the following dates:

(a) The date on which he ceases to serve as a Director of
all of the Funds; or

(b) The effective date of the termination of this
Agreement.

-2-
<PAGE> 5

3. COMPENSATION DEFERRALS
----------------------
3.1 Compensation Deferral Elections.

(a) On or prior to the first day of any Deferral Year,
the Director may elect, on the form described in Section 2.1 hereof, to defer
the receipt of all or a portion of his Compensation for such Deferral Year.
Such writing shall set forth the amount of such Compensation Deferral (in whole
percentage amounts). Such election shall continue in effect for all subsequent
Deferral Years unless it is canceled or modified as provided below.

(b) Compensation Deferrals shall be withheld from each
payment of Compensation by the Funds to the Director based upon the percentage
amount elected by the Director under Section 3.1(a) hereof.

(c) The Director may cancel or modify the amount of his
Compensation Deferrals on a prospective basis by submitting to the Presidents
of the Funds a revised Compensation Deferral election form. Such change will
be effective as of the first day of the Deferral Year following the date such
revision is submitted to the Presidents of the Funds.

3.2 Valuation of Deferral Account.

(a) Each Fund shall establish a bookkeeping Deferral
Account to which will be credited an amount equal to the Director's
Compensation Deferrals under this Agreement made with respect to Compensation
earned from each such Fund. Compensation Deferrals shall be allocated to the
Deferral Accounts on the first business day following the date such
Compensation Deferrals are withheld from the Director's Compensation. As of
the date of this Agreement, the Deferral Accounts also shall be credited with
the amounts credited to the Director under each other outstanding elective
deferred compensation agreement entered into by and between the Funds and the
Director which is superseded by this Agreement pursuant to Section 6.11 hereof.
The Deferral Accounts shall be debited to reflect any distributions from such
Accounts. Such debits shall be allocated to the Deferral Accounts as of the
date such distributions are made.

(b) As of each Valuation Date, income, gain and loss
equivalents (determined as if the Deferral Accounts are invested in the manner
set forth under Section 3.3, below) attributable to the period following the
next preceding Valuation Date shall be credited to and/or deducted from the
Director's Deferral Accounts.

3.3 Investment of Deferral Account Balances.

(a) (1) The Director may select, from various options
made available by the Funds, the investment media in which all or part of his
Deferral Accounts shall be deemed to be invested.

-3-
<PAGE> 6
(2) The Director shall make an investment
designation on a form provided by the Presidents of the Funds which shall
remain effective until another valid direction has been made by the Director as
herein provided. The Director may amend his investment designation by giving
written direction to the Presidents of the Funds in such manner and at such
time as the Funds may permit, but no less frequently than quarterly on thirty
(30) days' notice prior to the end of a calendar quarter. A timely change to a
Director's investment designation shall become effective as soon as practicable
following receipt by the Presidents of the Funds.

(3) The investment media deemed to be made
available to the Director, and any limitation on the maximum or minimum
percentages of the Director's Deferral Accounts that may be invested any
particular medium, shall be the same as from time-to-time communicated to the
Director by the Presidents of the Funds.

(b) Except as provided below, the Director's Deferral
Accounts shall be deemed to be invested in accordance with his investment
designations, provided such designations conform to the provisions of this
Section. If -

(1) the Director does not furnish the Presidents
of the Funds with complete, written investment instructions, or

(2) the written investment instructions from the
Director are unclear,

then the Director's election to make Compensation Deferrals hereunder shall be
held in abeyance and have no force or effect until such time as the Director
shall provide the Presidents of the Funds with complete investment
instructions. Notwithstanding the above, the Boards of Directors, in their
sole discretion, may disregard the Director's election and determine that all
Compensation Deferrals shall be deemed to be invested in a fund determined by
the Boards of Directors. In the event that any fund under which any portion of
the Director's Deferral Accounts is deemed to be invested ceases to exist, such
portion of the Deferral Accounts thereafter shall be held in the successor to
such fund, subject to subsequent deemed investment elections.

The Fund shall provide an annual statement to the Director
showing such information as is appropriate, including the aggregate amount in
the Deferral Accounts, as of a reasonably current date.

-4-
<PAGE> 7
4. DISTRIBUTIONS FROM DEFERRAL ACCOUNTS
------------------------------------
4.1 Payment Date and Methods.

(a) Designation of Date. Each deferral direction given
pursuant to Section 3.1 shall include designation of the Payment Date for the
value of the amount deferred. Such Payment Date shall be the first day of any
calendar quarter, subject to the limitation set forth in paragraph 4.1(c).

(b) Extension Date. At least one year before the Payment
Date initially designated pursuant to paragraph 4.1(a) above, the Participant
may irrevocably elect to extend such Payment Date to the first day of any
calendar quarter, subject to the limitation set forth in paragraph 4.1(c).

(c) Limitation. The Director shall select a Payment Date
(or extended Payment Date) that is no sooner than the earlier of (i) the
January 1 that follows the second anniversary of the Participant's deferral
election made pursuant to paragraph 4.1(a) or (b) or (ii) the January 1 of the
year after the Participant's Retirement.

(d) Methods of Payment. Distributions from the
Director's Deferral Accounts shall be paid in cash in a single sum unless the
Participant elects, at the time a Payment Date is selected pursuant to
paragraph 4.1(a) or 4.1(b), to receive the amount payable in generally equal
quarterly installments over a period not to exceed ten (10) years. In
addition, as least one year before the Payment Date, a Director may change the
method of payment previously selected.

(e) Irrevocability. Except as provided in paragraph
4.1(b) and 4.1(d), a designation of a Payment Date and an election of
installment payments shall be irrevocable; provided, however, that payment
shall be made or begin on a different date as follows:

(1) Upon the Director's death, payment shall be
made in accordance with Section 4.2,

(2) Upon the Director's ceasing to serve as a
director of all of the Funds for reasons other than death or Retirement,
payment shall be made or begin within three months after the end of the
calendar year in which such termination occurs in accordance with the method
elected by the Director pursuant to paragraph 4.1(d) provided the designation
of such method had been made at least one year before such termination occurred,
except that the Boards of Directors, in their sole discretion, may accelerate
the distribution of such Deferral Accounts,

(3) Upon termination of this Agreement, payment
shall be made in accordance with Section 5.2, and

-5-
<PAGE> 8
(4) In the event of the liquidation, dissolution
or winding up of a Fund or the distribution of all or substantially all of a
Fund's assets and property relating to one or more series of its shares to
the shareholders of such series (for this purpose a sale, conveyance or
transfer of a Fund's assets to a trust, partnership, association or
corporation in exchange for cash, shares or other securities with the
transfer being made subject to, or with the assumption by the transferee of,
the liabilities of the Fund shall not be deemed a termination of the Fund or
such a distribution), all unpaid balances of the Deferral Accounts related to
such Fund as of the effective date thereof shall be paid in a lump sum on
such effective date.

4.2 Death Prior to Complete Distribution of Deferral Accounts.
Upon the death of the Director prior to the commencement of the distribution of
the amounts credited to his Deferral Accounts, the balance of such Accounts
shall be distributed to his Beneficiary in accordance with the method of
payment selected pursuant to paragraph 4.1(d), commencing as soon as practicable
after the Director's death. In the event of the death of the Director after
the commencement of such distribution, but prior to the complete distribution
of his Deferral Accounts, the balance of the amounts credited to his Deferral
Accounts shall be distributed to his Beneficiary over the remaining period
during which such amounts were distributable to the Director under Section 4.1
hereof. Notwithstanding the above, the Boards of Directors, in their sole
discretion, may accelerate the distribution of the Deferral Accounts.

4.3 Designation of Beneficiary. For purposes of Section 4.2
hereof, the Director's Beneficiary shall be the person or persons so designated
by the Director in a written instrument submitted to the Presidents of the
Funds. In the event the Director fails to properly designate a Beneficiary,
his Beneficiary shall be the person or persons in the first of the following
classes of successive preference Beneficiaries surviving at the death of the
Director: the Director's (1) surviving spouse or (2) estate.

4.4 Payments Due Missing Persons. The Funds shall make a
reasonable effort to locate all persons entitled to benefits under this
Agreement. However, notwithstanding any provisions of this Agreement to the
contrary, if, after a period of five (5) years from the date such benefit shall
be due, any such persons entitled to benefits have not been located, their
rights under this Agreement shall stand suspended. Before this provision
becomes operative, the Funds shall send a certified letter to all such persons
to their last known address advising them that their benefits under this
Agreement shall be suspended. Any such suspended amounts shall be held by the
Funds for a period of three (3) additional years (or a total of eight (8) years
from the time the benefits first become payable) and thereafter, if unclaimed,
such amounts shall be forfeited.

-6-
<PAGE> 9
5. AMENDMENTS AND TERMINATION
--------------------------
5.1 Amendments.

(a) The Funds and the Director may, by a written
instrument signed by, or on behalf of, such parties, amend this Agreement at
any time and in any manner.

(b) The Funds reserve the right to amend, in whole or in
part, and in any manner, any or all of the provisions of this Agreement by
action of their Boards of Directors for the purposes of complying with any
provision of the Code or any other technical or legal requirements, provided
that:

(1) No such amendment shall make it possible for
any part of the Director's Deferral Accounts to be used for, or diverted to,
purposes other than for the exclusive benefit of the Director or his
Beneficiaries, except to the extent otherwise provided in this Agreement;
and

(2) No such amendment may reduce the amount of
the Director's Deferral Accounts as of the effective date of such amendment.

5.2 Termination. The Director and the Funds may, by written
instrument signed by, or on behalf of, such parties, terminate this Agreement
at any time. In the event of the termination of this Agreement, the Boards of
Directors, in their sole discretion, may choose to pay out the Director's
Deferral Accounts prior to the designated Payment Dates. Otherwise, following
a termination of this Agreement, such Accounts shall continue to be maintained
in accordance with the provisions of this Agreement until the time they are
paid out.

6. MISCELLANEOUS.
--------------
6.1 Rights of Creditors.

(a) This Agreement is unfunded. Neither the Director nor
any other persons shall have any interest in any specific asset or assets of
the Funds by reason of any Deferral Accounts hereunder, nor any rights to
receive distribution of his Deferral Accounts except and as to the extent
expressly provided hereunder. The Funds shall not be required to purchase,
hold or dispose of any investments pursuant to this Agreement; however, if in
order to cover their obligations hereunder the Funds elect to purchase any
investments the same shall continue for all purposes to be a part of the
general assets and property of the Funds, subject to the claims of their
general creditors and no person other than the Funds shall by virtue of the
provisions of this Agreement have any interest in such assets other than an
interest as a general creditor.

-7-
<PAGE> 10
(b) The rights of the Director and the Beneficiaries to
the amounts held in the Deferral Accounts are unsecured and shall be subject to
the creditors of the Funds. With respect to the payment of amounts held under
the Deferral Accounts, the Director and his Beneficiaries have the status of
unsecured creditors of the Funds. This Agreement is executed on behalf of the
Funds by an officer, or other representative, of the Funds as such and not
individually. Any obligation of the Funds hereunder shall be an unsecured
obligation of the Funds and not of any other person.

6.2 Agents. The Funds may employ agents and provide for such
clerical, legal, actuarial, accounting, advisory or other services as it deems
necessary to perform their duties under this Agreement. The Funds shall bear
the cost of such services and all other expenses they incur in connection with
the administration of this Agreement.

6.3 Liability and Indemnification. Except for their own gross
negligence, willful misconduct or willful breach of the terms of this
Agreement, the Funds shall be indemnified and held harmless by the Director
against liability or losses occurring by reason of any act or omission of the
Funds or any other person.

6.4 Incapacity. If the Funds shall receive evidence satisfactory
to them that the Director or any Beneficiary entitled to receive any benefit
under the Agreement is, at the time when such benefit becomes payable, a minor,
or is physically or mentally incompetent to receive such benefit and to give a
valid release therefor, and that another person or an institution is then
maintaining or has custody of the Director or Beneficiary and that no guardian,
committee or other representative of the estate of the Director or Beneficiary
shall have been duly appointed, the Funds may make payment of such benefit
otherwise payable to the Director or Beneficiary to such other person or
institution, including a custodian under a Uniform Gifts to Minors Act, or
corresponding legislation (who shall be an adult, a guardian of the minor or a
trust company), and the release of such other person or institution shall be a
valid and complete discharge for the payment of such benefit.

6.5 Cooperation of Parties. All parties to this Agreement and any
person claiming any interest hereunder agree to perform any and all acts and
execute any and all documents and papers which are necessary or desirable for
carrying out this Agreement or any of its provisions.

6.6 Governing Law. This Agreement is made and entered into in the
State of Texas and all matters concerning its validity, construction and
administration shall be governed by the laws of the State of Texas.

6.7 Nonguarantee of Directorship. Nothing contained in this
Agreement shall be construed as a contract or guarantee of the right of the
Director to be, or remain as, a director of any of the Funds or to receive any,
or any particular rate of, Compensation from any of the Funds.

-8-

<PAGE> 11
6.8 Counsel. The Funds may consult with legal counsel with
respect to the meaning or construction of this Agreement, their obligations or
duties hereunder or with respect to any action or proceeding or any question of
law, and they shall be fully protected with respect to any action taken or
omitted by them in good faith pursuant to the advice of legal counsel.

6.9 Spendthrift Provision. The Director's and Beneficiaries'
interests in the Deferral Accounts may not be anticipated, sold, encumbered,
pledged, mortgaged, charged, transferred,
alienated, assigned nor become subject to execution, garnishment or
attachment and any attempt to do so by any person shall render the Deferral
Accounts immediately forfeitable.

6.10 Notices. For purposes of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered personally or mailed by
United States registered or certified mail, return receipt requested, postage
prepaid, or by nationally recognized overnight delivery service providing for a
signed return receipt, addressed to the Director at the home address set forth
in the Funds' records and to the Funds at the address set forth on the first
page of this Agreement, provided that all notices to the Funds shall be
directed to the attention of the Presidents of the Funds or to such other
address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.

6.11 Entire Agreement. This Agreement contains the entire
understanding between the Funds and the Director with respect to the payment of
non-qualified elective deferred compensation by the Fund to the Director.
Effective as of the date hereof, this Agreement replaces, and supersedes, all
other non-qualified elective deferred compensation agreements by and between
the Director and the Funds.

6.12 Interpretation of Agreement. Interpretations of, and
determinations (including factual determinations) related to, this Agreement
made by the Funds in good faith, including any determinations of the amounts of
the Deferral Accounts, shall be conclusive and binding upon all parties; and
the Funds shall not incur any liability to the Director for any such
interpretation or determination so made or for any other action taken by it in
connection with this Agreement in good faith.

6.13 Successors and Assigns. This Agreement shall be binding upon,
and shall inure to the benefit of, the Funds and their successors and assigns
and to the Director and his heirs, executors, administrators and personal
representatives.

6.14 Severability. In the event any one or more provisions of this
Agreement are held to be invalid or unenforceable, such illegality or
unenforceability shall not affect the validity or enforceability of the other
provisions hereof and such other provisions shall remain in full force and
effect unaffected by such invalidity or unenforceability.

-9-

<PAGE> 12
6.15 Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same instrument.

-10-

<PAGE> 13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.

The Funds

________________________ By:_________________________
Witness Name:
Title:

________________________ ____________________________
Witness Director

-11-

<PAGE> 14
APPENDIX A
----------

AIM ADVISOR FUNDS, INC.

AIM EQUITY FUNDS, INC.

AIM FUNDS GROUP

AIM INTERNATIONAL FUNDS, INC.

AIM INVESTMENT SECURITIES FUNDS

AIM SUMMIT FUND, INC.

AIM TAX-EXEMPT FUNDS, INC.

AIM VARIABLE INSURANCE FUNDS, INC.

SHORT-TERM INVESTMENTS CO.

SHORT-TERM INVESTMENTS TRUST

TAX-FREE INVESTMENTS CO.
<PAGE> 15
DEFERRED COMPENSATION AGREEMENT
DEFERRAL ELECTION FORM
-------------------------------

TO: Presidents of the AIM Funds

FROM:

DATE:

With respect to the Deferred Compensation agreement (the
"Agreement") dated as of ________________ by and between the undersigned and
the AIM Funds, I hereby make the following elections:

Deferral of Compensation
------------------------
Starting with Compensation to be paid to me with respect to
services provided by me to the AIM Funds after the date this election Form is
received by the AIM Funds, I hereby elect that 50 percent (50%) of my
Compensation (as defined under the Agreement) be reduced and that the Fund
establish a bookkeeping account credited with amounts equal to the amount so
reduced (the "Deferral Account"). The Deferral Account shall be further
credited with income equivalents as provided under the Agreement. I understand
that this election will remain in effect with respect to Compensation I earn in
subsequent years unless I modify or revoke it. I further understand that such
modification or revocation will be effective only prospectively and will apply
commencing with the Compensation I earn in the calendar year that begins after
the change is received by you.

Payment Date
------------
I hereby designate ________ 1 (select the first month in any
calendar quarter) in the year ______ (select a year that is at least two years
after the year this election is made) as the Payment Date for the amounts
credited to my Deferral Account pursuant to the election made above. If my
Retirement (as defined in the Agreement) occurs sooner, I o do o do not (check
the appropriate box) want payment of such amounts to commence effective the
January 1 following my Retirement. I understand that amounts credited to my
Deferral Account may be paid to me prior to the Payment Date as provided in the
Agreement.

-5-
<PAGE> 16
Payment Method
--------------
I hereby elect to receive the amounts credited to my Deferral
Account in (check one)

o a single payment in cash
o quarterly installments for a period of ____ years (select no more
than 10 years)
o annual installments for a period of ____ (select no more than 10
years)

beginning within 30 days following the payment date selected above.

I understand that the amounts credited to my Deferral Account
shall remain the general assets of the AIM Funds and that, with respect to the
payment of such amounts, I am merely a general creditor of the AIM Funds. I
may not sell, encumber, pledge, assign or otherwise alienate the amounts
credited to my Deferral Account.

I hereby agree that the terms of the Agreement are
incorporated herein and are made a part hereof. Dated as of the day and year
first above written.

WITNESS: DIRECTOR:

_________________________ ______________________________

WITNESS: RECEIVED:

_________________________ AIM Funds

By:___________________________
Date:_________________________

-6-
<PAGE> 17
DEFERRED COMPENSATION AGREEMENT
BENEFICIARY DESIGNATION FORM
-------------------------------

TO: Presidents of the AIM Funds

FROM:

DATE:

With respect to the Deferred Compensation Agreement (the
"Agreement") dated as of _____________ by and between the undersigned and the
AIM Funds, I hereby make the following beneficiary designations:

I. Primary Beneficiary
-------------------
I hereby appoint the following as my Primary Beneficiary(ies)
to receive at my death the amounts credited to my Deferral Account under the
Agreement. In the event I am survived by more than one Primary Beneficiary,
such Primary Beneficiaries shall share equally in such amounts unless I
indicate otherwise on an attachment to this form:

_________________________________________________________________
Name Relationship

_________________________________________________________________
Address

_________________________________________________________________
City State Zip

-1-
<PAGE> 18
II. Secondary Beneficiary
---------------------
In the event I am not survived by any Primary Beneficiary, I
hereby appoint the following as Secondary Beneficiary(ies) to receive death
benefits under the Agreement. In the event I am survived by more than one
Secondary Beneficiary, such Secondary Beneficiaries shall share equally unless
I indicate otherwise on an attachment to this form:

_________________________________________________________________
Name Relationship

_________________________________________________________________
Address

_________________________________________________________________
City State Zip

I understand that I may revoke or amend the above designations
at any time. I further understand that if I am not survived by a Primary or
Secondary Beneficiary, my Beneficiary shall be as set forth under the
Agreement.

WITNESS: DIRECTOR:

_________________________ ______________________________

WITNESS: RECEIVED:

_________________________ AIM Funds

By:___________________________
Date:_________________________

-2-

<PAGE> 1
EXHIBIT 9(d)

ADMINISTRATIVE SERVICES AGREEMENT

This ADMINISTRATIVE SERVICES AGREEMENT (the "Agreement") is made this
28th day of February, 1997 by and between A I M ADVISORS, INC., a Delaware
corporation (the "Administrator"), and AIM SUMMIT FUND, INC., a Maryland
corporation (the "Company").

W I T N E S S E T H:

WHEREAS, the Company is an open-end investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and

WHEREAS, the Company has retained the Administrator to provide
investment advisory services pursuant to a Master Investment Advisory Agreement
which provides that the Administrator may perform (or arrange for the
performance of) accounting, shareholder servicing and other administrative
services as well as investment advisory services to the Company, and that the
Administrator may receive reasonable compensation or may be reimbursed for its
costs in providing such additional services, upon the request of the Board of
Directors and upon a finding by the Board of Directors that the provision of
such services is in the best interest of the Company and its shareholders; and

WHEREAS, the Board of Directors has found that the provision of such
administrative services is in the best interest of the Company and its
shareholders, and has requested that the Administrator perform such services;

NOW, THEREFORE, the parties hereby agree as follows:

1. The Administrator hereby agrees to provide, or arrange for the
provision of, any or all of the following services by the Administrator or its
affiliates:

(a) the services of a principal financial officer of the Company
(including related office space, facilities and equipment) whose
normal duties consist of maintaining the financial accounts and books
and records of the Company, including the review of daily net asset
value calculations and the preparation of tax returns; and the
services (including related office space, facilities and equipment) of
any of the personnel operating under the direction of such principal
financial officer;

(b) the services of staff to respond to shareholder inquiries
concerning the status of their accounts; providing assistance to
shareholders in exchanges among the mutual funds managed or advised by
the Administrator; changing account designations or changing
addresses; assisting in the purchase or redemption of the Company's
shares; supervising the operations of the custodian(s), transfer
agent(s) or dividend agent(s) for the Company; or otherwise providing
services to shareholders of the Company; and

(c) such other administrative services as may be furnished from time
to time by the Administrator to the Company at the request of the
Company's Board of Directors.

2. The services provided hereunder shall at all times be subject
to the direction and supervision of the Company's Board of Directors.

<PAGE> 2
3. As full compensation for the services performed and the
facilities furnished by or at the direction of the Administrator, the Company
shall reimburse the Administrator for expenses incurred by them or their
affiliates in accordance with the methodologies established from time to time
by the Company's Board of Directors. Such amounts shall be paid to the
Administrator on a quarterly basis.

4. The Administrator shall not be liable for any error of
judgment or for any loss suffered by the Company in connection with any matter
to which this Agreement relates, except a loss resulting from the
Administrator's willful misfeasance, bad faith or gross negligence in the
performance of its duties or from reckless disregard of its obligations and
duties under this Agreement.

5. The Company and the Administrator each hereby represent and
warrant, but only as to themselves, that each has all requisite authority to
enter into, execute, deliver and perform its obligations under this Agreement
and that this Agreement is legal, valid and binding, and enforceable in
accordance with its terms.

6. Nothing in this Agreement shall limit or restrict the rights
of any director, officer or employee of the Administrator who may also be a
director, officer or employee of the Company to engage in any other business or
to devote his time and attention in part to the management or other aspects of
any business, whether of a similar or a dissimilar nature, nor limit or
restrict the right of the Administrator to engage in any other business or to
render services of any kind to any other corporation, firm, individual or
association.

7. This Agreement shall continue in effect until February 28,
1999 and shall continue in effect from year to year thereafter; provided that
such continuance is specifically approved at least annually:

(a) (i) by the Company's Board of Directors or (ii) by the
vote of a majority of the outstanding voting securities of the Company
(as defined in Section 2(a)(42) of the 1940 Act); and

(b) by the affirmative vote of a majority of the Company's
directors who are not parties to this Agreement or interested persons
of a party to this Agreement, by votes cast in person at a meeting
specifically called for such purpose.

This Agreement shall terminate automatically in the event of its
assignment (as defined in Section 2(a) (4) of the 1940 Act) or in the event of
termination of the Master Investment Advisory Agreement between the Company
and the Administrator.

8. This Agreement may be amended or modified, but only by a
written instrument signed by both the Company and the Administrator.

9. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (a) to the Administrator at Eleven Greenway
Plaza, Suite 1919, Houston, Texas 77046, Attention: President, with a copy to
the General Counsel, or (b) to the Company at Eleven Greenway Plaza, Suite
1919, Houston, Texas 77046, Attention: President, with a copy to the General
Counsel.

<PAGE> 3
10. This Agreement contains the entire agreement between the
parties hereto and supersedes all prior agreements, understandings and
arrangements with respect to the subject matter hereof.

11. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.

A I M ADVISORS, INC.

Attest: /S/ DAVID L. KITE By: /S/ ROBERT H. GRAHAM
--------------------- -----------------------
Assistant Secretary President

(SEAL)

AIM SUMMIT FUND, INC.

Attest: /S/ OFELIA M. MAYO By: /S/ ROBERT H. GRAHAM
--------------------- -----------------------
Assistant Secretary President

(SEAL)

<PAGE> 1
EXHIBIT 9(j)

ADMINISTRATIVE SERVICES AGREEMENT
(SHAREHOLDER SERVICES)

ADMINISTRATIVE SERVICES AGREEMENT (the "Agreement"), dated as of the
28th day of February, 1997, by and between A I M ADVISORS, INC., a Delaware
corporation (the "Advisor"), and A I M FUND SERVICES, INC. (the
"Administrator") on behalf of the Portfolios and Classes of shares of the Funds
set forth in Appendix A to this agreement (the "Portfolios").

W I T N E S S E T H:

WHEREAS, each of the Funds listed in Appendix A hereto is an open-end
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"); and

WHEREAS, each of the Funds, on behalf of the Portfolios, has retained
the Advisor to provide investment advisory services pursuant to a Master
Investment Advisory Agreement which provides that the Advisor may perform (or
arrange for the performance of) accounting, shareholder servicing and other
administrative services as well as investment advisory services to the
Portfolios, and that the Advisor may receive reasonable compensation or may be
reimbursed for its costs in providing such additional services, upon the
request of the Board of Directors/Trustees and upon a finding by the Board of
Directors/Trustees that the provision of such services is in the best interests
of each Portfolio and its shareholders; and

WHEREAS, the Board of Directors/Trustees has found that the provision
of such administrative services is in the best interests of the Portfolios and
their shareholders, and has requested that the Administrator perform certain of
such services;

NOW, THEREFORE, the parties hereby agree as follows:

1. The Administrator hereby agrees to provide the services of staff
to respond to shareholder inquiries concerning the status of their accounts;
providing assistance to shareholders in exchanges among the mutual funds
managed or advised by the Advisor; changing account designations or changing
addresses; assisting in the purchase or redemption of the Portfolios' shares;
supervising the operations of the custodian(s), transfer agent(s) or dividend
agent(s) for the Portfolios; or otherwise providing services to shareholders of
the Portfolios.

2. The services provided hereunder shall at all times be subject to
the direction and supervision of the Funds' Boards of Directors/Trustees.

3. As full compensation for the services performed and the
facilities furnished by or at the direction of the Administrator, the Advisor
shall reimburse the Administrator for expenses incurred by it or its affiliates
in accordance with the methodologies established from time to time by the
Funds' Boards of Directors/Trustees with respect to the Portfolios. Such
amounts shall be paid to the Administrator on a quarterly basis.

4. The Administrator shall not be liable for any error of judgment
or for any loss suffered by the Funds or a Portfolio in connection with any
matter to which this Agreement relates, except a
<PAGE> 2
loss resulting from the Administrator's willful misfeasance, bad faith or gross
negligence in the performance of its duties or from reckless disregard of its
obligations and duties under this Agreement.

5. The Advisor and the Administrator each hereby represent and
warrant, but only as to themselves, that each has all requisite authority to
enter into, execute, deliver and perform its obligations under this Agreement
and that this Agreement is legal, valid and binding, and enforceable in
accordance with its terms.

6. Nothing in this Agreement shall limit or restrict the rights of
any director, officer or employee of the Administrator who may also be a
trustee, officer or employee of the Funds to engage in any other business or to
devote his or her time and attention in part to the management or other aspects
of any business, whether of a similar or a dissimilar nature, nor limit or
restrict the right of the Administrator to engage in any other business or to
render services of any kind to any other corporation, firm, individual or
association.

7. This Agreement shall continue in effect for a period of one (1)
year from the date hereof, and shall continue in effect from year to year
thereafter; provided that such continuance is specifically approved at least
annually:

(a) (i) by each Fund's Board of Directors/Trustees or (ii) by
the vote of a majority of the outstanding voting securities of the
applicable Portfolio (as defined in Section 2(a)(42) of the 1940 Act);
and

(b) by the affirmative vote of a majority of each Fund's
directors/trustees who are not parties to this Agreement or interested
persons of a party to this Agreement, by votes cast in person at a
meeting specifically called for such purpose.

This Agreement shall terminate automatically as to a Portfolio in the
event of its assignment (as defined in Section 2(a)(4) of the 1940 Act) or in
the event of termination of the Master Investment Advisory Agreement relating
to such Portfolio between a Fund and the Advisor.

8. This Agreement may be amended or modified, but only by a written
instrument signed by both the Advisor and the Administrator.

9. Any notice or other communication required to be given pursuant
to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (a) to the Administrator at 11 Greenway
Plaza, Suite 1919, Houston, Texas 77046, Attention: President, with a copy to
the General Counsel, or (b) to the Advisor at 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046, Attention: President, with a copy to the General Counsel.

10. This Agreement contains the entire agreement between the parties
hereto and supersedes all prior agreements, understandings and arrangements
with respect to the subject matter hereof.

11. This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas.

-2-
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.

A I M ADVISORS, INC.

Attest: /S/ DAVID L. KITE By: /S/ ROBERT H. GRAHAM
--------------------- ------------------------
Assistant Secretary Robert H. Graham
President

(SEAL)

A I M FUND SERVICES, INC.

Attest: /S/ OFELIA M. MAYO By: /S/ JOHN CALDWELL
--------------------- ------------------------
Assistant Secretary John Caldwell
President

(SEAL)

-3-
<PAGE> 4
APPENDIX A

AIM SUMMIT FUND, INC.

-4-

<PAGE> 1
EXHIBIT 11(a)

INDEPENDENT AUDITORS' CONSENT

The Shareholders and Board of Directors of
AIM Summit Fund, Inc.

We consent to the use of our report on AIM Summit Fund, Inc. dated December 5,
1997 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 18, 1998

<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. 21 to the Registration
Statement under the Securities Act of 1933 and Amendment No. 22 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, LLP
------------------------------------------
Ballard Spahr Andrews & Ingersoll, LLP

February 25, 1998

<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information for the AIM Summit
Fund, Inc. for the annual period ended October 31, 1997.
</LEGEND>
<CIK> 0000701748
<NAME> AIM SUMMIT FUND, INC.

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 1125824040
<INVESTMENTS-AT-VALUE> 1645584439
<RECEIVABLES> 8188776
<ASSETS-OTHER> 49488
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1653822703
<PAYABLE-FOR-SECURITIES> 2270696
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1317971
<TOTAL-LIABILITIES> 3588667
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 956102084
<SHARES-COMMON-STOCK> 108895887
<SHARES-COMMON-PRIOR> 97070057
<ACCUMULATED-NII-CURRENT> 23591883
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 150779670
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 519760399
<NET-ASSETS> 1650234036
<DIVIDEND-INCOME> 9871106
<INTEREST-INCOME> 1733705
<OTHER-INCOME> 0
<EXPENSES-NET> 9996055
<NET-INVESTMENT-INCOME> 1608756
<REALIZED-GAINS-CURRENT> 151798786
<APPREC-INCREASE-CURRENT> 212044735
<NET-CHANGE-FROM-OPS> 365452277
<EQUALIZATION> 2437968
<DISTRIBUTIONS-OF-INCOME> (3131614)
<DISTRIBUTIONS-OF-GAINS> (114611563)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8716348
<NUMBER-OF-SHARES-REDEEMED> (6706799)
<SHARES-REINVESTED> 9816281
<NET-CHANGE-IN-ASSETS> 389225792
<ACCUMULATED-NII-PRIOR> 22676773
<ACCUMULATED-GAINS-PRIOR> 113592447
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 9353715
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 10012418
<AVERAGE-NET-ASSETS> 1462594326
<PER-SHARE-NAV-BEGIN> 12.99
<PER-SHARE-NII> 0.02
<PER-SHARE-GAIN-APPREC> 3.34
<PER-SHARE-DIVIDEND> (0.03)
<PER-SHARE-DISTRIBUTIONS> (1.17)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.15
<EXPENSE-RATIO> 0.68
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>