<PAGE> 1
As filed with the Securities and Exchange Commission on February 16, 1999
1933 Act. Reg. No. 2-87377
1940 Act Reg. No. 811-3886
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
------
Post-Effective Amendment No. 35 [X]
------
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 36 [X]
------
AIM ADVISOR FUNDS, INC.
-----------------------
(Exact Name of Registrant as Specified in Charter)
11 Greenway Plaza, Suite 100, Houston, Texas 77046
--------------------------------------------------
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (713) 626-1919
--------------
Charles T. Bauer
11 Greenway Plaza, Suite 100, Houston, Texas 77046
--------------------------------------------------
(Name and Address of Agent for Service)
--------------
Copies to:
Ofelia M. Mayo, Esquire Martha J. Hays, Esquire
A I M Advisors, Inc. Ballard Spahr Andrews & Ingersoll, LLP
11 Greenway Plaza, Suite 100 1735 Market Street, 51st Floor
Houston, Texas 77046 Philadelphia, Pennsylvania 19103-7599
--------------
Approximate Date of Proposed Public Offering: As soon as practicable after this
post-effective amendment becomes effective.
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (a)
[ ] on (date), pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[X] on May 3, 1999, pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485.
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> 2
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION DATED FEBRUARY 16, 1999
[AIM LOGO APPEARS HERE]
AIM ADVISOR FLEX FUND
PROSPECTUS
MAY 3, 1999
AIM Advisor Flex Fund seeks to achieve a high total return on investment through
growth of capital and current income, without regard to federal income tax
considerations.
This prospectus contains important information. Please read it before investing
and keep it for future reference.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. There is a risk that you could lose a portion or all of your money.
AS WITH ALL OTHER MUTUAL FUND SECURITIES, THE SECURITIES AND EXCHANGE COMMISSION
HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED WHETHER THE
INFORMATION IN THIS PROSPECTUS IS ADEQUATE OR ACCURATE. ANYONE
WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
INVESTMENT OBJECTIVE AND STRATEGIES......................................................................3
PRINCIPAL RISKS OF INVESTING IN THE FUND.................................................................3
PERFORMANCE INFORMATION..................................................................................5
ANNUAL TOTAL RETURNS............................................................................5
PERFORMANCE TABLE...............................................................................6
FEE TABLE AND EXPENSE EXAMPLE............................................................................7
FEE TABLE.......................................................................................7
EXPENSE EXAMPLE.................................................................................8
FUND MANAGEMENT..........................................................................................9
THE ADVISORS....................................................................................9
ADVISOR COMPENSATION............................................................................9
PORTFOLIO MANAGERS..............................................................................9
OTHER INFORMATION.......................................................................................10
INITIAL SALES CHARGES FOR CLASS A SHARES.......................................................10
DIVIDENDS AND DISTRIBUTIONS....................................................................10
FINANCIAL HIGHLIGHTS....................................................................................11
SHAREHOLDER INFORMATION................................................................................A-1
CHOOSING A SHARE CLASS........................................................................A-1
PURCHASING SHARES.............................................................................A-4
REDEEMING SHARES..............................................................................A-6
EXCHANGING SHARES.............................................................................A-9
PRICING OF SHARES............................................................................A-11
TAXES........................................................................................A-11
OBTAINING ADDITIONAL INFORMATION...........................................................BACK COVER PAGE
</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, La Familia AIM de Fondos and Design and Invest with
Discipline are registered service marks and AIM Bank Connection is a service
mark of A I M Management Group Inc.
2
<PAGE> 4
INVESTMENT OBJECTIVE AND STRATEGIES
The fund's investment objective is to achieve a high total return on investment
through growth of capital and current income, without regard to federal income
tax considerations.
The fund attempts to meet this objective by investing in a combination of equity
securities and fixed and variable income securities. The fund normally invests
at least 20% of its total assets in equity securities and at least 20% of its
total assets in fixed and variable income securities. The fund's equity
investments will consist primarily of common stocks, and to a lesser extent
convertible securities, of selected companies from a list of companies with
market capitalizations among the largest 800 publicly traded U.S. corporations.
The fund's fixed-income investments will consist primarily of U.S. Government
obligations and corporate obligations that have been rated investment-grade, or
securities deemed by the fund's subadvisor to be of comparable quality.
The fund may invest in mortgage-backed securities, including mortgage
pass-through securities and collateralized mortgage obligations, that are
guaranteed as to timely payment of principal and interest by an agency of the
U.S. Government or a private issuer. The fund may invest up to 10% of its total
assets in non-Canadian foreign securities and unsponsored American Depositary
Receipts (ADRs). The fund may also invest up to 25% of its total assets in
securities of Canadian issuers and sponsored ADRs.
The portion of the fund's assets that can be invested in either equity
securities or income securities will be allocated according to the portfolio
managers' assessments of current business, economic and market conditions. The
fund seeks reasonably consistent returns over a variety of market cycles. The
fund's portfolio managers focus on securities that they believe have excellent
prospects for growth of capital and current income. In selecting equity
securities, the portfolio managers start with a list of securities of the 800
largest publicly traded U.S. corporations, which they reduce to a list of 100
eligible securities by utilizing a proprietary database system and fundamental
analysis. The fund's portfolio managers usually sell a particular equity
security when it no longer qualifies for the list of eligible securities. The
fund's portfolio managers will purchase fixed and variable income obligations
that they believe are undervalued and may offer superior yields. The fund's
portfolio managers usually sell a particular income security when any of those
factors materially changes.
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash,
money market securities, or debt securities. As a result, the fund may not
achieve its investment objectives.
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund and that the income you may receive from the fund may vary. The value of
your investment in the fund will go up and down with the prices of the
securities in which the fund invests. The price of equity securities goes up and
down in response to many factors, including the historical and prospective
earnings of the issuer of the stock, the value of its assets, general economic
conditions, interest rates, investor perceptions and market liquidity.
Interest rate increases may cause the price of a debt security to decrease; the
longer the debt security's duration, the more sensitive it is to this risk. The
issuer of a security may default or otherwise be unable to honor a financial
obligation. A faster than expected principal prepayment rate on U.S. Government
agency mortgage-backed securities will reduce both the market value of, and
income from, such securities.
The fund may also invest in securities issued by foreign companies, which have
additional risks, including exchange rate changes, political and economic
upheaval, the relative lack of information about these companies, relatively low
market liquidity and the potential lack of strict financial and accounting
controls and standards.
3
<PAGE> 5
The value of your shares could be adversely affected if the computer systems
used by the fund's investment advisor and the fund's other service providers are
unable to distinguish the year 2000 from the year 1900.
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances
that other service providers are taking similar steps. Year 2000 problems may
also affect issuers in whose securities the fund invests.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
4
<PAGE> 6
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund's past performance is not necessarily an
indication of its future performance.
ANNUAL TOTAL RETURNS
The following bar chart shows changes in the performance of the fund's Class C
shares from year to year. The bar chart does not reflect sales loads. If it did,
the annual total returns shown would be lower.
ADVISOR FLEX
<TABLE>
<CAPTION>
[GRAPH]
Year Return (%)
---- ----------
<S> <C>
1989 ............................................... 17.26%
1990 ............................................... (1.68%)
1991 ............................................... 24.80%
1992 ............................................... 7.72%
1993 ............................................... 10.48%
1994 ............................................... 0.64%
1995 ............................................... 27.30%
1996 ............................................... 13.61%
1997 ............................................... 23.64%
1998 ............................................... 12.41%
</TABLE>
During the periods shown in the bar chart, the highest quarterly return was
12.12% (quarter ended March 31, 1991) and the lowest quarterly return was
(8.25)% (quarter ended September 30, 1990).
5
<PAGE> 7
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
<TABLE>
<CAPTION>
==============================================================================================================
Average Annual Total Returns
(for the periods ended December 31, 1998)
Since Inception
1 Year 5 Years 10 Years Inception Date
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A 13.26% -- -- 18.80% 12/31/96
- --------------------------------------------------------------------------------------------------------------
Class B -- -- -- -- 03/03/98
- --------------------------------------------------------------------------------------------------------------
Class C 12.41% 15.13% 13.23% 12.49% 02/24/88
- --------------------------------------------------------------------------------------------------------------
S&P 500(1) 28.60% 24.05% 19.19% 18.31%(2) 02/29/88(2)
==============================================================================================================
</TABLE>
(1) The Standard & Poor's 500 Index is an unmanaged index of common stocks
frequently used as a general measure of U.S. stock market performance.
(2) The average annual total return given is since the date closest to the
inception date of the class with the longest performance history.
6
<PAGE> 8
FEE TABLE AND EXPENSE EXAMPLE
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund:
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
Shareholder Fees (fees paid directly from your investment)
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) 5.50% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price
or redemption proceeds, whichever is less) None(1) 5.00 1.00
Annual Fund Operating Expenses
(expenses that are deducted from fund assets)
Management Fees [0.75%] [0.75%] [0.75%]
Distribution and/or Service (12b-1) Fees(2) [0.25] [1.00] [1.00]
Other Expenses:
Transfer agent fees and costs [ ] [ ] [ ]
Other [ ] [ ] [ ]
------ ------ ------
[Fee Waiver(3) [ ] [ ] [ ]]
Total Other Expenses [ ] [ ] [ ]
Total Annual Fund Operating Expenses [ ] [ ] [ ]
====== ====== ======
</TABLE>
- -------------------
(1) If you buy $1,000,000 or more of Class A shares and redeem these shares
within 18 months from the date of purchase, you may pay a 1% contingent
deferred sales charge (CDSC) at the time of redemption.
(2) AIM Distributors has voluntarily agreed to limit the Class A shares Rule
12b-1 distribution plan payments to 0.25% for three years beginning
August 4, 1997. If these limitations were not in effect, the distribution
and/or service (12b-1) fees and total annual fund operating expenses of
the Class A shares would be 0.35% and 1.55%, respectively.
[(3) The investment advisor has agreed to waive a portion of its fees. The
waiver may not be terminated without the approval of the fund's Board of
Directors.]
As a result of 12b-1 fees, long-term shareholders in the fund may pay more than
the maximum permitted initial sales charge.
7
<PAGE> 9
EXPENSE EXAMPLE
This example is intended to help you compare the costs of investing in different
classes of the fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual returns and
costs may be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ $ $ $
Class B
Class C
You would pay the following expenses if you did not redeem your shares:
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ $ $ $
Class B
Class C
</TABLE>
8
<PAGE> 10
FUND MANAGEMENT
THE ADVISORS
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor and
manages the investment operations of the fund and has agreed to perform or
arrange for the performance of the fund's day-to-day management. The advisor is
located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. INVESCO
Capital Management, Inc. (the subadvisor), the fund's subadvisor, is located at
1315 Peachtree Street, N.E., Atlanta, GA 30309. The subadvisor is responsible
for the fund's day-to-day management, including the fund's investment decisions
and the execution of securities transactions with respect to the fund.
The advisor has acted as an investment advisor since its organization in 1976.
Today, the advisor, together with its subsidiaries, advises or manages over 110
investment portfolios, including the fund, encompassing a broad range of
investment objectives. The subadvisor has acted as an investment advisor since
1979.
ADVISOR COMPENSATION
During the fiscal year ended December 31, 1998, the advisor received
compensation of ___% of average net assets.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual
members of the team who are primarily responsible for the day-to-day management
of the fund's portfolio are
o Edward C. Mitchell, Jr., C.F.A., Senior Portfolio Manager, who has been
responsible for the fund since 1988 and has been associated with the
subadvisor and/or its affiliates since 1979.
o Margaret (Peg) W. Durkes, C.F.A., Assistant Portfolio Manager, who has
been responsible for the fund since 1997 and has been associated with
the subadvisor and/or its affiliates since 1993.
o David S. Griffin, C.F.A., Assistant Portfolio Manager, who has been
responsible for the fund since 1993 and has been associated with the
subadvisor and/or its affiliates since 1991.
9
<PAGE> 11
OTHER INFORMATION
INITIAL SALES CHARGES FOR CLASS A SHARES
Purchases of Class A shares of the fund are subject to the maximum 5.50% initial
sales charge as listed under the heading "CATEGORY I Initial Sales Charges" in
the "Shareholder Information--Choosing a Share Class" section of this
prospectus.
DIVIDENDS AND DISTRIBUTIONS
Dividends
The fund generally declares and pays dividends, if any, quarterly.
Capital Gains Distributions
The fund generally distributes long-term gains [(including any net gains from
foreign currency transactions)], if any, annually and short-term capital gains
(including any net gains from foreign currency transactions), if any, quarterly.
10
<PAGE> 12
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
financial performance. Certain information reflects financial results for a
single fund share.
The total returns in the table represent the rate that an investor would have
earned (or lost) on an investment in the fund (assuming reinvestment of all
dividends and distributions).
The information for the years or periods ended December 31, 1997, 1996, 1995 and
1994 has been audited by PricewaterhouseCoopers LLP. The information for the
fiscal year or period ended December 31, 1998, has been audited by KPMG LLP,
whose report, along with the fund's financial statements, is included in the
fund's annual report, which is available upon request.
<TABLE>
<CAPTION>
Class A(a)
Year Ended December 31,
1998 1997(b)
-------------------------
<S> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx
-------- --------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx)(c)
-------- --------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx)
-------- --------
Total from investment operations (x.xx) (x.xx)
-------- --------
Less distributions: (x.xx) (x.xx)
Dividends from net investment income: (x.xx) (x.xx)
-------- --------
Distributions from capital gains: (x.xx) (x.xx)
-------- --------
Total distributions (x.xx) (x.xx)
-------- --------
Net asset value, end of period $ xx.xx $ xx.xx
-------- --------
Total return(d) (x.xx)% (x.xx)%
-------- --------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx $ xx,xxx
-------- --------
Ratio of expenses to average net assets(e) x.xx%(f) x.xx%
-------- --------
Ratio of net investment income (loss) to average net assets(g) (x.xx)%(f) (x.xx)%
-------- --------
Portfolio turnover rate xx% xx%
-------- --------
Average brokerages commission rate(h) x.xxxx x.xxxx
-------- --------
</TABLE>
(a) Per share information and shares have been restated to reflect a 4 for 1
stock split, effective in the form of a 300% stock dividend, on November 7,
1997.
(b) The fund changed investment advisors on August 4, 1997.
(c) Calculated using average shares outstanding.
(d) Does not deduct sales charges.
(e) After fee waivers. The ratio of expenses to average net assets prior to fee
waivers was x.xx%.
(f) Ratios are based on average net asset of $xx,xxx,xxx.
(g) After fee waivers. The ratio of net investment income to average net assets
prior to fee waivers was x.xx%.
(h) 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.
11
<PAGE> 13
<TABLE>
<CAPTION>
For the Period March 3, 1998 through December 31,
Class B 1998
- ------- -------------------------------------------------
<S> <C>
Net asset value, beginning of period $ xx.xx
--------
Income from investment operations:
Net investment income (loss) (x.xx)
--------
Net gains on securities (both realized and unrealized) (x.xx)
--------
Total from investment operations (x.xx)
--------
Less distributions: (x.xx)
Dividends from net investment income: (x.xx)
--------
Distributions from capital gains: (x.xx)
--------
Total distributions (x.xx)
--------
Net asset value, end of period $ xx.xx
--------
Total return(a) (x.xx)%
--------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx
--------
Ratio of expenses to average net assets(b) x.xx%(c)
--------
Ratio of net investment income (loss) to average net assets(d) (x.xx)%(c)
--------
Portfolio turnover rate xx%
--------
Average brokerages commission rate(e) x.xxxx
--------
</TABLE>
(a) Does not deduct sales charges and are not annualized for periods less than
one year.
(b) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
(annualized).
(c) Ratios are annualized and based on average net assets of x,xxx,xxx.
(d) After fee waivers, Ratio of net investment income to average net assets
prior to fee waivers was x.xx%.
(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.
<TABLE>
<CAPTION>
Class C(a) 1998 1997(b) 1996 1995 1994
- ---------- -------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx)(c) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Less distributions: (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
Dividends from net investment income: (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Distributions from capital gains: (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Total distributions (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Net asset value, end of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
-------- -------- -------- -------- --------
Total return(d) (x.xx)% (x.xx)% (x.xx)% (x.xx)% (x.xx)%
-------- -------- -------- -------- --------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx $ xx,xxx $ xx,xxx $ xx,xxx $ xx,xxx
-------- -------- -------- -------- --------
Ratio of expenses to average net assets x.xx% x.xx%(e) x.xx% x.xx%(f) x.xx%
-------- -------- -------- -------- --------
Ratio of net investment income (loss) to average net assets (x.xx)% (x.xx)%(e) (x.xx)% (x.xx)%(f) (x.xx)%
-------- -------- -------- -------- --------
Portfolio turnover rate xx% xx% xx% xx% xx%
-------- -------- -------- -------- --------
Average brokerages commission rate(f) x.xxxx x.xxxx x.xxxx x.xxxx x.xxxx
-------- -------- -------- -------- --------
</TABLE>
(a) Per share information and shares have been restated to reflect a 4 for 1
stock split, effective in the form of a 300% stock dividend, on November 7,
1997.
(b) The fund changed investment advisors on August 4, 1997.
(c) Calculated using average shares outstanding.
(d) Does not deduct contingent deferred sales charges.
(e) Ratios are based on average net assets of xxx,xxx,xxx.
(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.
12
<PAGE> 14
Shareholder Information
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
Many of the funds advised by the advisor (the AIM Funds) have multiple classes
of shares, each class representing an interest in the same portfolio of
investments. When choosing a share class, you should consider the factors below:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
- - Initial sales charge - No initial sales charge - No initial sales charge
- - Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within six charge on redemptions within
years one year
- - Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
after eight years along with a shares
pro rata portion of its
reinvested dividends and
distributions*
- - Generally more appropriate for - Purchase orders limited to - Generally more appropriate
long-term investors amounts less than $250,000 for short-term investors
</TABLE>
* AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
AIM Global Trends Fund: If you held Class B shares on May 29, 1998 and
continue to hold them, those shares will convert to Class A shares of that
fund seven years after your date of purchase. If you exchange those shares
for Class B shares of another AIM Fund, the shares into which you exchanged
will not convert to Class A shares until eight years after your date of
purchase of the original shares.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans
that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc.
(the distributor) for the sale and distribution of its shares and fees for
services provided to shareholders, all or a substantial portion of which are
paid to the dealer of record. Because the AIM Fund pays these fees out of its
assets on an ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
MCF-03/99
A-1
<PAGE> 15
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class
A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money
Market Fund. You may be charged a contingent deferred sales charge if you redeem
AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain
exchanges. Sales charges on all other AIM Funds and classes of those Funds are
detailed below. As used below, the term "offering price" with respect to all
categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales
charges. The "Other Information" section of your prospectus will tell you in
what category your particular AIM Fund is classified.
<TABLE>
<CAPTION>
CATEGORY I INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY II INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY III INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
- ----------------------------------------------------------
</TABLE>
CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value.
However, if you purchase shares of that amount in Categories I or II, they will
be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them
prior to 18 months after the date of purchase. The distributor may pay a dealer
concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share.
However, when you redeem them, they are subject to a CDSC in the following
percentages:
<TABLE>
<CAPTION>
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
- ----------------------------------------------------------
<S> <C> <C>
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
- ----------------------------------------------------------
</TABLE>
A-2
<PAGE> 16
REDUCED SALES CHARGES AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify
for these reductions or exceptions, you or your financial consultant must
provide sufficient information at the time of purchase to verify that your
purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates
under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares
currently owned for the purpose of qualifying for the lower initial sales charge
rates that apply to larger purchases. The applicable initial sales charge for
the new purchase is based on the total of your current purchase and the current
value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount
of Class A shares of AIM Funds during a 13-month period. The amount you agree to
purchase determines the initial sales charge you pay. If the full face amount of
the LOI is not invested by the end of the 13-month period, your account will be
adjusted to the higher initial sales charge level for the amount actually
invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- - on shares purchased by reinvesting dividends and distributions;
- - when exchanging shares among certain AIM Funds;
- - when using the reinstatement privilege; and
- - when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- - if you redeem Class B shares you held for more than six years;
- - if you redeem Class C shares you held for more than one year;
- - if you redeem shares acquired through reinvestment of dividends and
distributions; and
- - on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares
at reduced or without sales charges. Consult the fund's Statement of Additional
Information for details.
A-3
<PAGE> 17
PURCHASING SHARES
MINIMUM INVESTMENTS PER AIM FUND ACCOUNT
The minimum investments for AIM Fund accounts (except for investments in AIM
Small Cap Opportunities Fund) are as follows:
<TABLE>
<CAPTION>
INITIAL ADDITIONAL
TYPE OF ACCOUNT INVESTMENTS INVESTMENTS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
<TABLE>
<CAPTION>
PURCHASE OPTIONS
- ----------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed Account Application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed Account Application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank
methods described above. Connection(SM) form to the transfer
agent. Once the transfer agent has
received the form, call the
transfer agent to place your
purchase.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
A-4
<PAGE> 18
SPECIAL PLANS
AUTOMATIC INVESTMENT PLAN
You can arrange for periodic investments in any of the AIM Funds by authorizing
the AIM Fund to withdraw the amount of your investment from your bank account on
a day or dates you specify and in an amount of at least $50. You may stop the
Automatic Investment Plan at any time by giving the transfer agent notice ten
days prior to your next scheduled withdrawal.
DOLLAR COST AVERAGING
Dollar Cost Averaging allows you to make automatic monthly or quarterly
exchanges, if permitted, from one AIM Fund account to one or more other AIM Fund
accounts with the identical registration. The account from which exchanges are
to be made must have a minimum balance of $5,000 before you can use this option.
Exchanges will occur on (or about) the 10th or 25th day of the month, whichever
you specify, in the amount you specify. The minimum amount you can exchange to
another AIM Fund is $50.
AUTOMATIC DIVIDEND INVESTMENT
All of your dividends and distributions may be paid in cash or invested in any
AIM Fund at net asset value. Unless you specify otherwise, your dividends and
distributions will automatically be reinvested in the same AIM Fund. You may
invest your dividends and distributions (1) into another AIM Fund in the same
class of shares; or (2) from Class A shares into AIM Cash Reserve Shares of AIM
Money Market Fund, or vice versa.
You must comply with the following requirements to be eligible to invest your
dividends and distributions in shares of another AIM Fund:
(1) Your account balance (a) in the AIM Fund paying the dividend must be at
least $5,000; or (b) in the AIM Fund receiving the dividend must be at least
$500;
(2) Both accounts must have identical registration information; and
(3) You must have completed an authorization form to reinvest dividends into
another AIM Fund.
PORTFOLIO REBALANCING PROGRAM
If you have at least $5,000 in your account, you may participate in the
Portfolio Rebalancing Program. Under this Program, you can designate how the
total value of your AIM Fund holdings should be rebalanced, on a percentage
basis, between two and ten of your AIM Funds on a quarterly, semiannual or
annual basis. Your portfolio will be rebalanced through the exchange of shares
in one or more of your AIM Funds for shares of the same class of one or more
other AIM Funds in your portfolio. If you wish to participate in the Program,
make changes or cancel the Program, the transfer agent must receive your request
to participate, changes or cancellation in good order at least five business
days prior to the next rebalancing date, which is normally the 28th day of the
last month of the period you choose. We may modify, suspend or terminate the
Program at any time on 60 days' prior written notice.
RETIREMENT PLANS
Shares of most of the AIM Funds can be purchased through
tax-sheltered retirement plans made available to corporations, individuals and
employees of non-profit organizations and public schools. A plan document must
be adopted to establish a retirement plan. You may use AIM Funds-sponsored
retirement plans, which include IRAs, Education IRAs, Roth IRAs, 403(b) plans,
401(k) plans, SIMPLE IRA plans, SEP/SARSEP plans and Money Purchase/Profit
Sharing plans, or another sponsor's retirement plan. The plan custodian of the
AIM Funds-sponsored retirement plan assesses an annual maintenance fee of $10.
Contact your financial consultant for details.
REDEEMING SHARES
REDEMPTION FEES
We will not charge you any fees to redeem your shares; however, your broker or
financial consultant may charge service fees for handling these transactions.
Your shares may be subject to a contingent deferred sales charge (CDSC).
COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their
original purchase price or current market value, net of reinvested dividends and
capital gains distributions. In determining whether to charge a CDSC, we will
assume that you have redeemed shares on which there is no CDSC first and, then,
shares in the order of purchase.
REDEMPTION OF AIM CASH RESERVE SHARES OF
AIM MONEY MARKET FUND ACQUIRED BY EXCHANGE
If you redeem AIM Cash Reserve Shares acquired by exchange from Class A shares
subject to a CDSC within eighteen months of the purchase of the Class A shares,
you will be charged a CDSC.
REDEMPTION OF CLASS B SHARES ACQUIRED BY
EXCHANGE FROM AIM FLOATING RATE FUND
If you redeem Class B shares you acquired by exchange via a tender offer by AIM
Floating Rate Fund, the early withdrawal charge applicable to shares of AIM
Floating Rate Fund will be applied instead of the CDSC normally applicable to
Class B shares.
A-5
<PAGE> 19
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Through a Financial Contact your financial consultant.
Consultant
By Mail Send a written request to the transfer agent. Requests must
include (1) original signatures of all registered owners;
(2) the name of the AIM Fund and your account number; (3) if
the transfer agent does not hold your shares, endorsed share
certificates or share certificates accompanied by an
executed stock power; and (4) signature guarantees, if
necessary (see below). The transfer agent may require that
you provide additional information, such as corporate
resolutions or powers of attorney, if applicable. If you are
redeeming from an IRA account, you must include a statement
of whether or not you are at least 59 1/2 years old and
whether you wish to have federal income tax withheld from
your proceeds. The transfer agent may require certain other
information before you can redeem from an employer-sponsored
retirement plan. Contact your employer for details.
By Telephone Call the transfer agent. You will be allowed to redeem by
telephone if (1) the proceeds are to be mailed to the
address on record with us or transferred electronically to a
pre-authorized checking account; (2) the address on record
with us has not been changed within the last thirty days;
(3) you do not hold physical share certificates; (4) you can
provide proper identification information; (5) the proceeds
of the redemption do not exceed $50,000; and (6) you have
not previously declined the telephone redemption privilege.
Certain accounts, including retirement accounts and 403(b)
plans, may not redeem by telephone. The transfer agent must
receive your call during the hours the NYSE is open for
business in order to effect the redemption at that day's
closing price.
</TABLE>
- --------------------------------------------------------------------------------
TIMING AND METHOD OF PAYMENT
We normally will send out checks within one business day, and in any event no
more than seven days, after we accept your request to redeem. If you redeem
shares recently purchased by check, you will be required to wait up to ten
business days before we will send your redemption proceeds. This delay is
necessary to ensure that the purchase check has cleared.
REDEMPTION BY MAIL
If you mail us a request in good order to redeem your shares, we will mail you a
check in the amount of the redemption proceeds to the address on record with us.
If your request is not in good order, you may have to provide us with additional
documentation in order to redeem your shares.
REDEMPTION BY TELEPHONE
If you redeem by telephone, we will mail you a check in the amount of the
redemption proceeds to your address of record (if there has been no change
communicated to the transfer agent within the previous 30 days) or transmit them
electronically to your pre-authorized bank account. We use reasonable procedures
to confirm that instructions communicated by telephone are genuine and are not
liable for telephone instructions that are reasonably believed to be genuine.
PAYMENT FOR SYSTEMATIC WITHDRAWALS
You may arrange for regular monthly or quarterly withdrawals from your account
of at least $50. You also may make annual withdrawals if you own Class A shares.
We will redeem enough shares from your account to cover the amount withdrawn.
You must have an account balance of at least $5,000 to establish a Systematic
Withdrawal Plan. You can stop this plan at any time by giving ten days prior
notice to the transfer agent.
EXPEDITED REDEMPTIONS
(AIM Cash Reserve Shares of AIM Money Market Fund only)
If we receive your redemption order before 11:30 a.m. Eastern Time, we will try
to transmit payment of redemption proceeds on that same day. If we receive your
redemption order after 11:30 a.m. Eastern Time and before the close of trading
on the New York Stock Exchange (NYSE), we generally will transmit payment on the
next business day.
REDEMPTIONS BY CHECK
(Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM
Money Market Fund only)
You may redeem shares of these AIM Funds by writing checks in amounts of $250 or
more if you have completed an authorization form. Redemption by check is not
available for retirement accounts.
SIGNATURE GUARANTEES
We require a signature guarantee when you redeem by mail and
(1) the amount is greater than $50,000;
(2) you request that payment be made to someone other than the name registered
on the account;
(3) you request that payment be sent somewhere other than the bank of record on
the account; or
(4) you request that payment be sent to a new address or an address that changed
in the last 30 days.
The transfer agent will accept a guarantee of your signature by a number of
financial institutions. Call the transfer agent for additional information. Some
institutions have transaction amount maximums for these guarantees. Please check
with the guarantor institution.
A-6
<PAGE> 20
REINSTATEMENT PRIVILEGE (Class A shares only)
You may, within 90 days after you sell Class A shares (except Class A shares of
AIM Tax-Exempt Cash Fund), reinvest all or part of your redemption proceeds in
Class A shares of any AIM Fund at net asset value in an identically registered
account. If you sold Class A shares of AIM Limited Maturity Treasury Fund or AIM
Tax-Free Intermediate Fund, you will incur an initial sales charge reflecting
the difference between the initial sales charges on those Funds and the ones in
which you will be investing. In addition, if you paid a contingent deferred
sales charge (CDSC) on any reinstated amount, you will not be subject to a CDSC
if you later redeem that amount. You must notify the transfer agent in writing
at the time you reinstate that you are exercising your reinstatement privilege.
You may exercise this privilege only once per year.
REDEMPTIONS BY THE AIM FUNDS
If your account has been open at least one year, you have not made an additional
purchase in the account during the past six calendar months, and the value of
your account falls below $500 for three consecutive months due to redemptions or
exchanges (excluding retirement accounts), the AIM Funds have the right to
redeem the account after giving you 60 days' prior written notice. You may avoid
having your account redeemed during the notice period by bringing the account
value up to $500 or by utilizing the Automatic Investment Plan.
If an AIM Fund determines that you have provided incorrect information in
opening an account or in the course of conducting subsequent transactions, the
AIM Fund may, in its discretion, redeem the account and distribute the proceeds
to you.
EXCHANGING SHARES
You may, under certain circumstances, exchange shares in one AIM Fund for those
of another AIM Fund. Before requesting an exchange, review the prospectus of the
AIM Fund you wish to acquire. Exchange privileges also apply to holders of the
Connecticut General Guaranteed Account, established for tax-qualified group
annuities, for contracts purchased on or before June 30, 1992.
PERMITTED EXCHANGES
Except as otherwise stated below, you may exchange your shares for shares of the
same class of another AIM Fund. You also may exchange AIM Cash Reserve Shares of
AIM Money Market Fund for Class A shares of another AIM Fund, or vice versa. You
may be required to pay an initial sales charge when exchanging from a Fund with
a lower initial sales charge than the one into which you are exchanging. If you
exchange from Class A shares not subject to a CDSC into Class A shares subject
to those charges, you will be charged a CDSC when you redeem the exchanged
shares. The CDSC charged on redemption of those shares will be calculated
starting on the date you acquired those shares through exchange.
YOU WILL NOT PAY A SALES CHARGE WHEN EXCHANGING:
(1) Class A shares with an initial sales charge (except for Class A shares of
AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund) for
Class A shares of another AIM Fund or AIM Cash Reserve Shares of AIM Money
Market Fund;
(2) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund for
(a) one another;
(b) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of
AIM Tax-Exempt Cash Fund; or
(c) Class A shares of another AIM Fund, but only if
(i) you acquired the original shares before May 1, 1994; or
(ii) you acquired the original shares on or after May 1, 1994 by way of
an exchange from shares with higher sales charges;
(3) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM
Tax-Exempt Cash Fund for
(a) one another;
(b) Class A shares of an AIM Fund subject to an initial sales charge (except
for Class A shares of AIM Limited Maturity Treasury Fund and AIM
Tax-Free Intermediate Fund), but only if you acquired the original
shares
(i) prior to May 1, 1994 by exchange from Class A shares subject to an
initial sales charge;
(ii) on or after May 1, 1994 by exchange from Class A shares subject to
an initial sales charge (except for Class A shares of AIM Limited
Maturity Treasury Fund and AIM Tax-Free Intermediate Fund); or
(c) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund, but only if you acquired the original shares by
exchange from Class A shares subject to an initial sales charge; or
(4) Class B shares for other Class B shares, and Class C shares for other Class
C shares.
EXCHANGES NOT PERMITTED
You may not exchange Class A shares subject to contingent deferred sales charges
for Class A shares of AIM Limited Maturity Treasury Fund, AIM Tax-Free
Intermediate Fund or AIM Tax-Exempt Cash Fund.
EXCHANGE CONDITIONS
The following conditions apply to all exchanges:
- - You must meet the minimum purchase requirements for the AIM Fund into which
you are exchanging;
- - Shares of the AIM Fund you wish to acquire must be qualified for sale in your
state of residence;
- - Exchanges must be made between accounts with identical registration
information;
A-7
<PAGE> 21
- - The account you wish to exchange from must have a certified tax identification
number (or the Fund has received an appropriate Form W-8 or W-9);
- - Shares must have been held for at least one day prior to the exchange; and
- - If you have physical share certificates, you must return them to the transfer
agent prior to the exchange.
TERMS OF EXCHANGE
Under unusual market conditions, an AIM Fund may delay the issuance of shares
being purchased in an exchange for up to five business days if it determines
that it would be materially disadvantaged by the immediate transfer of exchange
proceeds. There is no fee for exchanges. The exchange privilege is not an option
or right to purchase shares. Any of the participating AIM Funds or the
distributor may modify or discontinue this privilege at any time.
BY MAIL
If you wish to make an exchange by mail, you must include original signatures of
each registered owner exactly as the shares are registered, the account
registration and account number, the dollar amount or number of shares to be
exchanged and the names of the AIM Funds from which and into which the exchange
is to be made.
BY TELEPHONE
Conditions that apply to exchanges by telephone are the same as redemptions by
telephone, including that the transfer agent must receive exchange requests
during the hours the NYSE is open for business; however, you still will be
allowed to exchange by telephone even if you have changed your address of record
within the preceding 30 days.
EXCHANGING CLASS B AND CLASS C SHARES
If you make an exchange involving Class B or Class C shares, the amount of time
you held the original shares will be added to the holding period of the Class B
or Class C shares, respectively, into which you exchanged for the purpose of
calculating contingent deferred sales charges (CDSC) if you later redeem the
exchanged shares. If you redeem Class B shares acquired by exchange via a tender
offer by AIM Floating Rate Fund, you will be credited with the time period you
held the shares of AIM Floating Rate Fund for the purpose of computing the early
withdrawal charge applicable to those shares.
EACH AIM FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR
CANCEL ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR
CONDITIONS OF PURCHASE OF SHARES OF ANY AIM FUND; OR WITHDRAW ALL OR ANY PART
OF THE OFFERING MADE BY THIS PROSPECTUS.
PRICING OF SHARES
DETERMINATION OF NET ASSET VALUE
The price of each AIM Fund's shares is the fund's net asset value per share. The
AIM Funds value portfolio securities for which market quotations are readily
available at market value. The AIM Funds value short-term investments maturing
within 60 days at amortized cost, which approximates market value. AIM Money
Market Fund and AIM Tax-Exempt Cash Fund value all their securities at amortized
cost. AIM High Income Municipal Fund, AIM Municipal Bond Fund, AIM Tax-Exempt
Bond Fund of Connecticut and AIM Tax-Free Intermediate Fund value variable rate
securities that have an unconditional demand or put feature exercisable within
seven days or less at par, which reflects the market value of such securities.
The AIM Funds value all other securities and assets at their fair value.
Securities and other assets quoted in foreign currencies are valued in U.S.
dollars based on the prevailing exchange rates on that day. In addition, if,
between the time trading ends on a particular security and the close of the New
York Stock Exchange (NYSE), events occur that materially affect the value of the
security, the AIM Funds may value the security at its fair value as determined
in good faith by or under the supervision of the Board of Directors or Trustees
of the AIM Fund. The effect of using fair value pricing is that an AIM Fund's
net asset value will be subject to the judgment of the Board of Directors or
Trustees or its designee instead of being determined by the market. Because some
of the AIM Funds may invest in securities that are primarily listed on foreign
exchanges, the value of those funds' shares may change on days when you will not
be able to purchase or redeem shares.
Each AIM Fund determines the net asset value of its shares as of the close of
the NYSE on each day the NYSE is open for business. AIM Money Market Fund also
determines its net asset value as of 12:00 noon Eastern Time on each day the
NYSE is open for business.
TIMING OF ORDERS
You can purchase, exchange or redeem shares during the hours the NYSE is open
for business. The AIM Funds price purchase, exchange and redemption orders at
the net asset value calculated after the transfer agent receives an order in
good form. An AIM Fund may postpone the right of redemption only under unusual
circumstances, such as when the NYSE restricts or suspends trading.
TAXES
In general, dividends and distributions you receive are taxable as ordinary
income or long-term capital gains for federal income tax purposes, whether you
reinvest them in additional shares or take them in cash. Distributions are
taxable to you at different rates depending on the length of time the fund holds
its assets. Different tax rates apply to ordinary income and long-term capital
gain distributions, regardless of how long you have held your shares. Every
year, you will be sent information showing the amount of dividends and
distributions you received from each AIM Fund during the prior year.
A-8
<PAGE> 22
Any long-term or short-term capital gains realized from redemptions of AIM
Fund shares will be subject to federal income tax. Exchanges of shares for
shares of another AIM Fund are treated as a sale, and any gain realized on the
transaction will generally be subject to federal income tax.
The foreign, state and local tax consequences of investing in AIM Fund shares
may differ materially from the federal income tax consequences described above.
You should consult your tax advisor before investing.
A-9
<PAGE> 23
[BACK COVER PAGE]
OBTAINING ADDITIONAL INFORMATION
More information may be obtained free of charge upon request. The Statement of
Additional Information (SAI), a current version of which is on file with the
Securities and Exchange Commission (SEC), contains more details about the fund
and is incorporated by reference into the prospectus (is legally a part of this
prospectus). Annual and semiannual reports to shareholders contain additional
information about the fund's investments. The fund's annual report also
discusses the market conditions and investment strategies that significantly
affected the fund's performance during its last fiscal year.
If you have questions about this fund, another fund in The AIM Family of
Funds--Registered Trademark--or your account, or wish to obtain free copies of
the fund's current SAI or annual or semiannual reports, please contact us:
BY MAIL: A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
BY TELEPHONE: (800) 347-4246
BY E-MAIL: [email protected]
ON THE INTERNET: http://www.aimfunds.com (prospectuses and annual and semiannual
reports only)
You also can obtain copies of the fund's SAI and other information at the SEC's
Public Reference Room in Washington, D.C., on the SEC's website
(http://www.sec.gov), or by sending a letter, including a duplicating fee, to
the SEC's Public Reference Section, Washington, D.C. 20549-6009. Please call the
SEC at 1-800-SEC-0330 for information about the Public Reference Room.
AIM Advisor Flex Fund
SEC 1940 Act file number: 811-3886
<PAGE> 24
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION DATED FEBRUARY 16, 1999
[AIM LOGO APPEARS HERE]
AIM ADVISOR INTERNATIONAL VALUE FUND
PROSPECTUS
MAY 3, 1999
AIM Advisor International Value Fund seeks to achieve a high total return on
investment through growth of capital and current income, without regard to U.S.
or foreign tax considerations.
This prospectus contains important information. Please read it before investing
and keep it for future reference.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. There is a risk that you could lose a portion or all of your money.
AS WITH ALL OTHER MUTUAL FUND SECURITIES, THE SECURITIES AND EXCHANGE
COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED
WHETHER THE INFORMATION IN THIS PROSPECTUS IS ADEQUATE OR ACCURATE.
ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.
<PAGE> 25
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
INVESTMENT OBJECTIVE AND STRATEGIES......................................................................3
PRINCIPAL RISKS OF INVESTING IN THE FUND.................................................................3
PERFORMANCE INFORMATION..................................................................................5
ANNUAL TOTAL RETURNS............................................................................5
PERFORMANCE TABLE...............................................................................6
FEE TABLE AND EXPENSE EXAMPLE............................................................................7
FEE TABLE.......................................................................................7
EXPENSE EXAMPLE.................................................................................7
FUND MANAGEMENT..........................................................................................8
THE ADVISORS....................................................................................8
ADVISOR COMPENSATION............................................................................8
PORTFOLIO MANAGERS..............................................................................9
OTHER INFORMATION........................................................................................9
INITIAL SALES CHARGES FOR CLASS A SHARES........................................................9
DIVIDENDS AND DISTRIBUTIONS.....................................................................9
FINANCIAL HIGHLIGHTS....................................................................................10
SHAREHOLDER INFORMATION................................................................................A-1
CHOOSING A SHARE CLASS........................................................................A-1
PURCHASING SHARES.............................................................................A-4
REDEEMING SHARES..............................................................................A-6
EXCHANGING SHARES.............................................................................A-9
PRICING OF SHARES............................................................................A-11
TAXES........................................................................................A-11
OBTAINING ADDITIONAL INFORMATION...........................................................BACK COVER PAGE
</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, La Familia AIM de Fondos and Design and Invest with
Discipline are registered service marks and AIM Bank Connection is a service
mark of A I M Management Group Inc.
2
<PAGE> 26
INVESTMENT OBJECTIVE AND STRATEGIES
The fund's investment objective is to achieve a high total return on investment
through growth of capital and current income, without regard to U.S. or foreign
tax considerations.
The fund seeks to achieve its objective by investing, normally, at least 65% of
its total assets in a diversified portfolio of foreign equity securities. The
fund will normally invest in the securities of companies located in at least
four different countries. The fund may invest up to 20% of its total assets in
equity securities of companies located in developing countries, i.e., those that
are in the initial stages of their industrial cycle. The fund may also invest up
to 35% of its total assets in investment-grade debt securities, or securities
deemed by the fund's subadvisor to be of comparable quality.
The fund's portfolio managers compare the price of a stock to various factors
including shareholders' equity per share, historic return on equity, and the
company's ability to reinvest earnings for future growth or to pay earnings in
the form of dividends. They focus on securities that they believe have excellent
prospects for growth of capital and current income. The fund's portfolio
managers usually sell a particular security when any of those factors materially
changes.
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in the
securities of U.S. issuers, cash, money market securities, or debt securities
issued by the U.S. or a foreign government, their agencies or instrumentalities.
As a result, the fund may not achieve its investment objective.
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund and that the income you may receive from the fund may vary. The value of
your investment in the fund will go up and down with the prices of the
securities in which the fund invests. The price of equity securities goes up and
down in response to many factors, including the historical and prospective
earnings of the issuer of the stock, the value of its assets, general economic
conditions, interest rates, investor perceptions, and market liquidity. Interest
rate increases may cause the price of a debt security to decrease; the longer
the debt security's duration, the more sensitive it is to this risk. The issuer
of a debt security may default or otherwise be unable to honor a financial
obligation.
The prices of foreign securities may be further affected by other factors,
including
o Currency exchange rates--The dollar value of the fund's foreign
investments will be affected by changes in the exchange rates between
the dollar and the currencies in which those investments are traded.
o Political and economic conditions--The value of the fund's foreign
investments may be adversely affected by political and social
instability in their home countries and by changes in economic or
taxation policies in those countries.
o Regulations--Foreign companies generally are subject to less stringent
regulations, including financial and accounting controls, than are U.S.
companies. As a result, among other things, there generally is less
publicly available information about foreign companies than about U.S.
companies.
o Markets--The securities markets of other countries are smaller than
U.S. securities markets. As a result, many foreign securities may be
less liquid and more volatile than U.S. securities.
[To the extent that the fund invests in securities of issuers in developing
countries, the factors listed above may have a greater effect on the fund. For
example, many developing countries have, in the past,
3
<PAGE> 27
experienced high rates of inflation or sharply devalued their currencies against
the U.S. dollar, thereby causing the value of investments in companies located
in those countries to decline. Transaction costs are often higher in developing
countries and there may be delays in settlement procedures. In addition,
developing countries may have greater political or economic instability, less
regulation and smaller, less liquid and more volatile markets than countries
with more mature economies.]
The value of your shares could be adversely affected if the computer systems
used by the fund's investment advisor and the fund's other service providers are
unable to distinguish the year 2000 from the year 1900.
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances
that other service providers are taking similar steps. Year 2000 problems may
also affect issuers in whose securities the fund invests.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
4
<PAGE> 28
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund's past performance is not necessarily an
indication of its future performance.
ANNUAL TOTAL RETURNS
The following bar chart shows changes in the performance of the fund's Class C
shares from year to year. The bar chart does not reflect sales loads. If it did,
the annual total returns shown would be lower.
ADVISOR INTERNATIONAL VALUE
<TABLE>
<CAPTION>
[GRAPHIC]
Year Return (%)
---- ----------
<S> <C>
1996 ............................................. 20.99%
1997 ............................................. 12.98%
1998 ............................................. 10.38%
</TABLE>
During the periods shown in the bar chart, the highest quarterly return was
15.89% (quarter ended December 31, 1998) and the lowest quarterly return was
(16.70)% (quarter ended September 30, 1998).
5
<PAGE> 29
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
<TABLE>
<CAPTION>
====================================================================================================
Average Annual Total Returns
(for the periods ended December 31, 1998)
Since Inception
1 Year Inception Date
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A 11.20% 12.51% 01/01/97
- ----------------------------------------------------------------------------------------------------
Class B -- -- 03/03/98
- ----------------------------------------------------------------------------------------------------
Class C 10.38% 15.17% 05/01/95
- ----------------------------------------------------------------------------------------------------
EAFE(1) 20.00% 8.80%(2) 04/30/95(2)
====================================================================================================
</TABLE>
(1) The Morgan Stanley Capital International EAFE Index measures performance
for 20 developed country global stock markets. The index is capitalization
weighted. Companies included in the index replicate the industry
composition of each local market and, in addition, represent a sampling of
large, medium and small capitalization companies from each local market,
taking into account the stocks' liquidity.
(2) The average annual total return given is since the date closest to the
inception date of the class with the longest performance history.
6
<PAGE> 30
FEE TABLE AND EXPENSE EXAMPLE
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund:
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
Shareholder Fees (fees paid directly from your investment)
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) 5.50% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price
or redemption proceeds, whichever is less) None(1) 5.00 1.00
Annual Fund Operating Expenses
(expenses that are deducted from fund assets)
Management Fees [1.00%] [1.00%] [1.00%]
Distribution and/or Service (12b-1) Fees(2) [0.25] [1.00] [1.00]
Other Expenses:
Transfer agent fees and costs [ ] [ ] [ ]
Other [ ] [ ] [ ]
------ ------ ------
[Fee Waiver(3) [ ] [ ] [ ]]
Total Other Expenses [ ] [ ] [ ]
Total Annual Fund Operating Expenses [ ] [ ] [ ]
====== ====== ======
</TABLE>
- -------------------
(1) If you buy $1,000,000 or more of Class A shares and redeem these shares
within 18 months from the date of purchase, you may pay a 1% contingent
deferred sales charge (CDSC) at the time of redemption.
(2) AIM Distributors has voluntarily agreed to limit the Class A shares Rule
12b-1 distribution plan payments to 0.25% for three years beginning
August 4, 1997. If these limitations were not in effect, the distribution
and/or service (12b-1) fees and total annual fund operating expenses of
the Class A shares would be 0.35% and 1.81%, respectively.
[(3) The investment advisor has agreed to waive a portion of its fees. The
waiver may not be terminated without the approval of the fund's Board of
Directors.]
As a result of 12b-1 fees, long-term shareholders in the fund may pay more than
the maximum permitted initial sales charge.
EXPENSE EXAMPLE
This example is intended to help you compare the costs of investing in different
classes of the fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual returns and
costs may be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ $ $ $
Class B
Class C
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ $ $ $
Class B
Class C
</TABLE>
7
<PAGE> 31
FUND MANAGEMENT
THE ADVISORS
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor and
manages the investment operations of the fund and has agreed to perform or
arrange for the performance of the fund's day-to-day management. The advisor is
located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. INVESCO
Global Asset Management Limited (the subadvisor), the fund's subadvisor, is
located at Cedar House, 12 Bermudian Rd., 3rd Floor, Hamilton, HM AX Bermuda.
The subadvisor is responsible for the fund's day-to-day management, including
the fund's investment decisions and the execution of securities transactions
with respect to the fund.
The advisor has acted as an investment advisor since its organization in 1976.
Today, the advisor, together with its subsidiaries, advises or manages over 110
investment portfolios, including the fund, encompassing a broad range of
investment objectives. The subadvisor has acted as an investment advisor since
1995.
ADVISOR COMPENSATION
During the fiscal year ended December 31, 1998, the advisor received
compensation of % of average net assets.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual
members of the team who are primarily responsible for the day-to-day management
of the fund's portfolio are
o W. Lindsay Davidson, Senior Portfolio Manager, who has been responsible
for the fund since 1995 and has been associated with the subadvisor
and/or its affiliates since 1984.
o Michele T. Garren, C.F.A., Senior Portfolio Manager, who has been
responsible for the fund and has been associated with the subadvisor
and/or its affiliates since 1997. From 1993 to 1996 she was a Senior
Portfolio Manager with AIG Global Investment Corp.
o Erik B. Granade, C.F.A., Assistant Portfolio Manager, who has been
responsible for the fund since 1997 and has been associated with the
subadvisor and/or its affiliates since 1996. From 1994 to 1996 he was a
portfolio manager at Cashman Farrell & Associates.
8
<PAGE> 32
OTHER INFORMATION
INITIAL SALES CHARGES FOR CLASS A SHARES
Purchases of Class A shares of the fund are subject to the maximum 5.50% initial
sales charge as listed under the heading "CATEGORY I Initial Sales Charges" in
the "Shareholder Information--Choosing a Share Class" section of this
prospectus.
DIVIDENDS AND DISTRIBUTIONS
Dividends
The fund generally declares and pays dividends, if any, annually.
Capital Gains Distributions
The fund generally distributes long-term and short-term capital gains (including
any net gains from foreign currency transactions), if any, annually.
9
<PAGE> 33
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
financial performance. Certain information reflects financial results for a
single fund share.
The total returns in the table represent the rate that an investor would have
earned (or lost) on an investment in the fund (assuming reinvestment of all
dividends and distributions).
The information for the fiscal years or periods ended December 31, 1997, 1996
and 1995 has been audited by PricewaterhouseCoopers LLP. The information for the
fiscal year or period ended December 31, 1998, has been audited by KPMG LLP,
whose report, along with the fund's financial statements, is included in the
fund's annual report, which is available upon request.
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
Class A(a) 1998 1997(b)
-------- --------
<S> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx
-------- --------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (c)
-------- --------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx)
-------- --------
Total from investment operations (x.xx) (x.xx)
-------- --------
Less distributions: (x.xx) (x.xx)
Dividends from net investment income: (x.xx) (x.xx)
-------- --------
Distributions from capital gains: (x.xx) (x.xx)
-------- --------
Total distributions (x.xx) (x.xx)
-------- --------
Net asset value, end of period $ xx.xx $ xx.xx
-------- --------
Total return (d) (x.xx)% (x.xx)%
-------- --------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx $ xx,xxx
-------- --------
Ratio of expenses to average net assets (e) x.xx% x.xx%
-------- --------
Ratio of net investment income (loss) to average net assets (g) (x.xx)% (x.xx)%(f)
-------- --------
Portfolio turnover rate xx% xx% (f)
-------- --------
Average brokerages commission rate (h) x.xxxx x.xxxx
-------- --------
</TABLE>
(a) Per share information and shares have been restated to reflect a 4 for 1
stock split, effective in the form of a 300% stock dividend, on November 7,
1997.
(b) The fund changed investment advisors on August 4, 1997.
(c) Calculated using average shares outstanding.
(d) Does not deduct sales charges.
(e) After fee waivers. The ratio of expenses to average net assets prior to fee
waivers was x.xx%.
(f) Ratios are based on average net asset of $xx,xxx,xxx.
(g) After fee waivers. The ratio of net investment income to average net assets
prior to fee waivers was x.xx%.
(h) 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.
10
<PAGE> 34
<TABLE>
<CAPTION>
For the Period
March 3, 1998 through
December 31,
---------------------
Class B 1998
--------
<S> <C>
Net asset value, beginning of period $ xx.xx
--------
Income from investment operations:
Net investment income (loss) (x.xx) (a)
--------
Net gains on securities (both realized and unrealized) (x.xx)
--------
Total from investment operations (x.xx)
--------
Less distributions: (x.xx)
Dividends from net investment income: (x.xx)
--------
Distributions from capital gains: (x.xx)
--------
Total distributions (x.xx)
--------
Net asset value, end of period $ xx.xx
--------
Total return (b) (x.xx)%
--------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx
--------
Ratio of expenses to average net assets (c) x.xx% (d)
--------
Ratio of net investment income (loss) to average net assets (e) (x.xx)% (d)
--------
Portfolio turnover rate xx%
--------
Average brokerages commission rate (f) x.xxxx
--------
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct sales charges and are not annualized for periods less than
one year.
(c) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
(annualized).
(d) Ratios are annualized and based on average net assets of x,xxx,xxx.
(e) After fee waivers, ratio of net investment income to average net assets
prior to fee waivers was x.xx%.
(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.
<TABLE>
<CAPTION>
For the Period
May 1, 1995 through
December 31,
-------- -------- -------- -------------------
Class C(a) 1998 1997 (b) 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx
-------- -------- -------- --------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (c) (x.xx) (x.xx)
-------- -------- -------- --------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- --------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- --------
Less distributions: (x.xx) (x.xx) (x.xx) (x.xx)
Dividends from net investment income: (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- --------
Distributions from capital gains: (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- --------
Total distributions (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- --------
Net asset value, end of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx
-------- -------- -------- --------
Total return (d) (x.xx)% (x.xx)% (x.xx)% (x.xx)%
-------- -------- -------- --------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx $ xx,xxx $ xx,xxx $ xx,xxx
-------- -------- -------- --------
Ratio of expenses to average net assets x.xx% x.xx% (e) x.xx% x.xx% (f)
-------- -------- -------- --------
Ratio of net investment income (loss) to average net assets (x.xx)% (x.xx)%(e) (x.xx)% (x.xx)%(f)
-------- -------- -------- --------
Portfolio turnover rate xx% xx% xx% xx%
-------- -------- -------- --------
Average brokerages commission rate (g) x.xxxx x.xxxx x.xxxx x.xxxx
-------- -------- -------- --------
</TABLE>
(a) Per share information and shares have been restated to reflect a 4 for 1
stock split, effective in the form of a 300% stock dividend, on November 7,
1997.
(b) The fund changed investment advisors on August 4, 1997.
(c) Calculated using average shares outstanding.
(d) Does not deduct contingent deferred sales charges and for periods less than
one year, total returns are not annualized.
(e) Ratios are based on average net assets of xxx,xxx,xxx.
(f) Annualized.
(g) 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.
11
<PAGE> 35
Shareholder Information
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
Many of the funds advised by the advisor (the AIM Funds) have multiple classes
of shares, each class representing an interest in the same portfolio of
investments. When choosing a share class, you should consider the factors below:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
- - Initial sales charge - No initial sales charge - No initial sales charge
- - Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within six charge on redemptions within
years one year
- - Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
after eight years along with a shares
pro rata portion of its
reinvested dividends and
distributions*
- - Generally more appropriate for - Purchase orders limited to - Generally more appropriate
long-term investors amounts less than $250,000 for short-term investors
</TABLE>
* AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
AIM Global Trends Fund: If you held Class B shares on May 29, 1998 and
continue to hold them, those shares will convert to Class A shares of that
fund seven years after your date of purchase. If you exchange those shares
for Class B shares of another AIM Fund, the shares into which you exchanged
will not convert to Class A shares until eight years after your date of
purchase of the original shares.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans
that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc.
(the distributor) for the sale and distribution of its shares and fees for
services provided to shareholders, all or a substantial portion of which are
paid to the dealer of record. Because the AIM Fund pays these fees out of its
assets on an ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
MCF-03/99
A-1
<PAGE> 36
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class
A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money
Market Fund. You may be charged a contingent deferred sales charge if you redeem
AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain
exchanges. Sales charges on all other AIM Funds and classes of those Funds are
detailed below. As used below, the term "offering price" with respect to all
categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales
charges. The "Other Information" section of your prospectus will tell you in
what category your particular AIM Fund is classified.
<TABLE>
<CAPTION>
CATEGORY I INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY II INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY III INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
- ----------------------------------------------------------
</TABLE>
CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value.
However, if you purchase shares of that amount in Categories I or II, they will
be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them
prior to 18 months after the date of purchase. The distributor may pay a dealer
concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share.
However, when you redeem them, they are subject to a CDSC in the following
percentages:
<TABLE>
<CAPTION>
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
- ----------------------------------------------------------
<S> <C> <C>
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
- ----------------------------------------------------------
</TABLE>
A-2
<PAGE> 37
REDUCED SALES CHARGES AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify
for these reductions or exceptions, you or your financial consultant must
provide sufficient information at the time of purchase to verify that your
purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates
under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares
currently owned for the purpose of qualifying for the lower initial sales charge
rates that apply to larger purchases. The applicable initial sales charge for
the new purchase is based on the total of your current purchase and the current
value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount
of Class A shares of AIM Funds during a 13-month period. The amount you agree to
purchase determines the initial sales charge you pay. If the full face amount of
the LOI is not invested by the end of the 13-month period, your account will be
adjusted to the higher initial sales charge level for the amount actually
invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- - on shares purchased by reinvesting dividends and distributions;
- - when exchanging shares among certain AIM Funds;
- - when using the reinstatement privilege; and
- - when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- - if you redeem Class B shares you held for more than six years;
- - if you redeem Class C shares you held for more than one year;
- - if you redeem shares acquired through reinvestment of dividends and
distributions; and
- - on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares
at reduced or without sales charges. Consult the fund's Statement of Additional
Information for details.
A-3
<PAGE> 38
PURCHASING SHARES
MINIMUM INVESTMENTS PER AIM FUND ACCOUNT
The minimum investments for AIM Fund accounts (except for investments in AIM
Small Cap Opportunities Fund) are as follows:
<TABLE>
<CAPTION>
INITIAL ADDITIONAL
TYPE OF ACCOUNT INVESTMENTS INVESTMENTS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
<TABLE>
<CAPTION>
PURCHASE OPTIONS
- ----------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed Account Application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed Account Application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank
methods described above. Connection(SM) form to the transfer
agent. Once the transfer agent has
received the form, call the
transfer agent to place your
purchase.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
A-4
<PAGE> 39
SPECIAL PLANS
AUTOMATIC INVESTMENT PLAN
You can arrange for periodic investments in any of the AIM Funds by authorizing
the AIM Fund to withdraw the amount of your investment from your bank account on
a day or dates you specify and in an amount of at least $50. You may stop the
Automatic Investment Plan at any time by giving the transfer agent notice ten
days prior to your next scheduled withdrawal.
DOLLAR COST AVERAGING
Dollar Cost Averaging allows you to make automatic monthly or quarterly
exchanges, if permitted, from one AIM Fund account to one or more other AIM Fund
accounts with the identical registration. The account from which exchanges are
to be made must have a minimum balance of $5,000 before you can use this option.
Exchanges will occur on (or about) the 10th or 25th day of the month, whichever
you specify, in the amount you specify. The minimum amount you can exchange to
another AIM Fund is $50.
AUTOMATIC DIVIDEND INVESTMENT
All of your dividends and distributions may be paid in cash or invested in any
AIM Fund at net asset value. Unless you specify otherwise, your dividends and
distributions will automatically be reinvested in the same AIM Fund. You may
invest your dividends and distributions (1) into another AIM Fund in the same
class of shares; or (2) from Class A shares into AIM Cash Reserve Shares of AIM
Money Market Fund, or vice versa.
You must comply with the following requirements to be eligible to invest your
dividends and distributions in shares of another AIM Fund:
(1) Your account balance (a) in the AIM Fund paying the dividend must be at
least $5,000; or (b) in the AIM Fund receiving the dividend must be at least
$500;
(2) Both accounts must have identical registration information; and
(3) You must have completed an authorization form to reinvest dividends into
another AIM Fund.
PORTFOLIO REBALANCING PROGRAM
If you have at least $5,000 in your account, you may participate in the
Portfolio Rebalancing Program. Under this Program, you can designate how the
total value of your AIM Fund holdings should be rebalanced, on a percentage
basis, between two and ten of your AIM Funds on a quarterly, semiannual or
annual basis. Your portfolio will be rebalanced through the exchange of shares
in one or more of your AIM Funds for shares of the same class of one or more
other AIM Funds in your portfolio. If you wish to participate in the Program,
make changes or cancel the Program, the transfer agent must receive your request
to participate, changes or cancellation in good order at least five business
days prior to the next rebalancing date, which is normally the 28th day of the
last month of the period you choose. We may modify, suspend or terminate the
Program at any time on 60 days' prior written notice.
RETIREMENT PLANS
Shares of most of the AIM Funds can be purchased through
tax-sheltered retirement plans made available to corporations, individuals and
employees of non-profit organizations and public schools. A plan document must
be adopted to establish a retirement plan. You may use AIM Funds-sponsored
retirement plans, which include IRAs, Education IRAs, Roth IRAs, 403(b) plans,
401(k) plans, SIMPLE IRA plans, SEP/SARSEP plans and Money Purchase/Profit
Sharing plans, or another sponsor's retirement plan. The plan custodian of the
AIM Funds-sponsored retirement plan assesses an annual maintenance fee of $10.
Contact your financial consultant for details.
REDEEMING SHARES
REDEMPTION FEES
We will not charge you any fees to redeem your shares; however, your broker or
financial consultant may charge service fees for handling these transactions.
Your shares may be subject to a contingent deferred sales charge (CDSC).
COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their
original purchase price or current market value, net of reinvested dividends and
capital gains distributions. In determining whether to charge a CDSC, we will
assume that you have redeemed shares on which there is no CDSC first and, then,
shares in the order of purchase.
REDEMPTION OF AIM CASH RESERVE SHARES OF
AIM MONEY MARKET FUND ACQUIRED BY EXCHANGE
If you redeem AIM Cash Reserve Shares acquired by exchange from Class A shares
subject to a CDSC within eighteen months of the purchase of the Class A shares,
you will be charged a CDSC.
REDEMPTION OF CLASS B SHARES ACQUIRED BY
EXCHANGE FROM AIM FLOATING RATE FUND
If you redeem Class B shares you acquired by exchange via a tender offer by AIM
Floating Rate Fund, the early withdrawal charge applicable to shares of AIM
Floating Rate Fund will be applied instead of the CDSC normally applicable to
Class B shares.
A-5
<PAGE> 40
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Through a Financial Contact your financial consultant.
Consultant
By Mail Send a written request to the transfer agent. Requests must
include (1) original signatures of all registered owners;
(2) the name of the AIM Fund and your account number; (3) if
the transfer agent does not hold your shares, endorsed share
certificates or share certificates accompanied by an
executed stock power; and (4) signature guarantees, if
necessary (see below). The transfer agent may require that
you provide additional information, such as corporate
resolutions or powers of attorney, if applicable. If you are
redeeming from an IRA account, you must include a statement
of whether or not you are at least 59 1/2 years old and
whether you wish to have federal income tax withheld from
your proceeds. The transfer agent may require certain other
information before you can redeem from an employer-sponsored
retirement plan. Contact your employer for details.
By Telephone Call the transfer agent. You will be allowed to redeem by
telephone if (1) the proceeds are to be mailed to the
address on record with us or transferred electronically to a
pre-authorized checking account; (2) the address on record
with us has not been changed within the last thirty days;
(3) you do not hold physical share certificates; (4) you can
provide proper identification information; (5) the proceeds
of the redemption do not exceed $50,000; and (6) you have
not previously declined the telephone redemption privilege.
Certain accounts, including retirement accounts and 403(b)
plans, may not redeem by telephone. The transfer agent must
receive your call during the hours the NYSE is open for
business in order to effect the redemption at that day's
closing price.
</TABLE>
- --------------------------------------------------------------------------------
TIMING AND METHOD OF PAYMENT
We normally will send out checks within one business day, and in any event no
more than seven days, after we accept your request to redeem. If you redeem
shares recently purchased by check, you will be required to wait up to ten
business days before we will send your redemption proceeds. This delay is
necessary to ensure that the purchase check has cleared.
REDEMPTION BY MAIL
If you mail us a request in good order to redeem your shares, we will mail you a
check in the amount of the redemption proceeds to the address on record with us.
If your request is not in good order, you may have to provide us with additional
documentation in order to redeem your shares.
REDEMPTION BY TELEPHONE
If you redeem by telephone, we will mail you a check in the amount of the
redemption proceeds to your address of record (if there has been no change
communicated to the transfer agent within the previous 30 days) or transmit them
electronically to your pre-authorized bank account. We use reasonable procedures
to confirm that instructions communicated by telephone are genuine and are not
liable for telephone instructions that are reasonably believed to be genuine.
PAYMENT FOR SYSTEMATIC WITHDRAWALS
You may arrange for regular monthly or quarterly withdrawals from your account
of at least $50. You also may make annual withdrawals if you own Class A shares.
We will redeem enough shares from your account to cover the amount withdrawn.
You must have an account balance of at least $5,000 to establish a Systematic
Withdrawal Plan. You can stop this plan at any time by giving ten days prior
notice to the transfer agent.
EXPEDITED REDEMPTIONS
(AIM Cash Reserve Shares of AIM Money Market Fund only)
If we receive your redemption order before 11:30 a.m. Eastern Time, we will try
to transmit payment of redemption proceeds on that same day. If we receive your
redemption order after 11:30 a.m. Eastern Time and before the close of trading
on the New York Stock Exchange (NYSE), we generally will transmit payment on the
next business day.
REDEMPTIONS BY CHECK
(Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM
Money Market Fund only)
You may redeem shares of these AIM Funds by writing checks in amounts of $250 or
more if you have completed an authorization form. Redemption by check is not
available for retirement accounts.
SIGNATURE GUARANTEES
We require a signature guarantee when you redeem by mail and
(1) the amount is greater than $50,000;
(2) you request that payment be made to someone other than the name registered
on the account;
(3) you request that payment be sent somewhere other than the bank of record on
the account; or
(4) you request that payment be sent to a new address or an address that changed
in the last 30 days.
The transfer agent will accept a guarantee of your signature by a number of
financial institutions. Call the transfer agent for additional information. Some
institutions have transaction amount maximums for these guarantees. Please check
with the guarantor institution.
A-6
<PAGE> 41
REINSTATEMENT PRIVILEGE (Class A shares only)
You may, within 90 days after you sell Class A shares (except Class A shares of
AIM Tax-Exempt Cash Fund), reinvest all or part of your redemption proceeds in
Class A shares of any AIM Fund at net asset value in an identically registered
account. If you sold Class A shares of AIM Limited Maturity Treasury Fund or AIM
Tax-Free Intermediate Fund, you will incur an initial sales charge reflecting
the difference between the initial sales charges on those Funds and the ones in
which you will be investing. In addition, if you paid a contingent deferred
sales charge (CDSC) on any reinstated amount, you will not be subject to a CDSC
if you later redeem that amount. You must notify the transfer agent in writing
at the time you reinstate that you are exercising your reinstatement privilege.
You may exercise this privilege only once per year.
REDEMPTIONS BY THE AIM FUNDS
If your account has been open at least one year, you have not made an additional
purchase in the account during the past six calendar months, and the value of
your account falls below $500 for three consecutive months due to redemptions or
exchanges (excluding retirement accounts), the AIM Funds have the right to
redeem the account after giving you 60 days' prior written notice. You may avoid
having your account redeemed during the notice period by bringing the account
value up to $500 or by utilizing the Automatic Investment Plan.
If an AIM Fund determines that you have provided incorrect information in
opening an account or in the course of conducting subsequent transactions, the
AIM Fund may, in its discretion, redeem the account and distribute the proceeds
to you.
EXCHANGING SHARES
You may, under certain circumstances, exchange shares in one AIM Fund for those
of another AIM Fund. Before requesting an exchange, review the prospectus of the
AIM Fund you wish to acquire. Exchange privileges also apply to holders of the
Connecticut General Guaranteed Account, established for tax-qualified group
annuities, for contracts purchased on or before June 30, 1992.
PERMITTED EXCHANGES
Except as otherwise stated below, you may exchange your shares for shares of the
same class of another AIM Fund. You also may exchange AIM Cash Reserve Shares of
AIM Money Market Fund for Class A shares of another AIM Fund, or vice versa. You
may be required to pay an initial sales charge when exchanging from a Fund with
a lower initial sales charge than the one into which you are exchanging. If you
exchange from Class A shares not subject to a CDSC into Class A shares subject
to those charges, you will be charged a CDSC when you redeem the exchanged
shares. The CDSC charged on redemption of those shares will be calculated
starting on the date you acquired those shares through exchange.
YOU WILL NOT PAY A SALES CHARGE WHEN EXCHANGING:
(1) Class A shares with an initial sales charge (except for Class A shares of
AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund) for
Class A shares of another AIM Fund or AIM Cash Reserve Shares of AIM Money
Market Fund;
(2) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund for
(a) one another;
(b) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of
AIM Tax-Exempt Cash Fund; or
(c) Class A shares of another AIM Fund, but only if
(i) you acquired the original shares before May 1, 1994; or
(ii) you acquired the original shares on or after May 1, 1994 by way of
an exchange from shares with higher sales charges;
(3) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM
Tax-Exempt Cash Fund for
(a) one another;
(b) Class A shares of an AIM Fund subject to an initial sales charge (except
for Class A shares of AIM Limited Maturity Treasury Fund and AIM
Tax-Free Intermediate Fund), but only if you acquired the original
shares
(i) prior to May 1, 1994 by exchange from Class A shares subject to an
initial sales charge;
(ii) on or after May 1, 1994 by exchange from Class A shares subject to
an initial sales charge (except for Class A shares of AIM Limited
Maturity Treasury Fund and AIM Tax-Free Intermediate Fund); or
(c) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund, but only if you acquired the original shares by
exchange from Class A shares subject to an initial sales charge; or
(4) Class B shares for other Class B shares, and Class C shares for other Class
C shares.
EXCHANGES NOT PERMITTED
You may not exchange Class A shares subject to contingent deferred sales charges
for Class A shares of AIM Limited Maturity Treasury Fund, AIM Tax-Free
Intermediate Fund or AIM Tax-Exempt Cash Fund.
EXCHANGE CONDITIONS
The following conditions apply to all exchanges:
- - You must meet the minimum purchase requirements for the AIM Fund into which
you are exchanging;
- - Shares of the AIM Fund you wish to acquire must be qualified for sale in your
state of residence;
- - Exchanges must be made between accounts with identical registration
information;
A-7
<PAGE> 42
- - The account you wish to exchange from must have a certified tax identification
number (or the Fund has received an appropriate Form W-8 or W-9);
- - Shares must have been held for at least one day prior to the exchange; and
- - If you have physical share certificates, you must return them to the transfer
agent prior to the exchange.
TERMS OF EXCHANGE
Under unusual market conditions, an AIM Fund may delay the issuance of shares
being purchased in an exchange for up to five business days if it determines
that it would be materially disadvantaged by the immediate transfer of exchange
proceeds. There is no fee for exchanges. The exchange privilege is not an option
or right to purchase shares. Any of the participating AIM Funds or the
distributor may modify or discontinue this privilege at any time.
BY MAIL
If you wish to make an exchange by mail, you must include original signatures of
each registered owner exactly as the shares are registered, the account
registration and account number, the dollar amount or number of shares to be
exchanged and the names of the AIM Funds from which and into which the exchange
is to be made.
BY TELEPHONE
Conditions that apply to exchanges by telephone are the same as redemptions by
telephone, including that the transfer agent must receive exchange requests
during the hours the NYSE is open for business; however, you still will be
allowed to exchange by telephone even if you have changed your address of record
within the preceding 30 days.
EXCHANGING CLASS B AND CLASS C SHARES
If you make an exchange involving Class B or Class C shares, the amount of time
you held the original shares will be added to the holding period of the Class B
or Class C shares, respectively, into which you exchanged for the purpose of
calculating contingent deferred sales charges (CDSC) if you later redeem the
exchanged shares. If you redeem Class B shares acquired by exchange via a tender
offer by AIM Floating Rate Fund, you will be credited with the time period you
held the shares of AIM Floating Rate Fund for the purpose of computing the early
withdrawal charge applicable to those shares.
EACH AIM FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR
CANCEL ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR
CONDITIONS OF PURCHASE OF SHARES OF ANY AIM FUND; OR WITHDRAW ALL OR ANY PART
OF THE OFFERING MADE BY THIS PROSPECTUS.
PRICING OF SHARES
DETERMINATION OF NET ASSET VALUE
The price of each AIM Fund's shares is the fund's net asset value per share. The
AIM Funds value portfolio securities for which market quotations are readily
available at market value. The AIM Funds value short-term investments maturing
within 60 days at amortized cost, which approximates market value. AIM Money
Market Fund and AIM Tax-Exempt Cash Fund value all their securities at amortized
cost. AIM High Income Municipal Fund, AIM Municipal Bond Fund, AIM Tax-Exempt
Bond Fund of Connecticut and AIM Tax-Free Intermediate Fund value variable rate
securities that have an unconditional demand or put feature exercisable within
seven days or less at par, which reflects the market value of such securities.
The AIM Funds value all other securities and assets at their fair value.
Securities and other assets quoted in foreign currencies are valued in U.S.
dollars based on the prevailing exchange rates on that day. In addition, if,
between the time trading ends on a particular security and the close of the New
York Stock Exchange (NYSE), events occur that materially affect the value of the
security, the AIM Funds may value the security at its fair value as determined
in good faith by or under the supervision of the Board of Directors or Trustees
of the AIM Fund. The effect of using fair value pricing is that an AIM Fund's
net asset value will be subject to the judgment of the Board of Directors or
Trustees or its designee instead of being determined by the market. Because some
of the AIM Funds may invest in securities that are primarily listed on foreign
exchanges, the value of those funds' shares may change on days when you will not
be able to purchase or redeem shares.
Each AIM Fund determines the net asset value of its shares as of the close of
the NYSE on each day the NYSE is open for business. AIM Money Market Fund also
determines its net asset value as of 12:00 noon Eastern Time on each day the
NYSE is open for business.
TIMING OF ORDERS
You can purchase, exchange or redeem shares during the hours the NYSE is open
for business. The AIM Funds price purchase, exchange and redemption orders at
the net asset value calculated after the transfer agent receives an order in
good form. An AIM Fund may postpone the right of redemption only under unusual
circumstances, such as when the NYSE restricts or suspends trading.
TAXES
In general, dividends and distributions you receive are taxable as ordinary
income or long-term capital gains for federal income tax purposes, whether you
reinvest them in additional shares or take them in cash. Distributions are
taxable to you at different rates depending on the length of time the fund holds
its assets. Different tax rates apply to ordinary income and long-term capital
gain distributions, regardless of how long you have held your shares. Every
year, you will be sent information showing the amount of dividends and
distributions you received from each AIM Fund during the prior year.
A-8
<PAGE> 43
Any long-term or short-term capital gains realized from redemptions of AIM
Fund shares will be subject to federal income tax. Exchanges of shares for
shares of another AIM Fund are treated as a sale, and any gain realized on the
transaction will generally be subject to federal income tax.
The foreign, state and local tax consequences of investing in AIM Fund shares
may differ materially from the federal income tax consequences described above.
You should consult your tax advisor before investing.
A-9
<PAGE> 44
[BACK COVER PAGE]
OBTAINING ADDITIONAL INFORMATION
More information may be obtained free of charge upon request. The Statement of
Additional Information (SAI), a current version of which is on file with the
Securities and Exchange Commission (SEC), contains more details about the fund
and is incorporated by reference into the prospectus (is legally a part of this
prospectus). Annual and semiannual reports to shareholders contain additional
information about the fund's investments. The fund's annual report also
discusses the market conditions and investment strategies that significantly
affected the fund's performance during its last fiscal year.
If you have questions about this fund, another fund in The AIM Family of
Funds--Registered Trademark-- or your account, or wish to obtain free copies of
the fund's current SAI or annual or semiannual reports, please contact us:
BY MAIL: A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
BY TELEPHONE: (800) 347-4246
BY E-MAIL: [email protected]
ON THE INTERNET: http://www.aimfunds.com (prospectuses and annual and
semiannual reports only)
You also can obtain copies of the fund's SAI and other information at the SEC's
Public Reference Room in Washington, D.C., on the SEC's website
(http://www.sec.gov), or by sending a letter, including a duplicating fee, to
the SEC's Public Reference Section, Washington, D.C. 20549-6009. Please call the
SEC at 1-800-SEC-0330 for information about the Public Reference Room.
AIM Advisor International Value Fund
SEC 1940 Act file number: 811-3886
<PAGE> 45
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION DATED FEBRUARY 16, 1999
[AIM LOGO APPEARS HERE]
AIM ADVISOR LARGE CAP VALUE FUND
PROSPECTUS
MAY 3, 1999
AIM Advisor Large Cap Value Fund seeks to achieve a high total return on
investment through growth of capital and current income, without regard to
federal income tax considerations.
This prospectus contains important information. Please read it before investing
and keep it for future reference.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. There is a risk that you could lose a portion or all of your money.
AS WITH ALL OTHER MUTUAL FUND SECURITIES, THE SECURITIES AND EXCHANGE
COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED
WHETHER THE INFORMATION IN THIS PROSPECTUS IS ADEQUATE OR ACCURATE.
ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.
<PAGE> 46
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT OBJECTIVE AND STRATEGIES......................................................................3
PRINCIPAL RISKS OF INVESTING IN THE FUND.................................................................3
PERFORMANCE INFORMATION..................................................................................4
ANNUAL TOTAL RETURNS............................................................................4
PERFORMANCE TABLE...............................................................................5
FEE TABLE AND EXPENSE EXAMPLE............................................................................6
FEE TABLE.......................................................................................6
EXPENSE EXAMPLE.................................................................................7
FUND MANAGEMENT..........................................................................................8
THE ADVISORS....................................................................................8
ADVISOR COMPENSATION............................................................................8
PORTFOLIO MANAGERS..............................................................................8
OTHER INFORMATION........................................................................................9
INITIAL SALES CHARGES FOR CLASS A SHARES........................................................9
DIVIDENDS AND DISTRIBUTIONS.....................................................................9
FINANCIAL HIGHLIGHTS....................................................................................10
SHAREHOLDER INFORMATION................................................................................A-1
CHOOSING A SHARE CLASS........................................................................A-1
PURCHASING SHARES.............................................................................A-4
REDEEMING SHARES..............................................................................A-6
EXCHANGING SHARES.............................................................................A-9
PRICING OF SHARES............................................................................A-11
TAXES........................................................................................A-11
OBTAINING ADDITIONAL INFORMATION...........................................................BACK COVER PAGE
</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, La Familia AIM de Fondos and Design and Invest with
Discipline are registered service marks and AIM Bank Connection is a service
mark of A I M Management Group Inc.
2
<PAGE> 47
INVESTMENT OBJECTIVE AND STRATEGIES
The fund's investment objective is to achieve a high total return on investment
through growth of capital and current income, without regard to federal income
tax considerations.
The fund seeks to achieve its objective by investing, normally, at least 65% of
its investments in equity securities. These securities will consist principally
of common stocks, and to a lesser extent convertible securities, of selected
companies from a list of companies with market capitalizations among the largest
800 publicly traded U.S. corporations.
The fund may invest up to 10% of its total assets in non-Canadian foreign
securities and unsponsored American Depositary Receipts (ADRs). Up to 25% of the
fund's total assets may be invested in Canadian securities and sponsored ADRs.
The fund's portfolio managers focus on securities that they believe have
excellent prospects for growth of capital and current income. The portfolio
managers start with a list of securities of the 800 largest publicly traded U.S.
corporations, which they reduce to a list of 100 eligible securities by
utilizing a proprietary database system and fundamental analysis. The fund's
portfolio managers usually sell a particular security when it no longer
qualifies for the list of eligible securities.
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash,
money market instruments, bonds or other debt securities, high-quality corporate
preferred stocks, and in obligations issued or guaranteed by the U.S. government
or any instrumentality thereof. As a result, the fund may not achieve its
investment objective.
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund and that the income you may receive from the fund may vary. The value of
your investment in the fund will go up and down with the prices of the
securities in which the fund invests. The price of equity securities goes up and
down in response to many factors, including the historical and prospective
earnings of the issuer of the stock, the value of its assets, general economic
conditions, interest rates, investor perceptions and market liquidity.
Foreign securities have additional risks, including exchange rate changes,
political and economic upheaval, the relative lack of information about these
companies, relatively low market liquidity and the potential lack of strict
financial and accounting controls and standards.
[If the seller of a repurchase agreement in which the fund invests defaults on
its obligation or declares bankruptcy, the fund may experience delays in selling
the securities underlying the repurchase agreement. As a result, the fund may
incur losses arising from decline in the value of those securities, reduced
levels of income and expenses of enforcing its rights.]
The value of your shares could be adversely affected if the computer systems
used by the fund's investment advisor and the fund's other service providers are
unable to distinguish the year 2000 from the year 1900.
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances
that other service providers are taking similiar steps. Year 2000 problems may
also affect issuers in whose securities the fund invests.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
3
<PAGE> 48
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund's past performance is not necessarily an
indication of its future performance.
ANNUAL TOTAL RETURNS
The following bar chart shows changes in the performance of the fund's Class C
shares from year to year. The bar chart does not reflect sales loads. If it did,
the annual total returns shown would be lower.
ADVISOR LARGE CAP VALUE
<TABLE>
<CAPTION>
[GRAPH]
Year Return (%)
---- ----------
<S> <C>
1989 .............................................. 21.81%
1990 .............................................. (3.75%)
1991 .............................................. 33.59%
1992 .............................................. 4.84%
1993 .............................................. 9.16%
1994 .............................................. 2.70%
1995 .............................................. 30.27%
1996 .............................................. 17.17%
1997 .............................................. 30.66%
1998 .............................................. 13.15%
</TABLE>
During the periods shown in the bar chart, the highest quarterly return was
17.83% (quarter ended December 31, 1998) and the lowest quarterly return was
(15.27%) (quarter ended September 30, 1990).
4
<PAGE> 49
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
<TABLE>
<CAPTION>
==================================================================================================================
Average Annual Total Returns
(for the periods ended December 31, 1998)
Since Inception
1 Year 5 Years 10 Years Inception Date
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A 14.07% -- -- 22.55% 01/01/97
- ------------------------------------------------------------------------------------------------------------------
Class B -- -- -- -- 03/03/98
- ------------------------------------------------------------------------------------------------------------------
Class C 12.15% 18.31% 15.30% 14.62% 02/15/84
- ------------------------------------------------------------------------------------------------------------------
S&P 500(1) 28.60% 24.05% 19.19% 18.03%(2) 01/31/84(2)
==================================================================================================================
</TABLE>
(1) The Standard & Poor's 500 Index is an unmanaged index of common stocks
frequently used as a general measure of U.S. stock market performance.
(2) The average annual total return given is since the date closest to the
inception date of the class with the longest performance history.
5
<PAGE> 50
FEE TABLE AND EXPENSE EXAMPLE
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund:
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
Shareholder Fees (fees paid directly from your investment)
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) 5.50% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price
or redemption proceeds, whichever is less) None(1) 5.00 1.00
Annual Fund Operating Expenses (expenses that are deducted from fund assets)
Management Fees [0.75%] [0.75%] [0.75%]
Distribution and/or Service (12b-1) Fees(2) [0.25] [1.00] [1.00]
Other Expenses:
Transfer agent fees and costs [ ] [ ] [ ]
Other [ ] [ ] [ ]
------ ------ ------
[Fee Waiver(3) [ ] [ ] [ ]]
Total Other Expenses [ ] [ ] [ ]
Total Annual Fund Operating Expenses [ ] [ ] [ ]
====== ====== ======
</TABLE>
- -------------------
(1) If you buy $1,000,000 or more of Class A shares and redeem these shares
within 18 months from the date of purchase, you may pay a 1% contingent
deferred sales charge (CDSC) at the time of redemption.
(2) AIM Distributors has voluntarily agreed to limit the Class A shares Rule
12b-1 distribution plan payments to 0.25% for three years beginning
August 4, 1997. If these limitations were not in effect, the distribution
and/or service (12b-1) fees and total annual fund operating expenses of
the Class A shares would be 0.35% and 1.56%, respectively.
[(3) The investment advisor has agreed to waive a portion of its fees. The
waiver may not be terminated without the approval of the fund's Board of
Directors.]
As a result of 12b-1 fees, long-term shareholders in the fund may pay more than
the maximum permitted initial sales charge.
6
<PAGE> 51
EXPENSE EXAMPLE
This example is intended to help you compare the costs of investing in different
classes of the fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual returns and
costs may be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ $ $ $
Class B
Class C
You would pay the following expenses if you did not redeem your shares:
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ $ $ $
Class B
Class C
</TABLE>
7
<PAGE> 52
FUND MANAGEMENT
THE ADVISORS
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor and
manages the investment operations of the fund and has agreed to perform or
arrange for the performance of the fund's day-to-day management. The advisor is
located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. INVESCO
Capital Management, Inc. (the subadvisor), the fund's subadvisor, is located at
1315 Peachtree Street, N.E., Atlanta, GA 30309. The subadvisor is responsible
for the fund's day-to-day management, including the fund's investment decisions
and the execution of securities transactions with respect to the fund.
The advisor has acted as an investment advisor since its organization in 1976.
Today, the advisor, together with its subsidiaries, advises or manages over 110
investment portfolios, including the fund, encompassing a broad range of
investment objectives. The subadvisor has acted as an investment advisor since
1979.
ADVISOR COMPENSATION
During the fiscal year ended December 31, 1998, the advisor received
compensation of ___% of average net assets.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual
members of the team who are primarily responsible for the day-to-day management
of the fund's portfolio are
o Michael C. Harhai, C.F.A., Senior Portfolio Manager, who has been
responsible for the fund and has been associated with the subadvisor
and/or its affiliates since 1993.
o R. Terrence Irrgang, C.F.A., Assistant Portfolio Manager, who has been
responsible for the fund since 1993 and has been associated with the
subadvisor and/or its affiliates since 1992.
8
<PAGE> 53
OTHER INFORMATION
INITIAL SALES CHARGES FOR CLASS A SHARES
Purchases of Class A shares of the fund are subject to the maximum 5.50% initial
sales charge as listed under the heading "CATEGORY I Initial Sales Charges" in
the "Shareholder Information--Choosing a Share Class" section of this
prospectus.
DIVIDENDS AND DISTRIBUTIONS
Dividends
The fund generally declares and pays dividends, if any, quarterly.
Capital Gains Distributions
The fund generally distributes long-term gains, if any, annually and
short-term capital gains (including any net gains from foreign currency
transactions), if any, quarterly.
9
<PAGE> 54
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
financial performance. Certain information reflects financial results for a
single fund share.
The total returns in the table represent the rate that an investor would have
earned (or lost) on an investment in the fund (assuming reinvestment of all
dividends and distributions).
The information for the fiscal years or periods ended December 31, 1997, 1996,
1995 and 1994 has been audited by PricewaterhouseCoopers LLP. The information
for the fiscal year or period ended December 31, 1998, has been audited by KPMG
LLP, whose report, along with the fund's financial statements, is included in
the fund's annual report, which is available upon request.
<TABLE>
<CAPTION>
Class A(a) Year Ended December 31,
- ---------- --------------------------
1998 1997(b)
-------- --------
<S> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx
-------- --------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx)(c)
-------- --------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx)
-------- --------
Total from investment operations (x.xx) (x.xx)
-------- --------
Less distributions: (x.xx) (x.xx)
Dividends from net investment income: (x.xx) (x.xx)
-------- --------
Distributions from capital gains: (x.xx) (x.xx)
-------- --------
Total distributions (x.xx) (x.xx)
-------- --------
Net asset value, end of period $ xx.xx $ xx.xx
-------- --------
Total return(d) (x.xx)% (x.xx)%
-------- --------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx $ xx,xxx
-------- --------
Ratio of expenses to average net assets(e) x.xx%(f) x.xx%
-------- --------
Ratio of net investment income (loss) to average net assets(g) (x.xx)%(f) (x.xx)%
-------- --------
Portfolio turnover rate xx% xx%
-------- --------
Average brokerages commission rate(h) x.xxxx x.xxxx
-------- --------
</TABLE>
(a) Per share information and shares have been restated to reflect a 4 for 1
stock split, effective in the form of a 300% stock dividend, on November 7,
1997.
(b) The fund changed investment advisors on August 4, 1997.
(c) Calculated using average shares outstanding.
(d) Does not deduct sales charges.
(e) After fee waivers, ratio of expenses to average net assets prior to fee
waivers was x.xx%.
(f) Ratios are based on average net asset of $x,xxx,xxx.
(g) After fee waivers, ratio of net investment income to average net assets
prior to fee waivers was x.xx%.
(h) 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.
10
<PAGE> 55
<TABLE>
<CAPTION>
For the Period March 3, 1998 through December 31,
Class B 1998
-------------------------------------------------
<S> <C>
Net asset value, beginning of period $ xx.xx
--------
Income from investment operations:
Net investment income (loss) (x.xx)(a)
--------
Net gains on securities (both realized and unrealized) (x.xx)
--------
Total from investment operations (x.xx)
--------
Less distributions: (x.xx)
Dividends from net investment income: (x.xx)
--------
Distributions from capital gains: (x.xx)
--------
Total distributions (x.xx)
--------
Net asset value, end of period $ xx.xx
--------
Total return(b) (x.xx)%
--------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx
--------
Ratio of expenses to average net assets(c) x.xx%(d)
--------
Ratio of net investment income (loss) to average net assets(e) (x.xx)%(d)
--------
Portfolio turnover rate xx%
--------
Average brokerages commission rate(f) x.xxxx
--------
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct sales charges and are not annualized for periods less than
one year.
(c) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
(annualized).
(d) Ratios are annualized and based on average net assets of x,xxx,xxx.
(e) After fee waivers, ratio of net investment income to average net assets
prior to fee waivers was x.xx%.
(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.
<TABLE>
<CAPTION>
Class C(a) 1998 1997(b) 1996 1995 1994
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx)(c) (x.xx)
-------- -------- -------- -------- --------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Less distributions: (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
Dividends from net investment income: (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Distributions from capital gains: (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Total distributions (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Net asset value, end of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
-------- -------- -------- -------- --------
Total return (d) (x.xx)% (x.xx)% (x.xx)% (x.xx)% (x.xx)%
-------- -------- -------- -------- --------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx $ xx,xxx $ xx,xxx $ xx,xxx $ xx,xxx
-------- -------- -------- -------- --------
Ratio of expenses to average net assets x.xx% x.xx%(e) x.xx% x.xx%(f) x.xx%
-------- -------- -------- -------- --------
Ratio of net investment income (loss) to average net assets (x.xx)% (x.xx)%(e) (x.xx)% (x.xx)%(f) (x.xx)%
-------- -------- -------- -------- --------
Portfolio turnover rate xx% xx% xx% xx% xx%
-------- -------- -------- -------- --------
Average brokerages commission rate (f) x.xxxx x.xxxx x.xxxx x.xxxx x.xxxx
-------- -------- -------- -------- --------
</TABLE>
(a) Per share information and shares have been restated to reflect a 4 for 1
stock split, effective in the form of a 300% stock dividend, on November 7,
1997.
(b) The fund changed investment advisors on August 4, 1997.
(c) Calculated using average shares outstanding.
(d) Does not deduct contingent deferred sales charges.
(e) Ratios are based on average net assets of xxx,xxx,xxx.
(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.
11
<PAGE> 56
Shareholder Information
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
Many of the funds advised by the advisor (the AIM Funds) have multiple classes
of shares, each class representing an interest in the same portfolio of
investments. When choosing a share class, you should consider the factors below:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
- - Initial sales charge - No initial sales charge - No initial sales charge
- - Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within six charge on redemptions within
years one year
- - Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
after eight years along with a shares
pro rata portion of its
reinvested dividends and
distributions*
- - Generally more appropriate for - Purchase orders limited to - Generally more appropriate
long-term investors amounts less than $250,000 for short-term investors
</TABLE>
* AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
AIM Global Trends Fund: If you held Class B shares on May 29, 1998 and
continue to hold them, those shares will convert to Class A shares of that
fund seven years after your date of purchase. If you exchange those shares
for Class B shares of another AIM Fund, the shares into which you exchanged
will not convert to Class A shares until eight years after your date of
purchase of the original shares.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans
that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc.
(the distributor) for the sale and distribution of its shares and fees for
services provided to shareholders, all or a substantial portion of which are
paid to the dealer of record. Because the AIM Fund pays these fees out of its
assets on an ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
MCF-03/99
A-1
<PAGE> 57
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class
A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money
Market Fund. You may be charged a contingent deferred sales charge if you redeem
AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain
exchanges. Sales charges on all other AIM Funds and classes of those Funds are
detailed below. As used below, the term "offering price" with respect to all
categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales
charges. The "Other Information" section of your prospectus will tell you in
what category your particular AIM Fund is classified.
<TABLE>
<CAPTION>
CATEGORY I INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY II INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY III INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
- ----------------------------------------------------------
</TABLE>
CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value.
However, if you purchase shares of that amount in Categories I or II, they will
be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them
prior to 18 months after the date of purchase. The distributor may pay a dealer
concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share.
However, when you redeem them, they are subject to a CDSC in the following
percentages:
<TABLE>
<CAPTION>
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
- ----------------------------------------------------------
<S> <C> <C>
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
- ----------------------------------------------------------
</TABLE>
A-2
<PAGE> 58
REDUCED SALES CHARGES AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify
for these reductions or exceptions, you or your financial consultant must
provide sufficient information at the time of purchase to verify that your
purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates
under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares
currently owned for the purpose of qualifying for the lower initial sales charge
rates that apply to larger purchases. The applicable initial sales charge for
the new purchase is based on the total of your current purchase and the current
value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount
of Class A shares of AIM Funds during a 13-month period. The amount you agree to
purchase determines the initial sales charge you pay. If the full face amount of
the LOI is not invested by the end of the 13-month period, your account will be
adjusted to the higher initial sales charge level for the amount actually
invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- - on shares purchased by reinvesting dividends and distributions;
- - when exchanging shares among certain AIM Funds;
- - when using the reinstatement privilege; and
- - when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- - if you redeem Class B shares you held for more than six years;
- - if you redeem Class C shares you held for more than one year;
- - if you redeem shares acquired through reinvestment of dividends and
distributions; and
- - on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares
at reduced or without sales charges. Consult the fund's Statement of Additional
Information for details.
A-3
<PAGE> 59
PURCHASING SHARES
MINIMUM INVESTMENTS PER AIM FUND ACCOUNT
The minimum investments for AIM Fund accounts (except for investments in AIM
Small Cap Opportunities Fund) are as follows:
<TABLE>
<CAPTION>
INITIAL ADDITIONAL
TYPE OF ACCOUNT INVESTMENTS INVESTMENTS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
<TABLE>
<CAPTION>
PURCHASE OPTIONS
- ----------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed Account Application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed Account Application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank
methods described above. Connection(SM) form to the transfer
agent. Once the transfer agent has
received the form, call the
transfer agent to place your
purchase.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
A-4
<PAGE> 60
SPECIAL PLANS
AUTOMATIC INVESTMENT PLAN
You can arrange for periodic investments in any of the AIM Funds by authorizing
the AIM Fund to withdraw the amount of your investment from your bank account on
a day or dates you specify and in an amount of at least $50. You may stop the
Automatic Investment Plan at any time by giving the transfer agent notice ten
days prior to your next scheduled withdrawal.
DOLLAR COST AVERAGING
Dollar Cost Averaging allows you to make automatic monthly or quarterly
exchanges, if permitted, from one AIM Fund account to one or more other AIM Fund
accounts with the identical registration. The account from which exchanges are
to be made must have a minimum balance of $5,000 before you can use this option.
Exchanges will occur on (or about) the 10th or 25th day of the month, whichever
you specify, in the amount you specify. The minimum amount you can exchange to
another AIM Fund is $50.
AUTOMATIC DIVIDEND INVESTMENT
All of your dividends and distributions may be paid in cash or invested in any
AIM Fund at net asset value. Unless you specify otherwise, your dividends and
distributions will automatically be reinvested in the same AIM Fund. You may
invest your dividends and distributions (1) into another AIM Fund in the same
class of shares; or (2) from Class A shares into AIM Cash Reserve Shares of AIM
Money Market Fund, or vice versa.
You must comply with the following requirements to be eligible to invest your
dividends and distributions in shares of another AIM Fund:
(1) Your account balance (a) in the AIM Fund paying the dividend must be at
least $5,000; or (b) in the AIM Fund receiving the dividend must be at least
$500;
(2) Both accounts must have identical registration information; and
(3) You must have completed an authorization form to reinvest dividends into
another AIM Fund.
PORTFOLIO REBALANCING PROGRAM
If you have at least $5,000 in your account, you may participate in the
Portfolio Rebalancing Program. Under this Program, you can designate how the
total value of your AIM Fund holdings should be rebalanced, on a percentage
basis, between two and ten of your AIM Funds on a quarterly, semiannual or
annual basis. Your portfolio will be rebalanced through the exchange of shares
in one or more of your AIM Funds for shares of the same class of one or more
other AIM Funds in your portfolio. If you wish to participate in the Program,
make changes or cancel the Program, the transfer agent must receive your request
to participate, changes or cancellation in good order at least five business
days prior to the next rebalancing date, which is normally the 28th day of the
last month of the period you choose. We may modify, suspend or terminate the
Program at any time on 60 days' prior written notice.
RETIREMENT PLANS
Shares of most of the AIM Funds can be purchased through
tax-sheltered retirement plans made available to corporations, individuals and
employees of non-profit organizations and public schools. A plan document must
be adopted to establish a retirement plan. You may use AIM Funds-sponsored
retirement plans, which include IRAs, Education IRAs, Roth IRAs, 403(b) plans,
401(k) plans, SIMPLE IRA plans, SEP/SARSEP plans and Money Purchase/Profit
Sharing plans, or another sponsor's retirement plan. The plan custodian of the
AIM Funds-sponsored retirement plan assesses an annual maintenance fee of $10.
Contact your financial consultant for details.
REDEEMING SHARES
REDEMPTION FEES
We will not charge you any fees to redeem your shares; however, your broker or
financial consultant may charge service fees for handling these transactions.
Your shares may be subject to a contingent deferred sales charge (CDSC).
COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their
original purchase price or current market value, net of reinvested dividends and
capital gains distributions. In determining whether to charge a CDSC, we will
assume that you have redeemed shares on which there is no CDSC first and, then,
shares in the order of purchase.
REDEMPTION OF AIM CASH RESERVE SHARES OF
AIM MONEY MARKET FUND ACQUIRED BY EXCHANGE
If you redeem AIM Cash Reserve Shares acquired by exchange from Class A shares
subject to a CDSC within eighteen months of the purchase of the Class A shares,
you will be charged a CDSC.
REDEMPTION OF CLASS B SHARES ACQUIRED BY
EXCHANGE FROM AIM FLOATING RATE FUND
If you redeem Class B shares you acquired by exchange via a tender offer by AIM
Floating Rate Fund, the early withdrawal charge applicable to shares of AIM
Floating Rate Fund will be applied instead of the CDSC normally applicable to
Class B shares.
A-5
<PAGE> 61
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Through a Financial Contact your financial consultant.
Consultant
By Mail Send a written request to the transfer agent. Requests must
include (1) original signatures of all registered owners;
(2) the name of the AIM Fund and your account number; (3) if
the transfer agent does not hold your shares, endorsed share
certificates or share certificates accompanied by an
executed stock power; and (4) signature guarantees, if
necessary (see below). The transfer agent may require that
you provide additional information, such as corporate
resolutions or powers of attorney, if applicable. If you are
redeeming from an IRA account, you must include a statement
of whether or not you are at least 59 1/2 years old and
whether you wish to have federal income tax withheld from
your proceeds. The transfer agent may require certain other
information before you can redeem from an employer-sponsored
retirement plan. Contact your employer for details.
By Telephone Call the transfer agent. You will be allowed to redeem by
telephone if (1) the proceeds are to be mailed to the
address on record with us or transferred electronically to a
pre-authorized checking account; (2) the address on record
with us has not been changed within the last thirty days;
(3) you do not hold physical share certificates; (4) you can
provide proper identification information; (5) the proceeds
of the redemption do not exceed $50,000; and (6) you have
not previously declined the telephone redemption privilege.
Certain accounts, including retirement accounts and 403(b)
plans, may not redeem by telephone. The transfer agent must
receive your call during the hours the NYSE is open for
business in order to effect the redemption at that day's
closing price.
</TABLE>
- --------------------------------------------------------------------------------
TIMING AND METHOD OF PAYMENT
We normally will send out checks within one business day, and in any event no
more than seven days, after we accept your request to redeem. If you redeem
shares recently purchased by check, you will be required to wait up to ten
business days before we will send your redemption proceeds. This delay is
necessary to ensure that the purchase check has cleared.
REDEMPTION BY MAIL
If you mail us a request in good order to redeem your shares, we will mail you a
check in the amount of the redemption proceeds to the address on record with us.
If your request is not in good order, you may have to provide us with additional
documentation in order to redeem your shares.
REDEMPTION BY TELEPHONE
If you redeem by telephone, we will mail you a check in the amount of the
redemption proceeds to your address of record (if there has been no change
communicated to the transfer agent within the previous 30 days) or transmit them
electronically to your pre-authorized bank account. We use reasonable procedures
to confirm that instructions communicated by telephone are genuine and are not
liable for telephone instructions that are reasonably believed to be genuine.
PAYMENT FOR SYSTEMATIC WITHDRAWALS
You may arrange for regular monthly or quarterly withdrawals from your account
of at least $50. You also may make annual withdrawals if you own Class A shares.
We will redeem enough shares from your account to cover the amount withdrawn.
You must have an account balance of at least $5,000 to establish a Systematic
Withdrawal Plan. You can stop this plan at any time by giving ten days prior
notice to the transfer agent.
EXPEDITED REDEMPTIONS
(AIM Cash Reserve Shares of AIM Money Market Fund only)
If we receive your redemption order before 11:30 a.m. Eastern Time, we will try
to transmit payment of redemption proceeds on that same day. If we receive your
redemption order after 11:30 a.m. Eastern Time and before the close of trading
on the New York Stock Exchange (NYSE), we generally will transmit payment on the
next business day.
REDEMPTIONS BY CHECK
(Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM
Money Market Fund only)
You may redeem shares of these AIM Funds by writing checks in amounts of $250 or
more if you have completed an authorization form. Redemption by check is not
available for retirement accounts.
SIGNATURE GUARANTEES
We require a signature guarantee when you redeem by mail and
(1) the amount is greater than $50,000;
(2) you request that payment be made to someone other than the name registered
on the account;
(3) you request that payment be sent somewhere other than the bank of record on
the account; or
(4) you request that payment be sent to a new address or an address that changed
in the last 30 days.
The transfer agent will accept a guarantee of your signature by a number of
financial institutions. Call the transfer agent for additional information. Some
institutions have transaction amount maximums for these guarantees. Please check
with the guarantor institution.
A-6
<PAGE> 62
REINSTATEMENT PRIVILEGE (Class A shares only)
You may, within 90 days after you sell Class A shares (except Class A shares of
AIM Tax-Exempt Cash Fund), reinvest all or part of your redemption proceeds in
Class A shares of any AIM Fund at net asset value in an identically registered
account. If you sold Class A shares of AIM Limited Maturity Treasury Fund or AIM
Tax-Free Intermediate Fund, you will incur an initial sales charge reflecting
the difference between the initial sales charges on those Funds and the ones in
which you will be investing. In addition, if you paid a contingent deferred
sales charge (CDSC) on any reinstated amount, you will not be subject to a CDSC
if you later redeem that amount. You must notify the transfer agent in writing
at the time you reinstate that you are exercising your reinstatement privilege.
You may exercise this privilege only once per year.
REDEMPTIONS BY THE AIM FUNDS
If your account has been open at least one year, you have not made an additional
purchase in the account during the past six calendar months, and the value of
your account falls below $500 for three consecutive months due to redemptions or
exchanges (excluding retirement accounts), the AIM Funds have the right to
redeem the account after giving you 60 days' prior written notice. You may avoid
having your account redeemed during the notice period by bringing the account
value up to $500 or by utilizing the Automatic Investment Plan.
If an AIM Fund determines that you have provided incorrect information in
opening an account or in the course of conducting subsequent transactions, the
AIM Fund may, in its discretion, redeem the account and distribute the proceeds
to you.
EXCHANGING SHARES
You may, under certain circumstances, exchange shares in one AIM Fund for those
of another AIM Fund. Before requesting an exchange, review the prospectus of the
AIM Fund you wish to acquire. Exchange privileges also apply to holders of the
Connecticut General Guaranteed Account, established for tax-qualified group
annuities, for contracts purchased on or before June 30, 1992.
PERMITTED EXCHANGES
Except as otherwise stated below, you may exchange your shares for shares of the
same class of another AIM Fund. You also may exchange AIM Cash Reserve Shares of
AIM Money Market Fund for Class A shares of another AIM Fund, or vice versa. You
may be required to pay an initial sales charge when exchanging from a Fund with
a lower initial sales charge than the one into which you are exchanging. If you
exchange from Class A shares not subject to a CDSC into Class A shares subject
to those charges, you will be charged a CDSC when you redeem the exchanged
shares. The CDSC charged on redemption of those shares will be calculated
starting on the date you acquired those shares through exchange.
YOU WILL NOT PAY A SALES CHARGE WHEN EXCHANGING:
(1) Class A shares with an initial sales charge (except for Class A shares of
AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund) for
Class A shares of another AIM Fund or AIM Cash Reserve Shares of AIM Money
Market Fund;
(2) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund for
(a) one another;
(b) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of
AIM Tax-Exempt Cash Fund; or
(c) Class A shares of another AIM Fund, but only if
(i) you acquired the original shares before May 1, 1994; or
(ii) you acquired the original shares on or after May 1, 1994 by way of
an exchange from shares with higher sales charges;
(3) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM
Tax-Exempt Cash Fund for
(a) one another;
(b) Class A shares of an AIM Fund subject to an initial sales charge (except
for Class A shares of AIM Limited Maturity Treasury Fund and AIM
Tax-Free Intermediate Fund), but only if you acquired the original
shares
(i) prior to May 1, 1994 by exchange from Class A shares subject to an
initial sales charge;
(ii) on or after May 1, 1994 by exchange from Class A shares subject to
an initial sales charge (except for Class A shares of AIM Limited
Maturity Treasury Fund and AIM Tax-Free Intermediate Fund); or
(c) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund, but only if you acquired the original shares by
exchange from Class A shares subject to an initial sales charge; or
(4) Class B shares for other Class B shares, and Class C shares for other Class
C shares.
EXCHANGES NOT PERMITTED
You may not exchange Class A shares subject to contingent deferred sales charges
for Class A shares of AIM Limited Maturity Treasury Fund, AIM Tax-Free
Intermediate Fund or AIM Tax-Exempt Cash Fund.
EXCHANGE CONDITIONS
The following conditions apply to all exchanges:
- - You must meet the minimum purchase requirements for the AIM Fund into which
you are exchanging;
- - Shares of the AIM Fund you wish to acquire must be qualified for sale in your
state of residence;
- - Exchanges must be made between accounts with identical registration
information;
A-7
<PAGE> 63
- - The account you wish to exchange from must have a certified tax identification
number (or the Fund has received an appropriate Form W-8 or W-9);
- - Shares must have been held for at least one day prior to the exchange; and
- - If you have physical share certificates, you must return them to the transfer
agent prior to the exchange.
TERMS OF EXCHANGE
Under unusual market conditions, an AIM Fund may delay the issuance of shares
being purchased in an exchange for up to five business days if it determines
that it would be materially disadvantaged by the immediate transfer of exchange
proceeds. There is no fee for exchanges. The exchange privilege is not an option
or right to purchase shares. Any of the participating AIM Funds or the
distributor may modify or discontinue this privilege at any time.
BY MAIL
If you wish to make an exchange by mail, you must include original signatures of
each registered owner exactly as the shares are registered, the account
registration and account number, the dollar amount or number of shares to be
exchanged and the names of the AIM Funds from which and into which the exchange
is to be made.
BY TELEPHONE
Conditions that apply to exchanges by telephone are the same as redemptions by
telephone, including that the transfer agent must receive exchange requests
during the hours the NYSE is open for business; however, you still will be
allowed to exchange by telephone even if you have changed your address of record
within the preceding 30 days.
EXCHANGING CLASS B AND CLASS C SHARES
If you make an exchange involving Class B or Class C shares, the amount of time
you held the original shares will be added to the holding period of the Class B
or Class C shares, respectively, into which you exchanged for the purpose of
calculating contingent deferred sales charges (CDSC) if you later redeem the
exchanged shares. If you redeem Class B shares acquired by exchange via a tender
offer by AIM Floating Rate Fund, you will be credited with the time period you
held the shares of AIM Floating Rate Fund for the purpose of computing the early
withdrawal charge applicable to those shares.
EACH AIM FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR
CANCEL ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR
CONDITIONS OF PURCHASE OF SHARES OF ANY AIM FUND; OR WITHDRAW ALL OR ANY PART
OF THE OFFERING MADE BY THIS PROSPECTUS.
PRICING OF SHARES
DETERMINATION OF NET ASSET VALUE
The price of each AIM Fund's shares is the fund's net asset value per share. The
AIM Funds value portfolio securities for which market quotations are readily
available at market value. The AIM Funds value short-term investments maturing
within 60 days at amortized cost, which approximates market value. AIM Money
Market Fund and AIM Tax-Exempt Cash Fund value all their securities at amortized
cost. AIM High Income Municipal Fund, AIM Municipal Bond Fund, AIM Tax-Exempt
Bond Fund of Connecticut and AIM Tax-Free Intermediate Fund value variable rate
securities that have an unconditional demand or put feature exercisable within
seven days or less at par, which reflects the market value of such securities.
The AIM Funds value all other securities and assets at their fair value.
Securities and other assets quoted in foreign currencies are valued in U.S.
dollars based on the prevailing exchange rates on that day. In addition, if,
between the time trading ends on a particular security and the close of the New
York Stock Exchange (NYSE), events occur that materially affect the value of the
security, the AIM Funds may value the security at its fair value as determined
in good faith by or under the supervision of the Board of Directors or Trustees
of the AIM Fund. The effect of using fair value pricing is that an AIM Fund's
net asset value will be subject to the judgment of the Board of Directors or
Trustees or its designee instead of being determined by the market. Because some
of the AIM Funds may invest in securities that are primarily listed on foreign
exchanges, the value of those funds' shares may change on days when you will not
be able to purchase or redeem shares.
Each AIM Fund determines the net asset value of its shares as of the close of
the NYSE on each day the NYSE is open for business. AIM Money Market Fund also
determines its net asset value as of 12:00 noon Eastern Time on each day the
NYSE is open for business.
TIMING OF ORDERS
You can purchase, exchange or redeem shares during the hours the NYSE is open
for business. The AIM Funds price purchase, exchange and redemption orders at
the net asset value calculated after the transfer agent receives an order in
good form. An AIM Fund may postpone the right of redemption only under unusual
circumstances, such as when the NYSE restricts or suspends trading.
TAXES
In general, dividends and distributions you receive are taxable as ordinary
income or long-term capital gains for federal income tax purposes, whether you
reinvest them in additional shares or take them in cash. Distributions are
taxable to you at different rates depending on the length of time the fund holds
its assets. Different tax rates apply to ordinary income and long-term capital
gain distributions, regardless of how long you have held your shares. Every
year, you will be sent information showing the amount of dividends and
distributions you received from each AIM Fund during the prior year.
A-8
<PAGE> 64
Any long-term or short-term capital gains realized from redemptions of AIM
Fund shares will be subject to federal income tax. Exchanges of shares for
shares of another AIM Fund are treated as a sale, and any gain realized on the
transaction will generally be subject to federal income tax.
The foreign, state and local tax consequences of investing in AIM Fund shares
may differ materially from the federal income tax consequences described above.
You should consult your tax advisor before investing.
A-9
<PAGE> 65
[BACK COVER PAGE]
OBTAINING ADDITIONAL INFORMATION
More information may be obtained free of charge upon request. The Statement of
Additional Information (SAI), a current version of which is on file with the
Securities and Exchange Commission (SEC), contains more details about the fund
and is incorporated by reference into the prospectus (is legally a part of this
prospectus). Annual and semiannual reports to shareholders contain additional
information about the fund's investments. The fund's annual report also
discusses the market conditions and investment strategies that significantly
affected the fund's performance during its last fiscal year.
If you have questions about this fund, another fund in The AIM Family of
Funds--Registered Trademark-- or your account, or wish to obtain free copies of
the fund's current SAI or annual or semiannual reports, please contact us:
BY MAIL: A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
BY TELEPHONE: (800) 347-4246
BY E-MAIL: [email protected]
ON THE INTERNET: http://www.aimfunds.com (prospectuses and annual and semiannual
reports only)
You also can obtain copies of the fund's SAI and other information at the SEC's
Public Reference Room in Washington, D.C., on the SEC's website
(http://www.sec.gov), or by sending a letter, including a duplicating fee, to
the SEC's Public Reference Section, Washington, D.C. 20549-6009. Please call the
SEC at 1-800-SEC-0330 for information about the Public Reference Room.
AIM Advisor Large Cap Value Fund
SEC 1940 Act file number: 811-3886
<PAGE> 66
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION DATED FEBRUARY 16, 1999
[AIM LOGO APPEARS HERE]
AIM ADVISOR MULTIFLEX FUND
PROSPECTUS
MAY 3, 1999
AIM Advisor MultiFlex Fund seeks to achieve a high total return on investment
through growth of capital and current income, without regard to federal income
tax considerations.
This prospectus contains important information. Please read it before investing
and keep it for future reference.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. There is a risk that you could lose a portion or all of your money.
AS WITH ALL OTHER MUTUAL FUND SECURITIES, THE SECURITIES AND EXCHANGE
COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED
WHETHER THE INFORMATION IN THIS PROSPECTUS IS ADEQUATE OR ACCURATE.
ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.
<PAGE> 67
TABLE OF CONTENTS
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE AND STRATEGIES...............................................................3
PRINCIPAL RISKS OF INVESTING IN THE FUND..........................................................3
PERFORMANCE INFORMATION...........................................................................5
ANNUAL TOTAL RETURNS..................................................................5
PERFORMANCE TABLE.....................................................................6
FEE TABLE AND EXPENSE EXAMPLE.....................................................................7
FEE TABLE.............................................................................7
EXPENSE EXAMPLE.......................................................................8
FUND MANAGEMENT...................................................................................9
THE ADVISORS..........................................................................9
ADVISOR COMPENSATION..................................................................9
PORTFOLIO MANAGERS....................................................................9
OTHER INFORMATION................................................................................10
INITIAL SALES CHARGES FOR CLASS A SHARES.............................................10
DIVIDENDS AND DISTRIBUTIONS..........................................................10
FINANCIAL HIGHLIGHTS.............................................................................11
SHAREHOLDER INFORMATION.........................................................................A-1
CHOOSING A SHARE CLASS..............................................................A-1
PURCHASING SHARES...................................................................A-4
REDEEMING SHARES....................................................................A-6
EXCHANGING SHARES...................................................................A-9
PRICING OF SHARES..................................................................A-11
TAXES..............................................................................A-11
OBTAINING ADDITIONAL INFORMATION....................................................BACK COVER PAGE
</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, La Familia AIM de Fondos and Design and Invest with
Discipline are registered service marks and AIM Bank Connection is a service
mark of A I M Management Group Inc.
2
<PAGE> 68
INVESTMENT OBJECTIVE AND STRATEGIES
The fund's investment objective is to achieve a high total return on investment
through growth of capital and current income, without regard to federal income
tax considerations.
The fund attempts to meet this objective by investing in a combination of equity
securities and fixed income securities. The fund attempts to allocate the mix of
equity securities and fixed income securities among the following five asset
classes: (1) equity securities of large capitalization companies, i.e.,
companies with market capitalizations among the largest 800 publicly traded U.S.
corporations; (2) equity securities of small capitalization companies, i.e.,
companies with market capitalizations smaller than the largest 1,000 publicly
traded U.S. corporations; (3) fixed income securities; (4) real estate
securities; and (5) foreign securities. The fund may invest up to 40% of its
assets in each asset class. The fund will normally invest 20% of its assets in
each asset class.
The fund's fixed-income securities investments will consist primarily of U.S.
Government securities and corporate obligations. U.S. government securities
include securities issued or guaranteed by the U.S. government and obligations
of U. S. Government agencies or instrumentalities. The fund may invest in
mortgage-and asset-backed securities, municipal obligations, and foreign
currency denominated securities. The fund may also invest up to 5% of its assets
in lower quality debt securities, i.e., "junk bonds."
The fund's real estate securities investments will consist primarily of the
common stocks of real estate companies, shares of real estate investments trusts
(REITs) and other real estate related securities. The fund may invest in
non-Canadian foreign securities and American Depositary Receipts (ADRs).
Securities of Canadian issuers and sponsored ADRs are not considered within the
40% limitation on foreign securities.
The portion of the fund's assets that can be invested in each asset class will
be allocated according to the portfolio managers' assessment of current
business, economic and market conditions. The fund's portfolio managers focus on
securities that they believe have excellent prospects for growth of capital and
current income. The fund's portfolio managers usually sell a particular security
when any of those factors materially changes.
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash,
money market securities, bonds or other debt securities. As a result, the fund
may not achieve its investment objective.
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund and that the income you may receive from the fund may vary. The value of
your investment in the fund will go up and down with the prices of the
securities in which the fund invests. The price of equity securities goes up and
down in response to many factors, including the historical and prospective
earnings of the issuer of the stock, the value of its assets, general economic
conditions, interest rates, investor perceptions and market liquidity. [This is
especially true with respect to equity securities of smaller companies, whose
prices may go up and down more than equity securities of larger,
more-established companies. Also, since equity securities of smaller companies
may not be traded as often as equity securities of larger, more-established
companies, it may be difficult or impossible for the fund to sell securities at
a desired price.]
Interest rate increases may cause the price of a debt security to decrease; the
longer the debt security's duration, the more sensitive it is to this risk. The
issuer of a security may default or otherwise be unable to honor a financial
obligation. A faster than expected principal prepayment rate on U.S. government
agency mortgage-backed securities will reduce both the value of, and income
from, such securities.
3
<PAGE> 69
The fund may also invest in foreign securities which have additional risks,
including exchange rate changes, political and economic upheaval, the relative
lack of information about these companies, relatively low market liquidity and
the potential lack of strict financial and accounting controls and standards.
The fund could hold real estate directly if a company defaults on debt
securities the fund owns. In that event, an investment in the fund may have
additional risks relating to direct ownership in real estate, including
difficulties in valuing and trading real estate, declines in value of the
property, risks related to general and local economic conditions, changes in the
climate for real estate, environmental liability risks, increase in taxes,
expenses and costs, change in laws, casualty and condemnation losses, rent
control limitations and increases in interest rates.
The value of the fund's investment in REITs is affected by the factors listed
above, as well as the management skill of the persons managing the REIT. REITs
also are not diversified and, therefore, their value may fluctuate more widely,
and they may be subject to greater risks, than if they invested more broadly.
Since REITs have expenses of their own, you will bear a proportionate share of
those expenses in addition to those of the fund.
[If the seller of a repurchase agreement in which the fund invests defaults on
its obligation or declares bankruptcy, the fund may experience delays in selling
the securities underlying the repurchase agreement. As a result, the fund may
incur losses arising from decline in the value of those securities, reduced
levels of income and expenses of enforcing its rights.]
[Junk bond disclosure]
The value of your shares could be adversely affected if the computer systems
used by the fund's investment advisor and the fund's other service providers are
unable to distinguish the year 2000 from the year 1900.
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances that
other service providers are taking similar steps. Year 2000 problems may also
affect issuers in whose securities the fund invests.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
4
<PAGE> 70
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund's past performance is not necessarily an
indication of its future performance.
ANNUAL TOTAL RETURNS
The following bar chart shows changes in the performance of the fund's Class C
shares from year to year. The bar chart does not reflect sales loads. If it did,
the annual total returns shown would be lower.
ADVISOR MULTIFLEX
<TABLE>
<CAPTION>
[GRAPH]
Year Return (%)
---- ----------
<S> <C>
1994 ................................................ (1.01%)
1995 ................................................ 21.57%
1996 ................................................ 17.03%
1997 ................................................ 18.55%
1998 ................................................ (0.26%)
</TABLE>
During the periods shown in the bar chart, the highest quarterly return was
11.57% (quarter ended June 30, 1997) and the lowest quarterly return was
(14.52%) (quarter ended September 30, 1998).
5
<PAGE> 71
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
<TABLE>
<CAPTION>
=====================================================================================================
Average Annual Total Returns
(for the periods ended December 31, 1998)
Since Inception
1 Year 5 Years Inception Date
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.51% -- 9.55% 01/01/97
- -----------------------------------------------------------------------------------------------------
Class B -- -- -- 03/03/98
- -----------------------------------------------------------------------------------------------------
Class C (0.26%) 10.74% 10.57% 11/17/93
- -----------------------------------------------------------------------------------------------------
S&P 500(1) 28.60% 24.05% 23.92%(2) 11/30/93(2)
======================================================================================================
</TABLE>
(1) The Standard & Poor's 500 Index is an unmanaged index of common stocks
frequently used as a general measure of U.S. stock market performance.
(2) The average annual total return given is since the date closest to the
inception date of the class with the longest performance history.
6
<PAGE> 72
FEE TABLE AND EXPENSE EXAMPLE
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund:
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
Shareholder Fees (fees paid directly from your investment)
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) 5.50% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price
or redemption proceeds, whichever is less) None(1) 5.00 1.00
Annual Fund Operating Expenses (expenses that are deducted from fund assets)
Management Fees [1.00%] [1.00%] [1.00%]
Distribution and/or Service (12b-1) Fees(2) [0.25] [1.00] [1.00]
Other Expenses:
Transfer agent fees and costs [ ] [ ] [ ]
Other [ ] [ ] [ ]
------ ------ ------
[Fee Waiver(3) [ ] [ ] [ ]]
Total Other Expenses [ ] [ ] [ ]
Total Annual Fund Operating Expenses [ ] [ ] [ ]
====== ====== ======
</TABLE>
- -------------------
(1) If you buy $1,000,000 or more of Class A shares and redeem these shares
within 18 months from the date of purchase, you may pay a 1% contingent
deferred sales charge (CDSC) at the time of redemption.
(2) AIM Distributors has voluntarily agreed to limit the Class A shares Rule
12b-1 distribution plan payments to 0.25% for three years beginning August
4, 1997. If these limitations were not in effect, the distribution and/or
service (12b-1) fees and total annual fund operating expenses of the Class
A shares would be 0.35% and 1.77%, respectively.
[(3) The investment advisor has agreed to waive a portion of its fees. The
waiver may not be terminated without the approval of the fund's Board of
Directors.]
As a result of 12b-1 fees, long-term shareholders in the fund may pay more than
the maximum permitted initial sales charge.
7
<PAGE> 73
EXPENSE EXAMPLE
This example is intended to help you compare the costs of investing in different
classes of the fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual returns and
costs may be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ $ $ $
Class B
Class C
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ $ $ $
Class B
Class C
</TABLE>
8
<PAGE> 74
FUND MANAGEMENT
THE ADVISORS
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor and
manages the investment operations of the fund and has agreed to perform or
arrange for the performance of the fund's day-to-day management. The advisor is
located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. INVESCO
Management & Research, Inc. (the subadvisor), the fund's subadvisor, is located
at 101 Federal Street, Boston, MA 02110. The subadvisor is responsible for the
fund's day-to-day management, including the fund's investment decisions and
execution of securities transactions with respect to the fund.
The advisor has acted as an investment advisor since its organization in 1976.
Today, the advisor, together with its subsidiaries, advises or manages over 110
investment portfolios, including the fund, encompassing a broad range of
investment objectives. The subadvisor has acted as an investment advisor since
1969.
ADVISOR COMPENSATION
During the fiscal year ended December 31, 1998, the advisor received
compensation of % of average net assets.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual
members of the team who are primarily responsible for the day-to-day management
of the fund's portfolio are
o Alan J. Wind, C.F.A., Senior Portfolio Manager, who has been responsible
for the fund since 1999 and has been associated with the subadvisor and/or
its affiliates since 1997. From 1993 to 1997 he was Senior Financial
Analyst for Simpson Investment Company.
o Daniel A. Kostyk, Senior Portfolio Manager, who has been responsible for
the fund and has been associated with the subadvisor and/or its affiliates
since 1995. From 1984 to 1995 he was an Engineering Economic Analyst for
Fluor Daniel Inc.
9
<PAGE> 75
OTHER INFORMATION
INITIAL SALES CHARGES FOR CLASS A SHARES
Purchases of Class A shares of the fund are subject to the maximum 5.50% initial
sales charge as listed under the heading "CATEGORY I Initial Sales Charges" in
the "Shareholder Information--Choosing a Share Class" section of this
prospectus.
DIVIDENDS AND DISTRIBUTIONS
Dividends
The fund generally declares and pays dividends, if any, quarterly.
Capital Gains Distributions
The fund generally distributes long-term gains [(including any net gains from
foreign currency transactions)], if any, annually and short-term capital gains
(including any net gains from foreign currency transactions), if any, quarterly.
10
<PAGE> 76
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
financial performance. Certain information reflects financial results for a
single fund share.
The total returns in the table represent the rate that an investor would have
earned (or lost) on an investment in the fund (assuming reinvestment of all
dividends and distributions).
The information for the fiscal years or periods ended December 31, 1997, 1996,
1995 and 1994 has been audited by PricewaterhouseCoopers LLP. The information
for the fiscal year or period ended December 31, 1998, has been audited by KPMG
LLP, whose report, along with the fund's financial statements, is included in
the fund's annual report, which is available upon request.
<TABLE>
<CAPTION>
Class A(a) Year Ended December 31,
---------------------------
1998 1997(b)
-------- --------
<S> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx
-------- --------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (c)
-------- --------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx)
-------- --------
Total from investment operations (x.xx) (x.xx)
-------- --------
Less distributions: (x.xx) (x.xx)
Dividends from net investment income: (x.xx) (x.xx)
-------- --------
Distributions from capital gains: (x.xx) (x.xx)
-------- --------
Total distributions (x.xx) (x.xx)
-------- --------
Net asset value, end of period $ xx.xx $ xx.xx
-------- --------
Total return (d) (x.xx)% (x.xx)%
-------- --------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx $ xx,xxx
-------- --------
Ratio of expenses to average net assets (e) x.xx% (f) x.xx%
-------- --------
Ratio of net investment income (loss) to average net assets (g) (x.xx)% (f) (x.xx)%
-------- --------
Portfolio turnover rate xx% xx%
-------- --------
Average brokerages commission rate (h) x.xxxx x.xxxx
-------- --------
</TABLE>
(a) Per share information and shares have been restated to reflect a 4 for 1
stock split, effective in the form of a 300% stock dividend, on November 7,
1997.
(b) The fund changed investment advisors on August 4, 1997.
(c) Calculated using average shares outstanding.
(d) Does not deduct sales charges.
(e) After fee waivers, ratio of expenses to average net assets prior to fee
waivers was x.xx%.
(f) Ratios are based on average net asset of $x,xxx,xxx.
(g) After fee waivers, ratio of net investment income to average net assets
prior to fee waivers was x.xx%.
(h) 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.
11
<PAGE> 77
<TABLE>
<CAPTION>
Class B For the Period March 3, 1998 through December 31,
1998
--------
<S> <C>
Net asset value, beginning of period $ xx.xx
--------
Income from investment operations:
Net investment income (loss) (x.xx) (a)
--------
Net gains on securities (both realized and unrealized) (x.xx)
--------
Total from investment operations (x.xx)
--------
Less distributions: (x.xx)
Dividends from net investment income: (x.xx)
--------
Distributions from capital gains: (x.xx)
--------
Total distributions (x.xx)
--------
Net asset value, end of period $ xx.xx
--------
Total return (b) (x.xx)%
--------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx
--------
Ratio of expenses to average net assets (c) x.xx% (d)
--------
Ratio of net investment income (loss) to average net assets (e) (x.xx)% (d)
--------
Portfolio turnover rate xx%
--------
Average brokerages commission rate (f) x.xxxx
--------
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct sales charges and are not annualized for periods less than
one year.
(c) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
(annualized).
(d) Ratios are annualized and based on average net assets of x,xxx,xxx.
(e) After fee waivers, ratio of net investment income to average net assets
prior to fee waivers was x.xx%.
(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.
<TABLE>
<CAPTION>
-------- -------- -------- -------- --------
Class C(a) 1998 1997(b) 1996 1995 1994
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx)(c) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Less distributions: (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
Dividends from net investment income: (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Distributions from capital gains: (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Total distributions (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Net asset value, end of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
-------- -------- -------- -------- --------
Total return (d) (x.xx)% (x.xx)% (x.xx)% (x.xx)% (x.xx)%
-------- -------- -------- -------- --------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx $ xx,xxx $ xx,xxx $ xx,xxx $ xx,xxx
-------- -------- -------- -------- --------
Ratio of expenses to average net assets x.xx% x.xx%(e) x.xx% x.xx%(f) x.xx%
-------- -------- -------- -------- --------
Ratio of net investment income (loss) to average net assets (x.xx)% (x.xx)%(e) (x.xx)% (x.xx)(f) (x.xx)%
-------- -------- -------- -------- --------
Portfolio turnover rate xx% xx% xx% xx% xx%
-------- -------- -------- -------- --------
Average brokerages commission rate (g) x.xxxx x.xxxx x.xxxx x.xxxx x.xxxx
-------- -------- -------- -------- --------
</TABLE>
(a) Per share information and shares have been restated to reflect a 4 for 1
stock split, effective in the form of a 300% stock dividend, on November 7,
1997.
(b) The fund changed investment advisors on August 4, 1997.
(c) Calculated using average shares outstanding.
(d) Does not deduct contingent deferred sales charges and for periods less than
one year, total returns are not annualized.
(e) Ratios are based on average net assets of xxx,xxx,xxx.
(f) Annualized.
(g) The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of
12
<PAGE> 78
Shareholder Information
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
Many of the funds advised by the advisor (the AIM Funds) have multiple classes
of shares, each class representing an interest in the same portfolio of
investments. When choosing a share class, you should consider the factors below:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
- - Initial sales charge - No initial sales charge - No initial sales charge
- - Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within six charge on redemptions within
years one year
- - Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
after eight years along with a shares
pro rata portion of its
reinvested dividends and
distributions*
- - Generally more appropriate for - Purchase orders limited to - Generally more appropriate
long-term investors amounts less than $250,000 for short-term investors
</TABLE>
* AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
AIM Global Trends Fund: If you held Class B shares on May 29, 1998 and
continue to hold them, those shares will convert to Class A shares of that
fund seven years after your date of purchase. If you exchange those shares
for Class B shares of another AIM Fund, the shares into which you exchanged
will not convert to Class A shares until eight years after your date of
purchase of the original shares.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans
that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc.
(the distributor) for the sale and distribution of its shares and fees for
services provided to shareholders, all or a substantial portion of which are
paid to the dealer of record. Because the AIM Fund pays these fees out of its
assets on an ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
MCF-03/99
A-1
<PAGE> 79
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class
A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money
Market Fund. You may be charged a contingent deferred sales charge if you redeem
AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain
exchanges. Sales charges on all other AIM Funds and classes of those Funds are
detailed below. As used below, the term "offering price" with respect to all
categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales
charges. The "Other Information" section of your prospectus will tell you in
what category your particular AIM Fund is classified.
<TABLE>
<CAPTION>
CATEGORY I INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY II INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY III INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
- ----------------------------------------------------------
</TABLE>
CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value.
However, if you purchase shares of that amount in Categories I or II, they will
be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them
prior to 18 months after the date of purchase. The distributor may pay a dealer
concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share.
However, when you redeem them, they are subject to a CDSC in the following
percentages:
<TABLE>
<CAPTION>
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
- ----------------------------------------------------------
<S> <C> <C>
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
- ----------------------------------------------------------
</TABLE>
A-2
<PAGE> 80
REDUCED SALES CHARGES AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify
for these reductions or exceptions, you or your financial consultant must
provide sufficient information at the time of purchase to verify that your
purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates
under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares
currently owned for the purpose of qualifying for the lower initial sales charge
rates that apply to larger purchases. The applicable initial sales charge for
the new purchase is based on the total of your current purchase and the current
value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount
of Class A shares of AIM Funds during a 13-month period. The amount you agree to
purchase determines the initial sales charge you pay. If the full face amount of
the LOI is not invested by the end of the 13-month period, your account will be
adjusted to the higher initial sales charge level for the amount actually
invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- - on shares purchased by reinvesting dividends and distributions;
- - when exchanging shares among certain AIM Funds;
- - when using the reinstatement privilege; and
- - when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- - if you redeem Class B shares you held for more than six years;
- - if you redeem Class C shares you held for more than one year;
- - if you redeem shares acquired through reinvestment of dividends and
distributions; and
- - on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares
at reduced or without sales charges. Consult the fund's Statement of Additional
Information for details.
A-3
<PAGE> 81
PURCHASING SHARES
MINIMUM INVESTMENTS PER AIM FUND ACCOUNT
The minimum investments for AIM Fund accounts (except for investments in AIM
Small Cap Opportunities Fund) are as follows:
<TABLE>
<CAPTION>
INITIAL ADDITIONAL
TYPE OF ACCOUNT INVESTMENTS INVESTMENTS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
<TABLE>
<CAPTION>
PURCHASE OPTIONS
- ----------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed Account Application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed Account Application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank
methods described above. Connection(SM) form to the transfer
agent. Once the transfer agent has
received the form, call the
transfer agent to place your
purchase.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
A-4
<PAGE> 82
SPECIAL PLANS
AUTOMATIC INVESTMENT PLAN
You can arrange for periodic investments in any of the AIM Funds by authorizing
the AIM Fund to withdraw the amount of your investment from your bank account on
a day or dates you specify and in an amount of at least $50. You may stop the
Automatic Investment Plan at any time by giving the transfer agent notice ten
days prior to your next scheduled withdrawal.
DOLLAR COST AVERAGING
Dollar Cost Averaging allows you to make automatic monthly or quarterly
exchanges, if permitted, from one AIM Fund account to one or more other AIM Fund
accounts with the identical registration. The account from which exchanges are
to be made must have a minimum balance of $5,000 before you can use this option.
Exchanges will occur on (or about) the 10th or 25th day of the month, whichever
you specify, in the amount you specify. The minimum amount you can exchange to
another AIM Fund is $50.
AUTOMATIC DIVIDEND INVESTMENT
All of your dividends and distributions may be paid in cash or invested in any
AIM Fund at net asset value. Unless you specify otherwise, your dividends and
distributions will automatically be reinvested in the same AIM Fund. You may
invest your dividends and distributions (1) into another AIM Fund in the same
class of shares; or (2) from Class A shares into AIM Cash Reserve Shares of AIM
Money Market Fund, or vice versa.
You must comply with the following requirements to be eligible to invest your
dividends and distributions in shares of another AIM Fund:
(1) Your account balance (a) in the AIM Fund paying the dividend must be at
least $5,000; or (b) in the AIM Fund receiving the dividend must be at least
$500;
(2) Both accounts must have identical registration information; and
(3) You must have completed an authorization form to reinvest dividends into
another AIM Fund.
PORTFOLIO REBALANCING PROGRAM
If you have at least $5,000 in your account, you may participate in the
Portfolio Rebalancing Program. Under this Program, you can designate how the
total value of your AIM Fund holdings should be rebalanced, on a percentage
basis, between two and ten of your AIM Funds on a quarterly, semiannual or
annual basis. Your portfolio will be rebalanced through the exchange of shares
in one or more of your AIM Funds for shares of the same class of one or more
other AIM Funds in your portfolio. If you wish to participate in the Program,
make changes or cancel the Program, the transfer agent must receive your request
to participate, changes or cancellation in good order at least five business
days prior to the next rebalancing date, which is normally the 28th day of the
last month of the period you choose. We may modify, suspend or terminate the
Program at any time on 60 days' prior written notice.
RETIREMENT PLANS
Shares of most of the AIM Funds can be purchased through
tax-sheltered retirement plans made available to corporations, individuals and
employees of non-profit organizations and public schools. A plan document must
be adopted to establish a retirement plan. You may use AIM Funds-sponsored
retirement plans, which include IRAs, Education IRAs, Roth IRAs, 403(b) plans,
401(k) plans, SIMPLE IRA plans, SEP/SARSEP plans and Money Purchase/Profit
Sharing plans, or another sponsor's retirement plan. The plan custodian of the
AIM Funds-sponsored retirement plan assesses an annual maintenance fee of $10.
Contact your financial consultant for details.
REDEEMING SHARES
REDEMPTION FEES
We will not charge you any fees to redeem your shares; however, your broker or
financial consultant may charge service fees for handling these transactions.
Your shares may be subject to a contingent deferred sales charge (CDSC).
COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their
original purchase price or current market value, net of reinvested dividends and
capital gains distributions. In determining whether to charge a CDSC, we will
assume that you have redeemed shares on which there is no CDSC first and, then,
shares in the order of purchase.
REDEMPTION OF AIM CASH RESERVE SHARES OF
AIM MONEY MARKET FUND ACQUIRED BY EXCHANGE
If you redeem AIM Cash Reserve Shares acquired by exchange from Class A shares
subject to a CDSC within eighteen months of the purchase of the Class A shares,
you will be charged a CDSC.
REDEMPTION OF CLASS B SHARES ACQUIRED BY
EXCHANGE FROM AIM FLOATING RATE FUND
If you redeem Class B shares you acquired by exchange via a tender offer by AIM
Floating Rate Fund, the early withdrawal charge applicable to shares of AIM
Floating Rate Fund will be applied instead of the CDSC normally applicable to
Class B shares.
A-5
<PAGE> 83
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Through a Financial Contact your financial consultant.
Consultant
By Mail Send a written request to the transfer agent. Requests must
include (1) original signatures of all registered owners;
(2) the name of the AIM Fund and your account number; (3) if
the transfer agent does not hold your shares, endorsed share
certificates or share certificates accompanied by an
executed stock power; and (4) signature guarantees, if
necessary (see below). The transfer agent may require that
you provide additional information, such as corporate
resolutions or powers of attorney, if applicable. If you are
redeeming from an IRA account, you must include a statement
of whether or not you are at least 59 1/2 years old and
whether you wish to have federal income tax withheld from
your proceeds. The transfer agent may require certain other
information before you can redeem from an employer-sponsored
retirement plan. Contact your employer for details.
By Telephone Call the transfer agent. You will be allowed to redeem by
telephone if (1) the proceeds are to be mailed to the
address on record with us or transferred electronically to a
pre-authorized checking account; (2) the address on record
with us has not been changed within the last thirty days;
(3) you do not hold physical share certificates; (4) you can
provide proper identification information; (5) the proceeds
of the redemption do not exceed $50,000; and (6) you have
not previously declined the telephone redemption privilege.
Certain accounts, including retirement accounts and 403(b)
plans, may not redeem by telephone. The transfer agent must
receive your call during the hours the NYSE is open for
business in order to effect the redemption at that day's
closing price.
</TABLE>
- --------------------------------------------------------------------------------
TIMING AND METHOD OF PAYMENT
We normally will send out checks within one business day, and in any event no
more than seven days, after we accept your request to redeem. If you redeem
shares recently purchased by check, you will be required to wait up to ten
business days before we will send your redemption proceeds. This delay is
necessary to ensure that the purchase check has cleared.
REDEMPTION BY MAIL
If you mail us a request in good order to redeem your shares, we will mail you a
check in the amount of the redemption proceeds to the address on record with us.
If your request is not in good order, you may have to provide us with additional
documentation in order to redeem your shares.
REDEMPTION BY TELEPHONE
If you redeem by telephone, we will mail you a check in the amount of the
redemption proceeds to your address of record (if there has been no change
communicated to the transfer agent within the previous 30 days) or transmit them
electronically to your pre-authorized bank account. We use reasonable procedures
to confirm that instructions communicated by telephone are genuine and are not
liable for telephone instructions that are reasonably believed to be genuine.
PAYMENT FOR SYSTEMATIC WITHDRAWALS
You may arrange for regular monthly or quarterly withdrawals from your account
of at least $50. You also may make annual withdrawals if you own Class A shares.
We will redeem enough shares from your account to cover the amount withdrawn.
You must have an account balance of at least $5,000 to establish a Systematic
Withdrawal Plan. You can stop this plan at any time by giving ten days prior
notice to the transfer agent.
EXPEDITED REDEMPTIONS
(AIM Cash Reserve Shares of AIM Money Market Fund only)
If we receive your redemption order before 11:30 a.m. Eastern Time, we will try
to transmit payment of redemption proceeds on that same day. If we receive your
redemption order after 11:30 a.m. Eastern Time and before the close of trading
on the New York Stock Exchange (NYSE), we generally will transmit payment on the
next business day.
REDEMPTIONS BY CHECK
(Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM
Money Market Fund only)
You may redeem shares of these AIM Funds by writing checks in amounts of $250 or
more if you have completed an authorization form. Redemption by check is not
available for retirement accounts.
SIGNATURE GUARANTEES
We require a signature guarantee when you redeem by mail and
(1) the amount is greater than $50,000;
(2) you request that payment be made to someone other than the name registered
on the account;
(3) you request that payment be sent somewhere other than the bank of record on
the account; or
(4) you request that payment be sent to a new address or an address that changed
in the last 30 days.
The transfer agent will accept a guarantee of your signature by a number of
financial institutions. Call the transfer agent for additional information. Some
institutions have transaction amount maximums for these guarantees. Please check
with the guarantor institution.
A-6
<PAGE> 84
REINSTATEMENT PRIVILEGE (Class A shares only)
You may, within 90 days after you sell Class A shares (except Class A shares of
AIM Tax-Exempt Cash Fund), reinvest all or part of your redemption proceeds in
Class A shares of any AIM Fund at net asset value in an identically registered
account. If you sold Class A shares of AIM Limited Maturity Treasury Fund or AIM
Tax-Free Intermediate Fund, you will incur an initial sales charge reflecting
the difference between the initial sales charges on those Funds and the ones in
which you will be investing. In addition, if you paid a contingent deferred
sales charge (CDSC) on any reinstated amount, you will not be subject to a CDSC
if you later redeem that amount. You must notify the transfer agent in writing
at the time you reinstate that you are exercising your reinstatement privilege.
You may exercise this privilege only once per year.
REDEMPTIONS BY THE AIM FUNDS
If your account has been open at least one year, you have not made an additional
purchase in the account during the past six calendar months, and the value of
your account falls below $500 for three consecutive months due to redemptions or
exchanges (excluding retirement accounts), the AIM Funds have the right to
redeem the account after giving you 60 days' prior written notice. You may avoid
having your account redeemed during the notice period by bringing the account
value up to $500 or by utilizing the Automatic Investment Plan.
If an AIM Fund determines that you have provided incorrect information in
opening an account or in the course of conducting subsequent transactions, the
AIM Fund may, in its discretion, redeem the account and distribute the proceeds
to you.
EXCHANGING SHARES
You may, under certain circumstances, exchange shares in one AIM Fund for those
of another AIM Fund. Before requesting an exchange, review the prospectus of the
AIM Fund you wish to acquire. Exchange privileges also apply to holders of the
Connecticut General Guaranteed Account, established for tax-qualified group
annuities, for contracts purchased on or before June 30, 1992.
PERMITTED EXCHANGES
Except as otherwise stated below, you may exchange your shares for shares of the
same class of another AIM Fund. You also may exchange AIM Cash Reserve Shares of
AIM Money Market Fund for Class A shares of another AIM Fund, or vice versa. You
may be required to pay an initial sales charge when exchanging from a Fund with
a lower initial sales charge than the one into which you are exchanging. If you
exchange from Class A shares not subject to a CDSC into Class A shares subject
to those charges, you will be charged a CDSC when you redeem the exchanged
shares. The CDSC charged on redemption of those shares will be calculated
starting on the date you acquired those shares through exchange.
YOU WILL NOT PAY A SALES CHARGE WHEN EXCHANGING:
(1) Class A shares with an initial sales charge (except for Class A shares of
AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund) for
Class A shares of another AIM Fund or AIM Cash Reserve Shares of AIM Money
Market Fund;
(2) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund for
(a) one another;
(b) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of
AIM Tax-Exempt Cash Fund; or
(c) Class A shares of another AIM Fund, but only if
(i) you acquired the original shares before May 1, 1994; or
(ii) you acquired the original shares on or after May 1, 1994 by way of
an exchange from shares with higher sales charges;
(3) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM
Tax-Exempt Cash Fund for
(a) one another;
(b) Class A shares of an AIM Fund subject to an initial sales charge (except
for Class A shares of AIM Limited Maturity Treasury Fund and AIM
Tax-Free Intermediate Fund), but only if you acquired the original
shares
(i) prior to May 1, 1994 by exchange from Class A shares subject to an
initial sales charge;
(ii) on or after May 1, 1994 by exchange from Class A shares subject to
an initial sales charge (except for Class A shares of AIM Limited
Maturity Treasury Fund and AIM Tax-Free Intermediate Fund); or
(c) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund, but only if you acquired the original shares by
exchange from Class A shares subject to an initial sales charge; or
(4) Class B shares for other Class B shares, and Class C shares for other Class
C shares.
EXCHANGES NOT PERMITTED
You may not exchange Class A shares subject to contingent deferred sales charges
for Class A shares of AIM Limited Maturity Treasury Fund, AIM Tax-Free
Intermediate Fund or AIM Tax-Exempt Cash Fund.
EXCHANGE CONDITIONS
The following conditions apply to all exchanges:
- - You must meet the minimum purchase requirements for the AIM Fund into which
you are exchanging;
- - Shares of the AIM Fund you wish to acquire must be qualified for sale in your
state of residence;
- - Exchanges must be made between accounts with identical registration
information;
A-7
<PAGE> 85
- - The account you wish to exchange from must have a certified tax identification
number (or the Fund has received an appropriate Form W-8 or W-9);
- - Shares must have been held for at least one day prior to the exchange; and
- - If you have physical share certificates, you must return them to the transfer
agent prior to the exchange.
TERMS OF EXCHANGE
Under unusual market conditions, an AIM Fund may delay the issuance of shares
being purchased in an exchange for up to five business days if it determines
that it would be materially disadvantaged by the immediate transfer of exchange
proceeds. There is no fee for exchanges. The exchange privilege is not an option
or right to purchase shares. Any of the participating AIM Funds or the
distributor may modify or discontinue this privilege at any time.
BY MAIL
If you wish to make an exchange by mail, you must include original signatures of
each registered owner exactly as the shares are registered, the account
registration and account number, the dollar amount or number of shares to be
exchanged and the names of the AIM Funds from which and into which the exchange
is to be made.
BY TELEPHONE
Conditions that apply to exchanges by telephone are the same as redemptions by
telephone, including that the transfer agent must receive exchange requests
during the hours the NYSE is open for business; however, you still will be
allowed to exchange by telephone even if you have changed your address of record
within the preceding 30 days.
EXCHANGING CLASS B AND CLASS C SHARES
If you make an exchange involving Class B or Class C shares, the amount of time
you held the original shares will be added to the holding period of the Class B
or Class C shares, respectively, into which you exchanged for the purpose of
calculating contingent deferred sales charges (CDSC) if you later redeem the
exchanged shares. If you redeem Class B shares acquired by exchange via a tender
offer by AIM Floating Rate Fund, you will be credited with the time period you
held the shares of AIM Floating Rate Fund for the purpose of computing the early
withdrawal charge applicable to those shares.
EACH AIM FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR
CANCEL ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR
CONDITIONS OF PURCHASE OF SHARES OF ANY AIM FUND; OR WITHDRAW ALL OR ANY PART
OF THE OFFERING MADE BY THIS PROSPECTUS.
PRICING OF SHARES
DETERMINATION OF NET ASSET VALUE
The price of each AIM Fund's shares is the fund's net asset value per share. The
AIM Funds value portfolio securities for which market quotations are readily
available at market value. The AIM Funds value short-term investments maturing
within 60 days at amortized cost, which approximates market value. AIM Money
Market Fund and AIM Tax-Exempt Cash Fund value all their securities at amortized
cost. AIM High Income Municipal Fund, AIM Municipal Bond Fund, AIM Tax-Exempt
Bond Fund of Connecticut and AIM Tax-Free Intermediate Fund value variable rate
securities that have an unconditional demand or put feature exercisable within
seven days or less at par, which reflects the market value of such securities.
The AIM Funds value all other securities and assets at their fair value.
Securities and other assets quoted in foreign currencies are valued in U.S.
dollars based on the prevailing exchange rates on that day. In addition, if,
between the time trading ends on a particular security and the close of the New
York Stock Exchange (NYSE), events occur that materially affect the value of the
security, the AIM Funds may value the security at its fair value as determined
in good faith by or under the supervision of the Board of Directors or Trustees
of the AIM Fund. The effect of using fair value pricing is that an AIM Fund's
net asset value will be subject to the judgment of the Board of Directors or
Trustees or its designee instead of being determined by the market. Because some
of the AIM Funds may invest in securities that are primarily listed on foreign
exchanges, the value of those funds' shares may change on days when you will not
be able to purchase or redeem shares.
Each AIM Fund determines the net asset value of its shares as of the close of
the NYSE on each day the NYSE is open for business. AIM Money Market Fund also
determines its net asset value as of 12:00 noon Eastern Time on each day the
NYSE is open for business.
TIMING OF ORDERS
You can purchase, exchange or redeem shares during the hours the NYSE is open
for business. The AIM Funds price purchase, exchange and redemption orders at
the net asset value calculated after the transfer agent receives an order in
good form. An AIM Fund may postpone the right of redemption only under unusual
circumstances, such as when the NYSE restricts or suspends trading.
TAXES
In general, dividends and distributions you receive are taxable as ordinary
income or long-term capital gains for federal income tax purposes, whether you
reinvest them in additional shares or take them in cash. Distributions are
taxable to you at different rates depending on the length of time the fund holds
its assets. Different tax rates apply to ordinary income and long-term capital
gain distributions, regardless of how long you have held your shares. Every
year, you will be sent information showing the amount of dividends and
distributions you received from each AIM Fund during the prior year.
A-8
<PAGE> 86
Any long-term or short-term capital gains realized from redemptions of AIM
Fund shares will be subject to federal income tax. Exchanges of shares for
shares of another AIM Fund are treated as a sale, and any gain realized on the
transaction will generally be subject to federal income tax.
The foreign, state and local tax consequences of investing in AIM Fund shares
may differ materially from the federal income tax consequences described above.
You should consult your tax advisor before investing.
A-9
<PAGE> 87
[BACK COVER PAGE]
OBTAINING ADDITIONAL INFORMATION
More information may be obtained free of charge upon request. The Statement of
Additional Information (SAI), a current version of which is on file with the
Securities and Exchange Commission (SEC), contains more details about the fund
and is incorporated by reference into the prospectus (is legally a part of this
prospectus). Annual and semiannual reports to shareholders contain additional
information about the fund's investments. The fund's annual report also
discusses the market conditions and investment strategies that significantly
affected the fund's performance during its last fiscal year.
If you have questions about this fund, another fund in The AIM Family of
Funds--Registered Trademark-- or your account, or wish to obtain free copies of
the fund's current SAI or annual or semiannual reports, please contact us:
BY MAIL: A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
BY TELEPHONE: (800) 347-4246
BY E-MAIL: [email protected]
ON THE INTERNET: http://www.aimfunds.com (prospectuses and annual and
semiannual reports only)
You also can obtain copies of the fund's SAI and other information at the SEC's
Public Reference Room in Washington, D.C., on the SEC's website
(http://www.sec.gov), or by sending a letter, including a duplicating fee, to
the SEC's Public Reference Section, Washington, D.C. 20549-6009. Please call the
SEC at 1-800-SEC-0330 for information about the Public Reference Room.
AIM Advisor MultiFlex Fund
SEC 1940 Act file number: 811-3886
<PAGE> 88
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
Subject to Completion dated February 16, 1999
[AIM LOGO APPEARS HERE]
AIM ADVISOR REAL ESTATE FUND
PROSPECTUS
MAY 3, 1999
AIM Advisor Real Estate Fund seeks to achieve a high total return on investment
through growth of capital and current income, without regard to federal income
tax considerations.
This prospectus contains important information. Please read it before investing
and keep it for future reference.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. There is a risk that you could lose a portion or all of your money.
AS WITH ALL OTHER MUTUAL FUND SECURITIES, THE SECURITIES AND EXCHANGE
COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED
WHETHER THE INFORMATION IN THIS PROSPECTUS IS ADEQUATE OR ACCURATE.
ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.
<PAGE> 89
TABLE OF CONTENTS
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE AND STRATEGIES......................................................................3
PRINCIPAL RISKS OF INVESTING IN THE FUND.................................................................3
PERFORMANCE INFORMATION..................................................................................5
ANNUAL TOTAL RETURNS............................................................................5
PERFORMANCE TABLE...............................................................................6
FEE TABLE AND EXPENSE EXAMPLE............................................................................7
FEE TABLE.......................................................................................7
EXPENSE EXAMPLE.................................................................................8
FUND MANAGEMENT..........................................................................................9
THE ADVISORS....................................................................................9
ADVISOR COMPENSATION............................................................................9
PORTFOLIO MANAGERS..............................................................................9
OTHER INFORMATION.......................................................................................10
INITIAL SALES CHARGES FOR CLASS A SHARES.......................................................10
DIVIDENDS AND DISTRIBUTIONS....................................................................10
FINANCIAL HIGHLIGHTS....................................................................................11
SHAREHOLDER INFORMATION................................................................................A-1
CHOOSING A SHARE CLASS........................................................................A-1
PURCHASING SHARES.............................................................................A-4
REDEEMING SHARES..............................................................................A-6
EXCHANGING SHARES.............................................................................A-9
PRICING OF SHARES............................................................................A-11
TAXES........................................................................................A-11
OBTAINING ADDITIONAL INFORMATION...........................................................BACK COVER PAGE
</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, La Familia AIM de Fondos and Design and Invest with
Discipline are registered service marks and AIM Bank Connection is a service
mark of A I M Management Group Inc.
2
<PAGE> 90
INVESTMENT OBJECTIVE AND STRATEGIES
The fund's investment objective is to achieve a high total return on investment
through growth of capital and current income, without regard to federal income
tax considerations.
The fund attempts to meet this objective by investing, normally, at least 65% of
its total assets in equity securities of companies that are principally engaged
in the real estate industry and are listed on a U.S. exchange or the National
Association of Securities Dealers Automated Quotation System (NASDAQ). The fund
considers a company to be "principally engaged in the real estate industry" if
at least 50% of its assets, gross income or net profits are attributable to
ownership, construction, management or sale of residential, commercial or
industrial real estate, including Real Estate Investment Trusts (REITs). The
fund will not invest directly in private real estate assets.
The fund may invest up to 35% of its total assets in equity, debt or convertible
securities of companies whose products and services are related to the real
estate industry, and up to 35% of its total assets in securities of companies
unrelated to the real estate industry that the fund's portfolio managers believe
are undervalued and have potential for growth of capital. The fund may invest up
to 100% of its assets in debt securities of companies related to the real estate
industry. The fund will limit its investment in debt securities to those that
are investment-grade or deemed by the fund's subadvisor to be of comparable
quality.
The fund may invest up to 10% of its total assets in foreign securities and
unsponsored American Depositary Receipts (ADRs). The fund may also invest in
sponsored ADRs.
The fund's portfolio managers utilize fundamental real estate analysis and
numerical securities analysis to select investments for the fund, including
analyzing a company's management and strategic focus, evaluating the location,
physical attributes and cash flow generating capacity of a company's properties
and calculating expected returns, among other things. The fund's portfolio
managers usually sell a particular security when any of those factors materially
changes.
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash,
cash equivalents, money market securities or U.S. government securities. As a
result, the fund may not achieve its investment objective.
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund and that the income you may receive from your investment may vary. The
value of your investment in the fund will go up and down with the prices of the
securities in which the fund invests. The price of equity securities fluctuates
in response to many factors, including the historical and prospective earnings
of the issuer of the stock, the value of its assets, general economic
conditions, interest rates, investor perceptions and market liquidity. Debt
securities are particularly vulnerable to credit risk and interest rate
fluctuations. When interest rates rise, bond prices fall; the longer a bond's
duration, the more sensitive it is to this risk.
Foreign securities have additional risks, including exchange rate changes,
political and economic upheaval, the relative lack of information about these
companies, relatively low market liquidity and the potential lack of strict
financial and accounting controls and standards.
Because the fund focuses its investments in companies related to the real estate
industry, the value of your shares may rise and fall more than the value of
shares of a fund that invests in a broader range of companies.
3
<PAGE> 91
The fund could conceivably hold real estate directly if a company defaults on
debt securities the fund owns. In that event, an investment in the fund may have
additional risks relating to direct ownership in real estate, including
difficulties in valuing and trading real estate, declines in value of the
properties, risks relating to general and local economic conditions, changes in
the climate for real estate, increases in taxes, expenses and costs, change in
laws, casualty and condemnation losses, rent control limitations and increases
in interest rates.
The value of the fund's investment in REITs is affected by the factors listed
above, as well as the management skill of the persons managing the REIT. REITs
also are not diversified and, therefore, their value may fluctuate more widely,
and they may be subject to greater risks, than if they invested more broadly.
Since REITs have expenses of their own, you will bear a proportionate share of
those expenses in addition to those of the fund.
[MORE RISKS FOR REITS?]
[If the seller of a repurchase agreement in which the fund invests defaults on
its obligation or declares bankruptcy, the fund may experience delays in selling
the securities underlying the repurchase agreement. As a result, the fund may
incur losses arising from decline in the value of those securities, reduced
levels of income and expenses of enforcing its rights.]
The value of your shares could be adversely affected if the computer systems
used by the fund's investment advisor and the fund's other service providers are
unable to distinguish the year 2000 from the year 1900.
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances
that other service providers are taking similar steps. Year 2000 problems may
also affect issuers in whose securities the fund invests.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
4
<PAGE> 92
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund's past performance is not necessarily an
indication of its future performance.
ANNUAL TOTAL RETURNS
The following bar chart shows changes in the performance of the fund's Class C
shares from year to year. The bar chart does not reflect sales loads. If it did,
the annual total returns shown would be lower.
ADVISOR REAL ESTATE
<TABLE>
<CAPTION>
[GRAPH]
Year Return (%)
---- ----------
<S> <C>
1996 ...................................... 36.43%
1997 ...................................... 18.88%
1998 ...................................... (23.16)%
</TABLE>
During the periods shown in the bar chart, the highest quarterly return was
19.39% (quarter ended December 31, 1996) and the lowest quarterly return was
(15.54)% (quarter ended September 30, 1998).
5
<PAGE> 93
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
<TABLE>
<CAPTION>
==============================================================================================
Average Annual Total Returns
(for the periods ended December 31, 1998)
Since Inception
1 Year Inception Date
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A (22.54)% (3.68)% 01/01/97
- ----------------------------------------------------------------------------------------------
Class B -- -- 03/03/98
- ----------------------------------------------------------------------------------------------
Class C (23.16)% 8.74% 05/01/95
- ----------------------------------------------------------------------------------------------
S&P 500(1) 28.60% 29.29%(2) 04/30/95
==============================================================================================
</TABLE>
(1) The Standard & Poor's 500 Index is an unmanaged index of common stocks
frequently used as a general measure of U.S. stock market performance.
(2) The average annual total return given is since the date closest to the
inception date of the class with the longest performance history.
6
<PAGE> 94
FEE TABLE AND EXPENSE EXAMPLE
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund:
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
Shareholder Fees (fees paid directly from your investment)
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) 4.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price
or redemption proceeds, whichever is less) None(1) 5.00 1.00
Annual Fund Operating Expenses (expenses that are deducted from fund assets)
Management Fees [0.90%] [0.90%] [0.90%]
Distribution and/or Service (12b-1) Fees(2) [0.25] [1.00] [1.00]
Other Expenses:
Transfer agent fees and costs [ ] [ ] [ ]
Other [ ] [ ] [ ]
------ ------ ------
[Fee Waiver(3) [ ] [ ] [ ]]
Total Other Expenses [ ] [ ] [ ]
Total Annual Fund Operating Expenses [ ] [ ] [ ]
====== ====== ======
</TABLE>
- -------------------
(1) If you buy $1,000,000 or more of Class A shares and redeem these shares
within 18 months from the date of purchase, you may pay a 1% contingent
deferred sales charge (CDSC) at the time of redemption.
(2) AIM Distributors has voluntarily agreed to limit the Class A shares Rule
12b-1 distribution plan payments to 0.25% for three years beginning
August 4, 1997. If these limitations were not in effect, the distribution
and/or service (12b-1) fees and total annual fund operating expenses of
the Class A shares would be 0.35% and 1.70%, respectively.
[(3) The investment advisor has agreed to waive a portion of its fees. The
waiver may not be terminated without the approval of the fund's Board of
Directors.]
As a result of 12b-1 fees, long-term shareholders in the fund may pay more than
the maximum permitted initial sales charge.
7
<PAGE> 95
EXPENSE EXAMPLE
This example is intended to help you compare the costs of investing in different
classes of the fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual returns and
costs may be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ $ $ $
Class B
Class C
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ $ $ $
Class B
Class C
</TABLE>
8
<PAGE> 96
FUND MANAGEMENT
THE ADVISORS
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor and
manages the investment operations of the fund and has agreed to perform or
arrange for the performance of the fund's day-to-day management. The advisor is
located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. INVESCO
Realty Advisors, Inc. (the subadvisor), the fund's subadvisor, is located at One
Lincoln Centre, Suite 700, 5400 LBJ Freeway/LB-2, Dallas, TX 75240. The
subadvisor is responsible for the fund's day-to-day management, including the
fund's investment decisions and the execution of securities transactions with
respect to the fund.
The advisor has acted as an investment advisor since its organization in 1976.
Today, the advisor, together with its subsidiaries, advises or manages over 110
investment portfolios, including the fund, encompassing a broad range of
investment objectives. The subadvisor has acted as an investment advisor and
qualified professional asset manager since 1983.
ADVISOR COMPENSATION
During the fiscal year ended December 31, 1998, the advisor received
compensation of ___% of average net assets.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual
members of the team who are primarily responsible for the day-to-day management
of the fund's portfolio are
o Joe V. Rodriguez, Jr., Senior Portfolio Manager, who has been
responsible for the fund since 1995 and has been associated with the
subadvisor and/or its affiliates since 1990.
o Todd A. Johnston, Senior Portfolio Manager, who has been responsible
for the fund since 1995 and has been associated with the subadvisor
and/or its affiliates since 1986.
o James W. Trowbridge, Senior Portfolio Manager, who has been responsible
for the fund since 1995 and has been associated with the subadvisor
and/or its affiliates since 1989.
9
<PAGE> 97
OTHER INFORMATION
INITIAL SALES CHARGES FOR CLASS A SHARES
Purchases of Class A shares of the fund are subject to the maximum 4.75% initial
sales charge as listed under the heading "CATEGORY II Initial Sales Charges" in
the "Shareholder Information--Choosing a Share Class" section of this
prospectus.
DIVIDENDS AND DISTRIBUTIONS
Dividends
The fund generally declares and pays dividends, if any, quarterly.
Capital Gains Distributions
The fund generally distributes long-term gains, if any, annually and short-term
capital gains (including any net gains from foreign currency transactions), if
any, quarterly.
10
<PAGE> 98
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
financial performance. Certain information reflects financial results for a
single fund share.
The total returns in the table represent the rate that an investor would have
earned (or lost) on an investment in the fund (assuming reinvestment of all
dividends and distributions).
The information for the fiscal years or periods ended December 31, 1997, 1996
and 1995 has been audited by PricewaterhouseCoopers LLP. The information for the
fiscal year or period ended December 31, 1998, has been audited by KPMG LLP,
whose report, along with the fund's financial statements, is included in the
fund's annual report, which is available upon request.
<TABLE>
<CAPTION>
Class A(a)
Year Ended December 31,
1998 1997(b)
------- -------
<S> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx
------- -------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (c)
------- -------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx)
------- -------
Total from investment operations (x.xx) (x.xx)
------- -------
Less distributions: (x.xx) (x.xx)
Dividends from net investment income: (x.xx) (x.xx)
------- -------
Distributions from capital gains: (x.xx) (x.xx)
------- -------
Total distributions (x.xx) (x.xx)
------- -------
Net asset value, end of period $ xx.xx $ xx.xx
------- -------
Total return (d) (x.xx)% (x.xx)%
------- -------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $xx,xxx $xx,xxx
------- -------
Ratio of expenses to average net assets (e) x.xx% x.xx%
------- -------
Ratio of net investment income (loss) to average net assets (g) (x.xx)% (x.xx)%(f)
------- -------
Portfolio turnover rate xx% xx% (f)
------- -------
Average brokerages commission rate (h) x.xxxx x.xxxx
------- -------
</TABLE>
(a) Per share information and shares have been restated to reflect a 4 for 1
stock split, effective in the form of a 300% stock dividend, on
November 7, 1997.
(b) The fund changed investment advisors on August 4, 1997.
(c) Calculated using average shares outstanding.
(d) Does not deduct sales charges.
(e) After fee waivers. The ratio of expenses to average net assets prior to fee
waivers was x.xx%.
(f) Ratios are based on average net asset of $xx,xxx,xxx.
(g) After fee waivers. The ratio of net investment income to average net assets
prior to fee waivers was x.xx%.
(h) 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.
11
<PAGE> 99
<TABLE>
<CAPTION>
Class B
For the Period March 3, 1998
through December 31, 1998
----------------------------
<S> <C>
Net asset value, beginning of period $ xx.xx
-------
Income from investment operations:
Net investment income (loss) (x.xx) (a)
-------
Net gains on securities (both realized and unrealized) (x.xx)
-------
Total from investment operations (x.xx)
-------
Less distributions: (x.xx)
Dividends from net investment income: (x.xx)
-------
Distributions from capital gains: (x.xx)
-------
Total distributions (x.xx)
-------
Net asset value, end of period $ xx.xx
-------
Total return (b) (x.xx)%
-------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $xx,xxx
-------
Ratio of expenses to average net assets (c) x.xx% (d)
-------
Ratio of net investment income (loss) to average net assets (e) (x.xx)% (d)
-------
Portfolio turnover rate xx%
-------
Average brokerages commission rate (f) x.xxxx
-------
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct sales charges and are not annualized for periods less than
one year.
(c) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
(annualized).
(d) Ratios are annualized and based on average net assets of x,xxx,xxx.
(e) After fee waivers, ratio of net investment income to average net assets
prior to fee waivers was x.xx%.
(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.
<TABLE>
<CAPTION>
Class C(a)
1998 1997 (b) 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- -------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (c) (x.xx) (x.xx)
------- ------- ------- -------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- -------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- -------
Less distributions: (x.xx) (x.xx) (x.xx) (x.xx)
Dividends from net investment income: (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- -------
Distributions from capital gains: (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- -------
Total distributions (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- -------
Net asset value, end of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- -------
Total return (d) (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- -------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $xx,xxx $xx,xxx $xx,xxx $xx,xxx
------- ------- ------- -------
Ratio of expenses to average net assets x.xx% x.xx% (e) x.xx% x.xx% (f)
------- ------- ------- -------
Ratio of net investment income (loss) to average net assets (x.xx)% (x.xx)% (e) (x.xx)% (x.xx)% (f)
------- ------- ------- -------
Portfolio turnover rate xx% xx% xx% xx%
------- ------- ------- -------
Average brokerages commission rate (g) x.xxxx x.xxxx x.xxxx x.xxxx
------- ------- ------- -------
</TABLE>
(a) Per share information and shares have been restated to reflect a 4 for 1
stock split, effective in the form of a 300% stock dividend, on
November 7, 1997.
(b) The fund changed investment advisors on August 4, 1997.
(c) Calculated using average shares outstanding.
(d) Does not deduct contingent deferred sales charges and for periods less than
one year, total returns are not annualized.
(e) Ratios are based on average net assets of xxx,xxx,xxx.
(f) Annualized.
(g) 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.
12
<PAGE> 100
Shareholder Information
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
Many of the funds advised by the advisor (the AIM Funds) have multiple classes
of shares, each class representing an interest in the same portfolio of
investments. When choosing a share class, you should consider the factors below:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
- - Initial sales charge - No initial sales charge - No initial sales charge
- - Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within six charge on redemptions within
years one year
- - Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
after eight years along with a shares
pro rata portion of its
reinvested dividends and
distributions*
- - Generally more appropriate for - Purchase orders limited to - Generally more appropriate
long-term investors amounts less than $250,000 for short-term investors
</TABLE>
* AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
AIM Global Trends Fund: If you held Class B shares on May 29, 1998 and
continue to hold them, those shares will convert to Class A shares of that
fund seven years after your date of purchase. If you exchange those shares
for Class B shares of another AIM Fund, the shares into which you exchanged
will not convert to Class A shares until eight years after your date of
purchase of the original shares.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans
that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc.
(the distributor) for the sale and distribution of its shares and fees for
services provided to shareholders, all or a substantial portion of which are
paid to the dealer of record. Because the AIM Fund pays these fees out of its
assets on an ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
MCF-03/99
A-1
<PAGE> 101
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class
A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money
Market Fund. You may be charged a contingent deferred sales charge if you redeem
AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain
exchanges. Sales charges on all other AIM Funds and classes of those Funds are
detailed below. As used below, the term "offering price" with respect to all
categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales
charges. The "Other Information" section of your prospectus will tell you in
what category your particular AIM Fund is classified.
<TABLE>
<CAPTION>
CATEGORY I INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY II INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY III INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
- ----------------------------------------------------------
</TABLE>
CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value.
However, if you purchase shares of that amount in Categories I or II, they will
be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them
prior to 18 months after the date of purchase. The distributor may pay a dealer
concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share.
However, when you redeem them, they are subject to a CDSC in the following
percentages:
<TABLE>
<CAPTION>
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
- ----------------------------------------------------------
<S> <C> <C>
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
- ----------------------------------------------------------
</TABLE>
A-2
<PAGE> 102
REDUCED SALES CHARGES AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify
for these reductions or exceptions, you or your financial consultant must
provide sufficient information at the time of purchase to verify that your
purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates
under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares
currently owned for the purpose of qualifying for the lower initial sales charge
rates that apply to larger purchases. The applicable initial sales charge for
the new purchase is based on the total of your current purchase and the current
value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount
of Class A shares of AIM Funds during a 13-month period. The amount you agree to
purchase determines the initial sales charge you pay. If the full face amount of
the LOI is not invested by the end of the 13-month period, your account will be
adjusted to the higher initial sales charge level for the amount actually
invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- - on shares purchased by reinvesting dividends and distributions;
- - when exchanging shares among certain AIM Funds;
- - when using the reinstatement privilege; and
- - when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- - if you redeem Class B shares you held for more than six years;
- - if you redeem Class C shares you held for more than one year;
- - if you redeem shares acquired through reinvestment of dividends and
distributions; and
- - on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares
at reduced or without sales charges. Consult the fund's Statement of Additional
Information for details.
A-3
<PAGE> 103
PURCHASING SHARES
MINIMUM INVESTMENTS PER AIM FUND ACCOUNT
The minimum investments for AIM Fund accounts (except for investments in AIM
Small Cap Opportunities Fund) are as follows:
<TABLE>
<CAPTION>
INITIAL ADDITIONAL
TYPE OF ACCOUNT INVESTMENTS INVESTMENTS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
<TABLE>
<CAPTION>
PURCHASE OPTIONS
- ----------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed Account Application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed Account Application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank
methods described above. Connection(SM) form to the transfer
agent. Once the transfer agent has
received the form, call the
transfer agent to place your
purchase.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
A-4
<PAGE> 104
SPECIAL PLANS
AUTOMATIC INVESTMENT PLAN
You can arrange for periodic investments in any of the AIM Funds by authorizing
the AIM Fund to withdraw the amount of your investment from your bank account on
a day or dates you specify and in an amount of at least $50. You may stop the
Automatic Investment Plan at any time by giving the transfer agent notice ten
days prior to your next scheduled withdrawal.
DOLLAR COST AVERAGING
Dollar Cost Averaging allows you to make automatic monthly or quarterly
exchanges, if permitted, from one AIM Fund account to one or more other AIM Fund
accounts with the identical registration. The account from which exchanges are
to be made must have a minimum balance of $5,000 before you can use this option.
Exchanges will occur on (or about) the 10th or 25th day of the month, whichever
you specify, in the amount you specify. The minimum amount you can exchange to
another AIM Fund is $50.
AUTOMATIC DIVIDEND INVESTMENT
All of your dividends and distributions may be paid in cash or invested in any
AIM Fund at net asset value. Unless you specify otherwise, your dividends and
distributions will automatically be reinvested in the same AIM Fund. You may
invest your dividends and distributions (1) into another AIM Fund in the same
class of shares; or (2) from Class A shares into AIM Cash Reserve Shares of AIM
Money Market Fund, or vice versa.
You must comply with the following requirements to be eligible to invest your
dividends and distributions in shares of another AIM Fund:
(1) Your account balance (a) in the AIM Fund paying the dividend must be at
least $5,000; or (b) in the AIM Fund receiving the dividend must be at least
$500;
(2) Both accounts must have identical registration information; and
(3) You must have completed an authorization form to reinvest dividends into
another AIM Fund.
PORTFOLIO REBALANCING PROGRAM
If you have at least $5,000 in your account, you may participate in the
Portfolio Rebalancing Program. Under this Program, you can designate how the
total value of your AIM Fund holdings should be rebalanced, on a percentage
basis, between two and ten of your AIM Funds on a quarterly, semiannual or
annual basis. Your portfolio will be rebalanced through the exchange of shares
in one or more of your AIM Funds for shares of the same class of one or more
other AIM Funds in your portfolio. If you wish to participate in the Program,
make changes or cancel the Program, the transfer agent must receive your request
to participate, changes or cancellation in good order at least five business
days prior to the next rebalancing date, which is normally the 28th day of the
last month of the period you choose. We may modify, suspend or terminate the
Program at any time on 60 days' prior written notice.
RETIREMENT PLANS
Shares of most of the AIM Funds can be purchased through
tax-sheltered retirement plans made available to corporations, individuals and
employees of non-profit organizations and public schools. A plan document must
be adopted to establish a retirement plan. You may use AIM Funds-sponsored
retirement plans, which include IRAs, Education IRAs, Roth IRAs, 403(b) plans,
401(k) plans, SIMPLE IRA plans, SEP/SARSEP plans and Money Purchase/Profit
Sharing plans, or another sponsor's retirement plan. The plan custodian of the
AIM Funds-sponsored retirement plan assesses an annual maintenance fee of $10.
Contact your financial consultant for details.
REDEEMING SHARES
REDEMPTION FEES
We will not charge you any fees to redeem your shares; however, your broker or
financial consultant may charge service fees for handling these transactions.
Your shares may be subject to a contingent deferred sales charge (CDSC).
COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their
original purchase price or current market value, net of reinvested dividends and
capital gains distributions. In determining whether to charge a CDSC, we will
assume that you have redeemed shares on which there is no CDSC first and, then,
shares in the order of purchase.
REDEMPTION OF AIM CASH RESERVE SHARES OF
AIM MONEY MARKET FUND ACQUIRED BY EXCHANGE
If you redeem AIM Cash Reserve Shares acquired by exchange from Class A shares
subject to a CDSC within eighteen months of the purchase of the Class A shares,
you will be charged a CDSC.
REDEMPTION OF CLASS B SHARES ACQUIRED BY
EXCHANGE FROM AIM FLOATING RATE FUND
If you redeem Class B shares you acquired by exchange via a tender offer by AIM
Floating Rate Fund, the early withdrawal charge applicable to shares of AIM
Floating Rate Fund will be applied instead of the CDSC normally applicable to
Class B shares.
A-5
<PAGE> 105
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Through a Financial Contact your financial consultant.
Consultant
By Mail Send a written request to the transfer agent. Requests must
include (1) original signatures of all registered owners;
(2) the name of the AIM Fund and your account number; (3) if
the transfer agent does not hold your shares, endorsed share
certificates or share certificates accompanied by an
executed stock power; and (4) signature guarantees, if
necessary (see below). The transfer agent may require that
you provide additional information, such as corporate
resolutions or powers of attorney, if applicable. If you are
redeeming from an IRA account, you must include a statement
of whether or not you are at least 59 1/2 years old and
whether you wish to have federal income tax withheld from
your proceeds. The transfer agent may require certain other
information before you can redeem from an employer-sponsored
retirement plan. Contact your employer for details.
By Telephone Call the transfer agent. You will be allowed to redeem by
telephone if (1) the proceeds are to be mailed to the
address on record with us or transferred electronically to a
pre-authorized checking account; (2) the address on record
with us has not been changed within the last thirty days;
(3) you do not hold physical share certificates; (4) you can
provide proper identification information; (5) the proceeds
of the redemption do not exceed $50,000; and (6) you have
not previously declined the telephone redemption privilege.
Certain accounts, including retirement accounts and 403(b)
plans, may not redeem by telephone. The transfer agent must
receive your call during the hours the NYSE is open for
business in order to effect the redemption at that day's
closing price.
</TABLE>
- --------------------------------------------------------------------------------
TIMING AND METHOD OF PAYMENT
We normally will send out checks within one business day, and in any event no
more than seven days, after we accept your request to redeem. If you redeem
shares recently purchased by check, you will be required to wait up to ten
business days before we will send your redemption proceeds. This delay is
necessary to ensure that the purchase check has cleared.
REDEMPTION BY MAIL
If you mail us a request in good order to redeem your shares, we will mail you a
check in the amount of the redemption proceeds to the address on record with us.
If your request is not in good order, you may have to provide us with additional
documentation in order to redeem your shares.
REDEMPTION BY TELEPHONE
If you redeem by telephone, we will mail you a check in the amount of the
redemption proceeds to your address of record (if there has been no change
communicated to the transfer agent within the previous 30 days) or transmit them
electronically to your pre-authorized bank account. We use reasonable procedures
to confirm that instructions communicated by telephone are genuine and are not
liable for telephone instructions that are reasonably believed to be genuine.
PAYMENT FOR SYSTEMATIC WITHDRAWALS
You may arrange for regular monthly or quarterly withdrawals from your account
of at least $50. You also may make annual withdrawals if you own Class A shares.
We will redeem enough shares from your account to cover the amount withdrawn.
You must have an account balance of at least $5,000 to establish a Systematic
Withdrawal Plan. You can stop this plan at any time by giving ten days prior
notice to the transfer agent.
EXPEDITED REDEMPTIONS
(AIM Cash Reserve Shares of AIM Money Market Fund only)
If we receive your redemption order before 11:30 a.m. Eastern Time, we will try
to transmit payment of redemption proceeds on that same day. If we receive your
redemption order after 11:30 a.m. Eastern Time and before the close of trading
on the New York Stock Exchange (NYSE), we generally will transmit payment on the
next business day.
REDEMPTIONS BY CHECK
(Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM
Money Market Fund only)
You may redeem shares of these AIM Funds by writing checks in amounts of $250 or
more if you have completed an authorization form. Redemption by check is not
available for retirement accounts.
SIGNATURE GUARANTEES
We require a signature guarantee when you redeem by mail and
(1) the amount is greater than $50,000;
(2) you request that payment be made to someone other than the name registered
on the account;
(3) you request that payment be sent somewhere other than the bank of record on
the account; or
(4) you request that payment be sent to a new address or an address that changed
in the last 30 days.
The transfer agent will accept a guarantee of your signature by a number of
financial institutions. Call the transfer agent for additional information. Some
institutions have transaction amount maximums for these guarantees. Please check
with the guarantor institution.
A-6
<PAGE> 106
REINSTATEMENT PRIVILEGE (Class A shares only)
You may, within 90 days after you sell Class A shares (except Class A shares of
AIM Tax-Exempt Cash Fund), reinvest all or part of your redemption proceeds in
Class A shares of any AIM Fund at net asset value in an identically registered
account. If you sold Class A shares of AIM Limited Maturity Treasury Fund or AIM
Tax-Free Intermediate Fund, you will incur an initial sales charge reflecting
the difference between the initial sales charges on those Funds and the ones in
which you will be investing. In addition, if you paid a contingent deferred
sales charge (CDSC) on any reinstated amount, you will not be subject to a CDSC
if you later redeem that amount. You must notify the transfer agent in writing
at the time you reinstate that you are exercising your reinstatement privilege.
You may exercise this privilege only once per year.
REDEMPTIONS BY THE AIM FUNDS
If your account has been open at least one year, you have not made an additional
purchase in the account during the past six calendar months, and the value of
your account falls below $500 for three consecutive months due to redemptions or
exchanges (excluding retirement accounts), the AIM Funds have the right to
redeem the account after giving you 60 days' prior written notice. You may avoid
having your account redeemed during the notice period by bringing the account
value up to $500 or by utilizing the Automatic Investment Plan.
If an AIM Fund determines that you have provided incorrect information in
opening an account or in the course of conducting subsequent transactions, the
AIM Fund may, in its discretion, redeem the account and distribute the proceeds
to you.
EXCHANGING SHARES
You may, under certain circumstances, exchange shares in one AIM Fund for those
of another AIM Fund. Before requesting an exchange, review the prospectus of the
AIM Fund you wish to acquire. Exchange privileges also apply to holders of the
Connecticut General Guaranteed Account, established for tax-qualified group
annuities, for contracts purchased on or before June 30, 1992.
PERMITTED EXCHANGES
Except as otherwise stated below, you may exchange your shares for shares of the
same class of another AIM Fund. You also may exchange AIM Cash Reserve Shares of
AIM Money Market Fund for Class A shares of another AIM Fund, or vice versa. You
may be required to pay an initial sales charge when exchanging from a Fund with
a lower initial sales charge than the one into which you are exchanging. If you
exchange from Class A shares not subject to a CDSC into Class A shares subject
to those charges, you will be charged a CDSC when you redeem the exchanged
shares. The CDSC charged on redemption of those shares will be calculated
starting on the date you acquired those shares through exchange.
YOU WILL NOT PAY A SALES CHARGE WHEN EXCHANGING:
(1) Class A shares with an initial sales charge (except for Class A shares of
AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund) for
Class A shares of another AIM Fund or AIM Cash Reserve Shares of AIM Money
Market Fund;
(2) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund for
(a) one another;
(b) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of
AIM Tax-Exempt Cash Fund; or
(c) Class A shares of another AIM Fund, but only if
(i) you acquired the original shares before May 1, 1994; or
(ii) you acquired the original shares on or after May 1, 1994 by way of
an exchange from shares with higher sales charges;
(3) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM
Tax-Exempt Cash Fund for
(a) one another;
(b) Class A shares of an AIM Fund subject to an initial sales charge (except
for Class A shares of AIM Limited Maturity Treasury Fund and AIM
Tax-Free Intermediate Fund), but only if you acquired the original
shares
(i) prior to May 1, 1994 by exchange from Class A shares subject to an
initial sales charge;
(ii) on or after May 1, 1994 by exchange from Class A shares subject to
an initial sales charge (except for Class A shares of AIM Limited
Maturity Treasury Fund and AIM Tax-Free Intermediate Fund); or
(c) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund, but only if you acquired the original shares by
exchange from Class A shares subject to an initial sales charge; or
(4) Class B shares for other Class B shares, and Class C shares for other Class
C shares.
EXCHANGES NOT PERMITTED
You may not exchange Class A shares subject to contingent deferred sales charges
for Class A shares of AIM Limited Maturity Treasury Fund, AIM Tax-Free
Intermediate Fund or AIM Tax-Exempt Cash Fund.
EXCHANGE CONDITIONS
The following conditions apply to all exchanges:
- - You must meet the minimum purchase requirements for the AIM Fund into which
you are exchanging;
- - Shares of the AIM Fund you wish to acquire must be qualified for sale in your
state of residence;
- - Exchanges must be made between accounts with identical registration
information;
A-7
<PAGE> 107
- - The account you wish to exchange from must have a certified tax identification
number (or the Fund has received an appropriate Form W-8 or W-9);
- - Shares must have been held for at least one day prior to the exchange; and
- - If you have physical share certificates, you must return them to the transfer
agent prior to the exchange.
TERMS OF EXCHANGE
Under unusual market conditions, an AIM Fund may delay the issuance of shares
being purchased in an exchange for up to five business days if it determines
that it would be materially disadvantaged by the immediate transfer of exchange
proceeds. There is no fee for exchanges. The exchange privilege is not an option
or right to purchase shares. Any of the participating AIM Funds or the
distributor may modify or discontinue this privilege at any time.
BY MAIL
If you wish to make an exchange by mail, you must include original signatures of
each registered owner exactly as the shares are registered, the account
registration and account number, the dollar amount or number of shares to be
exchanged and the names of the AIM Funds from which and into which the exchange
is to be made.
BY TELEPHONE
Conditions that apply to exchanges by telephone are the same as redemptions by
telephone, including that the transfer agent must receive exchange requests
during the hours the NYSE is open for business; however, you still will be
allowed to exchange by telephone even if you have changed your address of record
within the preceding 30 days.
EXCHANGING CLASS B AND CLASS C SHARES
If you make an exchange involving Class B or Class C shares, the amount of time
you held the original shares will be added to the holding period of the Class B
or Class C shares, respectively, into which you exchanged for the purpose of
calculating contingent deferred sales charges (CDSC) if you later redeem the
exchanged shares. If you redeem Class B shares acquired by exchange via a tender
offer by AIM Floating Rate Fund, you will be credited with the time period you
held the shares of AIM Floating Rate Fund for the purpose of computing the early
withdrawal charge applicable to those shares.
EACH AIM FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR
CANCEL ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR
CONDITIONS OF PURCHASE OF SHARES OF ANY AIM FUND; OR WITHDRAW ALL OR ANY PART
OF THE OFFERING MADE BY THIS PROSPECTUS.
PRICING OF SHARES
DETERMINATION OF NET ASSET VALUE
The price of each AIM Fund's shares is the fund's net asset value per share. The
AIM Funds value portfolio securities for which market quotations are readily
available at market value. The AIM Funds value short-term investments maturing
within 60 days at amortized cost, which approximates market value. AIM Money
Market Fund and AIM Tax-Exempt Cash Fund value all their securities at amortized
cost. AIM High Income Municipal Fund, AIM Municipal Bond Fund, AIM Tax-Exempt
Bond Fund of Connecticut and AIM Tax-Free Intermediate Fund value variable rate
securities that have an unconditional demand or put feature exercisable within
seven days or less at par, which reflects the market value of such securities.
The AIM Funds value all other securities and assets at their fair value.
Securities and other assets quoted in foreign currencies are valued in U.S.
dollars based on the prevailing exchange rates on that day. In addition, if,
between the time trading ends on a particular security and the close of the New
York Stock Exchange (NYSE), events occur that materially affect the value of the
security, the AIM Funds may value the security at its fair value as determined
in good faith by or under the supervision of the Board of Directors or Trustees
of the AIM Fund. The effect of using fair value pricing is that an AIM Fund's
net asset value will be subject to the judgment of the Board of Directors or
Trustees or its designee instead of being determined by the market. Because some
of the AIM Funds may invest in securities that are primarily listed on foreign
exchanges, the value of those funds' shares may change on days when you will not
be able to purchase or redeem shares.
Each AIM Fund determines the net asset value of its shares as of the close of
the NYSE on each day the NYSE is open for business. AIM Money Market Fund also
determines its net asset value as of 12:00 noon Eastern Time on each day the
NYSE is open for business.
TIMING OF ORDERS
You can purchase, exchange or redeem shares during the hours the NYSE is open
for business. The AIM Funds price purchase, exchange and redemption orders at
the net asset value calculated after the transfer agent receives an order in
good form. An AIM Fund may postpone the right of redemption only under unusual
circumstances, such as when the NYSE restricts or suspends trading.
TAXES
In general, dividends and distributions you receive are taxable as ordinary
income or long-term capital gains for federal income tax purposes, whether you
reinvest them in additional shares or take them in cash. Distributions are
taxable to you at different rates depending on the length of time the fund holds
its assets. Different tax rates apply to ordinary income and long-term capital
gain distributions, regardless of how long you have held your shares. Every
year, you will be sent information showing the amount of dividends and
distributions you received from each AIM Fund during the prior year.
A-8
<PAGE> 108
Any long-term or short-term capital gains realized from redemptions of AIM
Fund shares will be subject to federal income tax. Exchanges of shares for
shares of another AIM Fund are treated as a sale, and any gain realized on the
transaction will generally be subject to federal income tax.
The foreign, state and local tax consequences of investing in AIM Fund shares
may differ materially from the federal income tax consequences described above.
You should consult your tax advisor before investing.
A-9
<PAGE> 109
[BACK COVER PAGE]
OBTAINING ADDITIONAL INFORMATION
More information may be obtained free of charge upon request. The Statement of
Additional Information (SAI), a current version of which is on file with the
Securities and Exchange Commission (SEC), contains more details about the fund
and is incorporated by reference into the prospectus (is legally a part of this
prospectus). Annual and semiannual reports to shareholders contain additional
information about the fund's investments. The fund's annual report also
discusses the market conditions and investment strategies that significantly
affected the fund's performance during its last fiscal year.
If you have questions about this fund, another fund in The AIM Family of
Funds--Registered Trademark-- or your account, or wish to obtain free copies of
the fund's current SAI or annual or semiannual reports, please contact us:
BY MAIL: A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
BY TELEPHONE: (800) 347-4246
BY E-MAIL: [email protected]
ON THE INTERNET: http://www.aimfunds.com (prospectuses and annual and
semiannual reports only)
You also can obtain copies of the fund's SAI and other information at the SEC's
Public Reference Room in Washington, D.C., on the SEC's website
(http://www.sec.gov), or by sending a letter, including a duplicating fee, to
the SEC's Public Reference Section, Washington, D.C. 20549-6009. Please call the
SEC at 1-800-SEC-0330 for information about the Public Reference Room.
AIM Advisor Real Estate Fund
SEC 1940 Act file number: 811-3886
<PAGE> 110
The information in this Statement of Additional Information is not complete and
may be changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
Statement of Additional Information is not an offer to sell these securities and
is not soliciting an offer to buy these securities in any state where the offer
or sale is not permitted.
SUBJECT TO COMPLETION DATED FEBRUARY 16, 1999
STATEMENT OF
ADDITIONAL INFORMATION
AIM ADVISOR FLEX FUND
AIM ADVISOR INTERNATIONAL VALUE FUND
AIM ADVISOR LARGE CAP VALUE FUND
AIM ADVISOR MULTIFLEX FUND
AIM ADVISOR REAL ESTATE FUND
(SERIES PORTFOLIOS OF AIM ADVISOR FUNDS, 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 FUNDS,
A COPY OF WHICH MAY BE OBTAINED
FROM AUTHORIZED DEALERS OR BY WRITING
A I M DISTRIBUTORS, INC.,
P.O. BOX 4739, HOUSTON, TX 77210-4739
OR BY CALLING (800) 347-4246
-----------------
STATEMENT OF ADDITIONAL INFORMATION DATED MAY 3, 1999,
RELATING TO THE AIM ADVISOR FLEX FUND PROSPECTUS DATED MAY 3, 1999,
THE AIM ADVISOR INTERNATIONAL VALUE FUND PROSPECTUS DATED MAY 3, 1999,
THE AIM ADVISOR LARGE CAP VALUE FUND PROSPECTUS DATED MAY 3, 1999,
THE AIM ADVISOR MULTIFLEX FUND PROSPECTUS DATED MAY 3, 1999,
AND THE AIM ADVISOR REAL ESTATE FUND DATED MAY 3, 1999
<PAGE> 111
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
INTRODUCTION......................................................................................................1
GENERAL INFORMATION ABOUT THE COMPANY.............................................................................1
The Company and its Shares...............................................................................1
INVESTMENT STRATEGIES AND RISKS...................................................................................2
Convertible Securities...................................................................................2
Foreign Securities.......................................................................................3
Developing Countries.....................................................................................4
Options ................................................................................................4
Combined Option Positions................................................................................5
Futures Contracts........................................................................................5
Options on Futures Contracts.............................................................................6
Risks as to Futures Contracts and Related Options........................................................7
Forward Foreign Currency Exchange Contracts..............................................................7
Securities Issued on a When-Issued or Delayed Delivery Basis.............................................8
Swap Agreements..........................................................................................8
Mortgage-Related Securities..............................................................................9
Risks of Mortgage-Related Securities....................................................................11
Zero Coupon Obligations.................................................................................12
Real-Estate Industry Securities.........................................................................12
High Yield/High Risk Securities.........................................................................13
Repurchase Agreements...................................................................................14
Portfolio Turnover......................................................................................14
INVESTMENT RESTRICTIONS..........................................................................................14
PORTFOLIO SECURITIES LOANS.......................................................................................16
MANAGEMENT OF THE COMPANY........................................................................................16
Directors and Officers..................................................................................17
Remuneration of Directors...............................................................................20
AIM Funds Retirement Plan for Eligible Directors/Trustees...............................................22
THE ADVISORY AND SUB-ADVISORY AGREEMENTS.........................................................................23
OPERATING SERVICES AGREEMENT.....................................................................................25
DISTRIBUTION OF SHARES...........................................................................................26
Class A and Class C Distribution Plan...................................................................26
Class B Distribution Plan...............................................................................27
THE DISTRIBUTOR..................................................................................................31
Sales Charges and Dealer Concessions....................................................................32
REDUCTIONS IN INITIAL SALES CHARGES..............................................................................35
</TABLE>
ii
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<TABLE>
<S> <C> <C>
Contingent Deferred Sales Charge Exceptions.............................................................38
HOW TO PURCHASE AND REDEEM SHARES................................................................................40
Backup Withholding......................................................................................40
NET ASSET VALUE DETERMINATION....................................................................................42
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS.........................................................................43
Reinvestment of Dividends and Distributions.............................................................43
Tax Matters.............................................................................................43
Special Tax Information.................................................................................43
Qualification as a Regulated Investment Company.........................................................44
Determination of Taxable Income of a Regulated Investment Company.......................................44
Excise Tax on Regulated Investment Companies............................................................45
Swap Agreements.........................................................................................46
Investment in Passive Foreign Investment Companies......................................................46
Debt Securities Acquired at a Discount..................................................................47
Distributions...........................................................................................47
Disposition of Shares...................................................................................48
Other Taxation..........................................................................................48
PORTFOLIO TRANSACTIONS AND BROKERAGE.............................................................................48
General Brokerage Policy................................................................................48
Allocation of Portfolio Transactions....................................................................49
Section 28(e) Standards.................................................................................50
Brokerage Commissions Paid..............................................................................50
REDEMPTIONS......................................................................................................51
PERFORMANCE INFORMATION..........................................................................................52
SHAREHOLDER INFORMATION..........................................................................................55
MISCELLANEOUS INFORMATION........................................................................................57
Charges for Certain Account Information.................................................................57
Audit Reports...........................................................................................58
Legal Matters...........................................................................................58
Custodian and Transfer Agent............................................................................58
Principal Holders of Securities.........................................................................59
APPENDIX ........................................................................................................63
FINANCIAL STATEMENTS.............................................................................................FS
</TABLE>
iii
<PAGE> 113
INTRODUCTION
AIM Advisor Funds, Inc. (INVESCO Advisor Funds, Inc. prior to August 4,
1997) (the "Company") is a series 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. The information for the
AIM ADVISOR FLEX FUND (formerly, INVESCO Advisor Flex Portfolio) (the "Flex
Fund") is included in a Prospectus dated May 3, 1999. The information for the
AIM ADVISOR INTERNATIONAL VALUE FUND (formerly, INVESCO Advisor International
Value Portfolio) (the "International Value Fund") is included in a Prospectus
dated May 3, 1999. The information for the AIM ADVISOR LARGE CAP VALUE FUND
(formerly, INVESCO Advisor Equity Portfolio) (the "Large Cap Value Fund") is
included in a Prospectus dated May 3, 1999. The information for the AIM ADVISOR
MULTIFLEX FUND (formerly, INVESCO Advisor MultiFlex Portfolio) (the "MultiFlex
Fund") is included in a Prospectus dated May 3, 1999. The information for the
AIM ADVISOR REAL ESTATE FUND (formerly, INVESCO Advisor Real Estate Portfolio)
(the "Real Estate Fund") is included in a Prospectus dated May 3, 1999.
Additional copies of the Prospectuses and Statement of Additional Information
may be obtained without charge by writing the principal distributor of the
Company's shares, A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, Texas 77210-4739, or by calling (800) 347-4246. Investors must receive
a Prospectus before they invest in the Funds.
This Statement of Additional Information is intended to furnish
prospective investors with additional information concerning the Funds. Some of
the information required to be in this Statement of Additional Information is
also included in the 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 Company's Registration Statement filed with the SEC. Copies of the
Registration Statement, including items omitted from the Prospectus and this
Statement of Additional Information, may be obtained from the SEC by paying the
charges prescribed under its rules and regulations.
GENERAL INFORMATION ABOUT THE COMPANY
THE COMPANY AND ITS SHARES
The Company was organized in 1989 as a Maryland corporation, and is
registered with the SEC as an open-end, series, management investment company.
The Company currently consists of five separate portfolios: AIM ADVISOR FLEX
FUND , AIM ADVISOR INTERNATIONAL VALUE FUND , AIM ADVISOR LARGE CAP VALUE FUND,
AIM ADVISOR MULTIFLEX FUND and AIM ADVISOR REAL ESTATE FUND (individually, a
"Fund" and collectively, the "Funds"). Each portfolio of the Company offers
Class A, Class B and Class C shares. This Statement of Additional Information
and the associated Prospectuses, relate solely to each Fund. Prior to August 4,
1997 and January 16, 1996 the Company was known as INVESCO Advisor Funds, Inc.
and the EBI Funds, Inc., respectively.
Effective August 4, 1997, A I M Advisors, Inc. ("AIM" or "Advisor")
became the investment advisor for the Funds pursuant to an investment advisory
agreement with terms substantially identical to those of the company's prior
investment advisory contracts with INVESCO Services, Inc. ("ISI"). The
sub-advisors did not change other than the substitution of INVESCO Global Asset
Management Limited for INVESCO Capital Management, Inc. as sub-advisor to
INTERNATIONAL VALUE FUND.
As used in this Statement of Additional Information, the term "majority
of the outstanding shares" of the Company, of a particular Fund or of a class of
a Fund means, respectively, the vote of the lesser of (i) 67% or more of the
shares of the Company, such Fund or such class present at a meeting of
shareholders, if the holders of more than 50% of the outstanding shares of the
Company, such Fund or such class are present or represented by proxy or (ii)
more than 50% of the outstanding shares of the Company, such Fund or such class.
<PAGE> 114
Each share of a Fund is entitled to one vote, to participate equally in
dividends and distributions declared by the Board of Directors with respect to
the class of such Fund and, upon liquidation of the Fund, to participate
proportionately in the net assets of the Fund allocable to such class remaining
after satisfaction of the outstanding liabilities of the Fund allocable to such
class. Fund shares are fully paid, non-assessable and fully transferable when
issued and have no preemptive rights and have such conversion and exchange
rights as set forth in the Prospectuses and Statement of Additional Information.
Fractional shares have proportionately the same rights, including voting rights,
as are provided for full shares.
Except as specifically noted above, shareholders of each Fund are
entitled to one vote per share (with proportionate voting for fractional
shares), irrespective of the relative net asset value of the different classes
of shares, where applicable, of a Fund. However, on matters affecting one
portfolio of the Company or one class of shares, a separate vote of shareholders
of that portfolio or class is required. Shareholders of a portfolio or class are
not entitled to vote on any matter which does not affect that portfolio or class
but which requires a separate vote of another portfolio or class. An example of
a matter which would be voted on separately by shareholders of a portfolio is
the approval of an advisory agreement, and an example of a matter which would be
voted on separately by shareholders of a class of shares is approval of a
distribution plan.
Shareholders of the Funds do not have cumulative voting rights, and
therefore the holders of more than 50% of the outstanding shares of all Funds
voting together for election of directors may elect all of the members of the
Board of Directors of the Company. In such event, the remaining holders cannot
elect any directors of the Company.
The Company, as a Maryland corporation, is not required to hold annual
shareholder meetings. However, special meetings may be called for purposes such
as electing or removing directors, changing fundamental policies or approving an
advisory contract, or as may be required by applicable law or the Company's
Articles of Incorporation or By-Laws. Meetings of shareholders will be called
upon written request of shareholders holding in the aggregate at least 10% of
the Company's outstanding shares. The Directors will provide appropriate
assistance to shareholders, in compliance with provisions of the Investment
Company Act of 1940, as amended (the "1940 Act"), if such a request for a
meeting is received.
INVESTMENT STRATEGIES AND RISKS
The following discussion of investment policies supplement the
discussion of the investment objectives and policies set forth in the applicable
Prospectus under the heading "Investment Objective and Strategies" and
"Principal Risks of Investing in the Fund."
CONVERTIBLE SECURITIES
Although the equity investments of the INTERNATIONAL VALUE FUND consist
primarily of common and preferred stocks, the Fund may buy securities
convertible into common stock if, for example, the sub-adviser believes that a
company's convertible securities are undervalued in the market. Convertible
securities eligible for purchase by the Fund include convertible bonds,
convertible preferred stocks, and warrants. A warrant is an instrument issued by
a corporation which gives the holder the right to subscribe to a specific amount
of the corporation's capital stock at a set price for a specified period of
time. Warrants do not represent ownership of the securities, but only the right
to buy the securities. The prices of warrants do not necessarily move parallel
to the prices of underlying securities. Warrants may be considered speculative
in that they have no voting rights, pay no dividends, and have no rights with
respect to the assets of a corporation issuing them. Warrant positions will not
be used to increase the leverage of the Fund; consequently, warrant positions
are generally accompanied by cash positions equivalent to the required exercise
amount.
2
<PAGE> 115
FOREIGN SECURITIES
All of the Funds may invest directly in foreign securities and ADRs.
THE MULTIFLEX FUND, INTERNATIONAL VALUE FUND and REAL ESTATE FUND may also
invest in foreign currency-denominated fixed income securities. Foreign
securities are securities issued by companies whose principal business
activities are outside the United States. These foreign securities may be
registered and traded in U.S. markets, traded in foreign markets or evidenced by
ADRs. Securities of Canadian issuers and sponsored ADRs are not included within
the limitations applicable to foreign securities. Investing in foreign
securities may involve significant risks not present in domestic investments.
For example, there is generally less publicly available information about
foreign companies, particularly those not subject to the disclosure and
reporting requirements of the U.S. securities laws. Foreign issuers are
generally not bound by uniform accounting, auditing, and financial reporting
requirements and standards of practice comparable to those applicable to
domestic issuers. Investments in foreign securities also involve the risk of
possible adverse changes in investment or exchange control regulations,
expropriation or confiscatory taxation, limitations on the removal of cash or
other assets of a Fund, political or financial instability, or diplomatic and
other developments which could affect such investments. Further, economies of
particular countries or areas of the world may differ favorable or unfavorable
the economy of the United States. Foreign securities often trade with less
frequency and volume than domestic securities and therefore may exhibit greater
price volatility. Additional costs associated with an investment in foreign
securities may include higher custodial fees than apply to domestic custodial
arrangements, and transaction costs of foreign currency conversions.
ADRs provide a method whereby the Funds may invest in securities issued
by companies whose principal business activities are outside the United States.
These securities will not be denominated in the same currency as the securities
into which they may be converted. Generally, ADRs, in registered form, are
designed for use in U.S. securities markets.
ADRs are receipts typically issued by a U.S. bank or trust company
evidencing ownership of the underlying securities, and may be issued as
sponsored or unsponsored programs. In sponsored programs, an issuer has made
arrangements to have its securities trade in the form of ADRs. In unsponsored
programs, the issuer may not be directly involved in the creation of the
program. Although regulatory requirements with respect to sponsored and
unsponsored programs are generally similar, in some cases it may be easier to
obtain financial information from an issuer that has participated in the
creation of a sponsored program. The LARGE CAP VALUE FUND and FLEX FUND intend
to invest only in sponsored ADRs. The MULTIFLEX FUND, INTERNATIONAL VALUE FUND
and REAL ESTATE FUND may invest in both sponsored and unsponsored ADRS.
Since certain Funds are authorized to invest in securities denominated
or quoted in currencies other than the U.S. dollar, as well as ADRs with respect
to such securities, changes in foreign currency exchange rates relative to the
U.S. dollar will affect the value of such ADRs and securities in the Funds and
the unrealized appreciation or depreciation of such investments. Changes in
foreign currency exchange rates relative to the U.S. dollar will also affect a
Fund's yield on assets denominated in currencies other than the U.S. dollar and
ADRs.
On January 1, 1999, certain members of the European Economic and
Monetary Union ("EMU"), namely Austria, Belgium, Finland, France, Germany,
Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain established a
common European currency known as the "euro" and each member's local currency
became a denomination of the euro. It is anticipated that each participating
country will replace its local currency with the euro on July 1, 2002. Any other
European country that is a member of the European Union and satisfies the
criteria for participation in the EMU may elect to participate in the EMU and
may supplement its existing currency with the euro. The anticipated replacement
of existing currencies with the euro on July 1, 2002 could cause market
disruptions before or after July 1, 2002 and could adversely affect the value of
securities held by a Fund.
3
<PAGE> 116
DEVELOPING COUNTRIES
The INTERNATIONAL VALUE FUND may invest in securities of companies
domiciled in developing countries. Investment in developing countries presents
risks greater in degree than, and in addition to, those presented by investment
in foreign issuers in general. A number of developing countries restrict, to
varying degrees, foreign investment in stocks. Repatriation of investment
income, capital, and the proceeds of sales by foreign investors may require
governmental registration and/or approval in some developing countries. A number
of the currencies of developing countries have experienced significant declines
against the U.S. dollar in recent years, and devaluation may occur subsequent to
investments in these currencies by the INTERNATIONAL VALUE FUND. Inflation and
rapid fluctuations in inflation rates have had and may continue to have negative
effects on the economies and securities markets of certain emerging market
countries. Many of the developing securities markets are relatively small, have
low trading volumes, suffer periods of relative illiquidity, and are
characterized by significant price volatility. There is a risk in developing
countries that a future economic or political crisis could lead to price
controls, forced mergers of companies, expropriation or confiscatory taxation,
seizure, nationalization, or creation of government monopolies, any of which may
have a detrimental effect on the Fund's investments.
OPTIONS
The purpose of engaging in put and call transactions is to hedge
against changes in the market value of the Funds' portfolio securities caused by
fluctuating interest rates, fluctuating currency exchange rates and changing
market conditions, and to close out or offset existing positions in such options
or futures contracts as described below. The Funds will not engage in such
transactions for speculative purposes and will engage in such transaction only
for hedging purposes and only when the benefits to be gained outweigh the cost
of entering into such transaction. Each of the Funds is authorized to write
(sell) covered call options on the securities in which it may invest and to
enter into closing purchase transactions with respect to such options. A Fund
may write a call or put option only if the option is "covered" by the Fund
holding a position in the underlying securities or by other means which would
permit immediate satisfaction of the Fund's obligation as writer of the option.
The purchase and writing of options involve certain risks. Writing a call option
obligates a Fund to sell or deliver the option's underlying security, in return
for the strike price, upon exercise of the option. By writing a call option, the
Fund receives an option premium from the purchaser of the call option. Writing
covered call options is generally a profitable strategy if prices remain the
same or fall. Through receipt of the option premium, a Fund would seek to
mitigate the effects of a price decline. By writing covered call options,
however, a Fund gives up the opportunity, while the option is in effect, to
profit from any price increase in the underlying security above the option
exercise price. The writer of an option has no control over the time when it may
be required to fulfill its obligation as a writer of the option. Once an option
writer has received an exercise notice, it cannot effect a closing purchase
transaction in order to terminate its obligation under the option and must
deliver the underlying securities at the exercise price. In addition, a Fund's
ability to sell the underlying security will be limited while the option is in
effect unless the Fund effects a closing purchase transaction.
Each Fund may purchase put options. A put purchased by the Fund
constitutes a hedge against a decline in the price of a security owned by the
Fund. It may be sold at a profit or loss depending upon changes in the price of
the underlying security. It may be exercised at a profit provided that the
amount of the decline in the price of the underlying security below the exercise
price during the option period exceeds the option premium, or it may expire
without value. A call constitutes a hedge against an increase in the price of a
security which the Fund has sold short. It may be sold at a profit or loss
depending upon changes in the price of the underlying security, it may be
exercised at a profit provided that the amount of the increase in the price of
the underlying security over the exercise price during the option period exceeds
the option premium, or it may expire without value. The maximum loss exposure
involved in the purchase of an option is the cost of the option contract. A Fund
may engage in strategies employing combinations of covered put and call options.
There can be no assurance that a liquid market will exist when a Fund seeks to
close out an option position. Furthermore, if trading restrictions or
suspensions are imposed on the options markets, a Fund may be unable to close
out a position.
4
<PAGE> 117
Each Fund may also buy or sell put and call options on foreign
securities and foreign currencies. Currency options traded on U.S. or other
exchanges may be subject to position limits which may limit the ability of the
Funds to reduce foreign currency risk using such options. Over-the-counter
options differ from traded options in that they are two-party contracts with
price and other terms negotiated between buyer and seller and generally do not
have as much market liquidity as exchange-traded options.
COMBINED OPTION POSITIONS
Each Fund, for hedging purposes, may purchase and write options in
combination with each other to adjust the risk and return characteristics of the
Fund's overall position. For example, a Fund may purchase a put option and write
a covered call option on the same underlying instrument, in order to construct a
combined position whose risk and return characteristics are similar to selling a
futures contract. This technique, called a "straddle," enables the Fund to
offset the cost of purchasing a put option with the premium received from
writing the call option. However, by selling the call option, the Fund gives up
the ability for potentially unlimited profit from the put option. Another
possible combined position would involve writing a covered call option at one
strike price and buying a call option at a lower price, in order to reduce the
risk of the written covered call option in the event of a substantial price
increase. Because combined options positions involve multiple trades, they
result in higher transaction costs and may be more difficult to open and close
out.
FUTURES CONTRACTS
Each of the Funds may purchase and sell futures contracts in order to
hedge the value of its portfolio against changes in market conditions. In cases
of purchases of futures contracts, an amount of liquid assets, equal to the cost
of the futures contracts (less any related margin deposits), will be segregated
to collateralize the position and ensure that the use of such futures contracts
is unleveraged. Unlike when a Fund purchases or sells a security, no price is
paid or received by a Fund upon the purchase or sale of a futures contract.
Initially, a 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 futures contract margin does not involve the
borrowing of funds by the customer to finance the transactions. Rather, the
initial margin is in the nature of a performance bond or good faith deposit on
the contract which is returned to the Fund upon termination of the futures
contract assuming all contractual obligations have been satisfied. Subsequent
payments, called "variation margin," to and from the broker will be made on a
daily basis as the price of the 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 a 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 a 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.
Variation margin payments would be made in a similar fashion when a Fund has
purchased an interest rate futures contract. At any time prior to expiration of
the futures contract, a Fund may elect to close the position by taking an
opposite position which will operate to terminate the Fund's position in the
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.
A description of the various types of futures contracts that may be
utilized by the Funds is as follows:
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
5
<PAGE> 118
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 Standard & Poor's 500 Stock Index, the New York Stock Exchange
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. The Funds will
only enter into stock index futures contracts in order to hedge the value of its
portfolio against changes in market conditions. When a 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 a Fund's portfolio of securities,
the Fund may sell stock index futures contracts. The Funds are subject to
certain restrictions on their use of financial futures contracts and options. A
Fund will not enter into financial futures contracts or purchase options on
financial futures contracts if, after such a transaction, the sum of initial
margin deposits on the open financial futures contracts and of premiums paid on
open options on financial futures contracts would exceed 5% of the Fund's total
assets. Subject to the provisions of the Company's fundamental investment
policies, a Fund will not enter into financial futures contracts or write
options (except to close out open positions) if, after such a transaction, the
aggregate principal amount of all open financial futures contract and all
options under which the Fund is obligated would exceed 100% of the Fund's total
assets. A Fund will not purchase put and call options on debt securities if,
after such a transaction, the sum invested for premiums in such options exceeds
2% of the Fund's total assets.
The Funds will only enter into futures contracts or futures options
which are standardized and traded on a U.S. or foreign exchange or board of
trade, or similar entity, or quoted on an automated quotation system. A Fund
will use financial futures contracts and related options only for "bona fide
hedging" purposes, as such term is defined in applicable regulations of the
Commodity Futures Trading Commission, or, with respect to positions in financial
futures and related options that do not qualify as "bona fide hedging"
positions, will enter into such non-hedging positions only to the extent that
aggregate initial margin deposits plus premiums paid by it for open futures
option positions, less the amount by which any such positions are
"in-the-money," would not exceed 5% of the Fund's total assets.
Foreign Currency Futures Contracts
A Fund may also use futures contracts to hedge the risk of changes in
the exchange rate of foreign currencies. A foreign currency futures contract
provides for the future sale by one party and purchase by another party of a
specified quantity of a foreign currency at a specified price and time.
OPTIONS ON FUTURES CONTRACTS
Each Fund may purchase options on futures contracts. An option on a
futures contract gives the purchaser the right, in return for the premium paid,
to assume a position in a futures contract (a long position if the option is a
call and a short position if the option is a put) at a specified exercise price
at any time during the option exercise period. The writer of the option is
required upon exercise to assume an offsetting futures position (a short
position if the option is a call and a long position if the option is a put) at
a specified exercise price at any time during the period of the option. Upon
exercise of the option, the assumption of offsetting futures positions by the
writer and holder of the option will be accompanied by delivery of the
accumulated cash balance in the writer's futures margin account which represents
the amount by which the market price of the futures contract, at exercise,
exceeds, in the case of a call, or is less than, in the case of a put, the
exercise price of the option on the futures contract. If an option on a futures
contract is exercised on the last trading date prior to the expiration date of
the option, the settlement will be made entirely in cash equal to the difference
between the exercise price of the option and the closing price of the futures
contract on the expiration date.
A Fund will purchase put options on futures contracts to hedge against
the risk of falling prices for its respective portfolio securities. A Fund will
purchase call options on futures contracts as a hedge against a rise in the
price of securities which it intends to purchase. Options on futures contracts
may also be used to hedge the risks of changes in the exchange rate of foreign
currencies. The purchase of a put option on a futures contract is similar to the
purchase of protective put options on a portfolio security or a foreign
currency. The
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purchase of a call option on a futures contract is similar in some respects to
the purchase of a call option on an individual security or a foreign currency.
Depending on the pricing of the option compared to either the price of the
futures contract upon which it is based or the price of the underlying
securities or currency, it may or may not be less risky than ownership of the
futures contract or underlying securities or currency.
RISKS AS TO FUTURES CONTRACTS AND RELATED OPTIONS
There are several risks in connection with the use of futures contracts
and related 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 stock, debt security or foreign currency which are the
subject of the hedge. If the price of a hedging instrument moves less than the
price of the stock, debt security or foreign currency which is 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 stock, debt security or foreign
currency, a 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 stock, debt
security or foreign currency which is the subject of the hedge. The use of
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 option.
Successful use of hedging instruments by the Funds is also subject to
AIM's ability to predict correctly movements in the direction of the stock
market, of interest rates or of foreign exchange rates. 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 a Fund has sold 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, a Fund would lose money on the futures contracts and also
experience a decline in the value of its portfolio securities. Similar risks
exist with respect to foreign currency hedges.
Positions in futures contracts or options may be closed out only on an
exchange on which such contracts are traded. Although the Funds intend to
purchase or sell futures contracts 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 futures position or purchase an option at such time. In the event of
adverse price movements under those circumstances, a Fund would continue to be
required to make daily cash payments of maintenance margin on its futures
positions. The extent to which a Fund may engage in futures contracts or related
options, will be limited by Internal Revenue Code requirements for qualification
as a regulated investment company and a Fund's intent to continue to qualify as
such. The result of a hedging program cannot be foreseen and may cause a Fund to
suffer losses which it would not otherwise sustain.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Each Fund may enter into forward foreign currency exchange contracts
("forward contracts") to attempt to minimize the risk to the Fund from adverse
changes in the relationship between the U.S. dollar and foreign currencies. A
forward contract is an obligation to purchase or sell a specific currency for an
agreed price at a future date which is individually negotiated and privately
traded by currency traders and their customers. Such contracts may not be
entered into for speculative purposes. A Fund will not enter into forward
contracts if, as a result, more than 10% of the value of its total assets would
be committed to the consummation of such contracts, and will segregate assets or
"cover" its positions consistent with requirements under the 1940 Act to avoid
any potential leveraging of the Fund.
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SECURITIES ISSUED ON A WHEN-ISSUED OR DELAYED DELIVERY BASIS
The MULTIFLEX FUND, REAL ESTATE FUND and INTERNATIONAL VALUE FUND may
purchase or sell securities on a when-issued or delayed delivery basis. These
transactions involve a commitment by the Fund to purchase or sell securities for
a predetermined price or yield, with payment and delivery taking place more than
three days in the future, or after a period longer than the customary settlement
period for that type of security. Investment in securities on a when-issued or
delayed delivery basis may increase a Fund's exposure to market fluctuation and
may increase the possibility that the Fund will incur short-term gains subject
to federal taxation or short-term losses if the Fund must engage in portfolio
transactions in order to honor a when-issued or delayed delivery commitment. In
a delayed delivery transaction, a Fund relies on the other party to complete the
transaction. If the transaction is not completed, the Fund may miss a price or
yield considered to be advantageous. A Fund will employ techniques designed to
reduce such risks. If a Fund purchases a when-issued security, the Fund's
custodian bank will segregate liquid assets in an amount equal to the
when-issued commitment. If the market value of such securities declines,
additional liquid assets will be segregated on a daily basis so that the market
value of the segregated liquid assets will equal the amount of the Fund's
when-issued commitments. To the extent liquid assets are segregated, they will
not be available for new investments or to meet redemptions. Securities
purchased on a delayed delivery basis may require a similar segregation of
liquid assets.
Typically, no income accrues on securities purchased on a delayed
delivery basis prior to the time delivery of the securities is made, although a
Fund may earn income on securities it has segregated. When purchasing a security
on a delayed delivery basis, a Fund assumes the rights and risks of ownership of
the security, including the risk of price and yield fluctuations, and takes such
fluctuations into account when determining its net asset value. Because a Fund
is not required to pay for the security until the delivery date, these risks are
in addition to the risks associated with the Fund's other investments. If a Fund
remains substantially fully invested at a time when delayed delivery purchases
are outstanding, the delayed delivery purchases may result in a form of
leverage. When a Fund has sold a security on a delayed delivery basis, the Fund
does not participate in future gains or losses with respect to the security. If
the other party to a delayed delivery transaction fails to deliver or pay for
the securities, the Fund could miss a favorable price or yield opportunity or
could suffer a loss. A Fund may dispose of or renegotiate a delayed delivery
transaction after it is entered into, and may sell when-issued securities before
they are delivered, which may result in a capital gain or loss.
SWAP AGREEMENTS
Each Fund may enter into interest rate, index and currency exchange
rate swap agreements for purposes of attempting to obtain a particular desired
return at a lower cost to the Fund than if it had invested directly in an
instrument that yielded that desired return. Swap agreements are two-party
contracts entered into primarily by institutional investors for periods ranging
from a few weeks to more than one year. In a standard "swap" transaction, two
parties agree to exchange the returns (or differentials in rates of return)
earned or realized on particular predetermined investments or instruments. The
gross returns to be exchanged or "swapped" between the parties are calculated
with respect to a "notional amount," i.e., the return on or increase in value of
a particular dollar amount invested at a particular interest rate, in a
particular foreign currency, or in a "basket" of securities representing a
particular index. Commonly used swap agreements include interest rate caps,
under which, in return for a premium, one party agrees to make payments to the
other to the extent that interest rates exceed a specified rate, or "cap";
interest rate floors, under which, in return for a premium, one party agrees to
make payments to the other to the extent that interest rates fall below a
specified level, or "floor"; and interest rate collars, under which a party
sells a cap and purchases a floor or vice versa in an attempt to protect itself
against interest rate movements exceeding given minimum or maximum levels.
The "notional amount" of the swap agreement is only a fictive basis on
which to calculate the obligations which the parties to a swap agreement have
agreed to exchange. Most swap agreements entered into by a Fund would calculate
the obligations of the parties to the agreement on a "net basis." Consequently,
a Fund's obligations (or rights) under a swap agreement will generally be equal
only to the net amount to be
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paid or received under the agreement based on the relative values of the
positions held by each party to the agreement (the "net amount"). Obligations
under a swap agreement will be accrued daily (offset against amounts owing to
the Fund) and any accrued but unpaid net amounts owed to a swap counterparty
will be covered by segregating liquid assets, to avoid any potential leveraging
of the Fund. A Fund will not enter into a swap agreement with any single party
if the net amount owed or to be received under existing contracts with that
party would exceed 5% of the Fund's total assets. For a discussion of the tax
considerations relating to swap agreements, see "Dividends, Distributions and
Tax Matters-Swap Agreements."
MORTGAGE-RELATED SECURITIES
Mortgage-related securities are interests in pools of mortgage loans
made to residential home buyers, including mortgage loans made by savings and
loan institutions, mortgage bankers, commercial banks and others. Pools of
mortgage loans are assembled as securities for sale to investors by various
governmental, government-related and private organizations (see "Mortgage
Pass-Through Securities" below). The Funds may also invest in debt securities
which are secured with collateral consisting of mortgage-related securities (see
"Collateralized Mortgage Obligations"), and in other types of mortgage-related
securities.
MORTGAGE PASS-THROUGH SECURITIES. The FLEX FUND may invest in mortgage
pass-through Securities. Interests in pools of mortgage-related securities
differ from other forms of debt securities, which normally provide for periodic
payment of interest in fixed amounts with principal payments at maturity or
specified call dates. Instead, these securities provide a monthly payment which
consists of both interest and principal payments. In effect, these payments are
a "pass-through" of the monthly payments made by the individual borrowers on
their residential or commercial mortgage loans, net of any fees paid to the
issuer or guarantor of such securities. Additional payments are caused by
repayments of principal resulting from the sale of the underlying property,
refinancing or foreclosure, net of fees or costs which may be incurred. Some
mortgage-related securities (such as securities issued by the Government
National Mortgage Association ("GNMA")) are described as "modified
pass-through." These securities entitle the holder to receive all interest and
principal payments owed on the mortgage pool, net of certain fees, at the
scheduled payment dates regardless of whether or not the mortgagor actually
makes the payment.
GNMA is the principal governmental guarantor of mortgage-related
securities. GNMA is a wholly owned U.S. government corporation within the
Department of Housing and Urban Development. GNMA is authorized to guarantee,
with the full faith and credit of the U.S. government, the timely payment of
principal and interest on securities issued by institutions approved by GNMA
(such as savings and loan institutions, commercial banks and mortgage bankers)
and backed by pools of FHA-insured or VA-guaranteed mortgages.
Government-related guarantors (i.e., not backed by the full faith and
credit of the U.S. government) include the Fannie Mae (formerly, the Federal
National Mortgage Association ("FNMA") and the Federal Home Loan Mortgage
Corporation ("FHLMC")). Fannie Mae is a government-sponsored corporation owned
entirely by private stockholders. It is subject to general regulation by the
Secretary of Housing and Urban Development. Fannie Mae purchases conventional
(i.e., not insured or guaranteed by any government agency) residential mortgages
from a list of approved seller/servicers which include state and federally
chartered savings and loan associations, mutual savings banks, commercial banks
and credit unions and mortgage bankers. Pass-through securities issued by Fannie
Mae are guaranteed as to timely payment of principal and interest by Fannie Mae
but are not backed by the full faith and credit of the U.S. government.
FHLMC was created by Congress in 1970 for the purpose of increasing the
availability of mortgage credit for residential housing. It is a
government-sponsored corporation formerly owned by the 12 Federal Home Loan
Banks and now owned entirely by private stockholders. FHLMC issues Participation
Certificates ("PCS") which represent interests in conventional mortgages from
FHLMC's national portfolio. FHLMC guarantees the timely payment of interest and
ultimate collection of principal, but PCS are not backed by the full faith and
credit of the U.S. government.
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Commercial banks, savings and loan institutions, private mortgage
insurance companies, mortgage bankers and other secondary market issuers also
create pass-through pools of conventional residential mortgage loans. Such
issuers may, in addition, be the originators and/or servicers of the underlying
mortgage loans as well as the guarantors of the mortgage-related securities.
Pools created by such non-governmental issuers generally offer a higher rate of
interest than government and government-related pools because there are no
direct or indirect government or agency guarantees of payments in the former
pools. However, timely payment of interest and principal of these pools may be
supported by various forms of insurance or guarantees, including individual
loan, title, pool and hazard insurance and letters of credit. The insurance and
guarantees are issued by governmental entities, private insurers and the
mortgage poolers. Such insurance and guarantees and the creditworthiness of the
issuers thereof will be considered in determining whether a mortgage-related
security meets a Fund's investment quality standards. There can be no assurance
that the private insurers or guarantors can meet their obligations under the
insurance policies or guarantee arrangements. Although the market for such
securities is becoming increasingly liquid, securities issued by certain private
organizations may not be readily marketable. A Fund will not purchase
mortgage-related securities or other assets which in the sub-adviser's opinion
are illiquid if, as a result, more than 15% of the value of the Fund's total
assets will be illiquid.
Mortgage-backed securities that are issued or guaranteed by the U.S.
government, its agencies or instrumentalities, are not subject to a Fund's
industry concentration restrictions, by virtue of the exclusion from that test
available to all U.S. Government securities. In the case of privately issued
mortgage-related securities, the Funds take the position that mortgage-related
securities do not represent interests in any particular "industry" or group of
industries. The assets underlying such securities may be represented by a
portfolio of first lien residential mortgages (including both whole mortgage
loans and mortgage participation interests) or portfolios of mortgage
pass-through securities issued or guaranteed by GNMA, Fannie Mae or FHLMC.
Mortgage loans underlying a mortgage-related security may in turn be insured or
guaranteed by the Federal Housing Administration or the Department of Veterans
Affairs. In the case of private issue mortgage-related securities whose
underlying assets are neither U.S. government securities nor U.S. government-
insured mortgages, to the extent that real properties securing such assets may
be located in the same geographical region, the security may be subject to a
greater risk of default than other comparable securities in the event of adverse
economic, political or business developments that may affect such region and,
ultimately, the ability of residential homeowners to make payments of principal
and interest on the underlying mortgages.
COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOs"). The FLEX FUND, MULTIFLEX
FUND and REAL ESTATE FUND may invest in CMOs. The MULTIFLEX FUND and REAL ESTATE
FUND can also invest in mortgage-backed bonds and asset-backed securities. A CMO
is a hybrid between a mortgage-backed bond and a mortgage pass-through security.
Similar to a bond, interest and prepaid principal is paid, in most cases,
semiannually. CMOs may be collateralized by whole mortgage loans, but are more
typically collateralized by portfolios of mortgage pass-through securities
guaranteed by GNMA, FHLMC, or FNMA, and their income streams.
CMOs are structured into multiple classes, each bearing a different
stated maturity. Actual maturity and average life will depend upon the
prepayment experience of the collateral. CMOs provide for a modified form of
call protection through a de facto breakdown of the underlying pool of mortgages
according to how quickly the loans are repaid. Monthly payment of principal
received from the pool of underlying mortgages, including prepayments, is first
returned to investors holding the shortest maturity class. Investors holding the
longer maturity classes receive principal only after the first class has been
retired. An investor is partially guarded against a sooner than desired return
of principal because of the sequential payments.
In a typical CMO transaction, a corporation ("issuer") issues multiple
series (e.g., A, B, C, Z) of CMO bonds ("Bonds"). Proceeds of the Bond offering
are used to purchase mortgages or mortgage pass-through certificates
("Collateral"). The Collateral is pledged to a third party trustee as security
for the Bonds. Principal and interest payments from the Collateral are used to
pay principal on the Bonds in the order A, B, C, Z. The Series A, B, and C Bonds
all bear current interest. Interest on the Series Z Bond is accrued and added to
principal and a like amount is paid as principal on the Series A, B, or C Bond
currently being paid off. When the Series A, B, and C Bonds are paid in full,
interest and principal on the Series Z Bond begins to be paid
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currently. With some CMOs, the issuer serves as a conduit to allow loan
originators (primarily builders or savings and loan associations) to borrow
against their loan portfolios.
CMOs that are issued or guaranteed by the U.S. government or by any of
its agencies or instrumentalities will be considered U.S. government securities
by the Funds, while other CMOs, even if collateralized by U.S. government
securities, will have the same status as other privately issued securities for
purposes of applying a Fund's diversification tests.
Mortgage-backed bonds --- are general obligations of the issuer fully
collateralized directly or indirectly by a pool of mortgages. The mortgages
serve as collateral for the issuer's payment obligations on the bonds but
interest and principal payments on the mortgages are not passed through either
directly (as with GNMA certificates and Fannie Mae and FHLMC pass-through
securities) or on a modified basis (as with CMOs). Accordingly, a change in the
rate of prepayments on the pool of mortgages could change the effective maturity
of a CMO but not that of a mortgage-backed bond (although, like many bonds,
mortgage-backed bonds can provide that they are callable by the issuer prior to
maturity).
Asset-backed securities --- are securities representing interests in
other types of financial assets, such as automobile-finance receivables or
credit-card receivables. Such securities are subject to many of the same risks
as are mortgage-backed securities, including prepayment risks and risks of
foreclosure. They may or may not be secured by the receivables themselves or may
be unsecured obligations of their issuers.
FHLMC CMOs. FHLMC CMOs are debt obligations of FHLMC issued in multiple
classes having different maturity dates which are secured by the pledge of a
pool of conventional mortgage loans purchased by FHLMC. Unlike FHLMC PCS,
payments of principal and interest on the CMOs are made semiannually, as opposed
to monthly. The amount of principal payable on each semiannual payment date is
determined in accordance with FHLMC's mandatory sinking fund schedule, which, in
turn, is equal to approximately 100% of FHA prepayment experience applied to the
mortgage collateral pool. All sinking fund payments in the CMOs are allocated to
the retirement of the individual classes of bonds in the order of their stated
maturities. Payment of principal on the mortgage loans in the collateral pool in
excess of the amount of FHLMC's minimum sinking fund obligation for any payment
date are paid to the holders of the CMOs as additional sinking fund payments.
Because of the "pass-through" nature of all principal payments received on the
collateral pool in excess of FHLMC's minimum sinking fund requirement, the rate
at which principal of the CMOs is actually repaid is likely to be such that each
class of bonds will be retired in advance of its scheduled maturity date.
If collection of principal (including prepayments) on the mortgage
loans during any semiannual payment period is not sufficient to meet FHLMC's
minimum sinking fund obligation on the next sinking fund payment date, FHLMC
agrees to make up the deficiency from its general funds.
Criteria for the mortgage loans in the pool backing the FHLMC CMOs are
identical to those of FHLMC PCS. FHLMC has the right to substitute collateral in
the event of delinquencies and/or defaults.
RISKS OF MORTGAGE-RELATED SECURITIES
Investment in mortgage-backed securities poses several risks, including
prepayment, market, and credit risk. Prepayment risk reflects the risk that
borrowers may prepay their mortgages faster than expected, thereby affecting the
investment's average life and perhaps its yield. Whether or not a mortgage loan
is prepaid is almost entirely controlled by the borrower. Borrowers are most
likely to exercise prepayment options at the time when it is least advantageous
to investors, generally prepaying mortgages as interest rates fall, and slowing
payments as interest rates rise. Besides the effect of prevailing interest
rates, the rate of prepayment and refinancing of mortgages may also be affected
by home value appreciation, ease of the refinancing process and local economic
conditions.
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Market risk reflects the risk that the price of the security may
fluctuate over time. The price of mortgage-backed securities may be particularly
sensitive to prevailing interest rates, the length of time the security is
expected to be outstanding, and the liquidity of the issue. In a period of
unstable interest rates, there may be decreased demand for certain types of
mortgage-backed securities, and a Fund invested in such securities wishing to
sell them may find it difficult to find a buyer, which may in turn decrease the
price at which they may be sold.
Credit risk reflects the risk that a Fund may not receive all or part
of its principal because the issuer or credit enhancer has defaulted on its
obligations. Obligations issued by U.S. government-related entities are
guaranteed as to the payment of principal and interest, but are not backed by
the full faith and credit of the U.S. government. The performance of private
label mortgage-backed securities, issued by private institutions, is based on
the financial health of those institutions. With respect to GNMA certificates,
although GNMA guarantees timely payment even if homeowners delay or default,
tracking the "pass-through" payments may, at times, be difficult.
ZERO COUPON OBLIGATIONS
The MULTIFLEX FUND may invest in zero coupon obligations, which are
fixed-income securities that do not make regular interest payments. Instead,
zero coupon obligations are sold at substantial discounts from their face value.
The Fund accrues income on these investments for tax and accounting purposes,
which is distributable to shareholders and which, because no cash is received at
the time of accrual, may require the liquidation of other portfolio securities
to satisfy distribution obligations, in which case the Fund will forego the
purchase of additional income-producing assets with these funds. The difference
between a zero coupon obligations's issue or purchase price and its face value
represents the imputed interest an investor will earn if the obligation is held
until maturity. Zero coupon obligations may offer investors the opportunity to
earn higher yields than those available on ordinary interest-paying obligations
of similar credit quality and maturity. However, zero coupon obligation prices
may also exhibit greater price volatility than ordinary fixed-income securities
because of the manner in which their principal and interest are returned to the
investor.
REAL-ESTATE INDUSTRY SECURITIES
Because each of the MULTIFLEX FUND and REAL ESTATE FUND invests in
securities of companies engaged in the real-estate industry, it could
conceivably own real estate directly as a result of a default on debt securities
it owns. The Fund, therefore, may be subject to certain risks associated with
the direct ownership of real estate, including difficulties in valuing and
trading real estate, declines in the value of real estate, risks related to
general and local economic conditions, adverse changes in the climate for real
estate, environmental liability risks, increases in property taxes and operating
expenses, changes in zoning laws, casualty or condemnation losses, limitations
on rents, changes in neighborhood values, the appeal of properties to tenants,
and increases in interest rates.
In addition to the risks described above, equity REITs may be affected
by any changes in the value of the underlying property owned by the trusts,
while mortgage REITs may be affected by the quality of any credit extended.
Equity and mortgage REITs are dependent upon management skill, are not
diversified, and are therefore subject to the risk of financing single or a
limited number of projects. Such trusts are also subject to heavy cash flow
dependency, defaults by borrowers, self-liquidation, and the possibility of
failing to qualify for tax-free pass-through of income under the Internal
Revenue Code and of failing to maintain exemption from the 1940 Act. Changes in
interest rates may also affect the value of debt securities held by the Fund. By
investing in REITs indirectly through the Fund, a shareholder will bear not only
his proportionate share of the expenses of the Fund, but also, indirectly,
similar expenses of the REITs.
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HIGH YIELD/HIGH RISK SECURITIES
The MULTIFLEX FUND may invest up to 5% of assets in securities rated
lower than Baa by Moody's Investors Service, Inc. ("Moody's") or BBB by Standard
& Poor's, a division of McGraw-Hill Companies Inc. ("S&P"), but rated at least
Ba by Moody's or BB by S&P or, if unrated, determined by the Fund's sub-advisor
to be of comparable quality. Securities rated lower than Baa by Moody's or lower
than BBB by S&P are sometimes referred to as "high yield," "high risk," or
"junk" bonds. In addition, securities rated Baa are considered by Moody's to
have some speculative characteristics.
Investing in high yield securities involves special risks in addition
to the risks associated with investments in higher rated debt securities. High
yield securities may be regarded as predominately speculative with respect to
the issuer's continuing ability to meet principal and interest payments.
Analysis of the creditworthiness of issuers of high yield securities may be more
complex than for issuers of higher quality debt securities, and the ability of
the Fund to achieve its investment objective may, to the extent of its
investments in high yield securities, be more dependent upon such
creditworthiness analysis than would be the case if the Fund were investing in
higher quality securities.
High yield securities may be more susceptible to real or perceived
adverse economic and competitive industry conditions than higher grade
securities. The prices of high yield securities have been found to be less
sensitive to interest rate changes than more highly rated investments, but more
sensitive to economic downturns or individual corporate developments. A
projection of an economic downturn or of a period of rising interest rates, for
example, could cause a decline in high yield security prices because the advent
of a recession could lessen the ability of a highly leveraged company to make
principal and interest payments on its debt securities. If the issuer of high
yield securities defaults, the Fund may incur additional expenses to seek
recovery. In the case of high yield securities structured as zero coupon
securities or payment-in-kind securities (which pay interest in the form of
additional securities), the market prices of such securities are affected to a
greater extent by interest rate changes, and therefore tend to be more volatile
than securities which pay interest periodically and in cash. Moreover, the Fund
records the interest on these securities as income even though it receives no
cash interest until the security's maturity or payment date. The Fund will be
required to distribute all or substantially all such amounts annually and may
have to obtain the cash to do so by selling securities which otherwise would
continue to be held. Shareholders will be taxed on these distributions.
The secondary markets on which high yield securities are traded may be
less liquid than the market for higher grade securities. Less liquidity in the
secondary trading markets could adversely affect and cause large fluctuations in
the daily net asset value of the Fund's shares. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may decrease the
values and liquidity of high yield securities, especially in thinly traded
markets.
The use of credit ratings as the sole method of evaluating high yield
securities can involve certain risks. For example, credit rating agencies
evaluate the safety of principal and interest payments, not the market value
risk of high yield securities. Also, credit rating agencies may fail to change
credit ratings in a timely fashion to reflect events since the security was last
rated. The sub-advisor does not rely solely on credit ratings when selecting
securities for the Fund, and develops its own independent analysis of issuer
credit quality. If a credit rating agency changes the rating of a portfolio
security held by the Fund, the Fund may retain the security if the subadvisor
deems it in the best interest of the shareholders.
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REPURCHASE AGREEMENTS
Each of the Funds may engage in repurchase agreements. A repurchase
agreement, which may be considered a "loan" under the 1940 Act, is a transaction
in which a Fund purchases a security and simultaneously commits to sell the
security to the seller at an agreed-upon price and date (usually not more than
seven days) after the date of purchase. The resale price reflects the purchase
price plus an agreed-upon market rate of interest which is unrelated to the
coupon rate or maturity of the purchased security. A Fund's risk is limited to
the ability of the seller to pay the agreed-upon amount on the delivery date. In
the opinion of management this risk is not material; if the seller defaults, the
underlying security constitutes collateral for the seller's obligations to pay.
This collateral, equal to or in excess of 100% of the repurchase agreement, will
be held by the custodian for the particular Fund's assets. Repurchase agreements
carry certain risks not associated with direct investments in securities,
including a possible decline in the market value of the underlying securities
and delays and costs to the Funds if the other party to the repurchase agreement
becomes insolvent. To the extent that the proceeds from a sale upon a default in
the obligation to repurchase are less than the repurchase price, the particular
Fund would suffer a loss. It is intended (but not required) that at no time will
the market value of any of the Fund's securities subject to repurchase
agreements exceed 50% of the total assets of such Fund entering into such
agreements. It is intended for these Funds to enter into repurchase agreements
with commercial banks and securities dealers. The Board of Directors will
monitor the creditworthiness of such entities.
PORTFOLIO TURNOVER
Generally, the rate of portfolio turnover will not be a limiting factor
when the Funds deem changes appropriate; however, it is anticipated that no
Fund's annual portfolio turnover rate generally will exceed 100%. In any
particular year, however, market conditions could result in portfolio activity
at a greater rate than anticipated.
INVESTMENT RESTRICTIONS
The Directors of the Company, on behalf of the Funds, have adopted the
following investment restrictions, all of which are fundamental policies and may
not be changed as to any Fund without the approval of the holders of a majority
of such Fund's outstanding voting securities. The Funds may not:
(1) Invest in the securities of issuers conducting their principal
business activity in the same industry, if immediately after such investment the
value of a Fund's investments in such industry would exceed 25% of the value of
such Fund's total assets; provided, however, that this limitation does not apply
to a Fund's investments in obligations issued or guaranteed by the U.S.
government, its agencies, authorities or instrumentalities.
(2) For the MULTIFLEX FUND, REAL ESTATE FUND and INTERNATIONAL VALUE
FUND, with respect to 75% of the Fund's assets, invest in the securities of any
one issuer, other than obligations of, or guaranteed by, the U.S. government,
its agencies, authorities or instrumentalities, if immediately after such
investment more than 5% of the value of the Fund's total assets, taken at market
value, would be invested in such issuer or more than 10% of such issuer's
outstanding voting securities would be owned by such Fund. For the LARGE CAP
VALUE FUND and FLEX FUND, with respect to 100% of the Fund's assets, invest in
the securities of any one issuer, other than obligations of, or guaranteed by,
the U.S. government, its agencies, authorities or instrumentalities, if
immediately after such investment more than 5% of the value of the Fund's total
assets, taken at market value, would be invested in such issuer or more than 10%
of such issuer's outstanding voting securities would be owned by such Fund.
(3) Underwrite securities of other issuers, except insofar as it may
technically be deemed an "underwriter" under the Securities Act of 1933, as
amended, in connection with the disposition of a Fund's portfolio securities.
14
<PAGE> 127
(4) Invest in companies for the purpose of exercising control or
management.
(5) Issue any class of senior securities or borrow money, except
borrowings from banks for temporary or emergency purposes not in excess of 5% of
the value of a Fund's total assets at the time the borrowing is made.
(6) Mortgage, pledge, hypothecate or in any manner transfer as
security for indebtedness any securities owned or held except to an extent not
greater than 5% of the value of a Fund's total assets.
(7) Make short sales of securities or maintain a short position. All
Funds may, however, purchase or sell options on futures and write, purchase and
sell puts and calls.
(8) Purchase securities on margin, except that a Fund may obtain such
short-term credit as may be necessary for the clearance of purchases and sales
of portfolio securities.
(9) Purchase or sell real estate or interests in real estate. A Fund
may invest in securities secured by real estate or interests therein or issued
by companies, including real estate investment trusts, which invest in real
estate or interests therein.
(10) Purchase or sell commodities or commodity contracts, except as set
forth in the Prospectus and in this Statement of Additional Information for
purchases and sales of options and futures, and options or futures on underlying
financial instruments.
(11) Make loans to other persons, provided that a Fund may purchase
debt obligations consistent with its investment objectives and policies and may
lend limited amounts (not to exceed 10% of total assets) of its portfolio
securities to broker-dealers or other institutional investors.
(12) Purchase securities of other investment companies except (a) in
connection with a merger, consolidation, acquisition or reorganization; or (b)
by purchase in the open market of securities of other investment companies
involving only customary brokers' commissions and only if immediately thereafter
(i) no more than 3% of the voting securities of any one investment company are
owned by the Fund, (ii) no more than 5% of the value of the total assets of a
Fund would be invested in any one investment company, and (iii) no more than 10%
of the value of the total assets of a Fund would be invested in the securities
of such investment companies. A portion of a Fund's cash may be invested from
time to time in investment companies to which the Advisor or sub-advisor serves
as investment advisor; provided that no management or distribution fee will be
charged by the Advisor or sub-advisor with respect to any such assets so
invested and provided further that at no time will more than 3% of the Fund's
assets be so invested. Should a Fund purchase securities of other investment
companies, shareholders may incur additional management, advisory and
distribution fees.
(13) Invest in securities for which there are legal or contractual
restrictions on resale, if more than 2% of the value of a Fund's total assets
would be invested in such securities, or invest in securities for which there is
no readily available market, if more than 5% of the value of a Fund's total
assets would be invested in such securities. In determining securities subject
to this 5% restriction, the Funds will include repurchase agreements maturing in
more than seven days.
Additional investment restrictions adopted by the Directors on behalf
of the Funds, which may be changed by the Directors at their discretion, provide
that the Funds may not:
(1) For the LARGE CAP VALUE FUND, FLEX FUND and REAL ESTATE FUND,
invest more than 10% of the value of the applicable Fund's total assets directly
in foreign securities, including unsponsored ADRs. Up to 25% of the total assets
of the LARGE CAP VALUE FUND and FLEX FUND may be invested in securities of
Canadian issuers and sponsored ADRs. The MULTIFLEX FUND may invest up to 40% of
total assets in securities of foreign issuers. Securities of Canadian issuers
and securities purchased by means of sponsored
15
<PAGE> 128
ADRs are not subject to this 40% limitation. The INTERNATIONAL VALUE FUND may
invest up to 100% of its total assets in securities of foreign issuers.
(2) Write, purchase or sell puts, calls, straddles, spreads or
combinations thereof, except as set forth in the Prospectuses and this Statement
of Additional Information for transactions in options, futures, and options on
futures and transactions arising under swap agreements. Options on interest rate
futures contracts and investments in initial margins will not exceed 5% of the
applicable Fund's total assets. Covered call options and cash secured puts will
not exceed 25% of the applicable Fund's total assets.
(3) Engage in arbitrage transactions.
Except for the Funds' investment objectives and those investment
policies of a Fund specifically identified as fundamental, all investment
policies and practices described in the Prospectuses and in the Statement of
Additional Information are not fundamental and, therefore, may be changed by the
Board of Directors without shareholder approval. Such changes may result in a
Fund having investment policies different from the investment policies which the
shareholder considered appropriate at the time of investment in the Fund.
PORTFOLIO SECURITIES LOANS
Each of the Funds may lend limited amounts of Fund securities (not to
exceed 10% of total assets) to broker-dealers or other institutional investors.
The sub-advisors will monitor the creditworthiness of such broker-dealers in
accordance with procedures adopted by the Directors. Fund management understands
that it is the current view of the staff of the SEC that the Funds are permitted
to engage in loan transactions only if the following conditions are met: (1) the
applicable Fund must receive 100% collateral in the form of cash or U.S.
government securities, e.g., U.S. Treasury bills or notes, from the borrower;
(2) the borrower must increase the collateral whenever the market value of the
borrowed securities (determined on a daily basis) rises above the level of the
collateral; (3) the applicable Fund must be able to terminate the loan after
notice; (4) the applicable Fund must receive reasonable interest on the loan or
a flat fee from the borrower, as well as amounts equivalent to any dividends,
interest or other distributions on the securities loaned and any increase in
market value; (5) the applicable Fund may pay only reasonable custodian fees in
connection with the loan; and (6) voting rights on the securities loaned may
pass to the borrower; however, if a material event affecting the investment
occurs, the Fund must be able to terminate the loan and vote proxies or enter
into an alternative arrangement with the borrower to enable the Fund to vote
proxies. Excluding items (1) and (2), these practices may be amended from time
to time as regulatory provisions permit.
While there may be delays in recovery of loaned securities or even a
loss of rights in collateral supplied should the borrower fail financially,
loans will be made only to firms deemed by the sub-advisers to be of good
standing and will not be made unless, in the judgment of the respective
sub-adviser, the consideration to be earned from such loans would justify the
risk.
It is expected that each of the Funds will use the cash portions of
loan collateral to invest in short-term income producing securities for such
Fund's account and that such Fund may share some of the income from these
investments with the borrower.
MANAGEMENT OF THE COMPANY
The overall management of the business and affairs of the Fund is
vested in the Company's Board of Directors. The Board of Directors approves all
significant agreements between the Company and persons or companies furnishing
services to the Funds, including the investment advisory agreement with AIM, the
agreements with AIM Distributors regarding distribution of each Fund's shares
and the agreements with State Street Bank and Trust Company as the custodian.
The day-to-day operations of each Fund are delegated to the officers of the
Company and to AIM, subject always to the objective and policies of the
applicable Fund and to the general supervision of the Board of Directors.
Certain directors and officers of the Company are affiliated with AIM and A I M
Management Group Inc. ("AIM Management"), the parent corporation of AIM.
16
<PAGE> 129
DIRECTORS AND OFFICERS
The directors and officers of the Company and their principal
occupations during the last five years are set forth below. Unless otherwise
indicated, the address of each director and officer is 11 Greenway Plaza, Suite
100, Houston, Texas 77046. All of the Company's executive officers hold similar
offices with some or all of the other investment companies managed or advised by
AIM or its subsidiaries (the " AIM Funds").
<TABLE>
<CAPTION>
==============================================================================================================
POSITIONS HELD PRINCIPAL OCCUPATION DURING, AT LEAST,
NAME, ADDRESS AND AGE WITH REGISTRANT THE PAST 5 YEARS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
*CHARLES T. BAUER (80) Director and Chairman of the Board of Directors,
Chairman A I M Management Group Inc.,
A I M Advisors, Inc., A I M Capital
Management, Inc., A I M Distributors, Inc.,
A I M Fund Services, Inc. and Fund
Management Company; and Vice Chairman
and Director, AMVESCAP PLC.
- --------------------------------------------------------------------------------------------------------------
BRUCE L. CROCKETT (55) Director Director, ACE Limited (insurance company).
906 Frome Lane Formerly, Director, President and Chief
McLean, VA 22102 Executive Officer, COMSAT Corporation and
Chairman, Board of Governors of INTELSAT
(international communications company.)
- --------------------------------------------------------------------------------------------------------------
OWEN DALY II (74) Director Director, Cortland Trust Inc. (investment
Six Blythewood Road company). Formerly, Director, CF & I Steel
Baltimore, MD 21210 Corp., Monumental Life Insurance Company
and Monumental General Insurance
Company; and Chairman of the Board of
Equitable Bancorporation.
- --------------------------------------------------------------------------------------------------------------
EDWARD K. DUNN, JR. (63) Director Chairman of the Board of Directors,
2 Hopkins Plaza, 20th Floor Mercantile Mortgage Corp. Formerly, Vice
Baltimore, MD 21201 Chairman of the Board of Directors and
President, Mercantile-Safe Deposit & Trust
Co.; and President, Mercantile Bankshares.
- --------------------------------------------------------------------------------------------------------------
JACK FIELDS (47) Director Chief Executive Officer, Texana Global, Inc.
Jetero Plaza, Suite E (foreign trading company) and Twenty-First
8810 Will Clayton Parkway Century Group, Inc. (governmental affairs
Humble, TX 77338 company). Formerly, Member of the U. S.
House of Representatives.
- --------------------------------------------------------------------------------------------------------------
</TABLE>
- -------------------
* A director who is an "interested person" of A I M Advisors, Inc. and the
Company as defined in the 1940 Act.
17
<PAGE> 130
<TABLE>
<CAPTION>
==============================================================================================================
POSITIONS HELD PRINCIPAL OCCUPATION DURING, AT LEAST,
NAME, ADDRESS AND AGE WITH REGISTRANT THE PAST 5 YEARS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
**CARL FRISCHLING (62) Director Partner, Kramer, Levin, Naftalis & Frankel
919 Third Avenue LLP (law firm). Formerly, Partner, Reid &
New York, NY 10022 Priest (law firm).
- --------------------------------------------------------------------------------------------------------------
*ROBERT H. GRAHAM (52) Director and Director, President and Chief Executive
President Officer, A I M Management Group Inc.;
Director and President, A I M Advisors, Inc.;
Director and Senior Vice President,
A I M Capital Management, Inc.,
A I M Distributors, Inc., A I M Fund Services,
Inc. and Fund Management Company;
Director, AMVESCAP PLC.
- --------------------------------------------------------------------------------------------------------------
PREMA MATHAI-DAVIS (48) Director Chief Executive Officer, YWCA of the U.S.A.;
350 Fifth Avenue, Suite 301 Commissioner, New York City Department
New York, NY 10118 for the Aging; and Member of the Board of
Directors, Metropolitan Transportation
Authority of New York State.
- --------------------------------------------------------------------------------------------------------------
LEWIS F. PENNOCK (56) Director Attorney in private practice in Houston,
6363 Woodway, Suite 825 Texas.
Houston, TX 77057
- --------------------------------------------------------------------------------------------------------------
IAN W. ROBINSON (76) Formerly, Executive Vice President and
183 River Drive Director Chief Financial Officer, Bell Atlantic
Tequesta, FL 33469 Management Services, Inc. (provider of
centralized management services to
telephone companies); Executive Vice
President, Bell Atlantic Corporation
(parent of seven telephone companies);
and Vice President and Chief Financial
Officer, Bell Telephone Company of
Pennsylvania and Diamond State
Telephone Company.
- --------------------------------------------------------------------------------------------------------------
LOUIS S. SKLAR (59) Director Executive Vice President, Development and
Transco Tower, 50th Floor Operations, Hines Interests Limited
2800 Post Oak Blvd. Partnership (real estate development).
Houston, TX 77056
- --------------------------------------------------------------------------------------------------------------
</TABLE>
- -----------------
** A director who is an "interested person" of the Company as defined in the
1940 Act.
* A director who is an "interested person" of A I M Advisors, Inc. and the
Company as defined in the 1940 Act.
18
<PAGE> 131
<TABLE>
<CAPTION>
==============================================================================================================
POSITIONS HELD PRINCIPAL OCCUPATION DURING, AT LEAST,
NAME, ADDRESS AND AGE WITH REGISTRANT THE PAST 5 YEARS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
***JOHN J. ARTHUR (54) Senior Vice Director, Senior Vice President, A I M
President and Advisors, Inc.; and Vice President and
Treasurer Treasurer, A I M Management Group Inc.
- --------------------------------------------------------------------------------------------------------------
GARY T. CRUM (51) Senior Vice Director and President, A I M Capital
President Management, Inc.; Director and Senior Vice
President, A I M Management Group Inc.
and A I M Advisors, Inc.; and Director,
A I M Distributors, Inc. and AMVESCAP PLC.
- --------------------------------------------------------------------------------------------------------------
***CAROL F. RELIHAN (44) Senior Vice Director, Senior Vice President, General
President and Counsel and Secretary, A I M Advisors, Inc.;
Secretary Senior Vice President, General Counsel and
Secretary, A I M Management Group Inc.;
Director, Vice President and General
Counsel, Fund Management Company;
General Counsel and Vice President,
A I M Fund Services, Inc.; and Vice
President, A I M Capital Management, Inc.
and A I M Distributors, Inc.
- --------------------------------------------------------------------------------------------------------------
DANA R. SUTTON (40) Vice President Vice President and Fund Controller,
and Assistant A I M Advisors, Inc.; and Assistant Vice
Treasurer President and Assistant Treasurer, Fund
Management Company.
- --------------------------------------------------------------------------------------------------------------
ROBERT G. ALLEY (50) Vice President Senior Vice President, A I M Capital
Management, Inc.; and Vice President,
A I M Advisors, Inc.
- --------------------------------------------------------------------------------------------------------------
STUART W. COCO (43) Vice President Senior Vice President, A I M Capital
Management, Inc.; and Vice President,
A I M Advisors, Inc.
- --------------------------------------------------------------------------------------------------------------
MELVILLE B. COX (55) 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.
- --------------------------------------------------------------------------------------------------------------
</TABLE>
- -----------------
*** Mr. Arthur and Ms. Relihan are married to each other.
19
<PAGE> 132
<TABLE>
<CAPTION>
==============================================================================================================
POSITIONS HELD PRINCIPAL OCCUPATION DURING, AT LEAST,
NAME, ADDRESS AND AGE WITH REGISTRANT THE PAST 5 YEARS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
KAREN DUNN KELLEY (38) Vice President Senior Vice President, A I M Capital
Management, Inc.; and Vice President,
A I M Advisors, Inc.
- --------------------------------------------------------------------------------------------------------------
JONATHAN C. SCHOOLAR (37) Vice President Senior Vice President, A I M Capital
Management, Inc.; and Vice President,
A I M Advisors, Inc.
==============================================================================================================
</TABLE>
The standing committees of the Board of Directors are the Audit
Committee, the Investments Committee and the Nominating and Compensation
Committee.
The members of the Audit Committee are Messrs. Crockett, Daly, Dunn
(Vice Chairman), Fields, Frischling, Pennock, Robinson (Chairman), Sklar and Ms.
Mathai-Davis. The Audit Committee is responsible for meeting with the Company'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 Company's fund accounting or its internal accounting
controls, and for considering such matters as may from time to time be set forth
in a charter adopted by the Board of Directors and such committee.
The members of the Investments Committee are Messrs. Bauer, Crockett,
Daly (Vice Chairman), Dunn, Fields, Frischling, Pennock, Robinson, Sklar
(Chairman) and Ms. Mathai-Davis. The Investments Committee is responsible for
reviewing portfolio compliance, brokerage allocation, portfolio investment
pricing issues, interim dividend and distribution issues, and 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 (Chairman), Daly, Dunn, Fields (Vice Chairman), Pennock, Robinson,
Sklar and Ms. Mathai-Davis. The Nominating and Compensation Committee is
responsible for considering and nominating individuals to stand for election as
directors who are not interested persons as long as the Company maintains a
distribution plan pursuant to Rule 12b-1 under the 1940 Act, reviewing from time
to time the compensation payable to the disinterested directors, and considering
such matters as may from time to time be set forth in a charter adopted by the
Board of Directors and such committee.
REMUNERATION OF DIRECTORS
Each director is reimbursed for expenses incurred in attending each
meeting of the Board of Directors or any committee thereof. Each director who is
not also an officer of the Company 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 other AIM Funds as well as a director of the
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.
20
<PAGE> 133
Set forth below is information regarding compensation paid or accrued
for each director of the Company during the year ended December 31, 1998:
<TABLE>
<CAPTION>
===============================================================================================================
RETIREMENT TOTAL
ESTIMATED BENEFITS COMPENSATION
COMPENSATION ACCRUED BY ALL FROM ALL
DIRECTOR FROM COMPANY(1) AIM FUNDS(2) AIM FUNDS(3)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Charles T. Bauer $ 0 $ 0 $ 0
- ---------------------------------------------------------------------------------------------------------------
Bruce L. Crockett [ ] 37,485 96,000
- ---------------------------------------------------------------------------------------------------------------
Owen Daly II [ ] 122,898 96,000
- ---------------------------------------------------------------------------------------------------------------
Edward K. Dunn, Jr. [ ] 0 78,889
- ---------------------------------------------------------------------------------------------------------------
Jack Fields [ ] 15,826 95,500
- ---------------------------------------------------------------------------------------------------------------
Carl Frischling(4) [ ] 97,791 [ ]
- ---------------------------------------------------------------------------------------------------------------
Robert H. Graham 0 0 0
- ---------------------------------------------------------------------------------------------------------------
John F. Kroeger(5) [ ] 107,896 [ ]
- ---------------------------------------------------------------------------------------------------------------
Prema Mathai-Davis [ ] 0 32,636
- ---------------------------------------------------------------------------------------------------------------
Lewis F. Pennock [ ] 45,766 [ ]
- ---------------------------------------------------------------------------------------------------------------
Ian W. Robinson [ ] 94,442 94,500
- ---------------------------------------------------------------------------------------------------------------
Louis S. Sklar [ ] 90,232 94,500
===============================================================================================================
</TABLE>
- ----------------
(1) The total amount of compensation deferred by all Directors of the Company
during the fiscal year ended December 31, 1998, including interest earned
thereon, was $_________________.
(2) During the fiscal year ended December 31, 1998, the total amount of expenses
allocated to the Company in respect of such retirement benefits was
$_________________. Data reflects compensation for the calendar year ended
December 31, 1998.
(3) Each Director serves as director or trustee of a total of 12 registered
investments companies advised by AIM (comprised of over 50 portfolios). Data
reflect total compensation earned during the calendar year ended December 31,
1998. Does not include accrued retirement benefits or earnings on deferred
compensation.
(4) During the fiscal year ended December 31, 1998, the Company paid
$_________________ in legal fees for services rendered by Kramer, Levin,
Naftalis & Frankel LLP. Mr. Frischling is a partner is such firm.
(5) Mr. Kroeger was a Director until June 11, 1998, when he resigned. On that
date he became a consultant to the Fund. Of the amount listed above,
$____________________ was compensation for services as a director and the
remainder as a consultant. Mr. Kroeger passed away on November 26, 1998. Mr.
Kroeger's widow will receive his pension as described below under "AIM Fund
Retirement Plan for Eligible Directors/Trustees."
21
<PAGE> 134
AIM FUNDS RETIREMENT PLAN FOR ELIGIBLE DIRECTORS/TRUSTEES
Under the terms of the AIM Funds Retirement Plan for Eligible
Directors/Trustees (the "Plan"), each director (who is not a employee of any of
the AIM Funds, A I M Management Group Inc. or any of their affiliates) may be
entitled to certain benefits upon retirement from the Board of Directors.
Pursuant to the Plan, the normal retirement date is the date on which the
eligible director has attained age 65 and has completed at least five years of
continuous service with one or more of the regulated investment companies
managed, administered or distributed by AIM or its affiliates (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 or her 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 Applicable
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, Sklar and Ms. Mathai-Davis are 11, 11, 0, 1, 21, 20, 17, 11, 9 and 0
years, respectively.
ESTIMATED ANNUAL BENEFITS UPON RETIREMENT
<TABLE>
<CAPTION>
=================================================
Number of Annual Retainer
Years of Paid by all
Service with Applicable AIM Funds
the Applicable
AIM Funds $80,000
=================================================
<S> <C>
10 $67,500
- -------------------------------------------------
9 $60,750
- -------------------------------------------------
8 $54,000
- -------------------------------------------------
7 $47,250
- -------------------------------------------------
6 $40,500
- -------------------------------------------------
5 $33,750
=================================================
</TABLE>
22
<PAGE> 135
Deferred Compensation Agreements
Messrs. Daly, Dunn, Fields, 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 Company, and such amounts are
placed into a deferral account. Currently, the deferring directors may select
various AIM Funds in which all or part of their deferral accounts 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 Company'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 Company. 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 Company and of each other AIM Fund from which they
are deferring compensation.
THE ADVISORY AND SUB-ADVISORY AGREEMENTS
The Company has entered into an Investment 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 was
organized in 1976, and, together with its subsidiaries, advises or manages over
110 investment portfolios encompassing a broad range of investment objectives.
AIM Management is a holding company engaged in the Financial services business
and is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire
Square, London EC2M 4YR, United Kingdom. AMVESCAP PLC and its subsidiaries are
an independent investment management group engaged in institutional investment
management and retail mutual fund businesses in the United States, Europe and
the Pacific Region. Certain of the directors and officers of AIM are also
executive officers of the Company and their affiliations are shown under
"Directors and Officers."
The sub-advisor to the LARGE CAP VALUE FUND and FLEX FUND is INVESCO
Capital Management, Inc., a Delaware corporation ("ICM"), which has its
principal office at 1315 Peachtree Street, N. E., Atlanta, Georgia 30309. ICM
also has an advisory office in Miami, Florida and a marketing and client service
office in San Francisco, California. ICM believes it has one of the nation's
largest discretionary portfolios of tax-exempt accounts (such as pension and
profit sharing funds for corporations and state and local governments). Funds
are supervised by investment managers who utilize ICM's facilities for
investment research and analysis, review of current economic conditions and
trends, and consideration of long-range investment policy matters.
The sub-advisor to the MULTIFLEX FUND is INVESCO Management and
Research, Inc., of Boston, Massachusetts, a Massachusetts corporation ("IMR"),
which has its principal office at 101 Federal Street, Boston, MA 02110. IMR
manages predominantly pension and endowment accounts. IMR currently sponsors one
investment company, The Commonwealth Investment Trust, which consists of one
portfolio.
The sub-advisor to the REAL ESTATE FUND is INVESCO Realty Advisors,
Inc., a Texas corporation based in Dallas ("IRAI"), which has its principal
office at One Lincoln Centre, Suite 700, 5400 LBJ Freeway/LB 2, Dallas, Texas
75240. IRAI is responsible for providing advisory services in the U.S. real
estate markets for AMVESCAP's clients worldwide. IRAI was established in 1983 as
a registered investment adviser and qualified professional asset manager. As of
December 31, 1998, IRAI's portfolio contained 199 properties totaling over 48
million square feet of commercial real estate and 25,410 apartment units.
Clients include corporate plans and public pension funds as well as endowment
and foundation accounts. IRAI currently advises one other mutual fund, INVESCO
Realty Fund.
23
<PAGE> 136
The sub-advisor to INTERNATIONAL VALUE FUND is INVESCO Global Asset
Management Limited, a ____________________ [corporation] ("IGAM"), which has its
principal office at Cedar House, 12 Bermudian Rd., 3rd Floor, Hamilton, HM AX,
Bermuda. ICAM is registered as an investment advisor under the Investment
Advisers Act of 1940. IGAM's responsibilities include analyzing global economic
trends and establishing AMVESCAP PLC's global investment asset allocation for
AMVESCAP PLC affiliates.
AIM and ICM provide general investment advice and portfolio management
to the LARGE CAP VALUE FUND and FLEX FUND. AIM and IMR provide general
investment advice and portfolio management to the MULTIFLEX FUND. AIM and IGAM
provide general investment advice and portfolio management to INTERNATIONAL
VALUE FUND. AIM and IRAI provide general investment advice and portfolio
management to the REAL ESTATE FUND. AIM, ICM, IMR, IRAI and IGAM are indirect
wholly owned subsidiaries of AMVESCAP (formerly, AMVESCO PLC and INVESCO PLC).
AMVESCAP, is one of the largest independent investment management businesses in
the world.
Effective August 4, 1997, AIM became the investment advisor for the
Funds pursuant to an investment advisory agreement with terms substantially
identical to those of the company's prior investment advisory contracts with
INVESCO Services, Inc. ("ISI"). The sub-advisors did not change other than the
substitution of IGAM for ICM as sub-advisor to INTERNATIONAL VALUE FUND.
Under their Investment Advisory and Sub-Advisory Agreements (the
"Agreements") with the respective Funds, the Advisor and sub-advisors will,
subject to the supervision of the Directors of the Company and in conformance
with the stated policies of the Funds, manage the investment operations of the
Funds. In this regard, it will be the responsibility of the Advisor and
sub-advisors not only to make investment decisions for the Funds, but also to
place the purchase and sale orders for the portfolio transactions of the Funds.
(See "Brokerage and Portfolio Transactions.") The Advisor and sub-advisors may
follow a policy of considering sales of shares of the Company as a factor in the
selection of broker-dealers to execute portfolio transactions. The Investment
Advisory Agreement provides that, in fulfilling its responsibilities, the
Advisor may engage the services of other investment managers with respect to one
or more of the Funds. In accordance with policies established by the Board of
Directors, AIM may take into account sales of shares of the Funds and other
funds advised by AIM in selecting broker-dealers to effect portfolio
transactions on behalf of the Funds.
The Advisor is also responsible for furnishing to the Funds, at the
Advisor's expense, the services of persons believed to be competent to perform
all supervisory and administrative services required by the Funds, in the
judgment of the Directors, to conduct their respective businesses effectively,
as well as the offices, equipment and other facilities necessary for their
operations. Such functions include the maintenance of each Fund's accounts and
records, and the preparation of all requisite corporate documents such as tax
returns and reports to the SEC and shareholders. Operational services which are
necessary for the day-to-day operations of the Funds are provided under a
separate Operating Services Agreement between the Company and AIM (See
"Operating Services Agreement").
Rule 18f-3 under the 1940 Act ("Rule 18f-3") permits a fund to use a
multiclass system including separate class arrangements for distribution of
shares and related exchange privileges applicable to the classes. The Company
has adopted a multiple class plan pursuant to Rule 18f-3, which provides that
advisory and operating services fees (see "Operating Services Agreement") are
expenses of a particular Fund and are not attributable to a particular class of
the Fund ("Fund Expenses") and, therefore, shall be allocated to each class on
the basis of its net asset value relative to the net asset value of the Fund.
(See "Computation of Net Asset Value").
Except as discussed below (see "Operating Services Agreement"), each of
the Funds is responsible for the payment of its own expenses. Interest, taxes,
distribution expenses, directors' fees and expenses and extraordinary items such
as litigation costs will be borne by the Company or particular Fund, as
applicable. Expenditures, including costs incurred in connection with the
purchase or sale of Fund securities, which are capitalized in accordance with
generally accepted accounting principles applicable to investment companies, are
accounted for as capital items and not as expenses.
24
<PAGE> 137
For the services to be rendered and the expenses to be assumed by the
Advisor under the Investment Advisory Agreements, each Fund will pay to the
Advisor an advisory fee which will be computed daily and paid as of the last day
of each month on the basis of the Fund's daily net asset value, using for each
daily calculation the most recently determined net asset value of the Fund. In
order to increase the return to investors, AIM may from time to time waive,
reduce its fee, or reimburse expenses, while retaining its ability to be
reimbursed for such fee prior to the end of each fiscal year. On an annual
basis, the advisory fee is equal to 0.75% of the average net asset value of the
LARGE CAP VALUE FUND and FLEX FUND, 0.90% of the average net asset value of the
REAL ESTATE FUND and 1.00% of the average net asset value of each of the
MULTIFLEX FUND and INTERNATIONAL VALUE FUND. Those fees which equal 0.75% of
average annual net assets are higher than those generally charged by investment
advisors to similar funds for advisory services. However, the Advisor also
provides certain supervisory and administrative services to the Funds pursuant
to the Investment Advisory Agreements.
For the services to be rendered and the expenses to be assumed by ICM,
IGAM, IMR and IRAI under their respective Sub-Advisory Agreements, the Advisor
will pay to each sub-advisor a fee which will be computed daily and paid as of
the last day of each month on the basis of each Fund's daily net asset value,
using for each daily calculation the most recently determined net asset value of
the Fund. (See "Computation of Net Asset Value"). On an annual basis, the
sub-advisory fee is equal to 0.20% of the average net asset value of the Fund
for each of the LARGE CAP VALUE FUND and FLEX FUND; 0.35% of the average net
asset value of the REAL ESTATE FUND on assets up to $100 million and 0.25% on
assets in excess of $100 million; 0.35% of the average net asset value of the
MULTIFLEX FUND on assets up to $500 million and 0.25% on assets in excess of
$500 million; and the following for the INTERNATIONAL VALUE FUND: 0.35% on net
assets up to $50 million, 0.30% on net assets over $50 million and up to $100
million, and 0.25% on net assets over $100 million.
The Agreements will each continue from year to year, provided that they
are specifically approved at least annually by (i) the vote of a majority of
each applicable Fund's outstanding voting securities (see "General Information
About the Company") or by the Directors, and (ii) the vote of a majority of the
Directors, who are not "interested persons" (as such term is defined in the 1940
Act) of the Funds or the Advisor or the respective sub-advisor. The Agreements
are terminable on 60 days' written notice by either party thereto and will
terminate automatically if assigned.
For the fiscal years ended December 31, 1998, 1997 and 1996, the
aggregate amounts of the advisory fees paid to AIM (or INVESCO Services, Inc.,
the prior advisor) by the Funds, were as follows:
<TABLE>
<CAPTION>
Aug. 4 Jan. 1
to Dec. 31 to Aug. 3
Fund 1998 1997* 1997 1996
---- ---- -------------- ---------- ----
<S> <C> <C> <C> <C>
LARGE CAP VALUE FUND $ $ 698,693 $ 486,185 $ 946,203
--------
FLEX FUND $ 2,511,884 1,732,896 3,351,899
--------
MULTIFLEX FUND $ 2,126,222 1,153,820 2,164,778
--------
REAL ESTATE FUND $ 229,632 90,122 102,386
--------
INTERNATIONAL VALUE FUND $ 536,578 272,940 314,843
--------
</TABLE>
*Effective August 4, 1997, AIM became advisor to the Funds.
The investment advisory services of the Advisor to the Funds are not
exclusive and the Advisor is free to render investment advisory services to
others, including other investment companies. See "Operating Services Agreement"
below regarding expense limitations.
OPERATING SERVICES AGREEMENT
AIM, as manager of the Funds, also provides operating services pursuant
to an Operating Services Agreement with the Fund. Under the Operating Services
Agreement, each Fund pays to AIM an annual fee of 0.45% of daily net assets of
the Fund for providing or arranging to provide accounting, legal (except
litigation), dividend disbursing, registrar, custodial, shareholder reporting,
sub-accounting and recordkeeping services and functions. These agreements
provide that AIM pays all fees and expenses associated with these
25
<PAGE> 138
and other functions, including, but not limited to, registration fees,
shareholder meeting fees, and proxy statement and shareholder report expenses.
The combined effect of the Advisory Agreements and Operating Services
Agreement, and the Distribution Plans of each of the Funds (see "Distribution of
Shares"), is to place a cap or ceiling on the total expenses of each Fund, other
than brokerage commissions, interest, taxes, litigation, directors' fees and
expenses, and other extraordinary expenses. AIM has voluntarily agreed to adhere
to maximum expense ratios for the Funds. To the extent that a Fund's expenses
exceed the amounts listed below, AIM will waive its fees or reimburse the Fund
to assure that each Fund's expenses do not exceed the designated maximum amounts
except for those items specifically identified above. The expense ceilings
include reductions at larger asset sizes to reflect anticipated economies of
scale as the Funds grow in size.
If, in any calendar quarter, the average net assets of each of the
LARGE CAP VALUE FUND or FLEX FUND are less than $500 million, each Fund's
expenses shall not exceed 1.55% for Class A and 2.20% for Class C; on the next
$500 million of net assets, expenses shall not exceed 1.50% for Class A and
2.15% for Class C; on the next $1 billion of net assets, expenses shall not
exceed 1.45% for Class A and 2.10% for Class C; and on all assets over $2
billion, expenses shall not exceed 1.40% for Class A and 2.05% for Class C. If,
in any calendar quarter, the average net assets of the MULTIFLEX FUND or
INTERNATIONAL VALUE FUND are less than $100 million, expenses shall not exceed
1.80% for Class A and 2.45% for Class C; on the next $400 million of net assets,
expenses shall not exceed 1.75% for Class A and 2.40% for Class C; on the next
$500 million, expenses shall not exceed 1.70% for Class A and 2.35% for Class C;
on the next $1 billion of net assets, expenses shall not exceed 1.65% for Class
A and 2.30% for Class C; and on all assets over $2 billion, expenses shall not
exceed 1.60% for Class A and 2.25% for Class C. If, in any calendar quarter, the
average net assets of the REAL ESTATE FUND are less than $500 million, expenses
shall not exceed 1.70% for Class A and 2.35% for Class C; on the next $500
million, expenses shall not exceed 1.65% for Class A and 2.30% for Class C; and
on all assets over $1 billion, expenses shall not exceed 1.60% for Class A and
2.25% for Class C.
DISTRIBUTION OF SHARES
Rule 12b-1 under the 1940 Act ("Rule 12b-1") permits a fund to use its
assets to bear expenses of distributing its shares if it complies with various
conditions, including adoption of a plan of distribution containing certain
provisions set forth in the Rule. The plans described below were approved with
respect to each Fund by the directors of the Fund, including a majority of the
directors who are not "interested persons" of the Funds as defined in the 1940
Act ("Independent Directors") and the directors who have no direct or indirect
financial interest in the plan or any agreement related thereto (the "Rule 12b-1
Directors"). The directors determined that, in their judgment, there was a
reasonable likelihood that the plans will benefit each Fund and its shareholders
by, among other things, providing broker-dealers with an incentive to sell
additional shares of the Company, thereby helping to satisfy the Company's
liquidity needs and helping to increase the Company's investment flexibility.
Continuation of the plans is approved annually. On June 8, 1993, the Plan and
Agreement of Distribution ("Distribution Plan") applicable to Class C shares was
approved by shareholders of the LARGE CAP VALUE FUND and FLEX FUND. On November
8, 1993, the Distribution Plan applicable to Class C shares was approved by the
sole shareholder of the MULTIFLEX FUND. On April 10, 1995, the Distribution Plan
applicable to Class C shares was approved by the sole shareholder of each of the
REAL ESTATE FUND and INTERNATIONAL VALUE FUND. The Distribution Plan for Class A
shares was approved by the board of directors of the Company at its August 13,
1996 Board meeting, and by the initial shareholder(s) of Class A shares of each
Fund prior to their public offering. On February 4, 1997, the board of directors
approved amending the Distribution Plan for Class A shares, effective January 1,
1997, to convert the Distribution Plan to a compensation type Rule 12b-1 plan.
This amendment of the Distribution Plan did not result in increasing the amount
of any Fund's payments thereunder. The Master Distribution Plan for Class B
shares was approved by the board of directors of the Company at its September
20, 1997 Board meeting.
CLASS A AND CLASS C DISTRIBUTION PLAN. The Company has adopted a Plan and
Agreement of Distribution pursuant to Rule 12b-1 under the 1940 Act relating to
the Class A and Class C shares of the Funds (the "Class A and C Plan"). The
Class A and C Plan provides that each Fund may incur certain distribution and
maintenance fees which may not exceed a maximum annual rate of 0.35% of the
average net assets attributable to Class A shares and 1.00% of the average net
assets attributable to Class C shares. For both
26
<PAGE> 139
Class A and Class C shares, this expense includes the payment of 0.25% of
average annual net assets to broker-dealers and other qualifying financial
institutions as a "service fee" for providing account maintenance or personal
service to existing shareholders.
Under the Class A and C Plan, broker-dealers selling Fund shares may be
paid fees for selling shares and maintaining Fund assets. For Class A shares, of
such fees .25% of average net assets may be paid as a "service fee." The service
fee, computed on the basis of the average net asset value of Class A shares sold
by broker-dealers which are outstanding on the books of such Funds for each
month, will be made at least quarterly to the selling broker-dealer. For Class C
shares, generally an asset-based fee for selling shares and providing services
to shareholders will be paid out of Rule 12b-1 plan payments by the Distributor
as follows: payments not exceeding 1.00% per annum, which amount includes the
0.25% "service fee," of the average net asset value of Class C shares sold by
broker-dealers, which are outstanding on the books of such Funds for each month,
will be made at least quarterly to the selling broker-dealer. Additionally, the
plan authorizes each applicable Fund, subject to the annual limitations
described above, to pay the Distributor (or other broker-dealers): (1) the costs
and expenses incurred in preparation, printing and distribution of the Company's
sales literature and prospectuses and statements of additional information for
prospective investors; (2) amounts from time to time to support marketing shares
of the Company through programs with broker-dealers selling Company shares; and
(3) overhead expenses which include the costs of the Distributor's personnel
whose primary responsibilities involve marketing the Company. In addition, the
plan provides that the Company may pay, subject to the annual limitations, such
other distribution costs and expenses as the Directors may from time to time
specify.
CLASS B DISTRIBUTION PLAN. The Company has also adopted a Master Distribution
Plan pursuant to Rule 12b-1 under the 1940 Act relating to Class B shares of the
Funds. Under the Class B Plan, the Funds pay compensation to AIM Distributors at
an annual rate of 1.00% of the average daily net assets attributable to Class B
shares. Of such amount, the Funds pay a service fee of 0.25% of the average
daily net assets attributable to Class B shares to selected dealers and other
institutions which furnish continuing personal shareholder services to their
customers who purchase and own Class B shares. Amounts paid in accordance with
the Class B Plan may be used to finance any activity primarily intended to
result in the sale of Class B shares, including, but not limited to, printing of
prospectuses and statements of additional information and reports for other than
existing shareholders; overhead; preparation and distribution of advertising
material and sales literature; expenses of organizing and conducting sales
seminars; supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements; and costs of administering the Class B Plan.
BOTH PLANS. Pursuant to an incentive program, AIM Distributors may enter into
agreements ("Shareholder Service Agreements") with investment dealers selected
from time to time by AIM Distributors for the provision of distribution
assistance in connection with the sale of the Funds' shares to such dealers'
customers, and for the provision of continuing personal shareholder services to
customers who may from time to time directly or beneficially own shares of the
Funds. The distribution assistance and continuing personal shareholder services
to be rendered by dealers under the Shareholder Service Agreements may include,
but shall not be limited to, the following: distributing sales literature;
answering routine customer inquiries concerning the Funds; assisting customers
in changing dividend options, account designations and addresses, and in
enrolling in any of several special investment plans offered in connection with
the purchase of the Fund's shares; assisting in the establishment and
maintenance of customer accounts and records and in the processing of purchase
and redemption transactions; investing dividends and any capital gains
distributions automatically in the Fund's shares; and providing such other
information and services as the Funds or the customer may reasonably request.
Under the Plans, in addition to the Shareholder Service Agreements
authorizing payments to selected dealers, banks may enter into Shareholder
Service Agreements authorizing payments under the Plans to be made to banks
which provide services to their customers who have purchased shares. Services
provided pursuant to Shareholder Service Agreements with banks may include some
or all of the following: answering shareholder inquiries regarding the Funds and
the Company; performing sub-accounting; establishing and maintaining shareholder
accounts and records; processing customer purchase and redemption transactions;
providing periodic statements showing a shareholder's account balance and the
integration of such statements
27
<PAGE> 140
with those of other transactions and balances in the shareholder's other
accounts serviced by the bank; forwarding applicable prospectuses, proxy
statements, reports and notices to bank clients who hold shares of the Funds;
and such other administrative services as the Funds reasonably may request, to
the extent permitted by applicable statute, rule or regulation. Similar
agreements may be permitted under the Plans for institutions which provide
recordkeeping for and administrative services to 401(k) plans.
The Company may also enter into Variable Group Annuity Contractholder
Service Agreements ("Variable Contract Agreements") on behalf of the Funds
authorizing payments to selected insurance companies offering variable annuity
contracts to employers as funding vehicles for retirement plans qualified under
Section 401(a) of the Internal Revenue Code. Services provided pursuant to such
Variable Contract Agreements may include some or all of the following: answering
inquiries regarding the Fund and the Company; performing sub-accounting;
establishing and maintaining Contractholder accounts and records; processing and
bunching purchase and redemption transactions; providing periodic statements of
contract account balances; forwarding such reports and notices to
Contractholders relative to the Fund as deemed necessary; generally,
facilitating communications with Contractholders concerning investments in a
Fund on behalf of Plan participants; and performing such other administrative
services as deemed to be necessary or desirable, to the extent permitted by
applicable statute, rule or regulation to provide such services.
Financial intermediaries and any other person entitled to receive
compensation for selling shares of the Funds may receive different compensation
for selling shares of one particular class over another.
Under a Shareholder Service Agreement, the Funds agree to pay
periodically fees to selected dealers and other institutions who render the
foregoing services to their customers. The fees payable under a Shareholder
Service Agreement generally will be calculated at the end of each payment period
for each business day of the Funds during such period at the annual rate of
0.25% of the average daily net asset value of the Funds' shares purchased or
acquired through exchange. Fees calculated in this manner shall be paid only to
those selected dealers or other institutions who are dealers or institutions of
record at the close of business on the last business day of the applicable
payment period for the account in which the Funds' shares are held.
The Plans are subject to any applicable limitations imposed from time
to time by rules of the National Association of Securities Dealers, Inc.
Under the Plans, AIM Distributors may in its discretion from time to
time agree to waive voluntarily all or any portion of its 12b-1 fee, while
retaining its ability to be reimbursed for such fee prior to the end of each
fiscal year.
AIM Distributors does not act as principal, but rather as agent for the
Funds, in making dealer incentive and shareholder servicing payments under the
Plans. These payments are an obligation of the Funds and not of AIM
Distributors.
GENERAL. The Plans may be terminated at any time by vote of a majority of the
Rule 12b-1 Directors or by vote of a majority of the outstanding voting
securities of the applicable class of the Fund. Any change in a Plan that would
materially increase the distribution expenses of a class of the Fund provided
for in the Plans requires shareholder approval; otherwise, the Plans may be
amended by a majority of the Directors, including a majority of the Rule 12b-1
Directors.
For so long as the Plans are in effect, the Funds will be required to
commit the selection and nomination of candidates for Independent Directors to
the discretion of the Independent Directors.
The total amounts paid by each Fund under the foregoing arrangements
for any year may not exceed the maximum plan limit specified above, and the
amounts and purposes of expenditures under the Plans must be reported to the
Rule 12b-1 Directors quarterly. The Rule 12b-1 Directors may require or approve
changes in the implementation or operation of the Plans and may also require
that total expenditures by each applicable class of a Fund under the Plans be
kept within limits lower than the maximum amount permitted by the Plans as
stated above.
28
<PAGE> 141
The Distributor may pay additional amounts from its own resources to
dealers or others who meet designated eligibility criteria relating to sales of
Company shares, or who provide administrative or informational assistance to
shareholders.
An estimate by category of the allocation of actual fees paid by each
of the Funds under the Plan for Class A shares for the year ended December 31,
1998, was as follows:
<TABLE>
<CAPTION>
LARGE CAP MULTIFLEX REAL INTERNATIONAL
VALUE FUND FLEX FUND FUND ESTATE FUND VALUE FUND
---------- --------- ---- ----------- ----------
<S> <C> <C> <C> <C> <C>
CLASS A
Advertising ................$ [ ] $ [ ] $ [ ] $ [ ] $ [ ]
Printing and mailing
prospectuses, semi-
annual reports and
annual reports
(other than to current
shareholders).................[ ] [ ] [ ] [ ] [ ]
Seminars .....................[ ] [ ] [ ] [ ] [ ]
Compensation to
Underwriters to partially
offset other marketing
expenses......................[ ] [ ] [ ] [ ] [ ]
Compensation to
Dealers including
finder's fees.................[ ] [ ] [ ] [ ] [ ]
Compensation to
Sales Personnel...............[ ] [ ] [ ] [ ] [ ]
Annual Report Total...........[ ] [ ] [ ] [ ] [ ]
</TABLE>
An estimate by category of the allocation of actual fees paid by each of the
Funds under the Plan for Class B shares for the period March 3, 1998 through
December 31, 1998, was as follows:
<TABLE>
<CAPTION>
LARGE CAP MULTIFLEX REAL INTERNATIONAL
VALUE FUND FLEX FUND FUND ESTATE FUND VALUE FUND
---------- --------- ---- ----------- ----------
<S> <C> <C> <C> <C> <C>
CLASS B
Advertising ................$ [ ] $ [ ] $ [ ] $ [ ] $ [ ]
Printing and mailing
prospectuses, semi-
annual reports and
annual reports
(other than to current
shareholders).................[ ] [ ] [ ] [ ] [ ]
Seminars .....................[ ] [ ] [ ] [ ] [ ]
Compensation to
Underwriters to partially
offset other marketing
expenses......................[ ] [ ] [ ] [ ] [ ]
Compensation to
Dealers including
finder's fees.................[ ] [ ] [ ] [ ] [ ]
Compensation to
Sales Personnel...............[ ] [ ] [ ] [ ] [ ]
Annual Report Total...........[ ] [ ] [ ] [ ] [ ]
</TABLE>
29
<PAGE> 142
An estimate by category of the allocation of actual fees paid by each of the
Funds under the Plan for Class C shares for the year ended December 31, 1998,
was as follows:
<TABLE>
<CAPTION>
LARGE CAP MULTIFLEX REAL INTERNATIONAL
VALUE FUND FLEX FUND FUND ESTATE FUND VALUE FUND
---------- --------- ---- ----------- ----------
<S> <C> <C> <C> <C> <C>
CLASS C
Advertising ................$ [ ] $ [ ] $ [ ] $ [ ] $ [ ]
Printing and mailing
prospectuses, semi-
annual reports and
annual reports
(other than to current
shareholders).................[ ] [ ] [ ] [ ] [ ]
Seminars .....................[ ] [ ] [ ] [ ] [ ]
Compensation to
Underwriters to partially
offset other marketing
expenses......................[ ] [ ] [ ] [ ] [ ]
Compensation to
Dealers including
finder's fees.................[ ] [ ] [ ] [ ] [ ]
Compensation to
Sales Personnel...............[ ] [ ] [ ] [ ] [ ]
Annual Report Total...........[ ] [ ] [ ] [ ] [ ]
</TABLE>
For the fiscal year ended December 31, 1998, each Fund paid AIM
Distributors the following amounts with respect to the Class A shares under the
Distribution Plans:
CLASS A SHARES
1998
LARGE CAP VALUE FUND
FLEX FUND
MULTIFLEX FUND
REAL ESTATE FUND
INTERNATIONAL VALUE FUND
For the period March 3, 1998 through December 31, 1998, each Fund paid
AIM Distributors the following amount with respect to the Class B shares under
the Distribution Plans:
CLASS B SHARES
1998
LARGE CAP VALUE FUND
FLEX FUND
MULTIFLEX FUND
REAL ESTATE FUND
INTERNATIONAL VALUE FUND
30
<PAGE> 143
For the fiscal year ended December 31, 1998, each Fund paid AIM
Distributors the following amount with respect to the Class C shares under the
Distribution Plans:
CLASS C SHARES
1998
LARGE CAP VALUE FUND
FLEX FUND
MULTIFLEX FUND
REAL ESTATE FUND
INTERNATIONAL VALUE FUND
THE DISTRIBUTOR
AIM Distributors, the Company's distributor, is the principal
underwriter of the Company under separate Distribution Agreements (the
"Distribution Agreement"). The Distributor's office is located at 11 Greenway
Plaza, Suite 100, Houston, Texas 77046-1143. The Distributor will receive
payments from each Fund pursuant to the provisions of the Company's plans of
distribution described under "Distribution of Shares." Prior to August 4, 1997,
INVESCO Services, Inc. (the "Prior Distributor") was the principal underwriter
of the Company.
The Distribution Agreements provide AIM Distributors with the exclusive
right to distribute shares of the Funds directly and through institutions with
whom AIM Distributors has entered into selected dealer agreements. Under the
Distribution Agreement for the Class B shares, AIM Distributors sells Class B
shares at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its assignee or transferee)
will receive 0.75% (of the total 1.00% payable under the distribution plan
applicable to Class B shares) of each Fund's average daily net assets
attributable to Class B shares attributable to the sales efforts of AIM
Distributors.
The Distribution Agreements provide that AIM Distributors will bear the
expenses of printing from the final proof and distributing the Funds'
prospectuses and statements of additional information relating to public
offerings made by AIM Distributors pursuant to the Distribution Agreements
(other than those prospectuses and statements of additional information
distributed to existing shareholders of the Funds), and any promotional or sales
literature used by AIM Distributors or furnished by AIM Distributors to dealers
in connection with the public offering of the Funds' shares, including expenses
of advertising in connection with such public offerings. AIM Distributors has
not undertaken to sell any specified number of shares of any classes of the
Funds.
AIM Distributors expects to pay sales commissions from its own
resources to dealers and institutions who sell Class B and Class C shares of the
Funds at the time of such sales.
The Company (on behalf of any class of any Fund) or AIM Distributors
may terminate the Distribution Agreements on sixty (60) days written notice
without penalty. The Distribution Agreements will terminate automatically in the
event of their assignment. In the event the Class B shares Distribution
Agreement is terminated, AIM Distributors would continue to receive payments of
asset-based distribution fees in respect of the outstanding Class B shares
attributable to the distribution efforts of AIM Distributors; provided, however,
that a complete termination of the Class B Plan (as defined in such Plan) would
terminate all payments to AIM Distributors. Termination of the Class B Plan or
the Distribution Agreement for Class B shares would not affect the obligation of
a Fund and its Class B shareholders to pay contingent deferred sales charges.
From time to time, AIM Distributors may transfer and sell its rights to
payments under the Class B Plan in order to finance distribution expenditures in
respect of Class B shares.
31
<PAGE> 144
The following chart reflects the total sales charges paid in connection
with the sale of Class A shares of each Fund and the amount retained by AIM
Distributors for the year ended December 31, 1998 and for period August 4, 1997
to December 31, 1997, and the amount retained by the Prior Distributor for the
period January 1, 1997 to August 3, 1997:
<TABLE>
<CAPTION>
AUGUST 4, 1997 JANUARY 1, 1997
TO TO
1998 DECEMBER 31, 1997 AUGUST 3, 1997
---- ----------------- --------------
SALES AMOUNT SALES SALES AMOUNT
CHARGES RETAINED CHARGES CHARGES RETAINED
------- -------- ------- ------- --------
<S> <S> <S> <C> <C> <C>
LARGE CAP VALUE FUND [ ] [ ] $50,144 $ 7,461 $ 999
FLEX FUND [ ] [ ] 80,657 11,729 6,860
MULTIFLEX FUND [ ] [ ] 200,181 30,382 7,203
REAL ESTATE FUND [ ] [ ] 356,286 54,138 1,424
INTERNATIONAL VALUE FUND [ ] [ ] 113,771 16,464 8,333
</TABLE>
The following chart reflects the contingent deferred sales charges paid
by Class A shareholders for the year ended December 31, 1998 and for the period
August 4, 1997 to December 31, 1997, and by Class B shareholder for the period
March 3, 1998 (inception date for Class B shares) to December 31, 1998, and by
Class C shareholders for the year ended December 1998 and for the period August
4, 1997 to December 1997, and the amount paid by Class A and Class C
shareholders to the Prior Distributor for the period January 1, 1997 to August
3, 1997:
<TABLE>
<CAPTION>
1998 AUGUST 4, 1997 JANUARY 1, 1997
---- TO TO
DECEMBER 31, 1997 AUGUST 3, 1997
----------------- --------------
<S> <C> <C>
LARGE CAP VALUE FUND $ 570 $ 8,692
FLEX FUND 18,422 18,877
MULTIFLEX FUND 10,269 12,043
REAL ESTATE FUND 2,643 1,935
INTERNATIONAL VALUE FUND 13,392 8,692
</TABLE>
SALES CHARGES AND DEALER CONCESSIONS
CATEGORY I. Certain AIM Funds are currently sold with a sales charge
ranging from 5.50% to 2.00% of the offering price on purchases of less than
$1,000,000. These AIM Funds include Class A shares of each of AIM Advisor Flex
Fund, AIM Advisor International Value Fund, AIM Advisor Large Cap Value Fund,
AIM Advisor MultiFlex Fund, AIM Aggressive Growth Fund, AIM Asian Growth Fund,
AIM Basic Value Fund, AIM Blue Chip Fund, AIM Capital Development Fund, AIM
Charter Fund, AIM Constellation Fund, AIM European Development Fund, AIM Europe
Growth Fund, AIM Global Utilities Fund, AIM Global Growth & Income Fund, AIM
International Equity Fund, AIM Japan Growth Fund, AIM Large Cap Growth Fund, AIM
Mid Cap Equity Fund, AIM Mid Cap Opportunities Fund, AIM New Pacific Growth
Fund, AIM Select Growth Fund, AIM Small Cap Growth Fund, AIM Small Cap
Opportunities Fund, AIM Value Fund and AIM Weingarten Fund.
32
<PAGE> 145
<TABLE>
<CAPTION>
Dealer
Concession
Investor's Sales Charge ----------
---------------------------- As a
As a As a Percentage
Percentage Percentage of the
of the Public of the Net Public
Amount of Investment in Offering Amount Offering
Single Transaction Price Invested Price
------------------ ----- -------- -----
<S> <C> <C> <C>
Less than $ 25,000 5.50% 5.82% 4.75%
$ 25,000 but less than $ 50,000 5.25 5.54 4.50
$ 50,000 but less than $ 100,000 4.75 4.99 4.00
$100,000 but less than $ 250,000 3.75 3.90 3.00
$250,000 but less than $ 500,000 3.00 3.09 2.50
$500,000 but less than $ 1,000,000 2.00 2.04 1.60
</TABLE>
CATEGORY II. Certain AIM Funds are currently sold with a sales charge
ranging from 4.75% to 2.00% of the offering price on purchases of less than
$1,000,000. These AIM Funds are: the Class A shares of each of AIM Advisor Real
Estate Fund, AIM Balanced Fund, AIM Developing Markets Fund, AIM Emerging
Markets Debt Fund, AIM Global Aggressive Growth Fund, AIM Global Consumer
Products and Services Fund, AIM Global Financial Services Fund, AIM Global
Government Income Fund, AIM Global Growth Fund, AIM Global Health Care Fund, AIM
Global Income Fund, AIM Global Infrastructure Fund, AIM Global Resources Fund,
AIM Global Telecommunications Fund, AIM Global Trends Fund, AIM High Income
Municipal Fund, AIM High Yield Fund, AIM High Yield Fund II, AIM Income Fund,
AIM Intermediate Government Fund, AIM Latin American Fund, AIM Municipal Bond
Fund, AIM Strategic Income Fund and AIM Tax-Exempt Bond Fund of Connecticut.
<TABLE>
<CAPTION>
Dealer
Concession
Investor's Sales Charge ----------
---------------------------- As a
As a As a Percentage
Percentage Percentage of the
of the Public of the Net Public
Amount of Investment in Offering Amount Offering
Single Transaction Price Invested Price
------------------ ----- -------- -----
<S> <C> <C> <C>
Less than $ 50,000 4.75% 4.99% 4.00%
$ 50,000 but less than $ 100,000 4.00 4.17 3.25
$100,000 but less than $ 250,000 3.75 3.90 3.00
$250,000 but less than $ 500,000 2.50 2.56 2.00
$500,000 but less than $ 1,000,000 2.00 2.04 1.60
</TABLE>
33
<PAGE> 146
CATEGORY III. Certain AIM Funds are currently sold with a sales charge
ranging from 1.00% to 0.50% of the offering price on purchases of less than
$1,000,000. These AIM Funds are the Class A shares of each of AIM Limited
Maturity Treasury Fund and AIM Tax-Free Intermediate Fund.
<TABLE>
<CAPTION>
Dealer
Concession
Investor's Sales Charge ----------
---------------------------- As a
As a As a Percentage
Percentage Percentage of the
of the Public of the Net Public
Amount of Investment in Offering Amount Offering
Single Transaction Price Invested Price
------------------ ----- -------- -----
<S> <C> <C> <C>
Less than $ 100,000 1.00% 1.01% 0.75%
$100,000 but less than $ 250,000 0.75 0.76 0.50
$250,000 but less than $ 1,000,000 0.50 0.50 0.40
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however,
AIM Distributors may pay a dealer concession and/or advance a service fee on
such transactions as set forth below.
ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the
entire initial sales charge to dealers for all sales with respect to which
orders are placed with AIM Distributors during a particular period. Dealers to
whom substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. At the option of the dealer, such
incentives may take the form of payment for travel expenses, including lodging,
incurred in connection with trips taken by qualifying registered representatives
and their families to places within or outside the United States. The total
amount of such additional bonus payments or other consideration shall not exceed
0.25% of the public offering price of the shares sold. Any such bonus or
incentive programs will not change the price paid by investors for the purchase
of the applicable AIM Fund's shares or the amount that any particular AIM Fund
will receive as proceeds from such sales. Dealers may not use sales of the AIM
Funds' shares to qualify for any incentives to the extent that such incentives
may be prohibited by the laws of any state.
AIM Distributors may make payments to dealers and institutions who are
dealers of record for purchases of $1 million or more of Class A shares (or
shares which normally involve payment of initial sales charges), which are sold
at net asset value and are subject to a contingent deferred sales charge, for
all AIM Funds other than Class A shares of each of AIM Limited Maturity Treasury
Fund and AIM Tax-Free Intermediate Fund as follows: 1% of the first $2 million
of such purchases, plus 0.80% of the next $1 million of such purchases, plus
0.50% of the next $17 million of such purchases, plus 0.25% of amounts in excess
of $20 million of such purchases. AIM Distributors may make payments to dealers
and institutions who are dealers of record for purchases of $1 million or more
of Class A shares (or shares which normally involve payment of initial sales
charges), and which are sold at net asset value and are not subject to a
contingent deferred sales charge, in an amount up to 0.10% of such purchases of
Class A shares of AIM Limited Maturity Treasury Fund, and in an amount up to
0.25% of such purchases of Class A shares of AIM Tax-Free Intermediate Fund.
AIM Distributors may pay sales commissions to dealers and institutions
who sell Class B shares of the AIM Funds at the time of such sales. Payments
with respect to Class B shares will equal 4.00% of the purchase price of the
Class B shares sold by the dealer or institution, and will consist of a sales
commission equal to 3.75% of the purchase price of the Class B shares sold plus
an advance of the first year service fee of 0.25% with respect to such shares.
The portion of the payments to AIM Distributors under the Class B Plan
34
<PAGE> 147
which constitutes an asset-based sales charge (0.75%) is intended in part to
permit AIM Distributors to recoup a portion of such sales commissions plus
financing costs.
AIM Distributors may pay sales commissions to dealers and institutions
who sell Class C shares of the AIM Funds at the time of such sales. Payments
with respect to Class C shares will equal 1.00% of the purchase price of the
Class C shares sold by the dealer or institution, and will consist of a sales
commission of 0.75% of the purchase price of the Class C shares sold plus an
advance of the first year service fee of 0.25% with respect to such shares. AIM
Distributors will retain all payments received by it relating to Class C shares
for the first year after they are purchased. The portion of the payments to AIM
Distributors under the Class A and C Plan attributable to Class C shares which
constitutes an asset-based sales charge (0.75%) is intended in part to permit
AIM Distributors to recoup a portion of on-going sales commissions to dealers
plus financing costs, if any. After the first full year, AIM Distributors will
make such payments quarterly to dealers and institutions based on the average
net asset value of Class C shares which are attributable to shareholders for
whom the dealers and institutions are designated as dealers of record. These
commissions are not paid on sales to investors exempt from the CDSC, including
shareholders of record on April 30, 1995, who purchase additional shares in any
of the Funds on or after May 1, 1995, and in circumstances where AIM
Distributors grants an exemption on particular transactions.
AIM Distributors may pay investment dealers or other financial service
firms for share purchases (measured on an annual basis) of Class A Shares of all
AIM Funds except AIM Limited Maturity Treasury Fund, AIM Tax-Free Intermediate
Fund and AIM Tax-Exempt Cash Fund sold at net asset value to an employee benefit
plan as follows: 1% of the first $2 million of such purchases, plus 0.80% of the
next $1 million of such purchases, plus 0.50% of the next $17 million of such
purchases, plus 0.25% of amounts in excess of $20 million of such purchases and
up to 0.10% of the net asset value of any Class A shares of AIM Limited Maturity
Treasury Fund sold at net asset value to an employee benefit plan in accordance
with this paragraph.
REDUCTIONS IN INITIAL SALES CHARGES
Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of shares of the AIM Funds that are
otherwise subject to an initial sales charge, provided that such purchases are
made by a "purchaser" as hereinafter defined. Purchases of Class A shares of AIM
Tax-Exempt Cash Fund, AIM Cash Reserve Shares of AIM Money Market Fund and Class
B and Class C shares of the AIM Funds will not be taken into account in
determining whether a purchase qualifies for a reduction in initial sales
charges.
The term "purchaser" means:
o an individual and his or her spouse and children, including any
trust established exclusively for the benefit of any such person;
or a pension, profit-sharing, or other benefit plan established
exclusively for the benefit of any such person, such as an IRA,
Roth IRA, a single-participant money-purchase/profit-sharing plan
or an individual participant in a 403(b) Plan (unless such 403(b)
plan qualifies as the purchaser as defined below);
o a 403(b) plan, the employer/sponsor of which is an organization
described under Section 501(c)(3) of the Internal Revenue Code of
1986, as amended (the "Code"), if:
a. the employer/sponsor must submit contributions for all
participating employees in a single contribution transmittal
(i.e., the Funds will not accept contributions submitted with
respect to individual participants);
b. each transmittal must be accompanied by a single check or wire
transfer; and
c. all new participants must be added to the 403(b) plan by
submitting an application on behalf of each new participant
with the contribution transmittal;
35
<PAGE> 148
o a trustee or fiduciary purchasing for a single trust, estate or
single fiduciary account (including a pension, profit-sharing or
other employee benefit trust created pursuant to a plan qualified
under Section 401 of the Code) and 457 plans, although more than
one beneficiary or participant is involved;
o a Simplified Employee Pension (SEP), Salary Reduction and other
Elective Simplified Employee Pension account (SAR-SEP) or a
Savings Incentive Match Plans for Employees IRA (SIMPLE IRA),
where the employer has notified the distributor in writing that
all of its related employee SEP, SAR-SEP or SIMPLE IRA accounts
should be linked; or
o any other organized group of persons, whether incorporated or not,
provided the organization has been in existence for at least six
months and has some purpose other than the purchase at a discount
of redeemable securities of a registered investment company.
Investors or dealers seeking to qualify orders for a reduced initial
sales charge must identify such orders and, if necessary, support their
qualification for the reduced charge. AIM Distributors reserves the right to
determine whether any purchaser is entitled, by virtue of the foregoing
definition, to the reduced sales charge. No person or entity may distribute
shares of the AIM Funds without payment of the applicable sales charge other
than to persons or entities who qualify for a reduction in the sales charge as
provided herein.
1. LETTERS OF INTENT. A purchaser, as previously defined, may pay
reduced initial sales charges by completing the appropriate section of the
account application and by fulfilling a Letter of Intent ("LOI"). The LOI
privilege is also available to holders of the Connecticut General Guaranteed
Account, established for tax qualified group annuities, for contracts purchased
on or before June 30, 1992. The LOI confirms such purchaser's intention as to
the total investment to be made in shares of the AIM Funds (except for (i) Class
A shares of AIM Tax-Exempt Cash Fund, and AIM Cash Reserve Shares of AIM Money
Market Fund and (ii) Class B and Class C shares of the AIM Funds) within the
following 13 consecutive months. By marking the LOI section on the account
application and by signing the account application, the purchaser indicates that
he understands and agrees to the terms of the LOI and is bound by the provisions
described below.
Each purchase of fund shares normally subject to an initial sales
charge made during the 13-month period will be made at the public offering price
applicable to a single transaction of the total dollar amount indicated by the
LOI, as described under "Sales Charges and Dealer Concessions." It is the
purchaser's responsibility at the time of purchase to specify the account
numbers that should be considered in determining the appropriate sales charge.
The offering price may be further reduced as described under "Rights of
Accumulation" if the Transfer Agent is advised of all other accounts at the time
of the investment. Shares acquired through reinvestment of dividends and capital
gains distributions will not be applied to the LOI. At any time during the
13-month period after meeting the original obligation, a purchaser may revise
his intended investment amount upward by submitting a written and signed
request. Such a revision will not change the original expiration date. By
signing an LOI, a purchaser is not making a binding commitment to purchase
additional shares, but if purchases made within the 13-month period do not total
the amount specified, the investor will pay the increased amount of sales charge
as described below. Purchases made within 90 days before signing an LOI will be
applied toward completion of the LOI. The LOI effective date will be the date of
the first purchase within the 90-day period. The Transfer Agent will process
necessary adjustments upon the expiration or completion date of the LOI.
Purchases made more than 90 days before signing an LOI will be applied toward
completion of the LOI based on the value of the shares purchased calculated at
the public offering price on the effective date of the LOI.
To assure compliance with the provisions of the 1940 Act, out of the
initial purchase (or subsequent purchases if necessary) the Transfer Agent will
escrow in the form of shares an appropriate dollar amount (computed to the
nearest full share). All dividends and any capital gain distributions on the
escrowed shares will be credited to the purchaser. All shares purchased,
including those escrowed, will be registered in the purchaser's name. If the
total investment specified under this LOI is completed within the 13-month
period, the escrowed shares will be promptly released. If the intended
investment is not completed, the purchaser will pay the Transfer Agent the
difference between the sales charge on the specified amount and the amount
36
<PAGE> 149
actually purchased. If the purchaser does not pay such difference within 20 days
of the expiration date, he irrevocably constitutes and appoints the Transfer
Agent as his attorney to surrender for redemption any or all shares, to make up
such difference within 60 days of the expiration date.
If at any time before completing the LOI Program, the purchaser wishes
to cancel the agreement, he must give written notice to AIM Distributors. If at
any time before completing the LOI Program the purchaser requests the Transfer
Agent to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
2. RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may
also qualify for reduced initial sales charges based upon such purchaser's
existing investment in shares of any of the AIM Funds (except for (i) Class A
shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money
Market Fund and (ii) Class B and Class C shares of the AIM Funds) at the time of
the proposed purchase. Rights of Accumulation are also available to holders of
the Connecticut General Guaranteed Account, established for tax-qualified group
annuities, for contracts purchased on or before June 30, 1992. To determine
whether or not a reduced initial sales charge applies to a proposed purchase,
AIM Distributors takes into account not only the money which is invested upon
such proposed purchase, but also the value of all shares of the AIM Funds
(except for (i) Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve
Shares of AIM Money Market Fund and (ii) Class B and Class C shares of the AIM
Funds) owned by such purchaser, calculated at their then current public offering
price. If a purchaser so qualifies for a reduced sales charge, the reduced sales
charge applies to the total amount of money then being invested by such
purchaser and not just to the portion that exceeds the breakpoint above which a
reduced sales charge applies. For example, if a purchaser already owns
qualifying shares of any AIM Fund with a value of $20,000 and wishes to invest
an additional $20,000 in a fund, with a maximum initial sales charge of 5.50%,
the reduced initial sales charge of 5.25% will apply to the full $20,000
purchase and not just to the $15,000 in excess of the $25,000 breakpoint. To
qualify for obtaining the discount applicable to a particular purchase, the
purchaser or his dealer must furnish AFS with a list of the account numbers and
the names in which such accounts of the purchaser are registered at the time the
purchase is made.
PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM
Funds at net asset value (without payment of an initial sales charge) may be
made in connection with: (a) the reinvestment of dividends and distributions
from a fund; (b) exchanges of shares of certain other funds; (c) use of the
reinstatement privilege; or (d) a merger, consolidation or acquisition of assets
of a fund.
The following purchasers will not pay initial sales charges on
purchases of Class A shares because there is a reduced sales effort involved in
sales to these purchasers:
o AIM Management and its affiliates, or their clients;
o Any current or retired officer, director or employee (and
members of their immediate family) of AIM Management, its
affiliates or The AIM Family of Funds--Registered
Trademark--and any foundation, trust or employee benefit plan
established exclusively for the benefit of, or by, such
persons;
o Any current or retired officer, director, or employee (and
members of their immediate family), of CIGNA Corporation or its
affiliates, or of First Data Investor Services Group; and any
deferred compensation plan for directors of investment
companies sponsored by CIGNA Investments, Inc. or its
affiliates;
o Sales representatives and employees (and members of their
immediate family) of selling group members or financial
institutions that have arrangements with such selling group
members;
o Purchases through approved fee-based programs;
37
<PAGE> 150
o Employee benefit plans designated as qualified purchasers as
defined above, provided the initial investment in the Fund(s)
is at least $1 million; the sponsor signs a $1 million LOI; the
employer-sponsored plan has at least 100 eligible employees; or
all plan transactions are executed through a single omnibus
account per Fund and the financial institution or service
organization has entered into the appropriate agreement with
the distributor. Section 403(b) plans sponsored by public
educational institutions are not eligible for a sales charge
exception based on the aggregate investment made by the plan or
the number of eligible employees. Purchases of AIM Small Cap
Opportunities Fund by such plans are subject to initial sales
charges;
o Shareholders of record or discretionary advised clients of any
investment advisor holding shares of AIM Weingarten Fund or AIM
Constellation Fund on September 8, 1986, or of AIM Charter Fund
on November 17, 1986, who have continuously owned shares having
a market value of at least $500 and who purchase additional
shares of the same Fund;
o Shareholders of record of Advisor Class shares of AIM
International Growth Fund or AIM Worldwide Growth Fund on
February 12, 1999 who have continuously owned shares of the AIM
Funds.
o Unitholders of G/SET series unit investment trusts investing
proceeds from such trusts in shares of AIM Weingarten Fund or
AIM Constellation Fund; provided, however, prior to the
termination date of the trusts, a unitholder may invest
proceeds from the redemption or repurchase of his units only
when the investment in shares of AIM Weingarten Fund and AIM
Constellation Fund is effected within 30 days of the redemption
or repurchase;
o A shareholder of a fund that merges or consolidates with an AIM
Fund or that sells its assets to an AIM Fund in exchange for
shares of an AIM Fund;
o Shareholders of the GT Global funds as of April 30, 1987 who
since that date continually have owned shares of one or more of
these funds; and
o Certain former AMA Investment Advisers' shareholders who became
shareholders of the AIM Global Health Care Fund in October
1989, and who have continuously held shares in the GT Global
funds since that time.
As used above, immediate family includes an individual and his or her
spouse, children, parents and parents of spouse.
CONTINGENT DEFERRED SALES CHARGE EXCEPTIONS
CDSCs will not apply to the following:
o Additional purchases of Class C shares of AIM Advisor Flex
Fund, AIM Advisor International Value Fund, AIM Advisor Large
Cap Value Fund, AIM Advisor MultiFlex Fund and AIM Advisor Real
Estate Fund by shareholders of record on April 30, 1995, of
these Funds, except that shareholders whose broker-dealers
maintain a single omnibus account with AFS on behalf of those
shareholders, perform sub-accounting functions with respect to
those shareholders, and are unable to segregate shareholders of
record prior to April 30, 1995, from shareholders whose
accounts were opened after that date will be subject to a CDSC
on all purchases made after March 1, 1996;
o Redemptions following the death or post-purchase disability of
(1) any registered shareholders on an account or (2) a settlor
of a living trust, of shares held in the account at the time of
death or initial determination of post-purchase disability;
38
<PAGE> 151
o Certain distributions from individual retirement accounts,
Section 403(b) retirement plans, Section 457 deferred
compensation plans and Section 401 qualified plans, where
redemptions result from (i) required minimum distributions to
plan participants or beneficiaries who are age 70-1/2 or older,
and only with respect to that portion of such distributions
that does not exceed 12% annually of the participant's or
beneficiary's account value in a particular AIM Fund; (ii) in
kind transfers of assets where the participant or beneficiary
notifies the distributor of the transfer no later than the time
the transfer occurs; (iii) tax-free rollovers or transfers of
assets to another plan of the type described above invested in
Class B or Class C shares of one or more of the AIM Funds; (iv)
tax-free returns of excess contributions or returns of excess
deferral amounts; and (v) distributions on the death or
disability (as defined in the Internal Revenue Code of 1986, as
amended) of the participant or beneficiary;
o Amounts from a Systematic Withdrawal Plan of up to an annual
amount of 12% of the account value on a per fund basis, at the
time the withdrawal plan is established, provided the investor
reinvests his dividends;
o Liquidation by the Fund when the account value falls below the
minimum required account size of $500;
o Investment account(s) of AIM; and
o Class C shares where the investor's dealer or record notifies
the distributor prior to the time of investment that the dealer
waives the payment otherwise payable to him.
Upon the redemption of shares in Categories I and II purchased in
amounts of $1 million or more, no CDSC will be applied in the following
situations:
o Shares held more than 18 months;
o Redemptions from employee benefit plans designated as qualified
purchasers, as defined above, where the redemptions are in
connection with employee terminations or withdrawals, provided
the total amount invested in the plan is at least $1,000,000;
the sponsor signs a $1 million LOI; or the employer-sponsored
plan has at least 100 eligible employees; provided, however,
that 403(b) plans sponsored by public educational institutions
shall qualify for the CDSC waiver on the basis of the value of
each plan participant's aggregate investment in the AIM Funds,
and not on the aggregate investment made by the plan or on the
number of eligible employees;
o Private foundations or endowment funds;
o Redemption of shares by the investor where the investor's
dealer waives the amounts otherwise payable to it by the
distributor and notifies the distributor prior to the time of
investment; and
o Shares acquired by exchange from Class A shares in Categories I
and II unless the shares acquired by exchange are redeemed
within 18 months of the original purchase of the Class A
shares.
39
<PAGE> 152
HOW TO PURCHASE AND REDEEM SHARES
A complete description of the manner by which shares of the Funds may
be purchased appears in the Prospectus under the caption "Purchasing Shares -
How to Purchase Shares."
The sales charge normally deducted on purchases of Class A shares of
the Funds is used to compensate AIM Distributors and participating dealers for
their expenses incurred in connection with the distribution of such shares.
Since there is little expense associated with unsolicited orders placed directly
with AIM Distributors by persons, who because of their relationship with the
Funds or with AIM and its affiliates, are familiar with the Funds, or whose
programs for purchase involve little expense (e.g., because of the size of the
transaction and shareholder records required), AIM Distributors believes that it
is appropriate and in the Funds' best interests that such persons be permitted
to purchase Class A shares of the Funds through AIM Distributors without payment
of a sales charge. The persons who may purchase Class A shares of the Funds
without a sales charge are shown in the Prospectuses.
Complete information concerning the method of exchanging shares of the
Funds for shares of the other mutual funds managed or advised by AIM is set
forth in the Prospectuses under the caption "Exchanging Shares."
Information concerning redemption of the Funds' shares is set forth in
the Prospectuses under the caption "Redeeming Shares - How to Redeem Shares."
Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer who has entered into an agreement with AIM Distributors. In
addition to the obligation of the Funds to redeem shares, AIM Distributors also
repurchases shares. AIM intends to redeem all shares of the Funds in cash. In
addition to the Funds' obligation to redeem shares, AIM Distributors may also
repurchase shares as an accommodation to shareholders. To effect a repurchase,
those dealers who have executed Selected Dealer Agreements with AIM Distributors
must phone orders to the order desk of the Fund telephone: (713) 626-1919,
Extension 5001 (in Houston) or (800) 347-4246 (elsewhere) and guarantee delivery
of all required documents in good order. A repurchase is effected at the net
asset value of a Fund next determined after such order is received. Such
arrangement is subject to timely receipt by AFS of all required documents in
good order. If such documents are not received within a reasonable time after
the order is placed, the order is subject to cancellation. While there is no
charge imposed by the Funds or by AIM Distributors (other than any applicable
CDSC) when shares are redeemed or repurchased, dealers may charge a fair service
fee for handling the transaction.
The right of redemption may be suspended or the date of payment
postponed when (a) trading on the New York Stock Exchange ("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 disposition of portfolio securities or the
valuation of the net assets of a Fund not reasonably practicable.
BACKUP WITHHOLDING
Accounts submitted without a correct, certified taxpayer identification
number or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8
(for non-resident aliens) or Form W-9 (certifying exempt status) accompanying
the registration information will generally be subject to backup withholding.
Each AIM Fund, and other payers, must, according to IRS regulations,
withhold 31% of redemption payments and reportable dividends (whether paid or
accrued) in the case of any shareholder who fails to provide the Fund with a
taxpayer identification number ("TIN") and a certification that he is not
subject to backup withholding.
An investor is subject to backup withholding if:
1. the investor fails to furnish a correct TIN to the Fund, or
2. the IRS notifies the Fund that the investor furnished an incorrect
TIN, or
40
<PAGE> 153
3. the investor is notified by the IRS that the investor is subject to
backup withholding because the investor failed to report all of the
interest and dividends on such investor's tax return (for reportable
interest and dividends only), or
4. the investor fails to certify to the Fund that the investor is not
subject to backup withholding under (3) above (for reportable
interest and dividend accounts opened after 1983 only), or
5. the investor does not certify his TIN. This applies only to
reportable interest, dividend, broker or barter exchange accounts
opened after 1983, or broker accounts considered inactive during
1983.
Except as explained in (5) above, other reportable payments are
subject to backup withholding only if (1) or (2) above applies.
Certain payees and payments are exempt from backup withholding and
information reporting. A complete listing of such exempt entities appears in the
Instructions for the Requester of Form W-9 (which can be obtained from the IRS)
and includes, among others, the following:
o a corporation
o an organization exempt from tax under Section 501(a), an individual
retirement plan (IRA), or a custodial account under Section
403(b)(7)
o the United States or any of its agencies or instrumentalities
o a state, the District of Columbia, a possession of the United
States, or any of their political subdivisions or instrumentalities
o a foreign government or any of its political subdivisions, agencies
or instrumentalities
o an international organization or any of its agencies or
instrumentalities
o a foreign central bank of issue
o a dealer in securities or commodities required to register in the
U.S. or a possession of the U.S.
o a futures commission merchant registered with the Commodity Futures
Trading Commission
o a real estate investment trust
o an entity registered at all times during the tax year under the 1940
Act
o a common trust fund operated by a bank under Section 584(a)
o a financial institution
o a middleman known in the investment community as a nominee or listed
in the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List
o a trust exempt from tax under Section 664 or described in Section
4947
Investors should contact the IRS if they have any questions
concerning entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
IRS PENALTIES -- Investors who do not supply the AIM Funds with a
correct TIN will be subject to a $50 penalty imposed by the IRS unless such
failure is due to reasonable cause and not willful neglect. If an investor
falsifies information on this form or makes any other false statement resulting
in no backup withholding
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on an account which should be subject to backup withholding, such investor may
be subject to a $500 penalty imposed by the IRS and to certain criminal
penalties including fines and/or imprisonment.
NONRESIDENT ALIENS -- Nonresident alien individuals and foreign
entities are not subject to the backup withholding previously discussed, but
must certify their foreign status by attaching IRS Form W-8 to their
application. Form W-8 remains in effect for three calendar years beginning with
the calendar year in which it is received by the Fund. Such shareholders may,
however, be subject to federal income tax withholding at a 30% rate on ordinary
income dividends and distributions and return of capital distributions. Under
applicable treaty law, residents of treaty countries may qualify for a reduced
rate of withholding or a withholding exemption.
NET ASSET VALUE DETERMINATION
In accordance with the current rules and regulations of the SEC, the
net asset value of a share of each Fund is determined once daily as of the close
of trading of the NYSE (generally 4:00 p.m. Eastern Time), on each business day
of the Fund. 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. For purposes of determining net asset
value per share, futures and options contract closing prices which are available
fifteen (15) minutes after the close of trading on the NYSE will generally be
used. The income or loss and the expenses (except those listed below) of a Fund
are allocated to each class on the basis of the net assets of the Fund allocable
to each such class, calculated as of the close of business on the previous
business day, as adjusted for the current day's shareholder activity of each
class. Distribution and service fees and transfer agency fees (to the extent
different rates are charged to different classes) are allocated only to the
class to which such expenses relate. The net asset value per share of a class is
determined by subtracting the liabilities (e.g., the expenses) of the Fund
allocated to the class from the assets of the Fund allocated to the class and
dividing the result by the total number of shares outstanding of such class.
Determination of each Fund's net asset value per share is made in accordance
with generally accepted accounting principles.
A security listed or traded on an exchange (except convertible bonds)
is valued at its last sales price on the exchange where the security is
principally traded or, lacking any sales on a particular day, the security is
valued at the closing bid price 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 on the basis of prices provided by independent
pricing services. Each security reported on the NASDAQ National Market System is
valued at the last sales price on the valuation date, or lacking a last sale, at
the closing bid price on that day; option contracts are valued at the mean
between the closing bid and asked prices on the exchange where the contracts are
principally traded; futures contracts are valued at final settlement price
quotations from the primary exchange on which they are traded. 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 dividend rate, yield, type of issue, coupon rate and
maturity date. Securities for which market quotations are not readily available
or for which market quotations are not reflective of fair value are valued at
fair value as determined in good faith by or under the supervision of the
Company's officers in a manner specifically authorized by the Board of Directors
of the Company. Short-term obligations having sixty (60) days or less to
maturity are valued at amortized cost, which approximates market value. (See
also "Purchasing Shares - How to Purchase Shares," and "Redeeming Shares - How
to Redeem Shares" and "Pricing of Shares" in the Prospectuses.)
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 a 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 a 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.
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Fund securities primarily traded in foreign markets may be traded in
such markets on days which are not business days of the Fund. Because the net
asset value per share of each Fund is determined only on business days of the
Fund, the net asset value per share of a Fund may be significantly affected on
days when an investor can not exchange or redeem shares of the Fund.
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS
It is the intention of each of the Funds to distribute to its
respective shareholders all of the applicable Fund's net investment income and
net realized capital gains, if any. The per share dividends and distribution on
each class of shares of a Fund will be reduced as a result of any service fees
applicable to that class. The gross income, realized and unrealized capital
gains and losses and expenses (other than Class Expenses, as defined below) of
each Fund shall be allocated to each class on the basis of its net asset value
relative to the net asset value of the Fund. Expenses to be so allocated include
expenses of the Company that are allocated to a Fund and are not attributable to
a particular Fund or class of a Fund ("Company Expenses") and expenses of the
particular Fund that are not attributable to a particular class of the Fund
("Fund Expenses"). Company Expenses include, but are not limited to, directors'
fees. Fund Expenses include advisory fees and operating service fees. Expenses
attributable to a particular class ("Class Expenses") include distribution plan
expenses, which must be allocated to the class for which they are incurred.
Other expenses may be allocated as Class Expenses, consistent with applicable
legal principles under the 1940 Act and the Internal Revenue Code of 1986, as
amended ("Code").
The LARGE CAP VALUE FUND, FLEX FUND, MULTIFLEX FUND, and REAL ESTATE
FUND make periodic distributions of their net investment income (including any
net short-term capital gain) during the months of March, June, September and
December and distribute any realized net capital gains at least annually, during
the month of December. The INTERNATIONAL VALUE FUND makes semiannual
distributions of net investment income (including any net short-term capital
gain) during the months of June and December and distributes any realized net
capital gain at least annually, during the month of December.
All such distributions will be reinvested automatically in additional
shares (or fractions thereof) of each applicable Fund and class pursuant to each
Fund's Automatic Dividend Reinvestment Plan unless a shareholder has elected not
to participate in this plan or has elected to terminate his participation in the
plan and to receive his distributions in excess of ten dollars in cash. (See
"Special Plans- Automatic Dividend Investment Plan" in the Prospectuses.)
TAX MATTERS
The following is only a summary of certain additional tax
considerations generally affecting the Funds and their shareholders that are not
described in the Prospectuses. No attempt is made to present a detailed
explanation of the tax treatment of each Fund or its shareholders, and the
discussion here and in the Prospectuses is not intended as a substitute for
careful tax planning.
SPECIAL TAX INFORMATION
For taxable years in which it is eligible to do so, the Funds may
elect to pass through to shareholders credits for foreign taxes paid. If the
fund makes such an election, a shareholder who receives a distribution (1) will
be required to include in gross income his proportionate share of foreign taxes
allocable to the distribution and (2) may claim a credit or deduction for such
share for his taxable year in which the distribution is received, subject to the
general limitations imposed on the allowance of foreign tax credits and
deductions. Shareholders should also note that certain gains or losses
attributable to fluctuations in exchange rates or foreign currency forward
contracts may increase or decrease the amount of income of the fund available
for distribution to shareholders, and should note that if such losses exceed
other income during a taxable year, the fund would not be able to pay ordinary
income dividends.
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QUALIFICATION AS A REGULATED INVESTMENT COMPANY
Each Fund has elected to be taxed as a regulated investment company
under Subchapter M of the Code. As a regulated investment company, each 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 a 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.
Each Fund may use "equalization accounting" in determining the portion
of its net investment income and capital gain net income that has been
distributed. A Fund that elects to use equalization accounting will allocate a
portion of its realized investment income and capital gains to redemptions of
Fund shares and will reduce the amount that it distributes in cash. However,
each Fund intends to make cash distributions for each taxable year in an
aggregate amount that is sufficient to satisfy the Distribution Requirement
without taking into account its use of equalization accounting. The Internal
Revenue Service has not published any guidance concerning the methods to be used
in allocating investment income and capital gains to redemptions of shares. In
the event that the Internal Revenue Service determines that a Fund is using an
improper method of allocation and has underdistributed its net investment income
and capital gain net income for any taxable year, such Fund may be liable for
additional federal income tax.
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 addition to satisfying the requirements described above, each 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 each 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
companies, and securities of other issuers, 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 a 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 such Fund's current and accumulated earnings
and profits. Such distributions generally will be eligible for the dividends
received deduction in the case of corporate shareholders.
DETERMINATION OF TAXABLE INCOME OF A REGULATED INVESTMENT COMPANY
In general, gain or loss recognized by a 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 a 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 unless the
Fund made an election to accrue market discount into income. In addition, under
the rules of Code
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Section 988, gain or loss recognized on the disposition of a debt obligation
denominated in a foreign currency or an option with respect thereto (but only to
the extent attributable to changes in foreign currency exchange rates), and gain
or loss recognized on the disposition of a foreign currency forward contract or
of foreign currency itself, will generally be treated as ordinary income or
loss.
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 (a) 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, (b) the
asset is otherwise held by the Fund as part of a "straddle", or (c) the asset is
stock and the Fund grants certain call options with respect thereto. In
addition, a 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. Any gain recognized by a Fund on
the lapse of, or any gain or loss recognized by a Fund from a closing
transaction with respect to, an option written by the Fund will generally be
treated as a short-term capital gain or loss. In the case of covered options,
gain or loss may be long-term.
Other hedging transactions that may be engaged in by certain of the
Funds (such as short sales "against the box") may be subject to special tax
treatment as "constructive sales" under section 1259 of the Code if a Fund holds
certain "appreciated financial positions" (defined generally as any interest
(including a futures or forward contract, short sale or option) with respect to
stock, certain debt instruments, or partnership interests if there would be a
gain were such interest sold, assigned, or otherwise terminated at its fair
market value). Upon entering into a constructive sales transaction with respect
to an appreciated financial position, a Fund will be deemed to have
constructively sold such appreciated financial position and will recognize gain
as if such position were sold, assigned, or otherwise terminated at its fair
market value on the date of such constructive sale (and will take into account
any gain for the taxable year which includes such date) unless the closed
transaction exception applies.
Some of the forward foreign currency exchange contracts, options and
futures contracts that certain of the Funds may enter into will be subject to
special tax treatment as "Section 1256 contracts." Section 1256 contracts are
treated as if they are sold for their fair market value on the last business day
of the taxable year, regardless of whether a taxpayer's obligations (or rights)
under such contracts have terminated (by delivery, exercise, entering into a
closing transaction or otherwise) as of such date. Any gain or loss recognized
as a consequence of the year-end deemed disposition of Section 1256 contracts is
combined with any other gain or loss that was previously recognized upon the
termination of Section 1256 contracts during that taxable year. The net amount
of such gain or loss for the entire taxable year (including gain or loss arising
as a consequence of the year-end deemed sale of such contracts) is deemed to be
60% long-term (taxable at a maximum rate of 20% for non-corporate shareholders)
and 40% short-term gain or loss. However, in the case of Section 1256 contracts
that are forward foreign currency exchange contracts, the net gain or loss is
separately determined and (as discussed above) generally treated as ordinary
income or loss.
Because application of the rules governing Section 1256 contracts and
constructive sales may affect the character of gains or losses and/or accelerate
the recognition of gains or losses from the affected investment positions, the
amount which must be distributed to shareholders and which will be taxed to
shareholders as ordinary income or long-term capital gain may be increased as
compared to a fund that did not engage in transactions involving Section 1256
contracts or constructive sales.
EXCISE TAX ON REGULATED INVESTMENT COMPANIES
A 4% non-deductible excise tax is imposed on a regulated investment
company that fails 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.
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For purposes of the excise tax, a regulated investment company shall
(a) reduce its capital gain net income (but not below its net capital gain) by
the amount of any net ordinary loss for the calendar year, and (b) exclude
foreign currency gains and losses incurred after October 31 of any year (or
after the end of its taxable year if it has made a taxable year election) 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).
Each 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,
in the event that the Internal Revenue Service determines that a Fund is using
an improper method of allocation for purposes of equalization accounting (as
discussed above), such Fund may be liable for excise tax. Moreover, investors
should note that a Fund may in certain circumstances be required to liquidate
portfolio investments to make sufficient distributions to avoid excise tax
liability.
SWAP AGREEMENTS
Each Fund may enter into swap agreements. The rules governing the tax
aspects of swap agreements are in a developing stage and are not entirely clear
in certain respects. Accordingly, while a Fund intends to account for such
transactions in a manner deemed to be appropriate, the Internal Revenue Service
( the "IRS") might not accept such treatment. If it did not, the status of the
Company as a regulated investment company might be affected. The Company intends
to monitor developments in this area. Certain requirements that must be met
under the Code in order for the Company to qualify as a regulated investment
company may limit the extent to which the Fund will be able to engage in swap
agreements.
INVESTMENT IN PASSIVE FOREIGN INVESTMENT COMPANIES
A Fund may invest in shares of foreign corporations which may be
classified under the Code as passive foreign investment companies ("PFICs"). In
general, a foreign corporation is classified as a PFIC if at least one-half of
its assets constitute investment-type assets, or 75% or more of its gross income
is investment-type income. If a Fund receives a so-called "excess distribution"
with respect to PFIC stock, the Fund itself may be subject to a tax on a portion
of the excess distribution, whether or not the corresponding income is
distributed by the Fund to shareholders. In general, under the PFIC rules, an
excess distribution is treated as having been realized ratably over the period
during which the Fund held the PFIC shares. The Fund itself will be subject to
tax on the portion, if any, of an excess distribution that is so allocated to
prior Fund taxable years and an interest factor will be added to the tax, as if
the tax had been payable in such prior taxable years. Certain distributions from
a PFIC as well as gain from the sale of PFIC shares are treated as excess
distributions. Excess distributions are characterized as ordinary income even
though, absent application of the PFIC rules, certain excess distributions might
have been classified as capital gain.
A Fund may be eligible to elect alternative tax treatment with respect
to PFIC shares. Under one such election (the "QEF Election") the Fund generally
would be required to include in its gross income its share of the earnings of a
PFIC on a current basis, regardless of whether distributions are received from
the PFIC in a given year. For taxable years beginning after December 31, 1997,
each Fund will alternatively be able to make an election to mark any shares of
PFIC stock that it holds to market (the "Section 1296 Election"). If the Section
1296 Election is made with respect to any PFIC stock, a Fund will recognize
ordinary income to the extent that the fair market value of such PFIC stock at
the close of any taxable year exceeds its adjusted basis and will also recognize
ordinary income in the event that it disposes of any shares of such PFIC stock
at a gain. In each case, such ordinary income will be treated as dividend income
for purposes of the Income Requirement. A Fund making the Section 1296 Election
with respect to any PFIC stock will similarly recognize a deductible ordinary
loss to the extent that the adjusted basis of such PFIC stock exceeds its fair
market value at the close of any taxable year and will also recognize a
deductible ordinary loss in the event that it disposes of such PFIC stock at a
loss. However, the amount of any ordinary loss recognized by a Fund making a
Section 1296 Election with respect to any PFIC stock may not exceed the amount
of ordinary income previously recognized by such Fund by reason of marking such
PFIC stock to market. If either the QEF Election or the Section 1296 Election is
made, the special rules, discussed above, relating to the taxation of excess
distributions, would not
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apply. A Fund's intention to qualify annually as a regulated investment company
may limit its ability to invest and hold PFIC shares.
Because the application of the PFIC rules may affect, among other
things, the character of gains, the amount of gain or loss and the timing of the
recognition of income with respect to PFIC shares, as well as subject a Fund
itself to tax on certain income from PFIC shares, the amount that must be
distributed to shareholders, and which will be taxed to shareholders as ordinary
income or long-term capital gain, may be increased or decreased substantially as
compared to a fund that did not invest in PFIC shares.
DEBT SECURITIES ACQUIRED AT A DISCOUNT
Some of the debt securities (with a fixed maturity date of more than
one year from the date of issuance) that may be acquired by a Fund may be
treated as debt securities that are issued originally at a discount. Generally,
the amount of the original issue discount ("OID") is treated as interest income
and is included in income over the term of the debt security, even though
payment of that amount is not received until a later time, usually when the debt
security matures.
Some of the debt securities (with a fixed maturity date of more than
one year from the date of issuance) that may be acquired by a Fund in the
secondary market may be treated as having market discount. Generally, gain
recognized on the disposition of, and any partial payment of principal on, a
debt security having market discount is treated as ordinary income to the extent
the gain, or principal payment, does not exceed the "accrued market discount" on
such debt security. In addition, the deduction of any interest expenses
attributable to debt securities having market discount may be deferred. Market
discount generally accrues in equal daily installments. A Fund may make one or
more of the elections applicable to debt securities having market discount,
which could affect the amount, character and timing of recognition of income.
Some debt securities (with a fixed maturity date of one year or less
from the date of issuance) that may be acquired by a Fund may be treated as
having acquisition discount, or OID in the case of certain types of debt
securities. Generally, a Fund will be required to include the acquisition
discount, or OID, in income over the term of the debt security, even though
payment of that amount is not received until a later time, usually when the debt
security matures. A Fund may make one or more of the elections applicable to
debt securities having acquisition discount, or OID, which could affect the
character and timing of recognition of income.
A Fund generally will be required to distribute dividends to
shareholders representing discount on debt securities that is currently
includable in income, even though cash representing such income may not have
been received by the Fund. Cash to pay such dividends may be obtained from sales
proceeds of securities held by the Fund or by borrowing.
DISTRIBUTIONS
With respect to tax-exempt shareholders, distributions from the Funds
will not be subject to federal income taxation to the extent permitted under the
applicable tax-exemption. With respect to shareholders that are not exempt from
federal taxation, distributions of investment company taxable income are taxable
to a U.S. shareholder as ordinary income, whether paid in cash or shares.
Dividends paid by a Fund to a corporate shareholder, to the extent such
dividends are attributable to dividends received from U.S. corporations, may
qualify for the dividends received deduction. However, the alternative minimum
tax applicable to corporations may reduce the value of the dividends received
deduction. Distributions of net capital gains (the excess of net long-term
capital gains over net short-term capital losses), if any, designated by a Fund
as capital gain dividends, are taxable as long-term capital gains, whether paid
in cash or in shares, regardless of how long the shareholder has held the Fund's
shares and are not eligible for the dividends received deduction. Shareholders
will be notified annually as to the U.S. federal tax status of distributions in
accordance with the guidance that has been provided by the IRS.
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If the net asset value of shares is reduced below a shareholder's cost
as a result of a distribution by a Fund, such distribution generally will be
taxable even though it represents a return of invested capital. Investors should
be careful to consider the tax implications of buying shares of a Fund just
prior to a distribution. The price of shares purchased at this time may reflect
the amount of the forthcoming distribution. Those purchasing just prior to a
distribution will receive a distribution which generally will be taxable to
them.
DISPOSITION OF SHARES
With respect to tax-exempt shareholders, a redemption, sale or
exchange of shares of a Fund will not be subject to federal income taxation to
the extent permitted under the applicable tax-exemption. Upon a redemption, sale
or exchange of his or her shares of a Fund, a shareholder that is not exempt
from federal income taxation will realize a taxable gain or loss depending upon
his or her basis in the shares. A gain or loss will be treated as capital gain
or loss if the shares are capital assets in the shareholder's hands and
generally will be long-term or short-term, depending upon the shareholder's
holding period for the shares. Except to the extent otherwise provided in future
Treasury regulations, any long-term capital gain recognized by a non-corporate
shareholder will be subject to tax at a maximum rate of 20%. Any loss realized
on a redemption, sale or exchange will be disallowed to the extent the shares
disposed of are replaced (including through reinvestment of dividends) within a
period of 61 days beginning 30 days before and ending 30 days after the shares
are disposed of. In such a case, the basis of the shares acquired will be
adjusted to reflect the disallowed loss. Any loss realized by a shareholder on
the sale of a Fund's shares held by the shareholder for six months or less will
be treated for tax purposes as a long-term capital loss to the extent of any
distributions of capital gain dividends received or treated as having been
received by the shareholder with respect to such shares.
If a shareholder (a) incurs a sales load in acquiring shares of a
Fund, (b) disposes of such shares less than 91 days after they are acquired, and
(c) subsequently acquires shares of the Fund 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.
OTHER TAXATION
Distributions may also be subject to additional state, local and
foreign taxes depending on each shareholder's particular situation. Non-U.S.
shareholders may be subject to U.S. tax rules that differ significantly from
those summarized above. This discussion does not purport to deal with all of the
tax consequences applicable to the Funds or shareholders. Shareholders are
advised to consult their own tax advisers with respect to the particular tax
consequences to them of an investment in a Fund.
PORTFOLIO TRANSACTIONS AND BROKERAGE
GENERAL BROKERAGE POLICY
The Advisor or sub-advisor make decisions to buy and sell securities
for each Fund, selects broker-dealers, effects the Funds' 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 Funds may not pay the lowest commission or spread available. See
"Section 28(e) Standards" below.
Some of the securities in which the Funds invest are traded in
over-the-counter markets. In such transactions, a 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.
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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 Funds) 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 Funds and the AIM Funds in particular, including sales of
the Funds and of the other AIM Funds. In connection with (3) above, the Funds'
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 a
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 Funds may engage in certain principal and agency transactions with
banks and their affiliates that own 5% or more of the outstanding voting
securities of a Fund, provided the conditions of an exemptive order received by
the Funds from the SEC are met. In addition, a Fund may purchase or sell a
security from or to another AIM Fund provided the Funds follow procedures
adopted by the Board of Directors/Trustees of the various AIM Funds, including
the Company. These inter-fund transactions do not generate brokerage commissions
but may result in custodial fees or taxes or other related expenses.
Under the 1940 Act, certain persons affiliated with the Company are
prohibited from dealing with the funds as principal in any purchase or sale of
securities unless an exemptive order allowing such transactions is obtained from
the SEC. The 1940 Act also prohibits the funds from purchasing a security being
publicly underwritten by a syndicate of which certain persons affiliated with
the Company are members except in accordance with certain conditions.
ALLOCATION OF PORTFOLIO TRANSACTIONS
AIM and its affiliates manage several other investment accounts. Some
of these accounts may have investment objectives similar to the Funds.
Occasionally, identical securities will be appropriate for investment by one of
the Funds and by another 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.
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<PAGE> 162
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, a 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 Company'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-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 Funds. However, the Funds are 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 Funds 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.
BROKERAGE COMMISSIONS PAID
For the fiscal years ended December 31, 1998, 1997 and 1996, the LARGE
CAP VALUE FUND paid total brokerage commissions of $_______________, $139,516
and $75,469, respectively. For the fiscal year ended December 31, 1998, AIM
allocated certain of LARGE CAP VALUE FUND'S brokerage transactions to certain
broker-dealers that provide AIM with certain research, statistical and other
information. Such transactions amounted to $__________________, and the related
commissions were $_________________. For the fiscal years ended December 31,
1998, 1997 and 1996, the FLEX FUND paid total brokerage commissions of
$_________________, $166,653 and $193,286, respectively. For the fiscal year
ended December 31, 1998, AIM allocated certain of FLEX FUND'S brokerage
transactions to certain broker-dealers that provide AIM with certain research,
statistical and other information. Such transactions amounted to
$________________, and the related commissions were $_______________. For the
fiscal years ended December 31, 1998, 1997 and 1996, the MULTIFLEX FUND paid
total brokerage commissions of $______________________, $455,949 and $400,646,
respectively. For the fiscal year ended December 31, 1998, AIM allocated certain
of MULTIFLEX FUND'S brokerage transactions to certain broker-
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<PAGE> 163
dealers that provide AIM with certain research, statistical and other
information. Such transactions amounted to $_________________ and the related
commissions were $__________________. For the fiscal year ended December 31,
1998, 1997, and 1996, the REAL ESTATE FUND paid total brokerage commissions of
$_________________, $115,951 and $40,353, respectively. For the fiscal year
ended December 31, 1998, AIM allocated certain of REAL ESTATE FUND'S brokerage
transactions to certain broker-dealers that provide AIM with certain research,
statistical and other information. Such transactions amounted to
$________________ and the related commissions were $_______________. For the
fiscal year ended December 31, 1998, 1997 and 1996, the INTERNATIONAL VALUE FUND
paid total brokerage commissions of $___________________, $44,731 and $21,872,
respectively. For the fiscal year ended December 31, 1998, AIM allocated certain
of INTERNATIONAL VALUE FUND'S brokerage transactions to certain broker-dealers
that provide AIM with certain research, statistical and other information. Such
transactions amounted to $_____________________, and the related commissions
were $_________________. There were no brokerage commissions paid to affiliated
broker-dealers during the fiscal years ended December 31, 1998, 1997 and 1996,
by any of the Funds.
At December 31, 1998, certain of the Funds held securities of the
Company's regular brokers or dealers, or their parents, as follows:
<TABLE>
<CAPTION>
Value of Securities
Fund Broker or Dealer at December 31, 1998
- ---- ---------------- --------------------
<S> <C> <C>
INTERNATIONAL VALUE FUND [HSBC Securities, Inc. $[ ]
Deutsche Bank Capital Corp. [ ]
Smith Barney Inc.] [ ]
LARGE CAP VALUE FUND [Dean Witter Reynolds [ ]
Smith Barney Inc.] [ ]
FLEX FUND [Dean Witter Reynolds [ ]
Smith Barney Inc.] [ ]
MULTIFLEX FUND [Bear Stearns & Co. Inc. [ ]
HSBC Securities, Inc. [ ]
Dean Witter Reynolds [ ]
Deutsche Bank Capital Corp. [ ]
Lehman Brothers Inc. [ ]
Smith Barney Inc.] [ ]
REAL ESTATE FUND [Smith Barney Inc.] [ ]
</TABLE>
During the fiscal years ended December 31, 1998, 1997 and 1996, the
LARGE CAP VALUE FUND'S portfolio turnover rates were 34%, 19% and 17%,
respectively; the FLEX FUND'S portfolio turnover rates were 17%, 26%, and 5%,
respectively; the MULTIFLEX FUND'S portfolio turnover rates were 62%, 62% and
50%, respectively; the REAL ESTATE FUND'S portfolio turnover rates were 57%, 25%
and 7%, respectively; the INTERNATIONAL VALUE FUND'S portfolio turnover rates
were 9%, 5% and 2%, respectively.
REDEMPTIONS
It is possible that in the future conditions may exist which would, in
the opinion of the Directors, make it undesirable for a Fund to pay for redeemed
shares in cash. In such cases, the Directors may authorize payment to be made in
Fund securities or other property of the applicable Fund. However, each Fund has
made an election under Rule 18f-1 under the 1940 Act, which obligates the Fund
to redeem for cash all shares presented to such Fund for redemption by any one
shareholder up to $250,000 (or 1% of the applicable Fund's net assets if that is
less) in any 90-day period. Securities delivered in payment of redemptions are
valued at the same value assigned to them in computing the applicable Fund's net
asset value per share. Shareholders receiving such securities are likely to
incur brokerage costs on their subsequent sales of such securities.
51
<PAGE> 164
PERFORMANCE INFORMATION
The Funds may from time to time include figures indicating their yield
and total return in advertisements or reports to shareholders or prospective
investors. Following is information on how those figures are computed.
Yield
ALL FUNDS
All Funds may advertise "yield," "dividend yield" and "distribution
yield" for each class. Quotations of yield for each class of these Funds will be
based on all investment income per share earned during a particular 30-day
period (including dividends and interest), less expenses accrued during the
period ("net investment income"), and are computed by dividing net investment
income by the maximum offering price per share (which includes the maximum sales
charge) on the last day of the period, according to the following formula:
(6)
Yield = 2[(a-b + 1) - 1]
---
cd
where a = dividends and interest earned during the period
b = expenses accrued for the period (net of
reimbursements or waivers),
c = the average daily number of shares outstanding during
period that were entitled to receive dividends, and
d = the maximum offering price per share on the last day
of the period.
For the 30-day period ended December 31, 1998, the yield for Class A
shares, Class B shares and Class C shares of REAL ESTATE FUND were ____%, ____%
and ____%, respectively.
Dividend yield is a measure of investment return during a specified
period based on dividends actually paid by a class of a Fund during that period.
Dividend yield is calculated by totaling the dividends paid by a class from its
net investment income during the specified period and dividing that sum by the
net asset value per share of the class on the last day of the period.
Distribution yield is computed in the same way, but includes distributions paid
with respect to a class from short-term capital gains realized by the Fund, as
well as dividends from the net investment income of the class. Where the
dividend or distribution yield is calculated for a period of less than a year,
results may be annualized by using the following calculation method:
Total dividends/distributions paid by the class during the specified
period are divided by the net asset value of a class share on the last
day of the specified period. This result is divided by the number of
days in the specified period and the result is multiplied by 365.
The dividend yields for the 30-day period ended December 31, 1998, for
Class A shares, Class B shares and Class C shares of REAL ESTATE FUND were
____%, ____% and ____%, respectively.
The distribution yields (including income and short-term capital gains
distributions) for the 365-day period ended December 31, 1998, for Class A
shares and Class C shares of REAL ESTATE FUND were 4.96% and 4.26%,
respectively.
Class B shares commenced operation on March 3, 1998; therefore, no
distribution yield information for the 365-day period ended December 31, 1998 is
available, as quoted above.
Total Return
Funds may advertise their "average annual total return" and their
"total return." Average annual total return and total return figures represent
the increase (or decrease) in the value of an investment in the Fund over a
specified period. Both calculations assume that all income dividends and capital
gains distributions during the period are reinvested at net asset value in
additional shares of the respective Fund.
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<PAGE> 165
Average annual total return may be calculated without assuming payment
of the full sales load according to the following formula:
(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.
Quotations of the average annual total return for each class reflect
the deduction of a proportional share of expenses allocated to the class and
Class Expenses on an annual basis. The results, which are annualized, represent
an average annual compound rate of return on a hypothetical investment in the
class over a period of 1, 5 and 10 years ending on the most recent calendar
quarter.
The average annual total return as of December 31, 1998, for Class A
shares of each of the following Funds for the periods listed below are as
follows:
<TABLE>
<CAPTION>
Fund 1 Year Since Inception*
---- --------- ----------------
<S> <C> <C>
LARGE CAP VALUE FUND % [ ]%
---------
FLEX FUND % [ ]%
---------
MULTIFLEX FUND % [ ]%
---------
REAL ESTATE FUND % [ ]%
---------
INTERNATIONAL VALUE FUND % [ ]%
---------
</TABLE>
- ------------------
* From January 1, 1997 (commencement of operations) (2 years).
The average annual total return as of December 31, 1998, for Class B
shares of each of the following Funds for the period listed below is as follows:
<TABLE>
<CAPTION>
Fund Since Inception*
---- ---------------
<S> <C>
LARGE CAP VALUE FUND [ ]%
FLEX FUND [ ]%
MULTIFLEX FUND [ ]%
REAL ESTATE FUND [ ]%
INTERNATIONAL VALUE FUND [ ]%
</TABLE>
* From March 3, 1998 (commencement of operations) (9 months)
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<PAGE> 166
The average annual total return as of December 31, 1998, for shares now
designated as Class C shares of each of the following Funds for the periods
listed below are as follows:
<TABLE>
<CAPTION>
Since
Fund 1 Year 5 Years 10 Years Inception
- ---- ------ ------- -------- ---------
<S> <C> <C> <C> <C>
LARGE CAP VALUE FUND [ ]% [ ]% [ ]% [ ]
FLEX FUND [ ]% [ ]% [ ]% [ ]%*
MULTIFLEX FUND [ ]% [ ]% N/A [ ]%**
REAL ESTATE FUND [ ]% N/A N/A [ ]%***
INTERNATIONAL VALUE FUND [ ]% N/A N/A [ ]%***
</TABLE>
- -----------------------
* From February 24, 1988 (commencement of operations) (10 years, 10
months).
** From November 17, 1993 (commencement of operations) (5 years, 1 month).
*** From May 1, 1995 (commencement of operations) (3 years, 7 months).
Quotations of total return, which are not annualized, represent
historical earnings and asset value fluctuations. Total return is based on past
performance and is not a guarantee of future results. These rates of return are
net of all expenses and assume all dividends and distributions by the Funds have
been reinvested on the reinvestment dates during each period.
The following table provides the actual total rates of return for Class
A shares of the indicated Funds for the fiscal years ended December 31, 1998 and
1997.
<TABLE>
<CAPTION>
LARGE REAL INTERNATIONAL
CAP VALUE FLEX MULTIFLEX ESTATE VALUE
FUND FUND FUND FUND FUND
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
1998 [ ]% [ ]% [ ]% [ ]% [ ]%
1997* 24.43% 17.73% 12.88% 14.11% 7.58%
</TABLE>
* Period January 1, 1997 (commencement of operation) through December 31, 1997.
The following table provides the actual total rates of return for Class
B shares of the indicated Funds for the fiscal year ended December 31, 1998.
<TABLE>
<CAPTION>
LARGE REAL INTERNATIONAL
CAP VALUE FLEX MULTIFLEX ESTATE VALUE
FUND FUND FUND FUND FUND
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
1998 [ ]% [ ]% [ ]% [ ]% [ ]%
</TABLE>
* Period March 3, 1998 (commencement of operation) through December 31, 1998.
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<PAGE> 167
The following table provides the actual total rates of return for Class
C shares of the indicated Funds for the fiscal years ended December 31, 1998,
1997, 1996, 1995, 1994, 1993 and 1992.
<TABLE>
<CAPTION>
LARGE REAL INTERNATIONAL
CAP VALUE FLEX MULTIFLEX ESTATE VALUE
FUND FUND FUND FUND FUND
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
1998 [ ]% [ ]% [ ]% [ ]% [ ]%
1997 29.66% 22.64% 17.55% 17.88% 11.98%
1996 17.17% 13.61% 17.03% 36.43% 20.99%
1995 30.28% 27.30% 21.58% 9.12%** 11.28%**
1994 2.69% 0.64% -1.02% N/A N/A
1993 9.16% 10.48% 0.46%* N/A N/A
1992 4.84% 7.72% N/A N/A N/A
</TABLE>
* Period November 17, 1993 (commencement of operations) through December 31,
1993.
** Period May 1, 1995 (commencement of operations) through December 31, 1995.
Performance information for a Fund or class reflects only the
performance of a hypothetical investment in that Fund or class during the
particular time period on which the calculations are based. Performance
information should be considered in light of the Fund's investment objectives
and policies, the types of quality of the Fund's portfolio investments, market
conditions during the particular time period and operating expenses. Such
information should not be considered as a representation of the future
performance of a Fund or class.
SHAREHOLDER INFORMATION
This information supplements the discussion in each Fund's Prospectus
under the title "Shareholder Information."
TIMING OF PURCHASE ORDERS. It is the responsibility of the dealer to
ensure that all orders are transmitted on a timely basis to the Transfer Agent,
as hereinafter defined. Any loss resulting from the dealer's failure to submit
an order within the prescribed time frame will be borne by that dealer. If a
check used to purchase shares does not clear, or if any investment order must be
canceled due to nonpayment, the investor will be responsible for any resulting
loss to an AIM Fund or to AIM Distributors.
SHARE CERTIFICATES. AIM Funds will issue share certificates upon
written request to AFS. Otherwise, shares are held on the shareholder's behalf
and recorded on the Fund books. AIM Funds will not issue certificates for shares
held in prototype retirement plans.
SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, all
shares are to be held by the Transfer Agent and all dividends and distributions
are reinvested in shares of the applicable AIM Fund by the Transfer Agent. To
provide funds for payments made under the Systematic Withdrawal Plan, the
Transfer Agent redeems sufficient full and fractional shares at their net asset
value in effect at the time of each such redemption.
Payments under a Systematic Withdrawal Plan constitute taxable events.
Since such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C Shares of the AIM Funds and AIM Cash Reserve
Shares of AIM Money Market Fund), it is disadvantageous to effect such purchases
while a Systematic Withdrawal Plan is in effect.
Each AIM Fund bears its share of the cost of operating the Systematic
Withdrawal Plan.
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<PAGE> 168
TERMS AND CONDITIONS OF EXCHANGES. If a shareholder is exchanging into
a fund paying daily dividends, and the release of the exchange proceeds is
delayed for the foregoing five-day period, such shareholder will not begin to
accrue dividends until the sixth business day after the exchange.
EXCHANGES BY TELEPHONE. AIM Distributors has made arrangements with
certain dealers and investment advisory firms to accept telephone instructions
to exchange shares between any of the AIM Funds. AIM Distributors reserves the
right to impose conditions on dealers or investment advisors who make telephone
exchanges of shares of the funds, including the condition that any such dealer
or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a shareholder, dealer or investment advisor who
has satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
shareholder is unable to reach AFS by telephone, he may also request exchanges
by telegraph or use overnight courier services to expedite exchanges by mail,
which will be effective on the business day received by the Transfer Agent as
long as such request is received prior to NYSE Close. The Transfer Agent and AIM
Distributors 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
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction.
By signing an account application form, an investor appoints the
Transfer Agent as his true and lawful attorney-in-fact to surrender for
redemption any and all unissued shares held by the Transfer Agent in the
designated account(s), or in any other account with any of the AIM Funds,
present or future, which has the identical registration as the designated
account(s), with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption proceeds to be applied to purchase shares
in any one or more of the AIM Funds, provided that such fund is available for
sale and provided that the registration and mailing address of the shares to be
purchased are identical to the registration of the shares being redeemed. An
investor acknowledges by signing the form that he understands and agrees that
the Transfer Agent and AIM Distributors may not be liable for any loss, expense
or cost arising out of any telephone exchange requests effected in accordance
with the authorization set forth in these instructions if they reasonably
believe such request to be genuine, but may in certain cases be liable for
losses due to unauthorized or fraudulent transactions. The Transfer Agent
reserves the right to modify or terminate the telephone exchange privilege at
any time without notice. An investor may elect not to have this privilege by
marking the appropriate box on the application. Then any exchanges must be
effected in writing by the investor.
REDEMPTIONS BY TELEPHONE. By signing an account application form, an
investor appoints the Transfer Agent as his true and lawful attorney-in-fact to
surrender for redemption any and all unissued shares held by the Transfer Agent
in the designated account(s), present or future, with full power of substitution
in the premises. The Transfer Agent and AIM Distributors are thereby authorized
and directed to accept and act upon any telephone redemptions of shares held in
any of the account(s) listed, from any person who requests the redemption. An
investor acknowledges by signing the form that he understands and agrees that
the Transfer Agent and AIM Distributors may not be liable for any loss, expense
or cost arising out of any telephone redemption requests effected in accordance
with the authorization set forth in these instructions if they reasonably
believe such request to be genuine, but may in certain cases be liable for
losses due to unauthorized or fraudulent transactions. Procedures for
verification of telephone transactions may include recordings of telephone
transactions (maintained for six months), requests for confirmation of the
shareholder's Social Security Number and current address, and mailings of
confirmations promptly after the transactions. The Transfer Agent reserves the
right to cease to act as attorney-in-fact subject to this appointment, and AIM
Distributors reserves the right to modify or terminate the telephone redemption
privilege at any time without notice. An investor may elect not to have this
privilege by marking the appropriate box on the application. If the investor so
elects, any redemptions must be effected in writing.
SIGNATURE GUARANTEES. In addition to those circumstances listed in the
"Shareholder Information" section of each Fund's prospectus, signature
guarantees are required in the following situations: (1) requests to transfer
the registration of shares to another owner; (2) telephone exchange and
telephone redemption
56
<PAGE> 169
authorization forms; (3) changes in previously designated wiring or electronic
funds transfer instructions; and (4) written redemptions or exchanges of shares
previously reported as lost, whether or not the redemption amount is under
$50,000 or the proceeds are to be sent to the address of record. AIM Funds may
waive or modify any signature guarantee requirements at any time.
Acceptable guarantors include banks, broker-dealers, credit unions,
national securities exchanges, savings associations and any other organization,
provided that such institution or organization qualifies as an "eligible
guarantor institution" as that term is defined in rules adopted by the SEC, and
further provided that such guarantor institution is listed in one of the
reference guides contained in the Transfer Agent's current Signature Guarantee
Standards and Procedures, such as certain domestic banks, credit unions,
securities dealers, or securities exchanges. The Transfer Agent will also accept
signatures with either: (1) a signature guaranteed with a medallion stamp of the
STAMP Program, or (2) a signature guaranteed with a medallion stamp of the NYSE
Medallion Signature Program, provided that in either event, the amount of the
transaction involved does not exceed the surety coverage amount indicated on the
medallion. For information regarding whether a particular institution or
organization qualifies as an "eligible guarantor institution," an investor
should contact the Client Services Department of AFS.
DIVIDENDS AND DISTRIBUTIONS. In determining the amount of capital
gains, if any, available for distribution, net capital gains are offset against
available net capital losses, if any, carried forward from previous fiscal
periods.
For funds that do not declare a dividend daily, such dividends and
distributions will be reinvested at the net asset value per share determined on
the ex-dividend date. For funds that declare a dividend daily, such dividends
and distributions will be reinvested at the net asset value per share determined
on the payable date.
Dividends on Class B and Class C shares are expected to be lower than
those for Class A shares or AIM Cash Reserve Shares because of higher
distribution fees paid by Class B and Class C shares. Dividends on all shares
may also be affected by other class-specific expenses.
Changes in the form of dividend and distribution payments may be made
by the shareholder at any time by notice to the Transfer Agent and are effective
as to any subsequent payment if such notice is received by the Transfer Agent
prior to the record date of such payment. Any dividend and distribution election
remains in effect until the Transfer Agent receives a revised written election
by the shareholder.
Any dividend or distribution paid by a fund which does not declare
dividends daily 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 declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes.
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<PAGE> 170
MISCELLANEOUS INFORMATION
CHARGES FOR CERTAIN ACCOUNT INFORMATION
The Transfer Agent may impose certain copying charges for requests for
copies of shareholder account statements and other historical account
information older than the current year and the immediately preceding year.
AUDIT REPORTS
The Board of Directors will issue semi-annual reports of the
transactions of the Funds to the shareholders. Financial statements, audited by
independent auditors, will be issued annually. The firm of KPMG LLP, 700
Louisiana, NationsBank Building, Houston, Texas 77002, currently serves as the
auditors of each Fund.
LEGAL MATTERS
Legal matters for the Company have been passed upon by Ballard Spahr
Andrews & Ingersoll, LLP, 1735 Market Street, Philadelphia, Pennsylvania.
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company (the "Custodian"), 225 Franklin
Street, Boston, Massachusetts 02110, is custodian of all securities and cash of
the Funds. The custodian attends to the collection of principal and income, pays
and collects all monies for securities bought and sold by the Funds and performs
certain other ministerial duties. A I M Fund Services, Inc. (the "Transfer
Agent"), a wholly owned subsidiary of AIM, P.O. Box 4739, Houston, Texas
77210-4739, acts as transfer and dividend disbursing agent for the Funds. These
services do not include any supervisory function over management or provide any
protection against any possible depreciation of assets. The Funds pay the
Custodian and the Transfer Agent such compensation as may be agreed upon from
time to time.
Chase Bank of Texas, N.A., 712 Main, Houston, Texas 77002, serves as
Sub-Custodian for retail purchase of the AIM Funds.
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S") has
entered into an agreement with the Company (and certain other AIM Funds), First
Data Investor Service Group and Financial Data Services, Inc., pursuant to which
MLPF&S has agreed to perform certain shareholder sub-accounting services for its
customers who beneficially own shares of the Fund(s).
58
<PAGE> 171
PRINCIPAL HOLDERS OF SECURITIES
As of ____________________, 1999, the following entities owned of
record or beneficially 5% or more of the shares of a Fund:
<TABLE>
<CAPTION>
Percent
Owned of
Percent Record
Name and Address of Owned of and
Beneficial Owner Record* Beneficially
- ---------------- ------ ------------
<S> <C> <C>
CLASS A
LARGE CAP VALUE FUND
[James L. Cash -0- [ ]%
5703 155th Ave. NE
Redmond, WA 98052
FLEX FUND
Merrill Lynch Pierce Fenner & Smith [ ]** -0-
FBO the Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East
Jacksonville, FL 32246
Cypress Enterprises -0- [ ]%
A Partnership
730 S. Tonti Street
New Orleans, LA 70119
MULTIFLEX FUND
Raymond James Assoc., Inc. -0- [ ]%
Cust. Charles C. Gleason IRA
4629 Rue Bayou
Sanibel, FL 33957
</TABLE>
- ------------------
* The Company has no knowledge as to whether all or any portion of the shares
owned of record only are also owned beneficially.
** A shareholder who holds 25% or more of the outstanding shares of a Fund may
be presumed to be in "control" of such Fund as defined in the 1940 Act.
59
<PAGE> 172
<TABLE>
<CAPTION>
Percent
Owned of
Percent Record
Name and Address of Owned of and
Beneficial Owner Record* Beneficially
- ---------------- ------ ------------
<S> <C> <C>
REAL ESTATE FUND
Merrill Lynch Pierce Fenner & Smith [ ]% -0-
FBO the Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East
Jacksonville, FL 32246
INTERNATIONAL VALUE FUND
Merrill Lynch Pierce Fenner & Smith [ ]% -0-
FBO the Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. E.
Jacksonville, FL 32246
Paul F. Brown, Jr. -0- [ ]%
and W. Todd Raible
TTEES Royal Oil & Gas Corp.
PSP & TR DTD 12/27/97
P.O. Box 809
Indiana, PA 15701
</TABLE>
- -------------------
* The Company has no knowledge as to whether all or any portion of the shares
owned of record only are also owned beneficially.
60
<PAGE> 173
<TABLE>
<CAPTION>
Percent
Owned of
Percent Record
Name and Address of Owned of and
Beneficial Owner Record* Beneficially
- ---------------- ------ ------------
<S> <C> <C>
CLASS B
LARGE CAP VALUE FUND
FLEX FUND
MULTIFLEX FUND
REAL ESTATE FUND
INTERNATIONAL VALUE FUND
CLASS C
LARGE CAP VALUE FUND
Merrill Lynch Pierce Fenner & Smith [ ]% -0-
FBO the Sole Benefit of Its Customers
Attn: Fund Administration
4800 Deer Lake Dr. E.
Jacksonville, FL 32246
FLEX FUND
Merrill Lynch Pierce Fenner & Smith [ ]% -0-
FBO the Sole Benefit of Its Customers
Attn: Fund Administration
4800 Deer Lake Dr. E.
Jacksonville, FL 32246
</TABLE>
- ------------------
* The Company has no knowledge as to whether all or any portion of the shares
owned of record only are also owned beneficially.
61
<PAGE> 174
<TABLE>
<CAPTION>
Percent
Owned of
Percent Record
Name and Address of Owned of and
Beneficial Owner Record Beneficially
- ------------------- --------- ------------
<S> <C> <C>
MULTIFLEX FUND
Merrill Lynch Pierce Fenner & Smith [ ]% -0-
FBO the Sole Benefit of Its Customers
Attn: Fund Administration
4800 Deer Lake Dr. E.
Jacksonville, FL 32246
REAL ESTATE FUND
Merrill Lynch Pierce Fenner & Smith [ ]% -0-
FBO the Sole Benefit of Its Customers
Attn: Fund Administration
4800 Deer Lake Dr. E.
Jacksonville, FL 32246
INTERNATIONAL VALUE FUND
Merrill Lynch Pierce Fenner & Smith [ ]%** -0-
FBO the Sole Benefit of Its Customers
Attn: Fund Administration
4800 Deer Lake Dr. E.
Jacksonville, FL 32246
</TABLE>
As of ____________________, 1999, the officers and Directors of the
Company, as a group, owned less than 1% of the outstanding shares of the Funds.
- -------------------
* The Company has no knowledge as to whether all or any portion of the
shares owned of record only are also owned beneficially.
** A shareholder who holds 25% or more of the outstanding shares of a Fund may
be presumed to be in "control" of such Fund as defined in the 1940 Act.
62
<PAGE> 175
APPENDIX
Some of the terms used in the Funds' Prospectuses and this Statement of
Additional Information are described below.
The term "MONEY MARKET" refers to the marketplace composed of the
financial institutions which handle the purchase and sale of liquid, short-term,
high-grade debt instruments. The money market is not a single entity, but
consists of numerous separate markets, each of which deals in a different type
of short-term debt instrument. These include U.S. Government obligations,
commercial paper, certificates of deposit, bankers' acceptances and master
notes, which are generally referred to as money market instruments.
U.S. GOVERNMENT OBLIGATIONS are debt securities (including bills, notes
and bonds) issued by the U.S. Treasury or issued by an agency or instrumentality
of the U.S. Government which is established under the authority of an Act of
Congress. Such agencies or instrumentalities include, but are not limited to,
the Federal National Mortgage Association, Government National Mortgage
Association, the Federal Farm Credit Bank, and the Federal Home Loan Bank.
Although all obligations of agencies, authorities and instrumentalities are not
direct obligations of the U.S. Treasury, payment of the interest and principal
on these obligations is generally backed directly or indirectly by the U.S.
Government. This support can range from the backing of the full faith and credit
of the United States to U.S. Treasury guarantees, or to the backing solely of
the issuing instrumentality itself. In the case of securities not backed by the
full faith and credit of the United States, the investor must look principally
to the agency issuing or guaranteeing the obligation for ultimate repayment, and
may not be able to assert a claim against the United States itself in the event
the agency or instrumentality does not meet its commitments.
BANK OBLIGATIONS include certificates of deposit which are negotiable
certificates evidencing the indebtedness of a commercial bank to repay funds
deposited with it for a definite period of time (usually from 14 days to one
year) at a stated interest rate.
BANKERS' ACCEPTANCES are credit instruments evidencing the obligation
of a bank to pay a draft which has been drawn on it by a customer. These
instruments reflect the obligation both of the bank and of the drawer to pay the
face amount of the instrument upon maturity.
TIME DEPOSITS are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate.
COMMERCIAL PAPER consists of short-term (usually one to 180 days)
unsecured promissory notes issued by corporations in order to finance their
current operations.
CORPORATE DEBT obligations are bonds and notes issued by corporations
and other business organizations, including business trusts, in order to finance
their long-term credit needs.
CERTIFICATES OF DEPOSIT are negotiable certificates issued against
funds deposited in a commercial bank for a definite period of time and earning a
specified return.
MORTGAGE-BACKED SECURITIES are interests in a pool of mortgage loans.
Most mortgage securities are pass-through securities, which means that they
provide investors with payments consisting of both principal and interest as
mortgages in the underlying mortgage pool are paid off by the borrowers. The
dominant issuers or guarantors of mortgage securities are the Government
National Mortgage Association ("GNMA"), the Federal National Mortgage
Association ("FNMA") and the Federal Home Loan Mortgage Corporation ("FHLMC").
COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS") are hybrid instruments
with characteristics of both mortgage-backed and mortgage pass-through
securities. Similar to a bond, interest and pre-paid principal on a CMO are
paid, in most cases, semi-annually. CMOs may be collateralized by whole mortgage
loans but are more typically collateralized by Funds of mortgage pass-through
securities guaranteed by GNMA, FHLMC, or FNMA. CMOs are structured into multiple
classes, with each class bearing a different stated maturity. Monthly
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<PAGE> 176
payments of principal, including prepayments, are first returned to investors
holding the shortest maturity class; investors holding the longer maturity
classes receive principal only after the first class has been retired.
MUNICIPAL BONDS are debt obligations which generally have a maturity at
the time of issue in excess of one year and are issued to obtain funds for
various public purposes. The two principal classifications of municipal bonds
are "general obligation" and "revenue" bonds. General obligation bonds are
secured by the issuer's pledge of its full faith, credit and taxing power for
the payment of principal and interest. Revenue bonds are payable only from the
revenues derived from a particular facility or class of facilities, or, in some
cases, from the proceeds of a special excise or specific revenue source.
Industrial development bonds or private activity bonds are issued by or on
behalf of public authorities to obtain funds for privately operated facilities
and are, in most cases, revenue bonds which do not generally carry the pledge of
the full faith and credit of the issuer of such bonds, but depend for payment on
the ability of the industrial user to meet its obligations (or any property
pledged as security).
ZERO COUPON BONDS are debt obligations issued without any requirement
for the periodic payment of interest. Zero coupon bonds are issued at a
significant discount from face value. The discount approximates the total amount
of interest the bonds would accrue and compound over the period until maturity
at a rate of interest reflecting the market rate at the time of issuance. A
Fund, if it holds zero coupon bonds in its Fund, however, would recognize income
currently for Federal tax purposes in the amount of the unpaid, accrued interest
(determined under tax rules) and generally would be required to distribute
dividends representing such income to shareholders currently, even though funds
representing such income would not have been received by the Fund. Cash to pay
dividends representing unpaid, accrued interest may be obtained from sales
proceeds of Fund securities and Fund shares and from loan proceeds. Because
interest on zero coupon obligations is not paid to the Fund on a current basis
but is in effect compounded, the value of the securities of this type is subject
to greater fluctuations in response to changing interest rates than the value of
debt obligations which distribute income regularly.
RATINGS OF CORPORATE DEBT OBLIGATIONS Fund purchases of taxable
obligations are not limited to those obligations rated within the four highest
categories by Moody's and S&P. However, the Flex Fund's standards for investment
grade obligations are generally similar to those standards included in the four
highest categories by Moody's and S&P. The MultiFlex Fund may invest up to 5% of
Fund assets in corporate bonds rated below Baa by Moody's or below BBB by S&P,
but rated at least Ba by Moody's or BB by S&P.
The characteristics of corporate debt obligations rated by Moody's are
generally as follows:
AAA -- Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A -- Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate but elements
may be present which suggest a susceptibility to impairment sometime in the
future.
Baa -- Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
64
<PAGE> 177
Ba -- Bonds which are rated Ba are judged to have speculative elements.
The future of such bonds cannot be considered as well assured.
B -- Bonds which are rated B generally lack characteristics of a
desirable investment.
Caa -- Bonds rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca -- Bonds rated Ca are speculative to a high degree.
C -- Bonds rated C are the lowest rated class of bonds and are regarded
as having extremely poor prospects.
The characteristics of corporate debt obligations rated by S&P are
generally as follows:
AAA -- This is the highest rating assigned by S&P to a debt obligation
and indicates an extremely strong capacity to pay principal and interest.
AA -- Bonds rated AA also qualify as high quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority of
instances they differ from AAA issues only in small degree.
A -- Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.
BBB -- Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
BB -- Debt rated BB is predominantly speculative with respect to
capacity to pay interest and repay principal in accordance with terms of the
obligation. BB indicates the lowest degree of speculation; CC indicates the
highest degree of speculation.
BB,B,CCC,CC -- Debt in these ratings is predominantly speculative with
respect to capacity to pay interest and repay principal in accordance with terms
of the obligation. BB indicates the lowest degree of speculation and CC the
highest.
A bond rating is not a recommendation to purchase, sell or hold a
security, inasmuch as it does not comment as to market price or suitability for
a particular investor.
The ratings are based on current information furnished by the issuer or
obtained by the rating services from other sources which they consider reliable.
The ratings may be changed, suspended or withdrawn as a result of changes in or
unavailability of, such information, or for other reasons.
RATINGS OF COMMERCIAL PAPER. Commercial paper rated A-1 by Standard &
Poor's has the following characteristics: liquidity ratios are adequate to meet
cash requirements; the issuer's long-term debt is rated "A" or better; the
issuer has access to at least two additional channels of borrowing; and basic
earnings and cash flow have an upward trend with allowances made for unusual
circumstances. Typically, the issuer's industry is well established and the
issuer has a strong position within the industry.
Commercial paper rated Prime 1 by Moody's is the highest commercial
paper assigned by Moody's. Among the factors considered by Moody's in assigning
ratings are the following: (1) evaluation of the management of the issuer; (2)
economic evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas; (3) evaluation of
the issuer's products in relation to competition and consumer acceptance; (4)
liquidity; (5) amount and quality of long-term debt; (6) trend of
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<PAGE> 178
earnings over a period of ten years; (7) financial strength of a parent company
and the relationships which exist with the issuer; and (8) recognition by the
management of obligations which may be present or may arise as a result of
public interest questions and preparations to meet such obligations. Relative
strength or weakness of the above factors determine how the issuer's commercial
paper is rated within various categories.
DETERMINATION OF CREDIT QUALITY OF UNRATED SECURITIES. In determining
whether an unrated debt security is of comparable quality to a rated security,
the sub-adviser may consider the following factors, among others:
(1) other securities of the issuer that are rated;
(2) the issuer's liquidity, debt structure, repayment schedules,
and external credit support facilities;
(3) the reliability and quality of the issuer's management;
(4) the length to maturity of the security and the percentage of
the Fund represented by securities of that issuer;
(5) the issuer's earnings and cash flow trends;
(6) the issuer's industry, the issuer's position in its industry,
and an appraisal of speculative risks which may be inherent in
the industry;
(7) the financial strength of the issuer's parent and its
relationship with the issuer;
(8) the extent and reliability of credit support, including a
letter of credit or third party guarantee applicable to
payment of principal and interest;
(9) the issuer's ability to repay its debt from cash sources or
asset liquidation in the event that the issuer's backup credit
facilities are unavailable;
(10) other factors deemed relevant by the subadvisor.
66
<PAGE> 179
FINANCIAL STATEMENTS
FS
<PAGE> 180
PART C
OTHER INFORMATION
Item 23. Exhibits
a (1) (a) Amended and Restated Articles of Incorporation dated
March 7, 1995, previously filed with Post-Effective
Amendment No. 24 to the Registrant's Registration Statement
on May 1, 1995, and were filed electronically as an Exhibit
to Registrant's Post-Effective Amendment No. 33 on December
30, 1997, and are incorporated by reference herein.
(b) Articles of Amendment to the Articles of Incorporation,
as filed with the State Department of Assessments and
Taxation of the state of Maryland on January 16, 1996, filed
on EDGAR with Post-Effective Amendment No. 26 on April 22,
1996, and are incorporated by reference herein.
(c) Articles Supplementary, dated February 14, 1996, to the
Articles of Incorporation were filed electronically as an
Exhibit with the Registrant's Post-Effective Amendment No.
34 on February 24, 1998, and are incorporated by reference
herein.
(d) Articles Supplementary to the Articles of Incorporation
dated August 13, 1996, were filed electronically as an
Exhibit with the Registrant's Post-Effective Amendment No.
34 on February 24, 1998, and are incorporated by reference
herein.
(e) Articles Supplementary, dated September 29, 1997, to the
Articles of Incorporation were filed electronically as an
Exhibit to Registrant's Post-Effective Amendment No. 33 on
December 30, 1997, and are incorporated by reference herein.
b (1) By-Laws of Registrant, as amended, previously filed with
Post-Effective Amendment No. 24 to the Registrant's
Registration Statement on May 1, 1995, was filed on EDGAR
with Post-Effective Amendment No. 31 on April 30, 1997.
(2) Amended and Restated Bylaws of Registrant, dated September
20, 1997, was filed electronically as an Exhibit to
Registrant's Post-Effective Amendment No. 33 on December 30,
1997, and is incorporated by reference herein.
c Instruments Defining Rights of Security Holders - None.
d (1) Investment Advisory Agreement between Registrant and INVESCO
Services, Inc. dated as of February 28, 1997 was filed on
EDGAR with Post-Effective Amendment No. 31 on April 30,
1997.
(2) Investment Advisory Agreement between Registrant and A I M
Advisors, Inc. dated August 4, 1997, was filed
electronically as an Exhibit to Registrant's Post-Effective
Amendment No. 33 on December 30, 1997, and is incorporated
by reference herein.
(3) Sub-Advisory Agreement between INVESCO Services, Inc. and
INVESCO Capital Management, Inc. dated as of February 28,
1997, was filed on EDGAR with Post-Effective Amendment No.
31 on April 30, 1997.
C-1
<PAGE> 181
(4) Sub-Advisory Agreement between A I M Advisors, Inc. and
INVESCO Capital Management, Inc. dated August 4, 1997, was
filed electronically as an Exhibit to Registrant's
Post-Effective Amendment No. 33 on December 30, 1997, and is
incorporated by reference herein.
(5) Sub-Advisory Agreement between INVESCO Services, Inc. and
INVESCO Management & Research, Inc. dated as of February 28,
1997 was filed on EDGAR with Post-Effective Amendment No. 31
on April 30, 1997.
(6) Sub-Advisory Agreement between A I M Advisors, Inc. and
INVESCO Management & Research, Inc. dated August 4, 1997,
was filed electronically as an Exhibit to Registrant's
Post-Effective Amendment No. 33 on December 30, 1997, and is
incorporated by reference herein.
(7) Sub-Advisory Agreement between INVESCO Services, Inc. and
INVESCO Realty Advisors, Inc. dated as of February 28, 1997
was filed on EDGAR with Post-Effective Amendment No. 31 on
April 30, 1997.
(8) Sub-Advisory Agreement between A I M Advisors, Inc. and
INVESCO Realty Advisors, Inc. dated August 4, 1997, was
filed electronically as an Exhibit to Registrant's
Post-Effective Amendment No. 33 on December 30, 1997, and is
incorporated by reference herein.
(9) Sub-Advisory Agreement between A I M Advisors, Inc. and
INVESCO Global Asset Management, Inc. dated August 4, 1997,
was filed electronically as an Exhibit with Registrant's
Post-Effective Amendment No. 34 on February 24, 1998, and is
incorporated by reference herein.
(10) (a) Foreign Country Selection and Mandatory Securities
Depository Responsibilities Delegation Agreement, dated
September 9, 1998, by and between A I M Advisors, Inc. and
the Registrant, is filed electronically herewith.
(b) Amendment No. 1, dated September 28, 1998 to the Foreign
Country Selection and Mandatory Securities Depository
Responsibilities Delegation Agreement, dated September 9,
1998, by and between A I M Advisors, Inc. and the
Registrant, is filed electronically herewith.
(c) Amendment No. 2, dated December 14, 1998, to the Foreign
Country Selection and Mandatory Securities Depository
Responsibilities Delegation Agreement, dated September 9,
1998, by and between A I M Advisors, Inc. and the
Registrant, is filed electronically herewith.
(d) Amendment No. 3, dated December 22, 1998, to the Foreign
Country Selection and Mandatory Securities Depository
Responsibilities Delegation Agreement, dated September 9,
1998, by and between A I M Advisors, Inc. and the
Registrant, is filed electronically herewith.
(e) Amendment No. 4, dated January 26, 1999, to the Foreign
Country Selection and Mandatory Securities Depository
Responsibilities Delegation Agreement, dated September 9,
1998, by and between A I M Advisors, Inc. and the
Registrant, is filed electronically herewith.
C-2
<PAGE> 182
(f) Amendment No. 5, dated March 1, 1999, to the Foreign
Country Selection and Mandatory Securities Depository
Responsibilities Delegation Agreement, dated September 9,
1998, by and between A I M Advisors, Inc. and the
Registrant, is filed electronically herewith.
e (1) Distribution Agreement between Registrant and INVESCO
Services, Inc., dated as of February 28, 1997 was filed on
EDGAR with Post-Effective Amendment No. 31 on April 30,
1997.
(2) Distribution Agreement between Registrant and A I M
Distributors, Inc. dated August 4, 1997, was filed
electronically as an Exhibit to Registrant's Post-Effective
Amendment No. 33 on December 30, 1997, and is incorporated
by reference herein.
(3) Master Distribution Agreement between Registrant and A I M
Distributors, Inc. (relating to Class B shares) is filed
electronically herein.
(4) Form of Selected Dealer Agreement between A I M
Distributors, Inc. and selected dealers is filed herewith
electronically.
(5) Form of Bank Selling Group Agreement between A I M
Distributors, Inc. and banks is filed herewith
electronically.
f (1) Defined Benefit Deferred Compensation Plan for
Non-Interested Directors and Trustees was filed on EDGAR
with Post-Effective Amendment No. 31 on April 30, 1997.
(2) Form of Deferred Compensation Agreement for Registrant's
Non-Affiliated Directors for Non-Interested Directors and
Trustees was filed electronically as an Exhibit to
Post-Effective Amendment No. 32 on June 9, 1997 and is
hereby incorporated by reference.
(3) Form of Deferred Compensation Agreement for Registrant's
Non-Affiliated Directors was filed electronically as an
Exhibit with Registrant's Post-Effective Amendment No. 34 on
February 24, 1998, and is incorporated by reference herein.
(4) Retirement Plan for Registrant's Non-Affiliated Directors
effective as of March 8, 1994 as restated September 18, 1997
was filed electronically as an Exhibit to Post-Effective
Amendment No. 32 on June 9, 1997 and is hereby incorporated
by reference.
g (1) Form of Custodian Agreement between Registrant and United
Missouri Bank of Kansas City, N.S., dated as of November 1,
1993, previously filed with Post-Effective Amendment No. 20
to the Registrant's Registration Statement on September 10,
1993. Custodian Agreement between Registrant and United
Missouri Bank of Kansas City, N.S., dated as of November 1,
1993, previously filed with Post-Effective Amendment No. 22
to the Registrant' Registration Statement on April 28, 1994.
Form of Custodian Agreement between Registrant and United
Missouri Bank, dated May 1, 1995, previously filed with
Post-Effective Amendment No. 24 to the Registrant's
Registration Statement on May 1, 1995, and filed on EDGAR
with Post-Effective Amendment No. 26 on April 22, 1996.
(2) (a) Custodian Contract, dated August 4, 1997, between
Registrant and State Street Bank and Trust Company was filed
electronically as an Exhibit with Registrant's
Post-Effective Amendment No. 34 on February 24, 1998, and is
incorporated by reference herein.
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<PAGE> 183
(b) Amendment to Custodian Contract dated September 9, 1998,
between Registrant and State Street Bank and Trust Company
is filed electronically herein.
h (1) Operating Services Agreement between Registrant and INVESCO
Services, Inc., dated as of February 28, 1997 was filed on
EDGAR with Post-Effective Amendment No. 31 on April 30,
1997.
(2) Operating Services Agreement between Registrant and A I M
Advisors, Inc. dated August 4, 1997, was filed
electronically as an Exhibit to Registrant's Post-Effective
Amendment No. 33 on December 30, 1997, and is incorporated
by reference herein.
(3) Transfer Agency and Service Agreement between Registrant,
A I M Advisors, Inc. and A I M Fund Services, Inc. dated
August 4, 1997, was filed electronically as an Exhibit to
Registrant's Post-Effective Amendment No. 33 on December 30,
1997, and is incorporated by reference herein.
(4) (a) Remote Access and Related Services Agreement, dated as
of December 23, 1994, between the Registrant and The
Shareholder Services Group, Inc. was filed electronically as
an Exhibit with Registrant's Post-Effective Amendment No. 34
on February 24, 1998, and is incorporated by reference
herein.
(b) Amendment No. 1, dated October 4, 1995, to the Remote
Access and First Data Investor Services Group, Inc.
(formerly The Shareholder Services Group, Inc.) was filed
electronically as an Exhibit with Registrant's
Post-Effective Amendment No. 34 on February 24, 1998, and is
incorporated by reference herein.
(c) Addendum No. 2, dated October 12, 1995, to the Remote
Access and Related Services Agreement, dated December 23,
1994, between Registrant and First Data Investor Services
Group, Inc. was filed electronically as an Exhibit with
Registrant's Post-Effective Amendment No. 34 on February 24,
1998, and is incorporated by reference herein.
(d) Amendment No. 3, dated as of February 1, 1997, to the
Remote Access and Related Services Agreement, dated December
23, 1994, between the Registrant and First Data Investor
Services Group, Inc. was filed electronically as an Exhibit
with Registrant's Post-Effective Amendment No. 34 on
February 24, 1998, and is incorporated by reference herein.
(e) Exhibit 1, effective as of August 4, 1997, to the Remote
Access and Related Services Agreement, dated December 23,
1994, between the Registrant and First Data Investor
Services Group, Inc. was filed electronically as an Exhibit
with Registrant's Post-Effective Amendment No. 34 on
February 24, 1998, and is incorporated by reference herein.
(f) Preferred Registration Technology Escrow Agreement,
dated September 10, 1997, between Registrant and First Data
Investor Services Group, Inc., was filed electronically as
an Exhibit with Registrant's Post-Effective Amendment No. 34
on February 24, 1998, and is incorporated by reference
herein.
(g) Amendment No. 4, dated as of June 30, 1998, to the
Remote Access and Related Services Agreement, dated December
23, 1994, between the Registrant and First Data Investor
Services Group, Inc. Is filed herewith electronically.
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(h) Amendment No. 5, dated July 1, 1998, to the Remote
Access and Related Services Agreement, dated December 23,
1994, between the Registrant and First Data Investor
Services Group, Inc. Is filed herewith electronically.
i Opinion and Consent of Ballard Spahr Andrews & Ingersoll was
filed electronically as an Exhibit to Registrant's Post-Effective
Amendment No. 33 on December 30, 1997, and is incorporated by
reference herein.
j Consent of Ballard Spahr Andrews & Ingersoll, LLP is filed
herewith electronically.
k Financial Statements - None.
l Initial Capital Agreements - Not applicable.
m (1) Plan and Agreement of Distribution pursuant to Rule 12b-1
between the Registrant and INVESCO Services, Inc., dated as
of January 1, 1997 was filed on EDGAR with Post-Effective
Amendment No. 31 on April 30, 1997.
(2) Plan and Agreement of Distribution pursuant to Rule 12b-1
between the Registrant (on behalf of Class A and Class C
shares) and A I M Distributors, Inc. dated August 4, 1997,
was filed electronically as an Exhibit to Registrant's
Post-Effective Amendment No. 33 on December 30, 1997, and is
incorporated by reference herein.
(3) Master Distribution Plan of the Registrant (on behalf of
Class B shares) is filed herewith electronically.
(4) Form of Shareholder Service Agreement to be used in
connection with Registrant's Master Distribution Plan is
filed herewith electronically.
(5) Form of Bank Shareholder Service Agreement to be used in
connection with Registrant's Master Distribution Plan is
filed herewith electronically.
(6) Form of Variable Group Annuity Contractholder Service
Agreement to be used in connection with Registrant's Master
Distribution Plan is filed herewith electronically.
(7) Form of Agency Pricing Agreement.
(8) Form of Service Agreement of Bank Trust Departments and for
Brokers for Bank Trust Departments to be used in connection
with Registrant's Master Distribution Plan is filed herewith
electronically.
n Financial Data Schedule - None.
o (1) Plan Pursuant To Rule 18f-3 under the Investment Company Act
of 1940 by the Registrant adopted by the Board of Directors
was filed on EDGAR with Post-Effective Amendment No. 31 on
April 30, 1997.
(2) Second Amended and Restated Multiple Class Plan (Rule 18f-3)
(effective September 1, 1997) was filed electronically as an
Exhibit to Registrant's Post-Effective Amendment No. 33 on
December 30, 1997, and is incorporated by reference herein.
C-5
<PAGE> 185
Item 25. Persons Controlled by or Under Common Control with Registrant
Provide a list or diagram of all persons directly or indirectly
controlled by or under common control with the Registrant. For
any person controlled by another person, disclose the percentage
of voting securities owned by the immediately controlling person
or other basis of that person's control. For each company, also
provide the state or other sovereign power under the laws of
which the company is organized.
None.
Item 25. 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 against any
liability incurred in their official capacity, other than
insurance provided by any director, officer, affiliated person or
underwriter for their own protection.
Section 2-418 of the General Corporation Law of the State of
Maryland, Article VI of the Registrant's Charter filed as Exhibit
1, Article VII of the Registrant's By-Laws filed as Exhibit 2,
and the Investment Advisory Agreement filed as Exhibit 5(a),
provide, or will provide, for indemnification.
The Registrant's Articles of Incorporation (Article VI) provide
that the Registrant shall indemnify (a) its directors to the
fullest extent permitted by law now or hereafter in force,
including the advance of expenses under the procedures provided
under such laws; (b) its officers to the same extent it shall
indemnify its directors; and (c) its officers who are not
directors to such further extent as shall be authorized by the
Board of Directors and be consistent with law, provided, however,
that such indemnification shall not be construed to protect any
director or officer against any liability to which such director
or officer would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard
of the duties involved in the conduct of his or her office.
The Registrant's By-laws (Article VII) provide that the
Registrant shall indemnify any director and/or officer who was or
is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is
or was a director or officer of the Registrant, or is or was
serving at the request of the Registrant as a director or officer
of another corporation, partnership, joint venture, trust or
other enterprise, against all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action,
suit or proceeding to the maximum extent permitted by law.
With respect to indemnification of officers and directors,
Section 2-418 of the Maryland General Corporation Law provides
that a corporation may indemnify any director who is made a party
to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
Registrant) by reason of service in that capacity, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
and expenses actually and reasonably incurred by him in
connection with such action, suit or proceeding unless (1) it is
established that the act or omission of the director was material
to the matter giving rise to the proceeding, and (a) was
committed in bad faith or (b) was the result of active and
deliberate dishonesty; or (2) the director actually received an
improper personal benefit of money, property, or services; or (3)
in the case of any criminal action or proceeding, had reasonable
cause to believe that the act
C-6
<PAGE> 186
or omission was unlawful. A court of appropriate jurisdiction
may, however, except in proceedings by or in the right of the
Registrant or in which liability has been adjudged by reason of
the person receiving an improper personal benefit, order such
indemnification as the court shall deem proper if it determines
that the director is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances,
whether or not the director has met the requisite standards of
conduct. Under Section 2-418, the Registrant shall also indemnify
officers, employees, and agents of the Registrant to the same
extent that it shall indemnify directors, and officers, employees
and agents who are not directors to such further extent,
consistent with law, as may be provided by general or specific
action of the Board of Directors or contract. Pursuant to Section
2-418 of the Maryland General Corporation Law, the termination of
any action, suit or proceeding by judgment, order or settlement
does not create a presumption that the person did not meet the
requisite standard of conduct required by Section 2-418. The
termination of any action, suit or proceeding by conviction, or a
plea of nolo contendere or its equivalent, or an entry of an
order of probation prior to judgment, creates a rebuttable
presumption that the person did not meet the requisite standard
of conduct.
Insofar as indemnification for liability arising under the
Securities Act of 1933 (the "Act") 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 as
expressed in the Act 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, 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 as expressed in
the Act and will be governed by the final adjudication of such
issue. Insurance coverage is provided under a joint Mutual Fund &
Investment Advisory Professional and Directors & Officers
Liability Policy, issued by ICI Mutual Insurance company, with a
$35,000,000 limit of liability.
Item 26. Business and Other Connections of Investment Advisor and
Sub-Advisor
Describe any other business, profession, vocation or employment
of a substantial nature that each investment advisor of the
Registrant, and each director, officer or partner of the advisor
is, or has been, engaged within the two fiscal years for his or
her own account or in the capacity of director, officer,
employee, partner or trustee.
See "Management" in the Prospectus and "The Advisory and
Sub-Advisory Agreements" in the Statement of Additional
Information for information regarding the business of the
investment advisor and sub-advisors. The only employment of a
substantial nature of the Advisor's directors and officers is
with the Advisor and its affiliated companies. For information as
to the business, profession, vocation or employment of a
substantial nature of each of the officers and directors of
INVESCO Capital Management, Inc., INVESCO Global Asset Management
Limited, INVESCO Management & Research, Inc., and INVESCO Realty
Advisors, Inc., reference is made to Form ADV filed under the
Investment Advisers Act of 1940 by INVESCO Capital Management,
Inc., INVESCO Global Asset Management Limited, INVESCO Management
& Research, Inc. and INVESCO Realty Advisors, Inc., herein
incorporated by reference.
C-7
<PAGE> 187
Item 27. Principal Underwriters
(a) State the name of each investment company (other than the
Registrant) for which each principal underwriter currently
distributing the Registrant's securities also acts as a principal
underwriter, depositor, or investment adviser.
A I M Distributors, Inc., the Registrant's principal underwriter
of its Retail Classes, also acts as a principal underwriter to
the following investment companies:
AIM Equity Funds, Inc. (Retail Classes)
AIM Funds Group
AIM Growth Series
AIM International Funds, Inc.
AIM Investment Funds
AIM Investment Securities Funds (Retail Classes)
AIM Series Trust
AIM Special Opportunities Funds
AIM Summit Fund, Inc.
AIM Tax-Exempt Funds, Inc.
AIM Variable Insurance Funds, Inc.
GT Global Floating Rate Fund, Inc.
AIM Summit Investors Plan I
(b) Provide the information required by the following table for
each director, officer, or partner of each principal underwriter
named in the response to Item 20:
<TABLE>
<CAPTION>
Name and Positions and Positions and
Principal Business Offices with Offices with
Address* Underwriter Registrant
- -------- ----------- ----------
<S> <C> <C>
Charles T. Bauer Chairman of the Board of Directors Chairman of the Board
of Directors
Michael J. Cemo President & Director None
Gary T. Crum Director Senior Vice President
James L. Salners Executive Vice President None
Robert H. Graham Senior Vice President & Director President & Director
W. Gary Littlepage Senior Vice President & Director None
John Caldwell Senior Vice President None
Marilyn M. Miller Senior Vice President None
</TABLE>
- --------
* 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173
C-8
<PAGE> 188
<TABLE>
<CAPTION>
Name and Positions and Positions and
Principal Business Offices with Offices with
Address* Underwriter Registrant
- -------- ----------- ----------
<S> <C> <C>
Gene L. Needles Senior Vice President None
Gordon J. Sprague Senior Vice President None
Michael C. Vessels Senior Vice President None
B.J. Thompson First Vice President None
Ofelia M. Mayo Vice President, General Counsel Assistant Secretary
& Assistant Secretary
James R. Anderson Vice President None
Dawn M. Hawley Vice President & Treasurer None
Mary K. Coleman Vice President None
Mary Corcoran Vice President None
Melville B. Cox Vice President & Chief Compliance Vice President
Officer
Sidney M. Dilgren Vice President None
Tony D. Green Vice President None
Terri L. Randsell 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
Gary K. Wendler Vice President None
Kim T. Auliffe Assistant Vice President None
Luke Beausoleil Assistant Vice President None
Tisha B. Christopher Assistant Vice President None
Glenda A. Dayton Assistant Vice President None
Mary E. Gentempo Assistant Vice President None
David E. Hessel Assistant Vice President, None
Assistant Treasurer & Controller
Kathryn A. Jordan Assistant Vice President None
Ivy B. McLemore Assistant Vice President None
Mary C. Mangham Assistant Vice President None
David B. O'Neil Assistant Vice President None
Rebecca Starling-Klatt Assistant Vice President None
Nicholas D. White Assistant Vice President None
Norman W. Woodson Assistant Vice President None
Nancy L. Martin Assistant General Counsel & Assistant Secretary
Assistant Secretary
Samuel D. Sirko Assistant General Counsel & Assistant Secretary
Assistant Secretary
Kathleen J. Pflueger Secretary Assistant Secretary
P. Michelle Grace Assistant Secretary Assistant Secretary
Lisa A. Moss Assistant Secretary Assistant Secretary
Stephen I. Winer Assistant Secretary Assistant Secretary
</TABLE>
- --------
* 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173
C-9
<PAGE> 189
(c) Provide the information required by the following table for
all commissions and other compensation received, directly or
indirectly, from the Registrant during the last fiscal year
by each principal underwriter who is not an affiliated
person of the Registrant or any affiliated person of an
affiliated person.
Not applicable.
Item 28. Location of Accounts and Records
State the name and address of each person maintaining physical possession
of each account, book, or other document required to be maintained by Section
31(a) [15 U.S.C. 80a-30(a)] and the rules under that section.
A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas
77046-1173, 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, State Street Bank and
Trust Company, 225 Franklin Street, Boston, Massachusetts 02110, and the
Registrant's Transfer Agent and Dividend Paying Agent, A I M Fund Services,
Inc., P.O. Box 4739, Houston, Texas 77210-4739.
Item 29. Management Services
Provide a summary of the substantive provisions of any management-related
service contract not discussed in Part A or B, disclosing the parties to
the contract and the total amount paid and by whom for the Registrant's
last three fiscal years.
None.
Item 30. Undertakings
In initial registration statements filed under the Securities Act, provide
an undertaking to file an amendment to the registration statement with certified
financial statements showing the initial capital received before accepting
subscriptions from more than 25 persons if the Registrant intends to raise its
initial capital under Section 14(a)(3) [15 U.S.C. 80a-14(a)(3)].
Not Applicable
C-10
<PAGE> 190
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant 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 16th day of
February, 1999.
REGISTRANT: AIM ADVISOR FUNDS, INC.
By: /s/ ROBERT H. GRAHAM
---------------------------------
Robert H. Graham, President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ CHARLES T. BAUER Chairman & Director 2/16/99
- ----------------------------------------
(Charles T. Bauer)
/s/ ROBERT H. GRAHAM Director & President 2/16/99
- ---------------------------------------- (Principal Executive Officer)
(Robert H. Graham)
/s/ BRUCE L. CROCKETT Director 2/16/99
- ----------------------------------------
(Bruce L. Crockett)
/s/ OWEN DALY II Director 2/16/99
- ----------------------------------------
(Owen Daly II)
/s/ EDWARD K. DUNN, JR. Director 2/16/99
- ----------------------------------------
(Edward K. Dunn, Jr.)
/s/ JACK FIELDS Director 2/16/99
- ----------------------------------------
(Jack Fields)
/s/ CARL FRISCHLING Director 2/16/99
- ----------------------------------------
(Carl Frischling)
/s/ PREMA MATHAI-DAVIS Director 2/16/99
- ----------------------------------------
(Prema Mathai-Davis)
/s/ LEWIS F. PENNOCK Director 2/16/99
- ----------------------------------------
(Lewis F. Pennock)
/s/ IAN W. ROBINSON Director 2/16/99
- ----------------------------------------
(Ian W. Robinson)
/s/ LOUIS S. SKLAR Director 2/16/99
- ----------------------------------------
(Louis S. Sklar)
/s/ JOHN J. ARTHUR Senior Vice President & 2/16/99
- ---------------------------------------- Treasurer (Principal Financial
(John J. Arthur) and Accounting Officer)
</TABLE>
<PAGE> 191
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No.
- -----------
<S> <C>
d(10)(a) Foreign Country Selection and Mandatory Securities Depository
Responsibilities Delegation Agreement, dated September 9, 1998,
by and between A I M Advisors, Inc. and the Registrant
d(10)(b) Amendment No. 1, dated September 28, 1998 to the Foreign Country
Selection and Mandatory Securities Depository Responsibilities
Delegation Agreement, dated September 9, 1998, by and between
A I M Advisors, Inc. and the Registrant
d(10)(c) Amendment No. 2, dated December 14, 1998, to the Foreign Country
Selection and Mandatory Securities Depository Responsibilities
Delegation Agreement, dated September 9, 1998, by and between
A I M Advisors, Inc. and the Registrant
d(10)(d) Amendment No. 3, dated December 22, 1998, to the Foreign Country
Selection and Mandatory Securities Depository Responsibilities
Delegation Agreement, dated September 9, 1998, by and between
A I M Advisors, Inc. and the Registrant
d(10)(e) Amendment No. 4, dated January 26, 1999, to the Foreign Country
Selection and Mandatory Securities Depository Responsibilities
Delegation Agreement, dated September 9, 1998, by and between
A I M Advisors, Inc. and the Registrant
d(10)(f) Amendment No. 5, dated March 1, 1999, to the Foreign Country
Selection and Mandatory Securities Depository Responsibilities
Delegation Agreement, dated September 9, 1998, by and between
A I M Advisors, Inc. and the Registrant
e(3) Master Distribution Agreement between Registrant and A I M
Distributors, Inc.
e(4) Form of Selected Dealer Agreement between A I M Distributors,
Inc. and selected dealers
e(5) Form of Bank Selling Group Agreement between A I M Distributors,
Inc. and banks
g(2)(b) Amendment to Custodian Contract, dated September 9, 1998, between
Registrant and State Street Bank and Trust Company
h(4)(g) Amendment No.4, dated as of June 30, 1998, to the Remote Access
and Related Services Agreement
h(4)(h) Amendment No. 5, dated July 1, 1998, to the Remote Access and
Related Services Agreement
j Consent of Ballard Spahr Andrews & Ingersoll, LLP
m(3) Master of Distribution Plan of the Registrant (on behalf of Class
B shares)
m(4) Form of Shareholder Service Agreement
m(5) Form of Bank Shareholder Service Agreement
m(6) Form of Variable Group Annuity Contractholder Service Agreement
m(7) Form of Agency Pricing Agreement
m(8) Form of Service Agreement of Bank Trust Departments and for
Brokers for Bank Trust Departments
</TABLE>
<PAGE> 1
EXHIBIT d(10)(a)
FOREIGN COUNTRY SELECTION
AND MANDATORY SECURITIES DEPOSITORY RESPONSIBILITIES
DELEGATION AGREEMENT
This FOREIGN COUNTRY SELECTION AND MANDATORY SECURITIES DEPOSITORY
RESPONSIBILITIES DELEGATION AGREEMENT (the "Agreement") is made this 9th day of
September, 1998 by and between A I M ADVISORS, INC., a Delaware corporation
("AIM") and each registered investment company (the "Investment Companies") and
its respective portfolios (the "Funds") listed on the signature page hereof.
W I T N E S S E T H:
WHEREAS, AIM has agreed to accept responsibility for selecting and
monitoring relationships with compulsory depositories; and
WHEREAS, AIM has agreed to accept responsibility for the selection of
foreign countries in which the Funds may invest;
NOW, THEREFORE, AIM hereby agrees to exercise reasonable care, prudence and
diligence such as a person having safekeeping of fund assets would exercise in
performing the following responsibilities:
1. DEFINITIONS.
A. "FOREIGN ASSETS" means any of a Fund's investments (including foreign
currencies) for which the primary market is outside the United States,
currency contracts that are settled outside the United States, and
such cash and cash equivalents as are reasonably necessary to effect
the Fund's transactions in such investments.
B. "FOREIGN CUSTODY MANAGER" means State Street Bank and Trust Company.
C. "MANDATORY SECURITIES DEPOSITORY" means a foreign securities
depository or clearing agency that, either as a legal or practical
matter, must be used if a Fund determines to place Foreign Assets in a
country outside the United States (i) because required by law or
regulation; (ii) because securities cannot be withdrawn from such
foreign securities depository or clearing agency; or (iii) because
maintaining or effecting trades in securities outside the foreign
securities depository or clearing agency is not consistent with
prevailing or developing custodial or market practices.
D. "PREVAILING COUNTRY RISKS" means all factors reasonably related to the
systemic risk of holding Foreign Assets in a particular country,
including but not limited to, such country's political environment;
economic and financial infrastructure (including any Mandatory
Securities Depositories operating in the country); prevailing or
developing custody and settlement practices; laws and regulations
applicable to the safekeeping and recovery of Foreign Assets held in
custody in that country; and factors comprising "prevailing country
risk", including the effects of foreign law on the safekeeping of Fund
assets, the likelihood of expropriation, nationalization, freezing or
confiscation of the Fund's assets and any reasonably foreseeable
difficulties in repatriating the Fund's assets.
<PAGE> 2
E. "SECURITIES DEPOSITORY" means a system for the central handling of
securities where all securities of any particular class or series of
any issuer deposited within the system are treated as fungible and may
be transferred or pledged by bookkeeping entry without physical
delivery of the securities. A Securities Depository includes a
Mandatory Securities Depository.
2. FOREIGN COUNTRY SELECTION. Selection of foreign countries in which a Fund
invests. AIM may determine that an issuer is located in a particular
country based on various factors, including the following: (i) the issuer
is organized under the laws of and maintains a principal office in that
country; (ii) the issuer derives 50% or more of its total revenues from
business in that country; or (iii) the primary market for the issuer's
securities is in that country. In addition, in determining whether to
maintain assets of a Fund in a foreign country, AIM shall consider
Prevailing Country Risks. AIM may rely on information provided by
computerized information services, such as Bloomberg terminals, in making
the foregoing determinations. AIM may also rely on information and
opinions provided by the Foreign Custody Manager in making such
determinations. AIM may add or delete foreign countries to or from the
list of approved foreign countries from time to time, as determined by the
AIM employees who are portfolio managers of the Funds.
3. MANDATORY SECURITIES DEPOSITORIES SELECTION. Selection of Mandatory
Securities Depositories for the placement and maintenance of Foreign
Assets. AIM shall not make any such selection unless and until it has
complied with the terms of paragraphs 4 through 6 of this Agreement.
4. DETERMINATION OF REASONABLE CARE. Determinations by AIM that the Foreign
Assets will be subject to reasonable care, based on the standards
applicable to custodians in the relevant market, if such Assets are held
with a Mandatory Securities Depository. In making such determinations, AIM
shall consider all factors relevant to the safekeeping of such Foreign
Assets, including without limitation:
A. The practices, procedures, and internal controls of the Mandatory
Securities Depository, including, but not limited to, the physical
protections available for certificated securities (if applicable), the
method of keeping custodial records, and the security and data
protection practices;
B. Whether the Mandatory Securities Depository has the requisite
financial strength to provide reasonable care for the Foreign Assets;
C. The general reputation and standing of the Mandatory Securities
Depository and its operating history and number of participants; and
D. Whether the Fund will have jurisdiction over and be able to enforce
judgments against the Mandatory Securities Depository, such as by
virtue of the existence of any offices of the Mandatory Securities
Depository in the United States or the consent by the Mandatory
Securities Depository to service of process in the United States.
5. FOREIGN CUSTODY ARRANGEMENTS. Implementation of the Funds' foreign custody
arrangements pursuant to written contracts, by the rules or established
practices or
<PAGE> 3
procedures of the Mandatory Securities Depository, or by any combination of the
foregoing that AIM determines will provide reasonable care for the Funds'
Foreign Assets based on the standards specified in paragraph A.2. above. Any
such contracts shall include provisions that provide:
A. For indemnification or insurance arrangements (or any combination of
the foregoing) such that the Funds will be adequately protected
against the risk of loss of Foreign Assets held in accordance with
such contracts;
B. That the Funds' Foreign Assets will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of the
custodian or its creditors except a claim of payment for their safe
custody or administration or, in the case of cash deposits, liens or
rights in favor of creditors of the custodian arising under
bankruptcy, insolvency, or similar laws;
C. That beneficial ownership for the Funds' Foreign Assets will be freely
transferable without the payment of money or value other than for safe
custody or administration;
D. That adequate records will be maintained identifying the Foreign
Assets as belonging to a Fund or as being held by a third party for
the benefit of the Fund;
E. That each Fund's independent public accountants will be given access
to those records or confirmation of the content of those records; and
F. That a Fund will receive periodic reports with respect to the
safekeeping of the Fund's Foreign Assets, including, but not limited
to, notification of any transfer to or from the Fund's accounts or a
third party account containing Foreign Assets held for the benefit of
the Fund.
In lieu of any or all of the provisions specified in a. through f.
above, such contracts may contain such other provisions that AIM
determines will provide, in their entirety, the same or a greater
level of care and protection for Fund Foreign Assets as the specified
provisions, in their entirety.
6. MONITORING MANDATORY SECURITIES DEPOSITORIES. Establishment of a system
(a) to monitor the appropriateness of maintaining the Fund's Foreign Assets
with a particular Mandatory Securities Depository under Section 4 above,
and the contracts governing the Funds' arrangements under Section 5 above;
and (b) to notify the Funds promptly if an arrangement no longer meets the
requirements of [this section B] and to withdraw promptly the Funds'
Foreign Assets from such Mandatory Securities Depository in such event.
7. REPORTS AND OTHER INFORMATION.
A. ANNUAL REPORTS AND OTHER INFORMATION. AIM shall furnish annually to
the Boards of Directors/Trustees information regarding the factors
used in its system to monitor Mandatory Securities Depositories.
B. QUARTERLY REPORTS. AIM will submit to the Boards of
Directors/Trustees a quarterly report listing all newly approved
countries and all countries in which a Fund invested
<PAGE> 4
for the first time during the preceding quarter. Such report shall
include a revised Appendix 1 to the Foreign Custody and Country
Selection Procedures, if applicable, listing the approved countries.
AIM will submit to the Boards of Directors/Trustees a quarterly report
indicating changes to Mandatory Securities Depositories to the extent
such report is not provided by the Foreign Custody Manager.
C. OTHER REPORTS. AIM will notify the Boards of Directors/Trustees in
writing of any material change in the Mandatory Securities
Depositories for a Fund that has not been reported by the Foreign
Custody Manager promptly after the occurrence of the material change.
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, as of the day and year first above
written.
A I M ADVISORS, INC.
Attest: /s/ NANCY L. MARTIN By: /s/ ROBERT H. GRAHAM
------------------------ -------------------------
Assistant Secretary Name:
Title:
(SEAL)
AIM ADVISOR FUNDS, INC. AIM SUMMIT FUND, INC.
AIM Advisor Flex Fund
AIM Advisor International Value Fund AIM INTERNATIONAL FUNDS, INC.
AIM Advisor Large Cap Value Fund AIM Asian Growth Fund
AIM Advisor MultiFlex Fund AIM European Development Fund
AIM Advisor Real Estate Fund AIM International Equity Fund
AIM Global Aggressive Growth Fund
AIM EQUITY FUNDS, INC. AIM Global Growth Fund
AIM Aggressive Growth Fund AIM Global Income Fund
AIM Blue Chip Fund
AIM Capital Development Fund AIM VARIABLE INSURANCE FUNDS, INC.
AIM Charter Fund AIM V.I. Aggressive Growth Fund
AIM Constellation Fund AIM V.I. Balanced Fund
AIM Weingarten Fund AIM V.I. Capital Appreciation Fund
AIM V.I. Capital Development Fund
AIM FUNDS GROUP AIM V.I. Diversified Income Fund
AIM Balanced Fund AIM V.I. Global Utilities Fund
AIM Global Utilities Fund AIM V.I. Government Securities Fund
AIM High Yield Fund AIM V.I. Growth Fund
AIM Income Fund AIM V.I. Growth & Income Fund
AIM Money Market Fund AIM V.I. High Yield Fund
AIM Select Growth Fund AIM V.I. International Equity Fund
AIM Value Fund AIM V.I. Money Market Fund
AIM V.I. Value Fund
AIM SPECIAL OPPORTUNITIES FUNDS
AIM Small Cap Opportunities Fund
Attest: /s/ P. MICHELLE GRACE By: /s/ JOHN J. ARTHUR
------------------------ ---------------------------
Assistant Secretary Name: John J. Arthur
Title: Senior Vice President
(SEAL)
<PAGE> 1
EXHIBIT d(10)(b)
AMENDMENT NO. 1
TO
FOREIGN COUNTRY SELECTION
AND MANDATORY SECURITIES DEPOSITORY RESPONSIBILITIES
DELEGATION AGREEMENT
This Amendment No. 1 dated as of September 28, 1998, amends the Foreign
Country Selection and Mandatory Securities Depository Responsibilities
Delegation Agreement (the "Agreement"), dated September 9, 1998, between A I M
Advisors, Inc., a Delaware corporation and each registered investment company
(the "Investment Companies") and its respective portfolios (the "Funds") listed
on the signature page thereof.
W I T N E S S E T H:
WHEREAS, the parties to the Agreement desire to amend the Agreement to
add AIM Investment Securities Funds on behalf of its AIM High Yield Fund II
portfolio as a party to the agreement;
NOW, THEREFORE, the parties agree as follows;
1. The list of Investment Companies and Funds covered by the
Agreement is hereby amended to include the following:
"AIM INVESTMENT SECURITIES FUNDS
AIM High Yield Fund II"
2. In all other respects, the Agreement is hereby confirmed and
remains in full force and effect.
<PAGE> 2
IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to be
executed by their respective officers on the date first written above.
A I M ADVISORS, INC.
Attest: /s/ SAMUEL D. SIRKO By: /s/ ROBERT H. GRAHAM
---------------------------- ---------------------------------
Assistant Secretary President
(SEAL)
AIM ADVISOR FUNDS, INC. AIM SPECIAL OPPORTUNITIES FUNDS
AIM Advisor Flex Fund AIM Small Cap Opportunities Fund
AIM Advisor International Value Fund
AIM Advisor Large Cap Value Fund AIM SUMMIT FUND, INC.
AIM Advisor MultiFlex Fund
AIM Advisor Real Estate Fund AIM INTERNATIONAL FUNDS, INC.
AIM Asian Growth Fund
AIM EQUITY FUNDS, INC. AIM European Development Fund
AIM Aggressive Growth Fund AIM International Equity Fund
AIM Blue Chip Fund AIM Global Aggressive Growth Fund
AIM Capital Development Fund AIM Global Growth Fund
AIM Charter Fund AIM Global Income Fund
AIM Constellation Fund
AIM Weingarten Fund AIM VARIABLE INSURANCE FUNDS, INC.
AIM V.I. Aggressive Growth Fund
AIM FUNDS GROUP AIM V.I. Balanced Fund
AIM Balanced Fund AIM V.I. Capital Appreciation Fund
AIM Global Utilities Fund AIM V.I. Capital Development Fund
AIM High Yield Fund AIM V.I. Diversified Income Fund
AIM Income Fund AIM V.I. Global Utilities Fund
AIM Money Market Fund AIM V.I. Government Securities Fund
AIM Select Growth Fund AIM V.I. Growth Fund
AIM Value Fund AIM V.I. Growth & Income Fund
AIM V.I. High Yield Fund
AIM INVESTMENT SECURITIES FUNDS AIM V.I. International Equity Fund
AIM High Yield Fund II AIM V.I. Money Market Fund
AIM V.I. Value Fund
Attest: /s/ SAMUEL D. SIRKO By: /s/ ROBERT H. GRAHAM
---------------------------- ---------------------------------
Assistant Secretary President
(SEAL)
<PAGE> 1
EXHIBIT d(10)(c)
AMENDMENT NO. 2
TO
FOREIGN COUNTRY SELECTION
AND MANDATORY SECURITIES DEPOSITORY RESPONSIBILITIES
DELEGATION AGREEMENT
This Amendment No. 2, dated as of December 14, 1998, amends the
Foreign Country Selection and Mandatory Securities Depository Responsibilities
Delegation Agreement (the "Agreement"), dated September 9, 1998, between A I M
Advisors, Inc., a Delaware corporation and each registered investment company
(the "Investment Companies") and its respective portfolios (the "Funds") listed
on the signature page thereof.
W I T N E S S E T H:
WHEREAS, the parties to the Agreement desire to amend the Agreement to
add AIM V.I. Global Growth and Income Fund and AIM V.I. Telecommunications Fund
of AIM Variable Insurance Funds, Inc. as a party to the agreement;
NOW, THEREFORE, the parties agree as follows;
1. The list of Investment Companies and Funds covered by the
Agreement is hereby amended to include the following:
"AIM V.I. Global Growth and Income Fund
AIM V.I. Telecommunications Fund"
2. In all other respects, the Agreement is hereby confirmed and
remains in full force and effect.
<PAGE> 2
IN WITNESS WHEREOF, the parties have caused this Amendment No. 2 to be
executed by their respective officers on the date first written above.
A I M ADVISORS, INC.
Attest: /s/ NANCY L. MARTIN By: /s/ ROBERT H. GRAHAM
------------------------------- ----------------------------
Assistant Secretary President
(SEAL)
AIM ADVISOR FUNDS, INC. AIM SPECIAL OPPORTUNITIES FUNDS
AIM Advisor Flex Fund AIM Small Cap Opportunities Fund
AIM Advisor International Value Fund
AIM Advisor Large Cap Value Fund AIM SUMMIT FUND, INC.
AIM Advisor MultiFlex Fund
AIM Advisor Real Estate Fund AIM INTERNATIONAL FUNDS, INC.
AIM Asian Growth Fund
AIM EQUITY FUNDS, INC. AIM European Development Fund
AIM Aggressive Growth Fund AIM International Equity Fund
AIM Blue Chip Fund AIM Global Aggressive Growth Fund
AIM Capital Development Fund AIM Global Growth Fund
AIM Charter Fund AIM Global Income Fund
AIM Constellation Fund
AIM Weingarten Fund AIM VARIABLE INSURANCE FUNDS, INC.
AIM V.I. Aggressive Growth Fund
AIM FUNDS GROUP AIM V.I. Balanced Fund
AIM Balanced Fund AIM V.I. Capital Appreciation Fund
AIM Global Utilities Fund AIM V.I. Capital Development Fund
AIM High Yield Fund AIM V.I. Diversified Income Fund
AIM Income Fund AIM V.I. Global Growth and Income Fund
AIM Money Market Fund AIM V.I. Global Utilities Fund
AIM Select Growth Fund AIM V.I. Government Securities Fund
AIM Value Fund AIM V.I. Growth Fund
AIM V.I. Growth & Income Fund
AIM INVESTMENT SECURITIES FUNDS AIM V.I. High Yield Fund
AIM High Yield Fund II AIM V.I. International Equity Fund
AIM V.I. Money Market Fund
AIM V.I. Telecommunications Fund
AIM V.I. Value Fund
Attest: /s/ NANCY L. MARTIN By: /s/ ROBERT H. GRAHAM
------------------------------- ----------------------------
Assistant Secretary President
(SEAL)
<PAGE> 1
EXHIBIT d(10)(d)
AMENDMENT NO. 3
TO
FOREIGN COUNTRY SELECTION
AND MANDATORY SECURITIES DEPOSITORY RESPONSIBILITIES
DELEGATION AGREEMENT
This Amendment No. 3, dated as of December 22, 1998, amends the Foreign
Country Selection and Mandatory Securities Depository Responsibilities
Delegation Agreement, dated September 9, 1998, between A I M Advisors, Inc., a
Delaware corporation and each registered investment company (the "Investment
Companies") and its respective portfolios (the "Funds") listed on the signature
page thereof (as amended and supplemented, the "Agreement").
NOW, THEREFORE, the parties agree as follows;
The list of Investment Companies and Funds covered by the Agreement is
hereby amended to include the following portfolio of AIM Special
Opportunities Funds:
AIM Mid Cap Opportunities Fund
In all other respects, the Agreement is hereby confirmed and remains in
full force and effect.
<PAGE> 2
IN WITNESS WHEREOF, the parties have caused this Amendment No. 3 to be
executed by their respective officers on the date first written above.
A I M ADVISORS, INC.
Attest: /s/ P. MICHELLE GRACE By: /s/ CAROL F. RELIHAN
----------------------------- -------------------------------
Assistant Secretary Senior Vice President
AIM ADVISOR FUNDS, INC. AIM SPECIAL OPPORTUNITIES FUNDS
AIM Advisor Flex Fund AIM Small Cap Opportunities Fund
AIM Advisor International Value Fund AIM Mid Cap Opportunities Fund
AIM Advisor Large Cap Value Fund
AIM Advisor MultiFlex Fund AIM SUMMIT FUND, INC.
AIM Advisor Real Estate Fund
AIM INTERNATIONAL FUNDS, INC.
AIM EQUITY FUNDS, INC. AIM Asian Growth Fund
AIM Aggressive Growth Fund AIM European Development Fund
AIM Blue Chip Fund AIM International Equity Fund
AIM Capital Development Fund AIM Global Aggressive Growth Fund
AIM Charter Fund AIM Global Growth Fund
AIM Constellation Fund AIM Global Income Fund
AIM Weingarten Fund
AIM VARIABLE INSURANCE FUNDS, INC.
AIM FUNDS GROUP AIM V.I. Aggressive Growth Fund
AIM Balanced Fund AIM V.I. Balanced Fund
AIM Global Utilities Fund AIM V.I. Capital Appreciation Fund
AIM High Yield Fund AIM V.I. Capital Development Fund
AIM Income Fund AIM V.I. Diversified Income Fund
AIM Money Market Fund AIM V.I. Global Growth and Income Fund
AIM Select Growth Fund AIM V.I. Global Utilities Fund
AIM Value Fund AIM V.I. Government Securities Fund
AIM V.I. Growth Fund
AIM INVESTMENT SECURITIES FUNDS AIM V.I. Growth & Income Fund
AIM High Yield Fund II AIM V.I. High Yield Fund
AIM V.I. International Equity Fund
AIM V.I. Money Market Fund
AIM V.I. Telecommunications Fund
AIM V.I. Value Fund
Attest: /s/ P. MICHELLE GRACE By: /s/ ROBERT H. GRAHAM
----------------------------- -----------------------------------
Assistant Secretary President
<PAGE> 1
EXHIBIT d(10)(e)
AMENDMENT NO. 4
TO
FOREIGN COUNTRY SELECTION
AND MANDATORY SECURITIES DEPOSITORY RESPONSIBILITIES
DELEGATION AGREEMENT
This Amendment No. 4, dated as of January 26, 1999, amends the Foreign
Country Selection and Mandatory Securities Depository Responsibilities
Delegation Agreement, dated September 9, 1998, between A I M Advisors, Inc., a
Delaware corporation and each registered investment company (the "Investment
Companies") and its respective portfolios (the "Funds") listed on the signature
page thereof (as amended and supplemented, the "Agreement").
NOW, THEREFORE, the parties agree as follows;
The list of Investment Companies and Funds covered by the Agreement is
hereby amended to include the following investment companies and funds:
EMERGING MARKETS DEBT PORTFOLIO
GROWTH PORTFOLIO
Small Cap Portfolio
Value Portfolio
GLOBAL INVESTMENT PORTFOLIO
Global Consumer Products and Services Portfolio
Global Financial Services Portfolio
Global Infrastructure Portfolio
Global Natural Resources Portfolio
GT GLOBAL FLOATING RATE FUND, INC. (doing business as AIM
Floating Rate Fund)
AIM SERIES TRUST
AIM Global Trends Fund
FLOATING RATE PORTFOLIO
AIM EASTERN EUROPE FUND
AIM INVESTMENT FUNDS
AIM Global Government Income Fund
AIM Strategic Income Fund
AIM Emerging Markets Debt Fund
AIM Global Growth & Income Fund
AIM Emerging Markets Fund
AIM Developing Markets Fund
AIM Latin American Growth Fund
AIM Global Financial Services Fund
<PAGE> 2
AIM Global Health Care Fund
AIM Global Telecommunications Fund
AIM Global Consumer Products and Services Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM GROWTH SERIES
AIM New Pacific Growth Fund
AIM Europe Growth Fund
AIM Japan Growth Fund
AIM International Growth Fund
AIM Worldwide Growth Fund
AIM Mid Cap Equity Fund
AIM Small Cap Growth Fund
AIM Basic Value Fund
GT GLOBAL VARIABLE INVESTMENT TRUST
GT Global Variable Latin America Fund
GT Global Variable Telecommunications Fund
GT Global Variable Growth & Income Fund
GT Global Variable Strategic Income Fund
GT Global Variable Emerging Markets Fund
GT Global Variable Government Income Fund
GT Global Variable U.S. Government Income Fund
GT Global Variable Infrastructure Fund
GT Global Variable Natural Resources Fund
GT GLOBAL VARIABLE INVESTMENT SERIES
GT Global Variable New Pacific Fund
GT Global Variable Europe Fund
GT Global Variable America Fund
GT Global Variable International Fund
GT Global Variable Money Market Fund
In all other respects, the Agreement is hereby confirmed and remains in
full force and effect.
<PAGE> 3
IN WITNESS WHEREOF, the parties have caused this Amendment No. 4 to be
executed by their respective officers on the date first written above.
A I M ADVISORS, INC.
Attest: /s/ P. MICHELLE GRACE By: /s/ CAROL F. RELIHAN
--------------------------------- ---------------------------------
Assistant Secretary Senior Vice President
AIM ADVISOR FUNDS, INC. AIM INTERNATIONAL FUNDS, INC.
AIM Advisor Flex Fund AIM Asian Growth Fund
AIM Advisor International Value Fund AIM European Development Fund
AIM Advisor Large Cap Value Fund AIM International Equity Fund
AIM Advisor MultiFlex Fund AIM Global Aggressive Growth Fund
AIM Advisor Real Estate Fund AIM Global Growth Fund
AIM Global Income Fund
AIM EQUITY FUNDS, INC.
AIM Aggressive Growth Fund AIM VARIABLE INSURANCE FUNDS, INC.
AIM Blue Chip Fund AIM V.I. Aggressive Growth Fund
AIM Capital Development Fund AIM V.I. Balanced Fund
AIM Charter Fund AIM V.I. Capital Appreciation Fund
AIM Constellation Fund AIM V.I. Capital Development Fund
AIM Weingarten Fund AIM V.I. Diversified Income Fund
AIM V.I. Global Growth and Income Fund
AIM FUNDS GROUP AIM V.I. Global Utilities Fund
AIM Balanced Fund AIM V.I. Government Securities Fund
AIM Global Utilities Fund AIM V.I. Growth Fund
AIM High Yield Fund AIM V.I. Growth & Income Fund
AIM Income Fund AIM V.I. High Yield Fund
AIM Money Market Fund AIM V.I. International Equity Fund
AIM Select Growth Fund AIM V.I. Money Market Fund
AIM Value Fund AIM V.I. Telecommunications Fund
AIM V.I. Value Fund
AIM INVESTMENT SECURITIES FUNDS
AIM High Yield Fund II EMERGING MARKETS DEBT PORTFOLIO
AIM SPECIAL OPPORTUNITIES FUNDS GROWTH PORTFOLIO
AIM Small Cap Opportunities Fund Small Cap Portfolio
AIM Mid Cap Opportunities Fund Value Portfolio
AIM SUMMIT FUND, INC.
<PAGE> 4
GLOBAL INVESTMENT PORTFOLIO AIM GROWTH SERIES
Global Consumer Products and Services AIM New Pacific Growth Fund
Portfolio AIM Europe Growth Fund
Global Financial Services Portfolio AIM Japan Growth Fund
Global Infrastructure Portfolio AIM International Growth Fund
Global Natural Resources Portfolio AIM Worldwide Growth Fund
AIM Mid Cap Equity Fund
GT GLOBAL FLOATING RATE FUND, INC. AIM Small Cap Growth Fund
(doing business as AIM Floating Rate AIM Basic Value Fund
Fund)
GT GLOBAL VARIABLE INVESTMENT TRUST
AIM SERIES TRUST GT Global Variable Latin America Fund
AIM Global Trends Fund GT Global Variable Telecommunications
Fund
FLOATING RATE PORTFOLIO GT Global Variable Growth & Income
Fund
AIM EASTERN EUROPE FUND GT Global Variable Strategic Income
Fund
AIM INVESTMENT FUNDS GT Global Variable Emerging Markets
AIM Global Government Income Fund Fund
AIM Strategic Income Fund GT Global Variable Government Income
AIM Emerging Markets Debt Fund Fund
AIM Global Growth & Income Fund GT Global Variable U.S. Government
AIM Emerging Markets Fund Income Fund
AIM Developing Markets Fund GT Global Variable Infrastructure Fund
AIM Latin American Growth Fund GT Global Variable Natural Resources
AIM Global Financial Services Fund Fund
AIM Global Health Care Fund
AIM Global Telecommunications Fund GT GLOBAL VARIABLE INVESTMENT SERIES
AIM Global Consumer Products and GT Global Variable New Pacific Fund
Services Fund GT Global Variable Europe Fund
AIM Global Infrastructure Fund GT Global Variable America Fund
AIM Global Resources Fund GT Global Variable International Fund
GT Global Variable Money Market Fund
/s/ SAMUEL D. SIRKO
Attest: /s/ P. MICHELLE GRACE By: /s/ ROBERT H. GRAHAM
------------------------------ ------------------------------------
Assistant Secretary President
<PAGE> 1
EXHIBIT d(10)(f)
AMENDMENT NO. 5
TO
FOREIGN COUNTRY SELECTION
AND MANDATORY SECURITIES DEPOSITORY RESPONSIBILITIES
DELEGATION AGREEMENT
This Amendment No. 5, dated as of March 1, 1999, amends the Foreign
Country Selection and Mandatory Securities Depository Responsibilities
Delegation Agreement, dated September 9, 1998, between A I M Advisors, Inc., a
Delaware corporation and each registered investment company (the "Investment
Companies") and its respective portfolios (the "Funds") listed on the signature
page thereof (as amended and supplemented, the "Agreement").
NOW, THEREFORE, the parties agree as follows;
The list of Investment Companies and Funds covered by the Agreement is
hereby amended to include the following portfolio of AIM Equity Funds,
Inc.:
AIM Large Cap Growth Fund
In all other respects, the Agreement is hereby confirmed and remains in
full force and effect.
<PAGE> 2
IN WITNESS WHEREOF, the parties have caused this Amendment No. 5 to be
executed by their respective officers on the date first written above.
A I M ADVISORS, INC.
Attest: By: /s/ CAROL F. RELIHAN
-------------------------------- -------------------------------
Assistant Secretary Senior Vice President
AIM ADVISOR FUNDS, INC. AIM INTERNATIONAL FUNDS, INC.
AIM Advisor Flex Fund AIM Asian Growth Fund
AIM Advisor International Value Fund AIM European Development Fund
AIM Advisor Large Cap Value Fund AIM International Equity Fund
AIM Advisor MultiFlex Fund AIM Global Aggressive Growth Fund
AIM Advisor Real Estate Fund AIM Global Growth Fund
AIM Global Income Fund
AIM EQUITY FUNDS, INC.
AIM Aggressive Growth Fund AIM VARIABLE INSURANCE FUNDS, INC.
AIM Blue Chip Fund AIM V.I. Aggressive Growth Fund
AIM Capital Development Fund AIM V.I. Balanced Fund
AIM Charter Fund AIM V.I. Capital Appreciation Fund
AIM Constellation Fund AIM V.I. Capital Development Fund
AIM Large Cap Growth Fund AIM V.I. Diversified Income Fund
AIM Weingarten Fund AIM V.I. Global Growth and Income Fund
AIM V.I. Global Utilities Fund
AIM FUNDS GROUP AIM V.I. Government Securities Fund
AIM Balanced Fund AIM V.I. Growth Fund
AIM Global Utilities Fund AIM V.I. Growth & Income Fund
AIM High Yield Fund AIM V.I. High Yield Fund
AIM Income Fund AIM V.I. International Equity Fund
AIM Money Market Fund AIM V.I. Money Market Fund
AIM Select Growth Fund AIM V.I. Telecommunications Fund
AIM Value Fund AIM V.I. Value Fund
AIM INVESTMENT SECURITIES FUNDS EMERGING MARKETS DEBT PORTFOLIO
AIM High Yield Fund II
GROWTH PORTFOLIO
AIM SPECIAL OPPORTUNITIES FUNDS Small Cap Portfolio
AIM Small Cap Opportunities Fund Value Portfolio
AIM Mid Cap Opportunities Fund
AIM SUMMIT FUND, INC.
<PAGE> 3
GLOBAL INVESTMENT PORTFOLIO AIM GROWTH SERIES
Global Consumer Products and Services AIM New Pacific Growth Fund
Portfolio AIM Europe Growth Fund
Global Financial Services Portfolio AIM Japan Growth Fund
Global Infrastructure Portfolio AIM International Growth Fund
Global Natural Resources Portfolio AIM Worldwide Growth Fund
AIM Mid Cap Equity Fund
GT GLOBAL FLOATING RATE FUND, INC. AIM Small Cap Growth Fund
(doing business as AIM Floating Rate AIM Basic Value Fund
Fund)
GT GLOBAL VARIABLE INVESTMENT
AIM SERIES TRUST TRUST
AIM Global Trends Fund GT Global Variable Latin America Fund
GT Global Variable Telecommunications
FLOATING RATE PORTFOLIO Fund
GT Global Variable Growth & Income
AIM EASTERN EUROPE FUND Fund
GT Global Variable Strategic Income
AIM INVESTMENT FUNDS Fund
AIM Global Government Income Fund GT Global Variable Emerging Markets
AIM Strategic Income Fund Fund
AIM Emerging Markets Debt Fund GT Global Variable Government Income
AIM Global Growth & Income Fund Fund
AIM Emerging Markets Fund GT Global Variable U.S. Government
AIM Developing Markets Fund Income Fund
AIM Latin American Growth Fund GT Global Variable Infrastructure
AIM Global Financial Services Fund Fund
AIM Global Health Care Fund GT Global Variable Natural Resources
AIM Global Telecommunications Fund Fund
AIM Global Consumer Products and
Services Fund GT GLOBAL VARIABLE INVESTMENT SERIES
AIM Global Infrastructure Fund GT Global Variable New Pacific Fund
AIM Global Resources Fund GT Global Variable Europe Fund
GT Global Variable America Fund
GT Global Variable International Fund
GT Global Variable Money Market Fund
/s/ SAMUEL D. SIRKO
Attest: /s/ P. MICHELLE GRACE By: /s/ ROBERT H. GRAHAM
-------------------------------- ------------------------------------
Assistant Secretary President
<PAGE> 1
EXHIBIT (e)(3)
MASTER DISTRIBUTION AGREEMENT
between
AIM ADVISOR FUNDS, INC.
(CLASS B SHARES)
and
A I M DISTRIBUTORS, INC.
THIS AGREEMENT made this 3rd day of March, 1998, by and between AIM
ADVISOR FUNDS, INC., a Maryland corporation (the "Company"), with respect to
each of the class B shares (the "Shares") of each series of shares of common
stock set forth on Schedule A to this agreement (the "Portfolios"), and A I M
DISTRIBUTORS, INC., a Delaware corporation (the "Distributor").
W I T N E S S E T H:
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:
FIRST: The Company hereby appoints the Distributor as its exclusive
agent for the sale of the Shares to the public directly and through investment
dealers in the United States and throughout the world. If subsequent to the
termination of the Distributor's services to the Company pursuant to this
Agreement, the Company retains the services of another distributor, the
distribution agreement with such distributor shall contain provisions comparable
to Clauses FOURTH and SEVENTH hereof and Exhibit A hereto, and without limiting
the generality of the foregoing, will require such distributor to maintain and
make available to the Distributor records regarding sales, redemptions and
reinvestments of Shares necessary to implement the terms of Clauses FOURTH,
SEVENTH and EIGHTH hereof.
SECOND: The Company shall not sell any Shares except through the
Distributor and under the terms and conditions set forth in paragraph FOURTH
below. Notwithstanding the provisions of the foregoing sentence, however:
(A) the Company may issue Shares to any other investment company or
personal holding company, or to the shareholders thereof, in exchange for all or
a majority of the shares or assets of any such company;
(B) the Company may issue Shares at their net asset value in connection
with certain classes of transactions or to certain classes of persons, in
accordance with Rule 22d-1 under the Investment Company Act of 1940, as amended
(the "1940 Act"), provided that any such class is specified in the then current
prospectus of the applicable Shares; and
(C) the Company shall have the right to specify minimum amounts for
initial and subsequent orders for the purchase of Shares.
1
<PAGE> 2
THIRD: The Distributor hereby accepts appointment as exclusive agent
for the sale of the Shares and agrees that it will use its best efforts to sell
such Shares; provided, however, that:
(A) the Distributor may, and when requested by the Company on behalf of
the Shares shall, suspend its efforts to effectuate such sales 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;
(B) the Company may withdraw the offering of the Shares (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; and
(C) the Distributor, as agent, does not undertake to sell any specific
amount of the Shares.
FOURTH:
(A) The public offering price of the Shares shall be the net asset
value per share of the applicable Shares. Net asset value per share shall be
determined in accordance with the provisions of the then current prospectus and
statement of additional information of the applicable Portfolio. The Distributor
may establish a schedule of contingent deferred sales charges to be imposed at
the time of redemption of the Shares, and such schedule shall be disclosed in
the current prospectus of each Portfolio. Such schedule of contingent deferred
sales charges may reflect variations in or waivers of such charges on
redemptions of Shares, either generally to the public or to any specified class
of shareholders and/or in connection with any specified class of transactions,
in accordance with applicable rules and regulations and exemptive relief granted
by the Securities and Exchange Commission, and as set forth in the Portfolios'
current prospectus(es). The Distributor and the Company shall apply any then
applicable scheduled variation in or waiver of contingent deferred sales charges
uniformly to all shareholders and/or all transactions belonging to a specified
class.
(B) The Distributor may pay to investment dealers and other financial
institutions through whom Shares are sold, such sales commission as the
Distributor may specify from time to time. Payment of any such sales commissions
shall be the sole obligation of the Distributor.
(C) No provision of this Agreement shall be deemed to prohibit any
payments by the Company to the Distributor or by the Company or the Distributor
to investment dealers, financial institutions and 401(k) plan service providers
where such payments are made under a distribution plan adopted by the Company
pursuant to Rule 12b-1 under the 1940 Act.
(D) The Company shall redeem the Shares from shareholders in accordance
with the terms set forth from time to time in the current prospectus and
statement of additional information of each Portfolio. The price to be paid to a
shareholder to redeem the Shares shall be equal to the net asset value of the
Shares being redeemed ("gross redemption proceeds"), less any applicable
contingent deferred sales charge, calculated pursuant to the then applicable
schedule of contingent deferred sales charges ("net redemption proceeds"). The
Distributor shall be entitled to receive the amount of the contingent deferred
sales charge that has been subtracted from gross redemption proceeds (the
"CDSC"), provided that the Shares being redeemed were (i) issued by a Portfolio
during the term of this Agreement and any predecessor Agreement between the
Company and the Distributor or (ii) issued by a Portfolio during or after the
term of this Agreement or any predecessor
2
<PAGE> 3
Agreement between the Company and the Distributor in one or a series of free
exchanges of Shares for class B shares of another portfolio, which can be traced
to Shares or class B shares of another portfolio initially issued by a Portfolio
or such other portfolio during the term of this Agreement, any predecessor
Agreement or any other distribution agreement with the Distributor with respect
to such other portfolio (the "Distributor's Earned CDSC"). The Company shall pay
or cause the Company's transfer agent to pay the Distributor's Earned CDSC to
the Distributor on the date net redemption proceeds are payable to the redeeming
shareholder.
(E) The Distributor shall maintain adequate books and records to
identify Shares (i) issued by a Portfolio during the term of this Agreement and
any predecessor Agreement between the Company and the Distributor or (ii) issued
by a Portfolio during or after the term of this Agreement or any predecessor
Agreement between the Company and the Distributor in one or a series of free
exchanges of Shares for class B shares of another portfolio, which can be traced
to Shares or class B shares of another portfolio initially issued by a Portfolio
or such other portfolio during the term of this Agreement, any predecessor
Agreement or any other distribution agreement with the Distributor with respect
to such other portfolio and shall calculate the Distributor's Earned CDSC, if
any, with respect to such Shares, upon their redemption. The Company shall be
entitled to rely on Distributor's books, records and calculations with respect
to Distributor's Earned CDSC.
FIFTH: The Distributor shall act as an agent of the Company in
connection with the sale and redemption of Shares. Except with respect to such
sales and redemptions, the Distributor shall act as principal in all matters
relating to the promotion of the sale of Shares and shall enter into all of its
own engagements, agreements and contracts as principal on its own account. The
Distributor shall enter into agreements with investment dealers and financial
institutions selected by the Distributor, authorizing such investment dealers
and financial institutions to offer and sell the Shares to the public upon the
terms and conditions set forth therein, which shall not be inconsistent with the
provisions of this Agreement. Each agreement shall provide that the investment
dealer or financial institution shall act as a principal, and not as an agent,
of the Company.
SIXTH: The Shares shall bear:
(A) the expenses of qualification of Shares for sale in connection with
such public offerings in such states as shall be selected by the Distributor,
and of continuing the qualification therein until the Distributor notifies the
Company that it does not wish such qualification continued; and
(B) all legal expenses in connection with the foregoing.
SEVENTH:
(A) The Distributor shall bear the expenses of printing from the final
proof and distributing the prospectuses and statements of additional information
for the Shares (including supplements thereto) relating to public offerings made
by the Company pursuant to such prospectuses (which shall not include those
prospectuses and statements of additional information, and supplements thereto,
to be distributed to existing shareholders of the Shares), and any other
promotional or sales literature used by the Distributor or furnished by the
Distributor to dealers in connection with such public offerings, and expenses of
advertising in connection with such public offerings.
3
<PAGE> 4
(B) Subject to the limitations, if any, of applicable law including the
NASD Conduct Rules (formerly, the NASD Rules of Fair Practice) regarding
asset-based sales charges, the Company shall pay to the Distributor as a
reimbursement for all or a portion of such expenses, or as reasonable
compensation for distribution of the Shares, an asset-based sales charge in an
amount equal to 0.75% per annum of the average daily net asset value of the
Shares of each Portfolio from time to time (the "Distributor's 12b-1 Share"),
such sales charge to be payable pursuant to the distribution plan adopted
pursuant to Rule 12b-1 under the 1940 Act (the "Plan"). The Distributor's 12b-1
Share shall be a percentage, which shall be recomputed periodically (but not
less than monthly) in accordance with Exhibit A to this Agreement. The
Distributor's 12b-1 Share shall accrue daily and be paid to the Distributor as
soon as practicable after the end of each calendar month within which it accrues
but in any event within 10 business days after the end of each such calendar
month (unless the Distributor shall specify a later date in written instructions
to the Company) provided, however, that any notices and calculation required by
Section EIGHTH: (B) and (C) have been received by the Company.
(C) The Distributor shall maintain adequate books and records to permit
calculations periodically (but not less than monthly) of, and shall calculate on
a monthly basis, the Distributor's 12b-1 Share to be paid to the Distributor.
The Company shall be entitled to rely on Distributor's books, records and
calculations relating to Distributor's 12b-1 Share.
EIGHTH:
(A) The Distributor may, from time to time, assign, transfer or pledge
("Transfer") to one or more designees (each an "Assignee"), its rights to all or
a designated portion of (i) the Distributor's 12b-1 Share (but not the
Distributor's duties and obligations pursuant hereto or pursuant to the Plan),
and (ii) the Distributor's Earned CDSC, free and clear of any offsets or claims
the Company may have against the Distributor. Each such Assignee's ownership
interest in a Transfer of a designated portion of a Distributor's 12b-1 Share
and a Distributor's Earned CDSC is hereinafter referred to as an "Assignee's
12b-1 Portion" and an "Assignee's CDSC Portion," respectively. A Transfer
pursuant to this Section EIGHTH: (A) shall not reduce or extinguish any claim of
the Company against the Distributor.
(B) The Distributor shall promptly notify the Company in writing of
each Transfer pursuant to Section EIGHTH: (A) by providing the Company with the
name and address of each such Assignee.
(C) The Distributor may direct the Company to pay directly to an
Assignee such Assignee's 12b-1 Portion and Assignee's CDSC Portion. In such
event, Distributor shall provide the Company with a monthly calculation of (i)
the Distributor's Earned CDSC and Distributor's 12b-1 Share and (ii) each
Assignee's 12b-1 Portion and Assignee's CDSC Portion, if any, for such month
(the "Monthly Calculation"). The Monthly Calculation shall be provided to the
Company by the Distributor promptly after the close of each month or such other
time as agreed to by the Company and the Distributor which allows timely payment
of the Distributor's 12b-1 Share and Distributor's Earned CDSC and/or the
Assignee's 12b-1 Portion and Assignee's CDSC Portion. The Company shall not be
liable for any interest on such payments occasioned by delayed delivery of the
Monthly Calculation by the Distributor. In such event following receipt from the
Distributor of (i) notice of Transfer referred to in Section EIGHTH: (B) and
(ii) each Monthly Calculation, the Company shall make all payments directly to
the Assignee or Assignees in accordance with the information provided in such
notice and Monthly Calculation, on the same terms and conditions as if such
4
<PAGE> 5
payments were to be paid directly to the Distributor. The Company shall be
entitled to rely on Distributor's notices, and Monthly Calculations in respect
of amounts to be paid pursuant to this Section EIGHTH: (B).
(D) Alternatively, in connection with a Transfer the Distributor may
direct the Company to pay all of such Distributor's 12b-1 Share and
Distributor's Earned CDSC from time to time to a depository or collection agent
designated by any Assignee, which depository or collection agent may be
delegated the duty of dividing such Distributor's 12b-1 Share and Distributor's
Earned CDSC between the Assignee's 12b-1 Portion and Assignee's CDSC Portion and
the balance of the Distributor's 12b-1 Share (such balance, when distributed to
the Distributor by the depository or collection agent, the "Distributor's 12b-1
Portion") and of the Distributor's Earned CDSC (such balance, when distributed
to the Distributor by the depository or collection agent, the "Distributor's
Earned CDSC Portion"), in which case only the Distributor's 12b-1 Portion and
Distributor's Earned CDSC Portion may be subject to offsets or claims the
Company may have against the Distributor.
(E) The Company shall not amend the Plan to reduce the amount payable
to the Distributor or any Assignee under Section SEVENTH: (B) hereof with
respect to the Shares for any Shares which have been issued prior to the date of
such amendment.
NINTH: The Distributor will accept orders for the purchase of Shares
only to the extent of purchase orders actually received and not in excess of
such orders, and it will not avail itself of any opportunity of making a profit
by expediting or withholding orders.
TENTH:
(A) Pursuant to the Plan and this Agreement, the Distributor shall
enter into Shareholder Service Agreements with investment dealers, financial
institutions and certain 401(K) plan service providers (collectively "Service
Providers") selected by the Distributor for the provision of certain continuing
personal services to customers of such Service Providers who have purchased
Shares. Such agreements shall authorize Service Providers to provide continuing
personal shareholder services to their customers upon the terms and conditions
set forth therein, which shall not be inconsistent with the provisions of this
Agreement. Each Shareholder Service Agreement shall provide that the Service
Provider shall act as principal, and not as an agent of the Company.
(B) Shareholder Service Agreements may provide that the Service
Providers may receive a service fee in the amount of .25% of the average daily
net assets of the Shares held by customers of such Service Providers provided
that such Service Providers furnish continuing personal shareholder services to
their customers in respect of such Shares. The continuing personal services to
be rendered by Service Providers under the Shareholder Service Agreements may
include, but shall not be limited to, some or all of the following: distributing
sales literature; answering routine customer inquiries concerning the Company;
assisting customers in changing dividend elections, options, account
designations and addresses, and in enrolling in any of several special
investment plans offered in connection with the purchase of Shares; assisting in
the establishment and maintenance of or establishing and maintaining customer
accounts and records and the processing of purchase and redemption transactions;
performing subaccounting; investing dividends and any capital gains
distributions automatically in the Company's shares; providing periodic
statements showing a customer's account balance and the integration of such
statements with those of other transactions and balances in the customer's
account serviced by the Service Provider; forwarding applicable prospectus,
proxy statements, reports and notices to customers who
5
<PAGE> 6
hold Shares and providing such other information and services as the Company or
the customers may reasonably request.
(C) The Distributor may advance service fees payable to Service
Providers pursuant to the Plan or any other distribution plan adopted by the
Company with respect to Shares of one or more of the Portfolios pursuant to Rule
12b-1 under the 1940 Act; and thereafter the Distributor may be reimbursed for
such advances through retention of service fee payments during the period for
which the service fees were advanced.
ELEVENTH: The Company and the Distributor shall each comply with all
applicable provisions of the 1940 Act, the Securities Act of 1933, as amended,
and of all other federal and state laws, rules and regulations governing the
issuance and sale of the Shares.
TWELFTH:
(A) In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties hereunder on the part of the
Distributor, the Company shall indemnify the Distributor against any and all
claims, demands, liabilities and expenses which the Distributor may incur under
the Securities Act of 1933, or common law or otherwise, arising out of or based
upon any alleged untrue statement of a material fact contained in any
registration statement or prospectus of the Shares, or any omission to state a
material fact therein, the omission of which makes any statement contained
therein misleading, unless such statement or omission was made in reliance upon,
and in conformity with, information furnished to the Company in connection
therewith by or on behalf of the Distributor. The Distributor shall indemnify
the Company and the Shares against any and all claims, demands, liabilities and
expenses which the Company or the Shares may incur arising out of or based upon
(i) any act or deed of the Distributor or its sales representatives which has
not been authorized by the Company in its prospectus or in this Agreement and
(ii) the Company's reliance on the Distributor's books, records, calculations
and notices in Sections FOURTH: (E), SEVENTH: (C), EIGHTH: (B), EIGHTH: (C) and
EIGHTH: (D).
(B) The Distributor shall indemnify the Company and the Shares against
any and all claims, demands, liabilities and expenses which the Company or the
Shares may incur under the Securities Act of 1933, as amended, or common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of the
Shares, or any omission to state a material fact therein if such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Company in connection therewith by or on behalf of the
Distributor.
(C) Notwithstanding any other provision of this Agreement, the
Distributor shall not be liable for any errors of the transfer agent(s) of the
Shares, or for any failure of any such transfer agent to perform its duties.
THIRTEENTH: Nothing herein contained shall require the Company to take
any action contrary to any provision of its Articles of Incorporation or to any
applicable statute or regulation.
FOURTEENTH: This Agreement shall become effective with respect to the
Shares of each Portfolio upon its approval by the Board of Directors of the
Company and by vote of a majority of the Company's directors who are not
interested parties to this Agreement or "interested persons" (as defined in
Section 2(a)(19) of the 1940 Act) of any party to this Agreement cast in person
at a
6
<PAGE> 7
meeting called for such purpose, shall continue in force and effect until
March 3, 2000, and from year to year thereafter, provided, that such
continuance is specifically approved with respect to the Shares of each
Portfolio at least annually (a)(i) by the Board of Directors of the Company or
(ii) by the vote of a majority of the outstanding Shares of such class of such
Portfolio, and (b) by vote of a majority of the Company's directors who are not
parties to this Agreement or "interested persons" (as defined in Section
2(a)(19) of the 1940 Act) of any party to this Agreement cast in person at a
meeting called for such purpose.
FIFTEENTH:
(A) This Agreement may be terminated with respect to the Shares of any
Portfolio, 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 Shares
of such Portfolio, or by the Distributor, on sixty (60) days' written notice to
the other party; and
(B) This Agreement shall also automatically terminate in the event of
its assignment, the term "assignment" having the meaning set forth in Section
2(a)(4) of the 1940 Act; provided, that, subject to the provisions of the
following sentence, if this Agreement is terminated for any reason, the
obligations of the Company and the Distributor pursuant to Sections FOURTH: (D),
FOURTH: (E), SEVENTH: (B), SEVENTH: (C), EIGHTH: (A) through (E) and TWELFTH:
(A) of this Agreement will continue and survive any such termination.
Notwithstanding the foregoing, upon Complete Termination of the Plan (as such
term is defined in Section 8 of the Plan in effect at the date of this
Agreement), the obligations of the Company pursuant to the terms of Sections
SEVENTH: (B), EIGHTH: (A), EIGHTH: (C), EIGHTH: (D) and EIGHTH: (E) (with
respect to payments of Distributor's 12b-1 Share and Assignee's 12b-1 Portion)
of this Agreement shall terminate. A termination of the Plan with respect to any
or all Shares of any or all Portfolios shall not affect the obligations of the
Company pursuant to Sections FOURTH: (D), EIGHTH: (A), EIGHTH: (C), EIGHTH: (D)
and EIGHTH: (E) (with respect to payments of Distributor's Earned CDSC or
Assignee's CDSC Portion) hereof or of the obligations of the Distributor
pursuant to Section FOURTH: (E) or EIGHTH: (B) hereof.
(C) The Transfer of the Distributor's rights to Distributor's 12b-1
Share or Distributor's Earned CDSC shall not cause a termination of this
Agreement or be deemed to be an assignment for purposes of Section FIFTEENTH:
(B) above.
SIXTEENTH: Any notice under this Agreement shall be in writing,
addressed and delivered, or mailed postage prepaid, to the other party at such
address as the other party may designate for the receipt of notices. Until
further notice to the other party, the addresses of both the Company and the
Distributor shall be 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173.
7
<PAGE> 8
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate on the day and year first above written.
AIM ADVISOR FUNDS, INC.
By: /s/ ROBERT H. GRAHAM
----------------------------
Name: Robert H. Graham
Title: President
Attest:
/s/ P. MICHELLE GRACE
- --------------------------------------
Name: P. Michelle Grace
Title: Assistant Secretary
A I M DISTRIBUTORS, INC.
By: /s/ MICHAEL J. CEMO
----------------------------
Name: Michael J. Cemo
Title: President
Attest:
/s/ NANCY L. MARTIN
- --------------------------------------
Name: Nancy L. Martin
Title: Assistant Secretary
8
<PAGE> 9
SCHEDULE A
TO
MASTER DISTRIBUTION AGREEMENT
OF
AIM ADVISOR FUNDS, INC.
CLASS B SHARES
AIM Advisor Flex Fund
AIM Advisor International Value Fund
AIM Advisor Large Cap Value Fund
AIM Advisor MultiFlex Fund
AIM Advisor Real Estate Fund
9
<PAGE> 10
Revised as of June 30, 1998
EXHIBIT A
The Distributor's 12b-1 Share in respect of each Portfolio
shall be 100 percent until such time as the Distributor shall cease to serve as
exclusive distributor of the Shares of such Portfolio and thereafter shall be a
percentage, recomputed first on the date of any termination of the Distributor's
services as exclusive distributor of Shares of any Portfolio and thereafter
periodically (but not less than monthly), representing the percentage of Shares
of such Portfolio outstanding on each such computation date allocated to the
Distributor in accordance with the following rules:
1. Definitions. For purposes of this Exhibit A defined terms
used herein shall have the meaning assigned to such terms in the Distribution
Agreement and the following terms shall have the following meanings:
"Commission Shares" shall mean shares of the
Portfolio or another portfolio the redemption of which would, in the absence of
the application of some standard waiver provision, give rise to the payment of a
CDSC and shall include Commission Shares which due to the expiration of the CDSC
period no longer bear a CDSC.
"Distributor" shall mean the Distributor.
"Other Distributor" shall mean each person appointed
as the exclusive distributor for the Shares of the Portfolio after the
Distributor ceases to serve in that capacity.
2. Allocation Rules. In determining the Distributor's 12b-1
Share in respect of a particular Portfolio:
(a) There shall be allocated to the Distributor and
each Other Distributor all Commission Shares of such Portfolio which were sold
while such Distributor or such Other Distributor, as the case may be, was the
exclusive distributor for the Shares of the Portfolio, determined in accordance
with the transfer records maintained for such Portfolio.
(b) Reinvested Shares: On the date that any Shares
are issued by a Portfolio as a result of the reinvestment of dividends or other
distributions, whether ordinary income, capital gains or exempt-interest
dividends or distributions ("Reinvested Shares"), Reinvested Shares shall be
allocated to the Distributor and each Other Distributor in a number obtained by
multiplying the total number of Reinvested Shares issued on such date by a
fraction, the numerator of which is the total number of all Shares outstanding
in such Portfolio as of the opening of business on such date and allocated to
the Distributor or Other Distributor as of such date of determination pursuant
<PAGE> 11
to these allocation procedures and the denominator is the total number of Shares
outstanding as of the opening of business on such date.
(c) Exchange Shares: There shall be allocated to the
Distributor and each Other Distributor, as the case may be, all Commission
Shares of such Portfolio which were issued during or after the period referred
to in (a) as a consequence of one or more free exchanges of Commission Shares of
the Portfolio or of another portfolio (other than Free Appreciation Shares) (the
"Exchange Shares"), which in accordance with the transfer records maintained for
such Portfolio can be traced to Commission Shares of the Portfolio or another
portfolio initially issued by the Company or such other portfolio during the
time the Distributor or such Other Distributor, as the case may be, was the
exclusive distributor for the Shares of the Portfolio or such other portfolio.
(d) Free Appreciation Shares: Shares (other than
Exchange Shares) that were acquired by the holders of such Shares in a free
exchange of Shares of any other Portfolio, which represent the appreciated value
of the Shares of the exiting portfolio over the initial purchase price paid for
the Shares being redeemed and exchanged and for which the original purchase date
and the original purchase price are not identified on an on-going basis, shall
be allocated to the Distributor and each Other Distributor ("Free Appreciation
Shares") daily in a number obtained by multiplying the total number of Free
Appreciation Shares issued by the exiting portfolio on such date by a fraction,
the numerator of which is the total number of all Shares outstanding as of the
opening of business on such date allocated to the Distributor or such Other
Distributor as of such date of determination pursuant to these allocation
procedures and the denominator is the total number of Shares outstanding as of
the opening of business on such date.
(e) Redeemed Shares: Shares (other than Reinvested
Shares and Free Appreciation Shares) that are redeemed will be allocated to the
Distributor and each Other Distributor to the extent such Share was previously
allocated to the Distributor or such Other Distributor in accordance with the
rules set forth in 2(a) or (c) above. Reinvested Shares and Free Appreciation
Shares that are redeemed will be allocated to the Distributor and each Other
Distributor daily in a number obtained by multiplying the total number of Free
Appreciation Shares and Reinvested Shares being redeemed by such Portfolio on
such date by a fraction, the numerator of which is the total number of all Free
Appreciation Shares and Reinvested Shares of such Portfolio outstanding as of
the opening of business on such date allocated to the Distributor or such Other
Distributor as of such date of determination pursuant to these allocation
procedures and the denominator is the total number of Free Appreciation Shares
and Reinvested Shares of such Portfolio outstanding as of the opening of
business on such date.
The Company shall use its best efforts to assure that the transfer
agents and sub-transfer agents for each Portfolio maintain the data necessary to
implement the foregoing rules. If,
<PAGE> 12
notwithstanding the foregoing, the transfer agents or sub-transfer agents for
such Portfolio are unable to maintain the data necessary to implement the
foregoing rules as written, or if the Distributor shall cease to serve as
exclusive distributor of the Shares of the Portfolio, the Distributor and the
Portfolio agree to negotiate in good faith with each other, with the transfer
agents and sub-transfer agents for such Portfolio and with any third party that
has obtained an interest in the Distributor's 12b-1 Share in respect of such
Portfolio with a view to arriving at mutually satisfactory modifications to the
foregoing rules designed to accomplish substantially identical results on the
basis of data which can be made available.
<PAGE> 1
EXHIBIT e(4)
[LOGO]
A I M Distributors, Inc.
SELECTED DEALER AGREEMENT
FOR INVESTMENT COMPANIES MANAGED
BY A I M ADVISORS, INC.
To the Undersigned Selected Dealer:
Gentlemen:
A I M Distributors, Inc., as the exclusive national distributor of shares (the
"Shares") of the registered investment companies for which we now or in the
future act as underwriter, as disclosed in each Fund's prospectus, which may be
amended from time to time by us (the "Funds"), understands that you are a member
in good standing of the National Association of Securities Dealers, Inc.
(""NASD"), or, if a foreign dealer, that you agree to abide by all of the rules
and regulations of the NASD for purposes of this Agreement (which you confirm by
your signature below). In consideration of the mutual covenants stated below,
you and we hereby agree as follows:
1. Sales of Shares through you will be at the public offering price of such
Shares (the net asset value of the Shares plus any sales charge
applicable to such Shares (the "Sales Charge")), as determined in
accordance with the then effective prospectus or Statement of Additional
Information used in connection with the offer and sale of Shares
(collectively, the "Prospectus"), which public offering price may reflect
scheduled variations in, or the elimination of, the Sales Charge on sales
of the Funds' Shares either generally to the public or in connection with
special purchase plans, as described in the Prospectus. You agree that
you will apply any scheduled variation in, or elimination of, the Sales
Charge uniformly to all offerees in the class specified in the
Prospectus.
2. You agree to purchase Shares solely through us and only for the purpose
of covering purchase orders already received from customers or for your
own bona fide investment. You agree not to purchase for any other
securities dealer unless you have an agreement with such other dealer or
broker to handle clearing arrangements and then only in the ordinary
course of business for such purpose and only if such other dealer has
executed a Selected Dealer Agreement with us. You also agree not to
withhold any customer order so as to profit therefrom.
3. The procedures relating to the handling of orders shall be subject to
instructions which we will forward from time to time to all selected
dealers with whom we have entered into a Selected Dealer Agreement. The
minimum initial order shall be specified in the Funds' then current
Prospectuses. All purchase orders are subject to receipt of Shares by us
from the Funds concerned and to acceptance of such orders by us. We
reserve the right in our sole discretion to reject any order.
4. With respect to the Funds the Shares of which are indicated in that
Fund's Prospectus as being sold with a Sales Charge (the "Load Funds"),
you will be allowed the concessions from the public offering price
provided in the Load Funds' Prospectus and/or periodic instruction from
us. With respect to the Funds, the Shares of which are indicated in that
Fund's Prospectus as being sold with a contingent deferred sales charge
or early withdrawal charge (the "CDSC Funds"), you will be paid a
commission as disclosed in the CDSC Fund's Prospectus and/or periodic
instructions from us. With respect to the Funds whose Shares are
indicated as being sold without a Sales Charge or a contingent deferred
sales charge (the "No-Load Funds"), you may charge a reasonable
administrative fee. For the purposes of this Agreement the term Dealer
Commission means commissions or concessions
5/98
<PAGE> 2
Page 2
payable to you as disclosed in the Funds' Prospectuses and the terms
"Sales Charge" and "Dealer Commission" apply only to the Load Funds and
the CDSC Funds. All Dealer Commissions are subject to change without
notice by us and will comply with any changes in regulatory requirements.
You agree that you will not combine customer orders to reach breakpoints
in commissions for any purpose whatsoever unless authorized by the
Prospectus or by us in writing.
5. You agree that your transactions in Shares of the Funds will be limited
to (a) the purchase of Shares from us for resale to your customers at the
public offering price then in effect or for your own bona fide
investment, (b) exchanges of Shares between Funds, as permitted by the
Funds' then current registration statement (which includes the
Prospectus) and in accordance with procedures as they may be modified by
us from time to time, and (c) transactions involving the redemption of
Shares by a Fund or the repurchase of Shares by us as an accommodation to
shareholders or where applicable, through tender offers. Redemptions by a
Fund and repurchases by us will be effected in the manner and upon the
terms described in the Prospectus. We will, upon your request, assist you
in processing such orders for redemptions or repurchases. To facilitate
prompt payment following a redemption or repurchase of Shares, the
owner's signature shall appear as registered on the Funds' records and,
as described in the Prospectus, it may be required to be guaranteed by a
commercial bank, trust company or a member of a national securities
exchange.
6. Sales and exchanges of Shares may only be made in those states and
jurisdictions where the Shares are registered or qualified for sale to
the public. We agree to advise you currently of the identity of those
states and jurisdictions in which the Shares are registered or qualified
for sale, and you agree to indemnify us and/or the Funds for any claim,
liability, expense or loss in any way arising out of a sale of Shares in
any state or jurisdiction in which such Shares are not so registered or
qualified.
7. We shall accept orders only on the basis of the then current offering
price. You agree to place orders in respect of Shares immediately upon
the receipt of orders from your customers for the same number of Shares.
Orders which you receive from your customers shall be deemed to be placed
with us when received by us. Orders which you receive prior to the close
of business, as defined in the Prospectus, and placed with us within the
time frame set forth in the Prospectus shall be priced at the offering
price next computed after they are received by you. We will not accept
from you a conditional order on any basis. All orders shall be subject to
confirmation by us.
8. Your customer will be entitled to a reduction in the Sales Charge on
purchases made under a Letter of Intent or Right of Accumulation
described in the Prospectus. In such case, your Dealer Commission will be
based upon such reduced Sales Charge; however, in the case of a Letter of
Intent signed by your customer, an adjustment to a higher Dealer
Commission will thereafter be made to reflect actual purchases by your
customer if he should fail to fulfill his Letter of Intent. When placing
wire trades, you agree to advise us of any Letter of Intent signed by
your customer or of any Right of Accumulation available to him of which
he has made you aware. If you fail to so advise us, you will be liable to
us for the return of any Dealer Commission plus interest thereon.
9. You and we agree to abide by the Conduct Rules of the NASD and all other
federal and state rules and regulations that are now or may become
applicable to transactions hereunder. Your expulsion from the NASD will
automatically terminate this Agreement without notice. Your suspension
from the
5/98
<PAGE> 3
Page 3
NASD or a violation by you of applicable state and federal laws and rules
and regulations of authorized regulatory agencies will terminate this
Agreement effective upon notice received by you from us. You agree that
it is your responsibility to determine the suitability of any Shares as
investments for your customers, and that AIM Distributors has no
responsibility for such determination.
10. With respect to the Load Funds and the CDSC Funds, and unless otherwise
agreed, settlement shall be made at the offices of the Funds' transfer
agent within three (3) business days after our acceptance of the order.
With respect to the No-Load Funds, settlement will be made only upon
receipt by the Fund of payment in the form of federal funds. If payment
is not so received or made within ten (10) business days of our
acceptance of the order, we reserve the right to cancel the sale or, at
our option, to sell the Shares to the Funds at the then prevailing net
asset value. In this event, or in the event that you cancel the trade for
any reason, you agree to be responsible for any loss resulting to the
Funds or to us from your failure to make payments as aforesaid. You shall
not be entitled to any gains generated thereby.
11. If any Shares of any of the Load Funds sold to you under the terms of
this Agreement are redeemed by the Fund or repurchased for the account of
the Funds or are tendered to the Funds for redemption or repurchase
within seven (7) business days after the date of our confirmation to you
of your original purchase order therefore, you agree to pay forthwith to
us the full amount of the Dealer Commission allowed to you on the
original sale and we agree to pay such amount to the Fund when received
by us. We also agree to pay to the Fund the amount of our share of the
Sales Charge on the original sale of such Shares.
12. Any order placed by you for the repurchase of Shares of a Fund is subject
to the timely receipt by the Fund's transfer agent of all required
documents in good order. If such documents are not received within a
reasonable time after the order is placed, the order is subject to
cancellation, in which case you agree to be responsible for any loss
resulting to the Fund or to us from such cancellation.
13. We reserve the right in our discretion without notice to you to suspend
sales or withdraw any offering of Shares entirely, to change the offering
prices as provided in the Prospectus or, upon notice to you, to amend or
cancel this Agreement. You agree that any order to purchase Shares of the
Funds placed by you after notice of any amendment to this Agreement has
been sent to you shall constitute your agreement to any such amendment.
14. In every transaction, we will act as agent for the Fund and you will act
as principal for your own account. You have no authority whatsoever to
act as our agent or as agent for the Funds, any other Selected Dealer or
the Funds' transfer agent and nothing in this Agreement shall serve to
appoint you as an agent of any of the foregoing in connection with
transactions with your customers or otherwise.
15. No person is authorized to make any representations concerning the Funds
or their Shares except those contained in the Prospectus and any such
information as may be released by us as information supplemental to the
Prospectus. If you should make such unauthorized representation, you
agree to indemnify the Funds and us from and against any and all claims,
liability, expense or loss in any way arising out of or in any way
connected with such representation.
5/98
<PAGE> 4
Page 4
16. We will supply you with copies of the Prospectuses of the Funds
(including any amendments thereto) in reasonable quantities upon request.
You will provide all customers with a prospectus prior to or at the time
such customer purchases Shares. You will provide any customer who so
requests a copy of the Statement of Additional Information within the
time dictated by regulatory requirements, as they may be amended from
time to time.
17. You shall be solely responsible for the accuracy, timeliness and
completeness of any orders transmitted by you on behalf of your customers
by wire or telephone for purchases, exchanges or redemptions, and shall
indemnify us against any claims by your customers as a result of your
failure to properly transmit their instructions.
18. No advertising or sales literature, as such terms are defined by the
NASD, of any kind whatsoever will be used by you with respect to the
Funds or us unless first provided to you by us or unless you have
obtained our prior written approval.
19. All expenses incurred in connection with your activities under this
Agreement shall be borne by you.
20. This Agreement shall not be assignable by you. This Agreement shall be
constructed in accordance with the laws of the State of Texas.
21. Any notice to you shall be duly given if mailed or telegraphed to you at
your address as registered from time to time with the NASD.
22. This Agreement constitutes the entire agreement between the undersigned
and supersedes all prior oral or written agreements between the parties
hereto.
5/98
<PAGE> 5
Page 5
A I M DISTRIBUTORS, INC.
Date: By: X
------------------------------ ------------------------------------
The undersigned accepts your invitation to become a Selected Dealer and agrees
to abide by the foregoing terms and conditions. The undersigned acknowledges
receipt of Prospectuses for use in connection with offers and sales of the
Funds.
Date By:X
------------------------------ ------------------------------------
Signature
------------------------------------
Print Name Title
------------------------------------
Dealer's Name
------------------------------------
Address
------------------------------------
City State Zip
------------------------------------
Telephone
Please sign both copies and return one copy of each to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
5/98
<PAGE> 1
EXHIBIT e(5)
[LOGO]
A I M Distributors, Inc.--Registered Trademark--
BANK ACTING AS AGENT
FOR ITS CUSTOMERS
AGREEMENT RELATING TO SHARES
OF THE AIM FAMILY OF FUNDS--Registered Trademark--
(CONFIRMATION AND PROSPECTUS TO BE SENT
BY A I M DISTRIBUTORS, INC. TO CUSTOMER)
A I M Distributors, Inc. is the exclusive national distributor of the shares of
the registered investment companies for which we now or in the future act as
underwriter, as disclosed in each Fund's prospectus, which may be amended from
time to time (the "Funds"). As exclusive agent for the Funds, we are offering to
make available shares of the Funds (the "Shares") for purchase by your customers
on the following terms:
1. In all sales of Shares you shall act as agent for your customers, and
in no transaction shall you have any authority to act as agent for any
Fund or for us.
2. The customers in question are, for all purposes, your customers and not
customers of A I M Distributors, Inc. In receiving orders from your
customers who purchase Shares, A I M Distributors, Inc. is not
soliciting such customers and, therefore, has no responsibility for
determining whether Shares are suitable investments for such customers.
3. It is hereby understood that in all cases in which you place orders
with us for the purchase of Shares (a) you are acting as agent for the
customer; (b) the transactions are without recourse against you by the
customer; (c) as between you and the customer, the customer will have
full beneficial ownership of the securities; (d) each such transaction
is initiated solely upon the order of the customer; and (e) each such
transaction is for the account of the customer and not for your
account.
4. Orders received from you will be accepted by us only at the public
offering price applicable to each order, as established by the then
current prospectus or Statement of Additional Information,
(collectively, the "Prospectus") of the appropriate Fund, subject to
the discounts (defined below) provided in such Prospectus. Following
receipt from you of any order to purchase Shares for the account of a
customer, we shall confirm such order to you in writing. We shall be
responsible for sending your customer a written confirmation of the
order with a copy of the appropriate Fund's current Prospectus. We
shall send you a copy of such confirmation. Additional instructions may
be forwarded to you from time to time. All orders are subject to
acceptance or rejection by us in our sole discretion.
5. Members of the general public, including your customers, may purchase
Shares only at the public offering price determined in the manner
described in the current Prospectus of the appropriate Fund. With
respect to the Funds, the Shares of which are indicated in that Fund's
Prospectus as being sold with a sales charge (i.e. the "Load Funds"),
you will be allowed to retain a commission or concession from the
public offering price provided in such Load Funds' current Prospectus
and/or periodic instructions from us. With respect to the Funds, the
Shares of which are indicated in that Fund's Prospectus as being sold
with a contingent deferred sales charge or early withdrawal charge (the
5/98
<PAGE> 2
Bank Acting as Agent for its Customers Page 2
"CDSC Funds"), you will be paid a commission or concession as disclosed
in the CDSC Fund's then current Prospectus and/or periodic instructions
from us. With respect to the Funds whose Shares are indicated on the
attached Schedule as being sold without a sales charge or a contingent
deferred sales charge, (i.e. the "No-Load Funds"), you will not be
allowed to retain any commission or concession. All commissions or
concessions set forth in any of the Load Funds' or CDSC Funds'
Prospectus are subject to change without notice by us and will comply
with any changes in regulatory requirements.
6. The tables of sales charges and discounts set forth in the current
Prospectus of each Fund are applicable to all purchases made at any one
time by any "purchaser", as defined in the current Prospectus. For this
purpose, a purchaser may aggregate concurrent purchases of securities
of any of the Funds.
7. Reduced sales charges may also be available as a result of quantity
discounts, rights of accumulation or letters of intent. Further
information as to such reduced sales charges, if any, is set forth in
the appropriate Fund Prospectus. In such case, your discount will be
based upon such reduced sales charge; however, in the case of a letter
of intent signed by your customer, an adjustment to a higher discount
will thereafter be made to reflect actual purchases by your customer if
he should fail to fulfill his letter of intent. You agree to advise us
promptly as to the amounts of any sales made by you to your customers
qualifying for reduced sales charges. If you fail to so advise us of
any letter of intent signed by your customer or of any right of
accumulation available to him of which he has made you aware, you will
be liable to us for the return of any discount plus interest thereon.
8. By accepting this Agreement you agree:
a. that you will purchase Shares only from us;
b. that you will purchase Shares from us only to cover purchase orders
already received from your customers; and
c. that you will not withhold placing with us orders received from
your customers so as to profit yourself as a result of such
withholdings.
9. We will not accept from you a conditional order for Shares on any
basis.
10. Payment for Shares ordered from us shall be in the form of a wire
transfer or a cashiers check mailed to us. Payment shall be made within
three (3) business days after our acceptance of the order placed on
behalf of your customer. Payment shall be equal to the public offering
price less the discount retained by you hereunder.
11. If payment is not received within ten (10) business days of our
acceptance of the order, we reserve the right to cancel the sale or, at
our option, to sell Shares to the Fund at the then prevailing net asset
value. In this event you agree to be responsible for any loss resulting
to the Fund from the failure to make payment as aforesaid.
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<PAGE> 3
Bank Acting as Agent for its Customers Page 3
12. Shares sold hereunder shall be available in book-entry form on the
books of the Funds' Transfer Agent unless other instructions have been
given.
13. No person is authorized to make any representations concerning Shares
of any Fund except those contained in the applicable current Prospectus
and printed information subsequently issued by the appropriate Fund or
by us as information supplemental to such Prospectus. You agree that
you will not make Shares available to your customers except under
circumstances that will result in compliance with the applicable
Federal and State Securities and Banking Laws and that you will not
furnish to any person any information contained in the then current
Prospectus or cause any advertisement to be published in any newspaper
or posted in any public place without our consent and the consent of
the appropriate Fund.
14. Sales and exchanges of Shares may only be made in those states and
jurisdictions where Shares are registered or qualified for sale to the
public. We agree to advise you currently of the identity of those
states and jurisdictions in which the Shares are registered or
qualified for sales, and you agree to indemnify us and/or the Funds for
any claim, liability, expense or loss in any way arising out of a sale
of Shares in any state or jurisdiction not identified by us as a state
or jurisdiction in which such Shares are so registered or qualified. We
agree to indemnify you for any claim, liability, expense or loss in any
way arising out of a sale of shares in any state or jurisdiction
identified by us as a state or jurisdiction in which shares are so
registered or qualified.
15. You shall be solely responsible for the accuracy, timeliness and
completeness of any orders transmitted by you on behalf of your
customers by wire or telephone for purchases, exchanges or redemptions,
and shall indemnify us against any claims by your customers as a result
of your failure to properly transmit their instructions.
16. All sales will be made subject to our receipt of Shares from the
appropriate Fund. We reserve the right, in our discretion, without
notice, to modify, suspend or withdraw entirely the offering of any
Shares and, upon notice, to change the sales charge or discount or to
modify, cancel or change the terms of this Agreement. You agree that
any order to purchase Shares of the Funds placed by you after any
notice of amendment to this Agreement has been sent to you shall
constitute your agreement to any such agreement.
17. The names of your customers shall remain your sole property and shall
not be used by us for any purpose except for servicing and information
mailings in the normal course of business to Fund Shareholders.
18. Your acceptance of this Agreement constitutes a representation that you
are a "Bank" as defined in Section 3 (a) (6) of the Securities Exchange
Act of 1934, as amended, and are duly authorized to engage in the
transactions to be performed hereunder.
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<PAGE> 4
Bank Acting as Agent for its Customers Page 4
All communications to us should be sent to A I M Distributors, Inc.,
Eleven Greenway Plaza, Suite 100, Houston, Texas 77046. Any notice to
you shall be duly given if mailed or telegraphed to you at the address
specified by you below or to such other address as you shall have
designated in writing to us. This Agreement shall be construed in
accordance with the laws of the State of Texas.
A I M DISTRIBUTORS, INC.
Date: By: X
-------------------------- -----------------------------
The undersigned agrees to abide by the foregoing terms and conditions.
Date: By: X
-------------------------- -----------------------------
Signature
-----------------------------
Print Name Title
-----------------------------
Dealer's Name
-----------------------------
Address
-----------------------------
City State Zip
Please sign both copies and return one copy of each to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
5/98
<PAGE> 1
EXHIBIT g(2)(b)
AMENDMENT TO CUSTODIAN CONTRACT
This Amendment to the Custodian Contract is made as of September 9,
1998 by and between AIM Advisor Funds, Inc., (the "Fund") and State Street Bank
and Trust Company (the "Custodian"); Capitalized terms used in this Amendment
without definition shall have the respective meanings ascribed to such terms in
the Custodian Contract referred to below.
WHEREAS, the Fund and the Custodian entered into a Custodian Contract
dated as of August 4, 1997 (as amended and in effect from time to time, the
"Contract"); and
WHEREAS, the Fund is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets, and the Fund has made AIM Advisor Flex Fund; AIM
Advisor International Value Fund; AIM Advisor Large Cap Value Fund; AIM Advisor
MultiFlex Fund; and AIM Advisor Real Estate Fund subject to the Contract (each
such series, together with all other series subsequently established by the Fund
and made subject to the Contract in accordance with the terms thereof, shall be
referred to as a "Portfolio", and, collectively, the "Portfolios"); and
WHEREAS, the Fund and the Custodian desire to amend certain provisions
of the Contract to reflect revisions to Rule 17f-5 ("Rule 17f-5") promulgated
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund and the Custodian desire to amend and restate certain
other provisions of the Contract relating to the terms and conditions of the
custody of assets of each of the Portfolios held outside of the United States.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter contained, the parties hereby agree to
amend the Contract, pursuant to the terms thereof, as follows:
I. Article 3 of the Contract is hereby deleted, and Articles 4 through 17
of the Contract are hereby amended, as of the effective date of this
Amendment, by renumbering same as Articles 5 through 18, respectively.
II. New Articles 3 and 4 of the Contract are hereby added, as of the
effective date of this Amendment, as set forth below.
3. THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.
3.1. Definitions.
Capitalized terms in this Article 3 of the Contract shall have the following
meanings:
"Country Risk" means all factors reasonably related to the systemic risk of
holding Foreign Assets in a particular country including, but not limited to,
such country's
<PAGE> 2
political environment; economic and financial infrastructure (including any
Mandatory Securities Depositories operating in the country); prevailing or
developing custody and settlement practices; laws and regulations applicable to
the safekeeping and recovery of Foreign Assets held in custody in that country;
and factors comprising the "prevailing country risk", including the effects of
foreign law on the safekeeping of Portfolio assets, the likelihood of
expropriation, nationalization, freezing, or confiscation of a Portfolio's
assets and any reasonably foreseeable difficulties in repatriating a Portfolio's
assets.
"Eligible Foreign Custodian" has the meaning set forth in section (a)(1) of Rule
17f-5, including a majority-owned or indirect subsidiary of a U.S. Bank (as
defined in Rule 17f-5), a bank holding company meeting the requirements of an
Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other appropriate
action of the SEC, or a foreign branch of a Bank (as defined in Section 2(a)(5)
of the 1940 Act) meeting the requirements of a custodian under Section 17(f) of
the 1940 Act, except that the term does not include Mandatory Securities
Depositories.
"Foreign Assets" means any of the Portfolio's investments (including foreign
currencies) for which the primary market is outside the United States, currency
contracts that are settled outside the United States and such cash and cash
equivalents as are reasonably necessary to effect the Portfolio's transactions
in such investments.
"Foreign Custody Manager" has the meaning set forth in section (a)(2) of Rule
l7f-5.
"Mandatory Securities Depository" means a foreign securities depository or
clearing agency that, either as a legal or practical matter, must be used if the
Fund determines to place Foreign Assets in a country outside the United States
(i) because required by law or regulation; (ii) because securities cannot be
withdrawn from such foreign securities depository or clearing agency; or (iii)
because maintaining or effecting trades in securities outside the foreign
securities depository or clearing agency is not consistent with prevailing or
developing custodial or market practices.
3.2. DELEGATION TO THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.
The Fund, by resolution adopted by its Board of Directors (the "Board"), hereby
delegates to the Custodian, subject to Section ~) of Rule 17f-5, the
responsibilities set forth in this Article 3 with respect to Foreign Assets held
outside the United States, and the Custodian hereby accepts such delegation, as
Foreign Custody Manager of each Portfolio.
3.3. COUNTRIES COVERED.
The Foreign Custody Manager shall be responsible for performing the delegated
responsibilities defined below only with respect to (a) the countries listed on
Schedule A hereto as approved by the Board, which list of Board-approved
countries may be amended from time to time by the Fund with the agreement of the
Foreign Custody Manager, and (b) the custody arrangements set forth on such
Schedule A. The Foreign Custody Manager shall list on Schedule A the Eligible
Foreign Custodians selected by the Foreign Custody Manager to maintain the
assets of each Portfolio, which list of Eligible Foreign Custodians may be
amended from time to time in the sole discretion of
<PAGE> 3
I
the Foreign Custody Manager. Mandatory Securities Depositories are listed on
Schedule B to this Contract, which Schedule B may be amended from time to time
by the Foreign Custody Manager. The Foreign Custody Manager will provide amended
versions of Schedules A and B in accordance with Section 3.7 of this Article 3.
Upon the receipt by the Foreign Custody Manager of Proper Instructions to open
an account, or to place or maintain Foreign Assets, in a country listed on
Schedule A, and the fulfillment by the Fund of the account opening requirements
for such country (if any), the Foreign Custody Manager shall be deemed to have
been appointed by the Board as Foreign Custody Manager with respect to that
country and to have accepted the delegation. Execution of this Amendment by the
Fund shall be deemed to be a Proper Instruction to open an account, or to place
or maintain Foreign Assets, in each Board-approved country listed on Schedule A
in which the Custodian has previously placed or currently maintains Foreign
Assets pursuant to the terms of the Contract. Following the receipt of Proper
Instructions directing the Foreign Custody Manager to close the account of a
Portfolio with the Eligible Foreign Custodian selected by the Foreign Custody
Manager in a designated country, the delegation by the Board to the Custodian as
Foreign Custody Manager for that country shall be deemed to have been withdrawn
and the Custodian shall immediately cease to be the Foreign Custody Manager of
the Portfolio with respect to that country.
The Foreign Custody Manager may withdraw its acceptance of delegated
responsibilities with respect to a designated country upon written notice to the
Fund. Thirty days (or such longer period as to which the parties agree in
writing) after receipt of any such notice by the Fund, the Custodian shall have
no further responsibility as Foreign Custody Manager to a Portfolio with respect
to the country as to which the Custodian 5 acceptance of delegation is
withdrawn.
3.4. Scope of Delegated Responsibilities.
3.4.1. Selection of Eligible Foreign Custodians.
Subject to the provisions of this Article 3, the Foreign Custody Manager may
place and maintain the Foreign Assets in the care of the Eligible Foreign
Custodians selected by the Foreign Custody Manager in each country listed as
"approved" on Schedule A, as such Schedule is amended from time to time.
In performing its delegated responsibilities as Foreign Custody Manager to place
or maintain the Foreign Assets with an Eligible Foreign Custodian, the Foreign
Custody Manager shall determine that the Foreign Assets will be subject to
reasonable care, based on the standards applicable to custodians in the country
in which the Foreign Assets will be held by that Eligible Foreign Custodian,
after considering all factors relevant to the safekeeping of such assets,
including, without limitation, the factors specified in Rule 17f-5(c)(1).
<PAGE> 4
I
3.4.2. CONTRACTS WITH ELIGIBLE FOREIGN CUSTODIANS.
The Foreign Custody Manager shall determine that the contract (or the rules or
established practices or procedures in the case of an Eligible Foreign Custodian
that is a foreign securities depository or clearing agency) governing the
foreign custody arrangements with each Eligible Foreign Custodian selected by
the Foreign Custody Manager will satisfy the requirements of Rule 17f-5(c)(2).
3.4.3. MONITORING.
In each case in which the Foreign Custody Manager maintains Foreign Assets with
an Eligible Foreign Custodian, selected by the Foreign Custody Manager, the
Foreign Custody Manager shall maintain a system to monitor (i) the
appropriateness of maintaining the Foreign Assets with such Eligible Foreign
Custodian, and (ii) the contract governing the custody arrangements established
by the Foreign Custody Manager with the Eligible Foreign Custodian (or the rules
or established practices and procedures in the case of an Eligible Foreign
Custodian selected by the Foreign Custody Manager which is a foreign securities
depository or clearing agency that is not a Mandatory Securities Depository).
The Foreign Custody Manager shall provide the Board with information at least
annually as to the factors used in such monitoring system. In the event the
Foreign Custody Manager determines that the custody arrangements with an
Eligible Foreign Custodian that it has selected are no longer appropriate, the
Foreign Custody Manager shall promptly transfer the Fund's Foreign Assets to
another Eligible Foreign Custodian in the market and shall notify the Board in
accordance with Section 3.7 hereunder.
3.5. GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY.
For purposes of this Article 3, the Board shall be deemed to have considered and
determined to accept such Country Risk as is incurred by placing and maintaining
the Foreign Assets in each country for which the Custodian is serving as Foreign
Custody Manager of a Portfolio, and the Board shall be deemed to be monitoring
on a continuing basis such Country Risk to the extent that the Board considers
necessary or appropriate.
Notwithstanding any provision of this Contract to the contrary, the Fund on
behalf of the Portfolios and the Custodian expressly acknowledge and agree that
the Foreign Custody Manager shall not be delegated any responsibilities under
this Article 3 with respect to Mandatory Securities Depositories, and that the
determination by or on behalf of the Board to place the Foreign Assets in a
particular country shall be deemed to include the determination to place such
Foreign Assets eligible for any Mandatory Securities Depository with such
Mandatory Securities Depository, whether the Mandatory Securities Depository
exists at the time the Foreign Assets are acquired, or after the acquisition
thereof.
<PAGE> 5
I
3.6. STANDARD OF CARE AS FOREIGN CUSTODY MANAGER OF A PORTFOLIO.
In performing the responsibilities delegated to it, the Foreign Custody Manager
shall exercise reasonable care, prudence and diligence such as a person having
responsibility for the safekeeping of assets of management investment companies
registered under the 1940 Act would exercise.
3.7. REPORTING REQUIREMENTS.
The Foreign Custody Manager shall report at least quarterly on the Foreign
Assets held with each Eligible Foreign Custodian and in connection therewith if
applicable, provide to the Board amended Schedules A or B at the end of the
calendar quarter in which an amendment to either Schedule has occurred. The
Foreign Custody Manager will make written reports notifying the Board of any
other material change in the foreign custody arrangements of the Portfolios
described in this Article 3 promptly after the occurrence of the material
change.
3.8. REPRESENTATIONS WITH RESPECT TO RULE 17F-5.
The Foreign Custody Manager represents to the Fund that it is a U.S. Bank as
defined in section (a)(7) of Rule 17f-5.
The Fund represents to the Custodian that the Board has determined that it is
reasonable for the Board to rely on the Custodian to perform the
responsibilities delegated pursuant to this Contract to the Custodian as the
Foreign Custody Manager of each Portfolio.
3.9. Effective Date and Termination of the CUSTODIAN AS FOREIGN CUSTODY
MANAGER.
The Board's delegation to the Custodian as Foreign Custody Manager of a
Portfolio shall be effective as of the date hereof and shall remain in effect
until terminated at any time, without penalty, by written notice from the
terminating party to the non-terminating party. Termination will become
effective thirty days after receipt by the non-terminating party of such notice.
The provisions of Section 3.3 hereof shall govern the delegation to and
termination of the Custodian as Foreign Custody Manager of the Fund with respect
to designated countries.
3.10 FUTURE NEGOTIATIONS.
If at any time prior to termination of this Amendment the Custodian as a matter
of standard business practice, accepts delegation as Foreign Custody Manager for
its U.S. mutual fund clients on terms materially different than set forth in
this Amendment, the Custodian hereby agrees to negotiate with the fund in good
faith with respect thereto.
<PAGE> 6
4. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE PORTFOLIOS HELD
OUTSIDE THE UNITED STATES.
4.1 DEFINITIONS.
Terms used in this Article 4 and not defined below shall have the meanings
ascribed them in the Contract or in this Amendment:
"Foreign Securities System" means either a clearing agency or a securities
depository which is listed on Schedule A hereto or a Mandatory Securities
Depository.
"Foreign Sub-Custodian" means a foreign banking institution serving as an
Eligible Foreign Custodian.
4.2. HOLDING SECURITIES.
The Custodian shall identify on its books as belonging to the Portfolios the
foreign securities held by each Foreign Sub-Custodian or Foreign Securities
System. The Custodian may hold foreign securities for all of its customers,
including the Portfolios, with any Foreign Sub-Custodian in an account that is
identified as belonging to the Custodian for the benefit of its customers,
provided however. that (i) the records of the
Custodian with respect to foreign securities of the Portfolios which are
maintained in such account shall identify those securities as belonging to the
Portfolios and (ii), to the extent permitted and customary in the market in
which the account is maintained, the Custodian shall require that securities so
held by the Foreign Sub-Custodian be held separately from any assets of such
Foreign Sub-Custodian or of other customers of such Foreign Sub-Custodian.
4.3. Foreign Securities Systems.
Foreign securities shall be maintained in a Foreign Securities System in a
designated country only through arrangements implemented by the Foreign
Sub-Custodian in such country pursuant to the terms of this Contract.
4.4. TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.
4.4.1. DELIVERY of Foreign Assets.
The Custodian or a Foreign Sub-Custodian shall release and deliver foreign
securities of a Portfolio held by such Foreign Sub-Custodian, or in a Foreign
Securities System account, only upon receipt of Proper Instructions, which may
be continuing instructions when deemed appropriate by the parties, and only in
the following cases:
(i) upon sale of such foreign securities for the Portfolio in
accordance with reasonable market practice in the country
where such Foreign Assets are held or traded, including,
without limitation: (A) delivery against expectation of
receiving later payment; or (B), in the case of a sale
<PAGE> 7
effected through a Foreign Securities System, in accordance with the rules
governing the operation of the Foreign Securities System;
(ii) in connection with any repurchase agreement related to foreign
securities;
(III) TO THE depository agent in connection with tender or other similar
offers for foreign securities of the Portfolio;
(iv) to the issuer thereof or its agent when such foreign securities are
called, redeemed, retired or otherwise become payable;
(v) to the issuer thereof, or its agent, for transfer into the name of the
Custodian (or the name of the respective Foreign Sub-Custodian or of
any nominee of the Custodian (or such Foreign SubCustodian)) or for
exchange for a different number of bonds, certificates or other
evidence representing the same aggregate face amount or number of
units;
(vi) to brokers, clearing banks or other clearing agents for examination or
trade execution in accordance with reasonable market practices in the
country where such securities are held or traded; pr~~i that in any
such case the Sub-Custodian shall have no responsibility or liability
for any loss arising from the delivery of such securities prior to
receiving payment for such securities except as may arise from the
Sub-Custodian's own negligence or willful misconduct;
(vii) for exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the
securities of the issuer of such securities, or pursuant to provisions
for conversion contained in such securities, or pursuant to any deposit
agreement;
(viii) in the case of warrants, rights or similar foreign securities, the
surrender thereof in the exercise of such warrants, rights or similar
securities or the surrender of interim receipts or temporary securities
for definitive securities;
(ix) for delivery as security in connection with any borrowing by the Fund
requiring a pledge of assets by the Portfolio;
(x) in connection with trading in options and futures contracts, including
delivery as original margin and variation margin;
(xi) in connection with the lending of foreign securities; and
(xii) for any other proper corporate purpose, hut only upon receipt of, in
addition to Proper Instructions, a copy of a resolution of the Board or
of an Executive Committee of the Board so authorized by the Board,
signed by an officer of the Fund and certified by its Secretary or an
Assistant Secretary that the resolution was duly adopted and is in full
force and effect (a "Certified Resolution"), specifying the Foreign
Assets to be
<PAGE> 8
delivered, setting forth the purpose for which such delivery is to be made,
declaring such purpose to be a proper corporate purpose, and naming the person
or persons to whom delivery of such Foreign Assets shall be made.
4.4.2. PAYMENT OF PORTFOLIO MONIES.
Upon receipt of Proper Instructions, which may be continuing instructions when
deemed appropriate by the parties, the Custodian shall pay out, or direct the
respective Foreign Sub-Custodian or the respective Foreign Securities System to
pay out, moneys of a Portfolio in the following cases only:
(i) upon the purchase of foreign securities for the Portfolio,
unless otherwise directed by Proper Instructions, in
accordance with reasonable market settlement practice in the
country where such foreign securities are held or traded,
including, without limitation: (A) delivering money to the
seller thereof or to a dealer therefor (or an agent for such
seller or dealer) against expectation of receiving later
delivery of such foreign securities; or ('3) in the case of a
purchase effected through a Foreign Securities System, in
accordance with the rules governing the operation of such
Foreign Securities System;
(ii) in connection with the conversion, exchange or surrender of
foreign securities of the Portfolio;
(iii) for the payment of any expense or liability of the Portfolio
including but not limited to the following payments: interest,
taxes, investment advisory fees, transfer agency fees, fees
under this Contract, legal fees, accounting fees, and other
operating expenses;
(iv) for the purchase or sale of foreign exchange or foreign
exchange contracts for the Portfolio, including transactions
executed with or through the Custodian or its Foreign
Sub-Custodians;
(v) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(vii) in connection with the borrowing or lending of foreign
securities; and
(viii) for any other proper purpose, hilt only upon receipt of, in
addition to Proper Instructions, a Certified Resolution
specifying the amount of such payment, setting forth the
purpose for which such payment is to be made, declaring such
purpose to be a proper purpose, and naming the person or
persons to whom such payment is to be made.
<PAGE> 9
4.4.3. MARKET CONDITIONS: MARKET INFORMATION.
Notwithstanding any provision of this Contract to the contrary, settlement and
payment for Foreign Assets received for the account of a Portfolio and delivery
of Foreign Assets maintained for the account of~a Portfolio may be effected in
accordance with the customary established securities trading or processing
practices and procedures in the country or market in which the transaction
occurs generally accepted by Institutional Clients, including, without
limitation, delivering Foreign Assets to the purchaser thereof or to a dealer
therefor (or an agent for such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such Foreign Assets from such
purchaser or dealer. For purposes of this Contract, "Institutional Clients"
means U.S. registered investment companies or major U.S. based commercial banks,
insurance companies, pension funds or substantially similar institutions which,
as apart of their ordinary business operations, purchase or sell securities and
make use of global custody services.
The Custodian shall provide to the Board the information with respect to custody
and settlement practices in countries in which the Custodian employs a Foreign
Sub-Custodian, including without limitation information relating to Foreign
Securities Systems, described on Schedule C hereto at the time or times set
forth on such Schedule. The Custodian may revise Schedule C from time to time,
provided that no such revision shall result in the Board being provided with
substantively less information than had been previously provided hereunder and,
provided further, that the Custodian shall in any event provide to the Board and
to A I M Advisors, Inc. annually the following information and opinions with
respect to the Board-approved countries listed on Schedule A:
(i) legal opinions relating to whether local law restricts with
respect to U.S. registered mutual funds (a) access of a fund's
independent public accountants to books and records of a
Foreign Sub-Custodian or Foreign Securities System, (b) a
fund's ability to recover in the event of bankruptcy or
insolvency of a Foreign Sub-Custodian or Foreign Securities
System, (c) a fund's ability to recover in the event of a loss
by a Foreign Sub-Custodian or Foreign Securities System, and
(d) the ability of a foreign investor to convert cash and cash
equivalents to U.S. dollars;
(ii) summary of information regarding Foreign Securities Systems;
and
(iii) country profile information containing market practice for (a)
delivery versus payment, (b) settlement method, (c) currency
restrictions, (d) buy-in practices, (e) foreign ownership
limits, and (f) unique market arrangements.
4.5. REGISTRATION OF FOREIGN SECURITIES.
The foreign securities maintained in the custody of a Foreign Custodian (other
than bearer securities) shall be registered in the name of the Fund (on behalf
of the applicable Portfolio) or in the name of the Custodian or in the name of
any Foreign Sub-Custodian
<PAGE> 10
or in the name of any nominee of the foregoing, and the Fund agrees to hold any
such nominee harmless from any liability as a holder of record of such foreign
securities, except to the extent that the Fund incurs loss or damage due to
failure of such nominee to meet its standard of care as set forth in the
Contract. The Custodian or a Foreign Sub-Custodian shall not be obligated to
accept securities on behalf of the Fund (on behalf of the applicable Portfolio)
under the terms of this Contract unless the form of such securities and the
manner in which they are delivered are in accordance with reasonable market
practice.
4.6. RANK ACCOUNTS.
The Custodian shall identify on its books as belonging to a Portfolio cash
(including cash denominated in foreign currencies) deposited with the Custodian.
Where the Custodian is unable to maintain, or market practice does not
facilitate the maintenance of, cash on the books of the Custodian, a bank
account or bank accounts opened and maintained outside the United States on
behalf of a Portfolio with a Foreign Sub- Custodian shall be subject only to
draft or order by the Custodian or such Foreign Sub-Custodian, acting pursuant
to the terms of this Contract to hold cash received by or from or for the
account of the Portfolio.
4.7. COLLECTION OF INCOME.
The Custodian shall use reasonable commercial efforts to collect all dividends,
income and other payments with respect to the Foreign Assets held hereunder to
which a Portfolio shall be entitled and shall credit such income, as collected,
to the Portfolio. In the event the Custodian or a Foreign Sub-Custodian must use
measures beyond those which are customary in a particular country to collect
such payments, the Fund and the Custodian shall consult as to such measures and
as to the compensation and expenses of the Custodian attendant thereto.
4.8. SHAREHOLDER RIGHTS.
With respect to the foreign securities held under this Article 4, the Custodian
will use commercially reasonable efforts to facilitate the exercise by the Fund
on behalf of the Portfolios of voting and other shareholder rights, subject
always to the laws, regulations and practical constraints that may obtain in the
country where such securities are issued. The Fund acknowledges that local
conditions, including lack of regulation, onerous procedural obligations, lack
of notice and other factors may have the effect of severely limiting the ability
of the Fund to exercise shareholder rights.
4.9. COMMUNICATIONS RELATING~ TO FOREIGN SECURITIES.
The Custodian shall transmit promptly to the Fund written information
(including, without limitation, pendency of calls and maturities of foreign
securities and expirations of rights in connection therewith) received by the
Custodian via the Foreign Sub-Custodians from issuers of the foreign securities
being held for the account of a Portfolio. With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Fund written information so
received by the Custodian from issuers of the foreign securities whose tender or
exchange is sought or from the party (or its agents) making the
<PAGE> 11
tender or exchange offer. Subject to the standard of care to which the Custodian
is held under this Contract, the Custodian shall not be liable for any untimely
exercise of any tender, exchange or other right or power in connection with
foreign securities or other property of the Portfolio at any time held by it
unless (i) the Custodian or the respective Foreign Sub-Custodian is in actual
possession of such foreign securities or property and (ii) the Custodian
receives Proper Instructions with regard to the exercise of any such right or
power, and both (i) and (ii) occur at least two New York business days prior to
the date on which the Custodian is to take action to exercise such right or
power.
4.10. LIABILITY OF FOREIGN SUB-CUSTODIANS AND FOREIGN SECURITIES SYSTEMS.
Each agreement pursuant to which the Custodian employs a Foreign Sub-Custodian
shall, to the extent possible consistent with prevailing market practice,
require the Foreign Sub-Custodian to exercise reasonable care in the performance
of its duties and to indemnify, and hold harmless, the Custodian from and
against any loss, damage, cost, expense, liability or claim arising out of or in
connection with such Foreign Sub-Custodian's performance of such obligations. At
the election of the Fund, the Fund shall be entitled to be subrogated to the
rights of the Custodian with respect to any claims against a Foreign Sub-
Custodian as a consequence of any such loss, damage, cost, expense, liability or
claim if and to the extent that the Fund and any applicable Portfolio has not
been made whole for any such loss, damage, cost, expense, liability or claim.
4.11. TAX LAW.
The Custodian shall have no responsibility or liability for any obligations now
or hereafter imposed on the Fund or the Custodian as custodian of the Portfolios
by the tax law of the United States or of any state or political subdivision
thereof. With respect to jurisdictions other than the United States, the sole
responsibility of the Custodian with regard to the tax law of any such
jurisdiction shall be to use reasonable efforts to (a) notify the Fund of the
obligations imposed on the Fund with respect to the Portfolios or the Custodian
as custodian of such Portfolios by the tax law of such jurisdictions, including
responsibility for withholding and other taxes, assessment or other governmental
charges, certifications and government reporting and ~) perform such ministerial
steps as are required to collect any tax refund, to ascertain the appropriate
rate of tax withholding and to provide such documents as may be required to
enable each Fund to receive appropriate tax treatment under applicable tax laws
and any applicable treaty provisions. The Custodian, in performance of its
duties under this Section, shall be entitled to treat each Fund as a Maryland
corporation which is a "registered investment company" under the laws of the
United States, and it shall be the duty of each Fund to inform the Custodian of
any change in the organization, domicile or, to the extent within the knowledge
of the Fund, other relevant facts concerning tax treatment of the Fund and
further to inform the Custodian if the Fund is or becomes the beneficiary of any
special ruling or treatment not applicable to the general nationality and
category of entity of which the Fund is a part under general laws and treaty
provisions. The Custodian shall be entitled to rely on any information supplied
by the Fund. The Custodian may engage reasonable professional advisors disclosed
to the Fund by the Custodian, which may include attorneys, accountants or
financial institutions in the regular business of investment administration and
may rely upon advice received therefrom.
<PAGE> 12
4.12. LIABILITY OF CUSTODIAN.
Except as may arise from the Custodian's own negligence or willful misconduct or
the negligence or willful misconduct of a Sub-Custodian, the Custodian shall be
without liability to the Fund for any loss, liability, claim or expense
resulting from or caused by Country Risk (as such term is defined in Article 3
hereof), regardless of whether assets are maintained in the custody of a Foreign
Sub-Custodian or a Foreign Securities Depository, the Custodian shall be without
liability for any loss, damage, cost, expense, liability or claim resulting from
nationalization, expropriation, currency restrictions, or acts of war or
terrorism, or any other similar loss beyond the reasonable control of the
Custodian or the Sub-Custodian.
The Custodian shall be liable to the Fund on account of any actions or omissions
of any Foreign Sub- Custodian to the same extent as such Foreign Sub-Custodian
shall be liable to the Custodian.
4.13 USE OF TERM "FUND"; ASSETS AND LIABILITIES
All references in this Article 4 or in Article 3 of this Agreement to "Fund"
shall mean the Fund, or a Portfolio of the Fund, as the context requires or as
applicable.
The Custodian shall maintain separate and distinct records for each Portfolio
and the assets allocated solely with such Portfolio shall be held and accounted
for separately from the assets of the Fund associated solely with any other
Portfolio. The debts, liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to a particular Portfolio shall be
enforceable against the assets of such Portfolio only, and not against the
assets of the Fund generally or the assets of any other Portfolio.
III. Except as specifically superseded or modified herein, the terms and
provisions of the Contract shall continue to apply with full force and effect.
In the event of any conflict between the terms of the Contract prior to this
Amendment and this Amendment, the terms of this Amendment shall prevail. If the
Custodian is delegated the responsibilities of Foreign Custody Manager pursuant
to the terms of Article 3 hereof, in the event of any conflict between the
provisions of Articles 3 and 4 hereof, the provisions of Article 3 shall
prevail.
<PAGE> 13
IN WITNESS WHEREOF, each of the parties has caused this Amendment to be
executed in its name and behalf by its duly authorized representative as of the
date first above written.
WITNESSED By: STATE STREET BANK AND TRUST
COMPANY
/s/ MARC L. PARSONS
- -------------------------- By: /s/ RONALD E. LOGUE
Marc L. Parsons -----------------------------------------
Associate Counsel Name: Ronald E. Logue
Title: Executive Vice President
AIM ADVISOR FUNDS, INC.
WITNESSED By:
/s/ P. MICHELLE GRACE
- -------------------------- By: /s/ JOHN J. ARTHUR
Name: P. Michelle Grace -----------------------------------------
Title: Assistant Secretary Name: John J. Arthur
Title: Senior Vice President
<PAGE> 14
STATE STREET SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
<TABLE>
<CAPTION>
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
<S> <C> <C>
Argentina Citibank, N.A. --
Australia Westpac Banking Corporation --
Austria Erste Bank der Oesterreichischen --
Sparkassen AG
Bahrain British Bank of the Middle East --
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Bangladesh Standard Chartered Bank --
Belgium Generale de Banque --
Bermuda The Bank of Bermuda Limited --
Bolivia Banco Boliviano Americano S.A. --
Botswana Barclays Bank of Botswana Limited --
Brazil Citibank, N.A. --
Bulgaria ING Bank N.V. --
Canada Canada Trustco Mortgage Company --
Chile Citibank, N.A. --
People's Republic The Hongkong and Shanghai --
of China Banking Corporation Limited,
Shanghai and Shenzhen branches
Colombia Cititrust Colombia S.A. --
Sociedad Fiduciaria
</TABLE>
8/13/98 1
<PAGE> 15
STATE STREET SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
<TABLE>
<CAPTION>
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
<S> <C> <C>
Croatia Privredna Banka Zagreb d.d --
Cyprus Barclays Bank Plc. --
Cyprus Offshore Banking Unit
Czech Republic Ceskoslovenska Obchodni --
Banka, A.S.
Denmark Den Danske Bank --
Ecuador Citibank, N.A. --
Egypt National Bank of Egypt --
Estonia Hansabank --
Finland Merita Bank Limited --
France Banque Paribas --
Germany Dresdner Bank AG --
Ghana Barclays Bank of Ghana Limited --
Greece National Bank of Greece S.A. The Bank of Greece,
System for Monitoring Transactions in
Securities in Book-Entry Form
Hong Kong Standard Chartered Bank --
Hungary Citibank Budapest Rt. --
Iceland Icebank Ltd. --
</TABLE>
8/13/98 2
<PAGE> 16
STATE STREET SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
<TABLE>
<CAPTION>
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
<S> <C> <C>
India Deutsche Bank AG --
The Hongkong and Shanghai --
Banking Corporation Limited
Indonesia Standard Chartered Bank --
Ireland Bank of Ireland --
Israel Bank Hapoalim B.M. --
Italy Banque Paribas --
Ivory Coast Societe Generale de Banques --
en Cote d'Ivoire
Jamaica Scotiabank Jamaica Trust and Merchant --
Bank Ltd.
Japan The Daiwa Bank, Limited Japan Securities Depository
Center
The Fuji Bank, Limited
Jordan British Bank of the Middle East --
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Kenya Barclays Bank of Kenya Limited --
Republic of Korea The Hongkong and Shanghai Banking --
Corporation Limited
Latvia JSC Hansabank-Latvija --
Lebanon British Bank of the Middle East --
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
</TABLE>
8/13/98 3
<PAGE> 17
STATE STREET SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
<TABLE>
<CAPTION>
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
<S> <C> <C>
Lithuania Vilniaus Bankas AB --
Malaysia Standard Chartered Bank --
Malaysia Berhad
Mauritius The Hongkong and Shanghai --
Banking Corporation Limited
Mexico Citibank Mexico, S.A. --
Morocco Banque Commerciale du Maroc --
Namibia (via) Standard Bank of South Africa --
The Netherlands MeesPierson N.V. --
New Zealand ANZ Banking Group --
(New Zealand) Limited
Norway Christiania Bank og --
Kreditkasse
Oman British Bank of the Middle East --
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Pakistan Deutsche Bank AG --
Peru Citibank, N.A. --
Philippines Standard Chartered Bank --
Poland Citibank (Poland) S.A. --
Bank Polska Kasa Opieki S.A.
Portugal Banco Comercial Portugues --
</TABLE>
8/13/98 4
<PAGE> 18
STATE STREET SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
<TABLE>
<CAPTION>
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
<S> <C> <C>
Romania ING Bank N.V. --
Russia Credit Suisse First Boston AO, Moscow --
(as delegate of Credit Suisse
First Boston, Zurich)
Singapore The Development Bank --
of Singapore Limited
Slovak Republic Ceskoslovenska Obchodna --
Banka, A.S.
Slovenia Banka Creditanstalt d.d. --
South Africa Standard Bank of South Africa Limited --
Spain Banco Santander, S.A. --
Sri Lanka The Hongkong and Shanghai --
Banking Corporation Limited
Swaziland Standard Bank Swaziland Limited --
Sweden Skandinaviska Enskilda Banken --
Switzerland UBS AG --
Taiwan - R.O.C. Central Trust of China --
Thailand Standard Chartered Bank --
Trinidad & Tobago Republic Bank Limited --
Tunisia Banque Internationale Arabe de Tunisie --
</TABLE>
8/13/98 5
<PAGE> 19
STATE STREET SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
<TABLE>
<CAPTION>
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
<S> <C> <C>
Turkey Citibank N.A. --
Ottoman Bank
Ukraine ING Bank, Ukraine --
United Kingdom State Street Bank and Trust Company, --
London Branch
Uruguay Citibank, N.A. --
Venezuela Citibank, N.A. --
Zambia Barclays Bank of Zambia Limited --
Zimbabwe Barclays Bank of Zimbabwe Limited --
</TABLE>
Euroclear (The Euroclear System)/State Street London Limited
Cedel, S.A. (Cedel Bank, societe anonyme)/State Street London Limited
INTERSETTLE (for EASDAQ Securities)
8/13/98
6
<PAGE> 20
STATE STREET SCHEDULE B
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Argentina Caja de Valores S.A.
Australia Austraclear Limited
Reserve Bank Information
and Transfer System
Austria Oesterreichische Kontrollbank AG
(Wertpapiersammelbank Division)
Belgium Caisse Interprofessionnelle de Depot et
de Virement de Titres S.A.
Banque Nationale de Belgique
Brazil Companhia Brasileira de Liquidacao e
Custodia (CBLC)
Bolsa de Valores de Rio de Janeiro
All SSB clients presently use CBLC
Central de Custodia e de Liquidacao Financeira,
de Titulos
Banco Central do Brasil,
Sistema Especial de Liquidacao de
Custodia
Bulgaria Central Depository AD
Bulgarian National Bank
Canada The Canadian Depository
for Securities Limited
People's Republic Shanghai Securities Central Clearing and
of China Registration Corporation
Shenzhen Securities Central Clearing
Co., Ltd.
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
8/13/98 1
<PAGE> 21
STATE STREET SCHEDULE B
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Croatia Ministry of Finance
National Bank of Croatia
Czech Republic Stredisko cennych papirti
Czech National Bank
Denmark Vaerdipapircentralen (the Danish
Securities Center)
Egypt Misr Company for Clearing, Settlement,
and Central Depository
Estonia Eesti Vaartpaberite Keskdepositoorium
Finland The Finnish Central Securities
Depository
France Societe Interprofessionnelle
pour la Compensation des
Valeurs Mobilieres (SICOVAM)
Germany Deutsche Borse Clearing AG
Greece The Central Securities Depository
(Apothetirion Titlon AE)
Hong Kong The Central Clearing and
Settlement System
Central Money Markets Unit
Hungary The Central Depository and Clearing
House (Budapest) Ltd. (KELER)
[Mandatory for Gov't Bonds only;
SSB does not use for other securities]
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
8/13/98 2
<PAGE> 22
STATE STREET SCHEDULE B
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
India The National Securities Depository Limited
Indonesia Bank Indonesia
Ireland Central Bank of Ireland
Securities Settlement Office
Israel The Tel Aviv Stock Exchange Clearing
House Ltd.
Bank of Israel
Italy Monte Titoli S.p.A.
Banca d'Italia
Jamaica The Jamaican Central Securities Depository
Japan Bank of Japan Net System
Kenya Central Bank of Kenya
Republic of Korea Korea Securities Depository Corporation
Latvia The Latvian Central Depository
Lebanon The Custodian and Clearing Center of
Financial Instruments for Lebanon
and the Middle East (MIDCLEAR) S.A.L.
The Central Bank of Lebanon
Lithuania The Central Securities Depository of Lithuania
Malaysia The Malaysian Central Depository Sdn. Bhd.
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
8/13/98 3
<PAGE> 23
STATE STREET SCHEDULE B
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Bank Negara Malaysia,
Scripless Securities Trading and Safekeeping
System
Mauritius The Central Depository & Settlement
Co. Ltd.
Mexico S.D. INDEVAL, S.A. de C.V.
(Instituto para el Deposito de
Valores)
Morocco Maroclear
(pending publication of enabling legislation
in the Moroccan government Gazette)
The Netherlands Nederlands Centraal Instituut voor
Giraal Effectenverkeer B.V. (NECIGEF)
De Nederlandsche Bank N.V.
New Zealand New Zealand Central Securities
Depository Limited
Norway Verdipapirsentralen (the Norwegian
Registry of Securities)
Oman Muscat Securities Market
Pakistan Central Depository Company of Pakistan Limited
Peru Caja de Valores y Liquidaciones S.A.
(CAVALI)
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
8/13/98 4
<PAGE> 24
STATE STREET SCHEDULE B
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Philippines The Philippines Central Depository. Inc.
The Registry of Scripless Securities
(ROSS) of the Bureau of the Treasury
Poland The National Depository of Securities
(Krajowy Depozyt Papierow Wartosciowych)
Central Treasury Bills Registrar
Portugal Central de Valores Mobiliarios (Central)
Romania National Securities Clearing, Settlement and
Depository Co.
Bucharest Stock Exchange Registry Division
Singapore The Central Depository (Pte)
Limited
Monetary Authority of Singapore
Slovak Republic Stredisko Cennych Papierov
National Bank of Slovakia
Slovenia Klirinsko Depotna Druzba d.d.
South Africa The Central Depository Limited
Spain Servicio de Compensacion y
Liquidacion de Valores, S.A.
Banco de Espana
Central de Anotaciones en Cuenta
Sri Larika Central Depository System
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
8/13/98 5
<PAGE> 25
STATE STREET SCHEDULE B
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
(Pvt) Limited
Sweden Vardepapperscentralen AB
(the Swedish Central Securities Depository)
Switzerland Schweizerische Effekten - Giro AG
INTERSETTLE
Taiwan - R.O.C. The Taiwan Securities Central
Depository Co., Ltd.
Thailand Thailand Securities Depository
Company Limited
Tunisia Societe Tunisienne Interprofessionelle de
Compensation et de Depot de
Valeurs Mobilieres
Central Bank of Tunisia
Tunisian Treasury
Turkey Takas ve Saklama Bankasi A.S.
(TAKASBANK)
Central Bank of Turkey
Ukraine The National Bank of Ukraine
United Kingdom The Bank of England,
The Central Gilts Office and
The Central Moneymarkets Office
Uruguay Central Bank of Uruguay
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
8/13/98 6
<PAGE> 26
STATE STREET SCHEDULE B
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Venezuela Central Bank of Venezuela
Zambia Lusaka Central Depository Limited
Bank of Zambia
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
8/13/98 7
<PAGE> 27
SCHEDULE C
MARKET INFORMATION
<TABLE>
<CAPTION>
PUBLICATION/TYPE OF INFORMATION BRIEF DESCRIPTION
- ------------------------------- -----------------
(FREQUENCY)
<S> <C>
The Guide to Custody in World Markets An overview of safekeeping and settlement practices and
(annually) procedures in each market in which State Street Bank and
Trust Company offers custodial services.
Global Custody Network Review Information relating to the operating history and structure of
(annually) depositories and subcustodians located in the markets in
which State Street Bank and Trust Company offers custodial
services, including transnational depositories.
Global Legal Survey With respect to each market in which State Street Bank and
(annually) Trust Company offers custodial services, opinions relating to
whether local law restricts (i) access of a fund's independent
public accountants to books and records of a Foreign Sub-Custodian
or Foreign Securities System, (ii) the Fund's ability to recover in
the event of bankruptcy or insolvency of a Foreign Sub-Custodian
or Foreign Securities System, (iii) the Fund's ability to recover in
the event of a loss by a Foreign Sub-Custodian or Foreign Securities
System, and (iv) the ability of a foreign investor to convert cash
and cash equivalents to U.S. dollars.
Subcustodian Agreements Copies of the subcustodian contracts State Street Bank and
(annually) Trust Company has entered into with each subcustodian in the
markets in which State Street Bank and Trust Company offers
subcustody services to its US mutual fund clients.
Network Bulletins (weekly): Developments of interest to investors in the markets in which
State Street Bank and Trust Company offers custodial
services.
Foreign Custody Advisories (as
necessary): With respect to markets in which State Street Bank and Trust
Company offers custodial services which exhibit special custody
risks, developments which may impact State Street's ability to
deliver expected levels of service.
</TABLE>
<PAGE> 1
EXHIBIT (h)(4)(g)
AMENDMENT NUMBER 4 TO THE REMOTE
ACCESS AND RELATED SERVICES AGREEMENT
THIS AMENDMENT, dated as of June 30, 1998 is made to the Remote Access
and Related Services Agreement dated December 23, 1994, as amended (the
"Agreement") between each registered investment company listed on Exhibit 1 of
the Agreement (the "Fund") and First Data Investor Services Group, Inc,
("FDISG").
WITNESSETH
WHEREAS, the Fund and FDISG desire to further amend the Agreement to
reflect certain changes thereto.
NOW THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree that as of the date first referenced above, the
Agreement shall be amended as follows:
1. Section 14(a) of the Agreement (as amended by Amendment Number 3) is
hereby deleted in its entirety and replaced with the following new Section
14(a):
"(a) This Agreement which became effective as of December 23, 1994 is
hereby extended and shall continue through December 31, 2002 (the
"Initial Term"). Upon the expiration of the Initial Term, this
Agreement shall automatically renew for successive terms of one
(1) year ("Renewal Terms") each, unless the Fund or FDISG
provides written notice to the other of its intent not to renew.
Such notice must be received not less than one-hundred and eighty
(180) days prior to the expiration of the Initial Term or the
then current Renewal Term."
2. Effective January 1, 1999, Section I "Shareholder Account Fees" of
Schedule C "Fee Schedule" (as amended by Amendment Number 3) is amended by
deleting Section I in its entirety and adding the following new Section I:
"I. SHAREHOLDER ACCOUNT FEES. The Fund shall pay the following
fees:
For the period beginning on January 1, 1999, and continuing through
December 31, 2002, the Fund shall pay FDISG an annualized fee for
shareholder accounts open during any monthly period ("Open Account
Fee") as follows:
<TABLE>
<CAPTION>
Account Volume Fee per shareholder account
-------------- ---------------------------
<S> <C> <C>
1-1.5 million $3.50
1.5-3 million $2.40
3-4 million $2.00
4-5 million $1.90
Exceeding 5 million $1.80
</TABLE>
<PAGE> 2
The Fund also shall pay FDISG Group an annualized fee of $1.60 per
shareholder account that is closed during any monthly period (Closed
Account Fee")(The Open Account Fees and Closed Account Fees hereafter
collectively referred to as "Shareholder Account Fees"). The
Shareholder Account Fees shall be billed by FDISG monthly in arrears on
a prorated basis of 1/12 of the annualized fee, for all such accounts.
In addition, on January 1 of the years 2001 and 2002 the Shareholder
Account fees may be increased by FDISG in an amount equal to the lesser
of (i) the cumulative percentage increase in the Consumer Price Index
for all Urban Consumers (CPI-U) U.S. City Average, All Items
(unadjusted = (1982-84 + 100). published by the U.S. Department of
Labor, or (ii) seven percent (7%) of the Shareholder Account Fees
charged by FDISG to the Fund for the preceding twelve (12) month
period.
In return for the Shareholder Account Fees, FDISG agrees to provide the
following to the Fund:
o Remote Access to FDISG's FSR System
o License for 512 IMPRESS Plus seats. Includes six weeks of
technical training (Completed)
o Conversion of the GT Global Funds into the AIM Family of Funds.
Conversion estimated at 4500 hours of systems development
o License for up to 15 copies of FDISG's ACE+ (Automate Control
Environment) software as further defined in Schedule H
o Dedicated Programming Support equivalent to 1 Systems Manager, 4
Programmers, and 2 Business Systems Analysts
o Separate FSR processing cycle
o Implementation of a Separate FSR processing cycle by September
15, 1997, as more fully described in the attached Exhibit 3 of
this Schedule C (Completed)
o Implementation of the core TA system functionality identified in
Exhibit 1 of this Schedule C (Completed)
o Implementation of IWT Release 5.x functionality as identified in
Exhibit 2 of this Schedule C (Completed)
o Continued use of FDISG's Price/Rate Transmission (PRAT)
application. The PRAT Application will accept prices and dividend
rates from the Fund Accounting Department of the Fund
electronically and post them to the FDISG Pricing System. The
PRAT application will run interconnected via Local Area Network
hardware and software."
The Agreement, as previously amended and as amended by this Amendment,
("Modified Agreement") constitutes the entire agreement between the parties with
respect to the subject matter hereof. The Modified Agreement supersedes all
prior and contemporaneous agreements between the parties in connection with the
subject matter hereof. No officer, employee, servant
<PAGE> 3
or other agent of either party is authorized to make any representation,
warranty, or other promises not expressly contained herein with respect to the
subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers, as of the day and year first above
written.
On behalf of the Funds and respective Portfolios and Classes set forth in
Exhibit 1 of the Agreement, as amended and as may be amended in the future from
time to time.
By: /s/ [ILLEGIBLE]
--------------------------------------
Title: AIM Fund Services, Inc.
-----------------------------------
FIRST DATA INVESTOR SERVICES GROUP, INC
By: /s/ [ILLEGIBLE]
--------------------------------------
Title: Executive VP
-----------------------------------
<PAGE> 1
EXHIBIT (h)(4)(h)
AMENDMENT NUMBER 5 TO THE REMOTE
ACCESS AND RELATED SERVICES AGREEMENT
THIS AMENDMENT, dated as of July 1, 1998 is made to the Remote Access
and Related Services Agreement dated December 23, 1994, as amended (the
"Agreement") between each registered investment company listed on Exhibit 1 of
the Agreement (the "Fund") and First Data Investor Services Group, Inc.
("FDISG").
WITNESSETH
WHEREAS, the Fund and FDISG desire to further amend the Agreement to
reflect certain changes thereto.
NOW THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree that as of the date first referenced above, the
Agreement shall be amended as follows:
1. Exhibit 1 of the Agreement is hereby deleted and replaced with the
Attached revised Exhibit 1.
2. Section III "Additional Fees" of Schedule C "Fee Schedule" is hereby
amended to add the following new subsection h:
"h. Fees for IMPRESS Plus COLD:
(i) IMPRESS Plus COLD Software License Fees - The Fund shall pay an
initial license fee of $302,469 (the "License Fee) based on 512
IMPRESS Plus COLD seats licensed, which includes the use of the
INSCI Software. The initial License Fee shall be financed over a
period of 36 months and be payable monthly in arrears in amounts of
$8,401.66. Thereafter, the then current monthly License Fee
payments shall continue so long as the Fund continues to license
and use the IMPRESS Plus COLD Software. License Fee payments shall
commence on the earlier of a) first production usage of IMPRESS
Plus COLD software or b) September 1, 1998.
(ii) IMPRESS Plus Software Usage Fees. In addition to the License
Fee set forth above, the Fund shall pay a monthly usage fee of
$9,728.00 (the "Usage Fee") based on 512 IMPRESS Plus COLD seats
licensed, which includes the use of the INSCI Software. The Usage
Fee shall commence on the earlier of a) first production usage of
IMPRESS Plus COLD software or b) September 1, 1998.
(iii) IMPRESS Plus COLD Installation Fees. - Thirty (30) days
following the execution of Amendment Number 4 to the Agreement and
receipt of an invoice, the Fund shall pay to FDISG one-time
installation fee of $140,000. Installation
<PAGE> 2
covers 3 line data application and 1 Intelligent Data Stream
application. Installation activities include:
o Hardware installation at FDISG site
o IMPRESS Plus COLD application installation
o IMPRESS Plus COLD third party software installation
o Network Design Assistance
o Project Management
o Post Installation Support
(iv) Additional IMPRESS Plus COLD Fees:
o One-time fee for each additional Line Data Application - $10,000
o One-time fee for each additional Intelligent Data Stream
Application - $20,000
o Application Enhancements - $150/hr
(v) Maintenance and Support for IMPRESS Plus COLD includes items
listed in Section III.b above and the following:
o Report conversion to Express Delivery/IMPRESS Plus COLD
o Hardware support and maintenance
(v) IMPRESS Plus COLD License and Usage and IMPRESS Plus COLD
Installation Fees do not include the following:
o Hardware
o Network and Server Software not listed in Exhibit 1 of
Schedule G
o Customization or application integration
o Support for IMPRESS Plus COLD applications customized or built
by the Fund (see Section 3 of Exhibit 3 of Schedule G)
o Installation, Integration and On-going Support of hardware,
network, and software components not included in Schedule G
o Travel Expenses for install and support staff for on-site
visits (billed separately per Schedule D)
o Application Source Code
(vi) IMPRESS Plus COLD Hardware and Network Fees:
<TABLE>
<CAPTION>
One-time* Monthly Support Fee*
--------- --------------------
(Due Upon Execution)
<S> <C> <C>
Hardware $308,729.52 $3276.27
</TABLE>
* Fee is subject to change based on actual vendor costs"
<PAGE> 3
3. Section 1.3 of Schedule G is amended by adding the following:
"Notwithstanding the foregoing provisions of this Section 1.3 to the
contrary, FDISG shall install and maintain the equipment associated
with FDISG's IMPRESS Plus COLD product set forth in Exhibit 2.3 of this
Schedule G at its facility for the fees set forth in Section III.h. of
Schedule C. At the expense of the Fund, upon termination of the
Agreement or at the request of the Funds FDISG shall deliver to the
Fund such equipment."
4. Exhibit 1 of Schedule G is hereby amended as follows:
(a) Section 1.1 is amended by adding "IMPRESS Plus COLD Release 6.0" to
the list of IMPRESS Plus software products.
(b) Section 2.1 "FDISG Provided Third Party Software" is amended by
adding the following new section 2.1.3:
"2.1.3 INSCI Software. The following Third Party Software is
licensed directly to the Fund by FDISG subject to the terms and
conditions set forth in this Agreement:
Advanced COINSERV Software w/Hierarchical Storage Mgr.
WINCOINS Software
Vector Forms Software
Jukebox Driver Software, Two, 12" Drives
Metacode Server License
CDP Metacode Viewer, 300 Concurrent Users
Metacode Desktop & Converter
Operating Kit (Includes Dial-In for Trouble Shooting)"
5. Exhibit 1.1 of Schedule G "Specifications" is hereby amended to add the
IMPRESS Plus COLD Specifications attached hereto as Exhibit 1.1a of Schedule G.
The Agreement, as previously amended and as amended by this Amendment,
("Modified Agreement") constitutes the entire agreement between the parties with
respect to the subject matter hereof. The Modified Agreement supersedes all
prior and contemporaneous agreements between the parties in connection with the
subject matter hereof. No officer, employee, servant or other agent of either
party is authorized to make any representation, warranty, or other promises not
expressly contained herein with respect to the subject matter hereof.
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their duly authorized officers, as of the day and year first
above written.
On behalf of the Funds and respective Portfolios and Classes set forth in
Exhibit 1 attached hereto as may be amended from time to time.
By: /s/ [ILLEGIBLE]
-----------------------------------
Title: Senior Vice President
--------------------------------
FMT DATA INVESTOR SERVICES GROUP, INC.
By: /s/ [ILLEGIBLE]
-----------------------------------
Title: Executive VP
--------------------------------
<PAGE> 5
EXHIBIT 1
List of Funds
<TABLE>
<CAPTION>
Fund# Fund Name
<S> <C>
1 AIM WEINGARTEN FUND - CLASS A
2 AIM CONSTELLATION FUND - CLASS A
6 AIM BALANCED FUND - CLASS A
7 AIM LIMITED MATURITY TREASURY FUND - CL
8 AIM TAX-FREE INTERMEDIATE SHARES
10 AIM CHARTER FUND - CLASS A
16 AIM INTERNATIONAL EQUITY FUND - CLASS A
17 AIM HIGH INCOME MUNICIPAL FUND - CLASS
30 AIM EUROPEAN DEVELOPMENT FUND - CLASS A
31 AIM ASIAN GROWTH FUND - CLASS A
34 AIM SMALL CAP OPPORTUNITIES FUND - CLASS
81 AIM GLOBAL AGGRESSIVE GROWTH FUND - CLASS
82 AIM GLOBAL GROWTH FUND - CLASS A
83 AIM GLOBAL INCOME FUND - CLASS A
301 AIM WEINGARTEN FUND - CLASS C
302 AIM CONSTELLATION FUND - CLASS C
303 AIM MUNICIPAL BOND FUND - CLASS C
305 AIM VALUE FUND - CLASS C
306 AIM BALANCED FUND - CLASS C
308 AIM GLOBAL UTILITIES FUND - CLASS C
310 AIM CHARTER FUND - CLASS C
314 AIM CAPITAL DEVELOPMENT FUND - CLASS C
315 AIM BLUE CHIP FUND - CLASS C
316 AIM INTERNATIONAL EQUITY FUND - CLASS C
317 AIM HIGH INCOME MUNICIPAL FUND - CLASS
320 AIM ADVISOR LARGE CAP VALUE FUND - CLASS
321 AIM ADVISOR INCOME FUND - CLASS C
322 AIM ADVISOR FLEX FUND - CLASS C
323 AIM ADVISOR CASH MANAGEMENT FUND - CLASS
324 AIM ADVISOR MULTIFLEX FUND - CLASS C
325 AIM ADVISOR REAL ESTATE FUND - CLASS C
326 AIM ADVISOR INTERNATIONAL VALUE FUND -
330 AIM EUROPEAN DEVELOPMENT FUND - CLASS C
331 AIM ASIAN GROWTH FUND - CLASS C
350 AIM SELECT GROWTH FUND - CLASS C
360 AIM INTERMEDIATE GOVERNMENT FUND - CLASS
365 AIM INCOME FUND - CLASS C
375 AIM HIGH YIELD FUND - CLASS C
380 AIM MONEY MARKET FUND - CLASS C
381 AIM GLOBAL AGGRESSIVE GROWTH FUND - CLASS
382 AIM GLOBAL GROWTH FUND - CLASS C
383 AIM GLOBAL INCOME FUND - CLASS C
384 AIM NEW DIMENSION FUND - CLASS C
401 AIM MONEY MARKET FUND - CLASS A
402 AIM INCOME FUND - CLASS A
403 AIM MUNICIPAL BOND FUND - CLASS A
404 AIM INTERMEDIATE GOVERNMENT FUND - CLASS
405 AIM VALUE FUND - CLASS A
</TABLE>
Page 1
<PAGE> 6
EXHIBIT 1
List of Funds
<TABLE>
<S> <C>
406 AIM SELECT GROWTH FUND - CLASS A
407 AIM AGGRESSIVE GROWTH FUND - CLASS A
408 AIM GLOBAL UTILITIES FUND - CLASS A
421 AIM CASH RESERVE SHARES
422 AIM TAX-EXEMPT CASH FUND
425 AIM HIGH YIELD FUND - CLASS A
430 CG GUARANTEED ACCT 71-73
431 CG GUARANTEED ACCT 74-77
432 CG GUARANTEED ACCT 1978
433 CG GUARANTEED ACCT 1979
434 CG GUARANTEED ACCT 1980
435 CG GUARANTEED ACCT 1981
436 CG GUARANTEED ACCT 1982
437 CG GUARANTEED ACCT 1983
438 CG GUARANTEED ACCT 1984
439 CG GUARANTEED ACCT 1985
440 CG GUARANTEED ACCT 1985A
441 CG GUARANTEED ACCT 1985B
442 CG GUARANTEED ACCT 1986
443 CG GUARANTEED ACCT 1986A
444 CG GUARANTEED ACCT 1987
445 CG GUARANTEED ACCT 1988
446 CG GUARANTEED ACCT 1989
447 CG GUARANTEED ACCT 1990
448 CG GUARANTEED ACCT 1991
449 CG GUARANTEED ACCT 1992
460 AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
514 AIM CAPITAL DEVELOPMENT FUND - CLASS A
515 AIM BLUE CHIP FUND - CLASS A
520 AIM ADVISOR LARGE CAP VALUE FUND - CLASS
521 AIM ADVISOR INCOME FUND - CLASS A
522 AIM ADVISOR FLEX FUND - CLASS A
523 AIM ADVISOR CASH MANAGEMENT FUND - CLASS
524 AIM ADVISOR MULTIFLEX FUND - CLASS A
525 AIM ADVISOR REAL ESTATE FUND - CLASS A
526 AIM ADVISOR INTERNATIONAL VALUE FUND -
541 AIM DOLLAR FUND CLASS A
542 AIM NEW PACIFIC GROWTH FUND CLASS A
543 AIM EUROPE GROWTH FUND CLASS A
544 AIM JAPAN GROWTH FUND CLASS A
546 AIM MID CAP GROWTH FUND CLASS A
547 AIM WORLDWIDE GROWTH FUND CLASS A
548 AIM STRATEGIC INCOME FUND CLASS A
549 AIM GLOBAL GOVERNMENT INCOME FUND CLASS
551 AIM GLOBAL HEALTH CARE FUND CLASS A
553 AIM LATIN AMERICAN GROWTH FUND CLASS A
556 AIM EMERGING MARKETS FUND CLASS A
557 AIM FINANCIAL SERVICES FUND CLASS A
558 AIM GLOBAL HIGH INCOME - CLASS A
</TABLE>
Page 2
<PAGE> 7
EXHIBIT 1
List of Funds
<TABLE>
<S> <C>
559 AIM GLOBAL INFRASTRUCTURE - CLASS A
561 AIM GLOBAL RESOURCES - CLASS A
562 AIM GLOBAL CONSUMER PRODUCTS & SERVICES
563 AIM AMERICA VALUE FUND - CLASS A
564 AIM SMALL CAP EQUITY FUND - CLASS A
576 AIM DEVELOPING MARKETS FUND - CLASS A
577 AIM INTERNATIONAL GROWTH FUND - CLASS A
578 AIM GLOBAL GROWTH AND INCOME FUND - CLASS
579 AIM GLOBAL TELECOMMUNICATIONS FUND - CLASS
584 AIM NEW DEVELOPING MARKETS FUND - CLASS
602 AIM CONSTELLATION FUND - CLASS B
614 AIM CAPITAL DEVELOPMENT FUND - CLASS B
615 AIM BLUE CHIP FUND - CLASS B
617 AIM HIGH INCOME MUNICIPAL FUND - CLASS
620 AIM ADVISOR LARGE CAP VALUE FUND - CLASS
622 AIM ADVISOR FLEX FUND - CLASS B
624 AIM ADVISOR MULTIFLEX FUND - CLASS B
625 AIM ADVISOR REAL ESTATE FUND - CLASS B
626 AIM ADVISOR INTERNATIONAL VALUE FUND - CLASS
630 AIM EUROPEAN DEVELOPMENT FUND - CLASS B
631 AIM ASIAN GROWTH FUND - CLASS B
634 AIM SMALL CAP OPPORTUNITIES - CLASS B
640 AIM WEINGARTEN FUND - CLASS B
641 AIM DOLLAR FUND CLASS B
642 AIM NEW PACIFIC GROWTH FUND CLASS B
643 AIM EUROPE GROWTH FUND CLASS B
644 AIM JAPAN GROWTH FUND CLASS B
645 AIM CHARTER FUND - CLASS B
646 AIM MID CAP GROWTH FUND CLASS B
647 AIM WORLDWIDE GROWTH FUND CLASS B
648 AIM STRATEGIC INCOME FUND CLASS B
649 AIM GLOBAL GOVERNMENT INCOME FUND CLASS
650 AIM SELECT GROWTH FUND - CLASS B
651 AIM GLOBAL HEALTH CARE FUND CLASS B
653 AIM LATIN AMERICAN GROWTH FUND CLASS B
655 AIM GLOBAL UTILITIES FUND - CLASS B
656 AIM EMERGING MARKETS FUND CLASS B
657 AIM GLOBAL FINANCIAL SERVICES FUND CLASS
658 AIM GLOBAL HIGH INCOME FUND CLASS B
659 AIM GLOBAL INFRASTRUCTURE FUND CLASS B
660 AIM INTERMEDIATE GOVERNMENT FUND - CLASS
661 AIM GLOBAL RESOURCES FUND CLASS B
662 AIM GLOBAL CONSUMER PRODUCTS AND SERVICE
663 AIM AMERICA VALUE FUND CLASS B
664 AIM SMALL CAP EQUITY FUND CLASS B
665 AIM INCOME FUND - CLASS B
670 AIM MUNICIPAL BOND FUND - CLASS B
675 AIM HIGH YIELD FUND - CLASS B
676 AIM DEVELOPING MARKETS FUND CLASS B
</TABLE>
Page 3
<PAGE> 8
EXHIBIT I
List of Funds
<TABLE>
<S> <C>
677 AIM INTERNATIONAL GROWTH FUND CLASS B
678 AIM GLOBAL GROWTH AND INCOME FUND CLASS
679 AIM GLOBAL TELECOMMUNICATIONS FUND CLASS
680 AIM MONEY MARKET FUND - CLASS B
684 AIM NEW DIMENSION FUND CLASS B
685 AIM BALANCED FUND - CLASS B
690 AIM VALUE FUND - CLASS B
691 AIM GLOBAL AGGRESSIVE GROWTH FUND - CLASS
692 AIM GLOBAL GROWTH FUND - CLASS B
693 AIM GLOBAL INCOME FUND - CLASS B
694 AIM INTERNATIONAL EQUITY FUND. - CLASS B
695 AIM FLOATING RATE FUND
800 SHORT-TERM INVESTMENTS TRUST - TREASURY
841 AIM DOLLAR FUND ADVISOR CLASS
842 AIM NEW PACIFIC GROWTH ADVISOR CLASS
843 AIM EUROPE GROWTH ADVISOR CLASS
844 AIM JAPAN GROWTH ADVISOR CLASS
846 AIM MID CAP GROWTH ADVISOR CLASS
847 AIM WORLDWIDE GROWTH ADVISOR CLASS
848 AIM STRATEGIC INCOME ADVISOR CLASS
849 AIM GLOBAL GOVT INCOME ADVISOR CLASS
851 AIM GLOBAL HEALTH CARE ADVISOR CLASS
853 AIM LATIN AMERICAN GROWTH ADVISOR CLASS
856 AIM EMERGING MARKETS ADVISOR CLASS
857 AIM GLOBAL FINANCIAL SERVICES ADVISOR CLASS
858 AIM GLOBAL HIGH INCOME ADVISOR CLASS
859 AIM GLOBAL INFRASTRUCTURE ADVISOR CLASS
861 AIM GLOBAL RESOURCES ADVISOR CLASS
862 AIM GLOBAL CONSUMER PRODUCTS & SERVICES
863 AIM AMERICAN VALUE FUND ADVISOR CLASS
864 AIM SMALL CAP EQUITY ADVISOR CLASS
876 AIM DEVELOPING MARKETS ADVISOR CLASS
877 AIM INTERNATIONAL GROWTH ADVISOR CLASS
878 AIM GLOBAL GROWTH & INCOME ADVISOR CLASS
879 AIM GLOBAL TELECOMMUNICATIONS ADVISOR CLASS
884 AIM NEW DIMENSION ADVISOR CLASS
</TABLE>
Page 4
<PAGE> 9
EXHIBIT 1.1a OF SCHEDULE G
SPECIFICATIONS
TABLE OF CONTENTS
III. HIGH LEVEL OVERVIEW OF IMPRESS PLUS FUNCTIONALITY
E. Computer Output to Laser Disc (COLD)
This item is the property of First Data Investor Services Group (First Data) of
Boston, Massachusetts, and contains confidential and trade secret information.
This Item may not be transferred from the custody or control of First Data
except as authorized by, and then only by way of loan for limited purposes. It
must be returned to First Data upon request and, in all events, upon completion
of the purpose of the loan. Neither this item nor the information it contains
may be used or disclosed to persons not having a need for such use or disclosure
consistent with the purpose of the loan, without the prior written consent of
First Data.
Copyright First Data Investor Services Group
1994,1995,1996,1997
ALL RIGHTS RESERVED
This media contains unpublished, confidential, and proprietary information of
First Data Investor Services Group. No disclosure or use of any portion of these
materials may be made without the express written consent of First Data Investor
Services Group.
<PAGE> 10
COMPUTER OUTPUT TO LASER DISC (COLD)
IMPRESS PLUS COMPUTER OUTPUT TO LASER DISC (COLD)
The IMPRESS Plus COLD module is a client/server based, graphical user interface
(GUI) system designed to provide an intelligent real-time application to enable
clients to improve the quality of the service provided to both shareholders and
broker dealers. This system provides functionality in the following areas:
STATEMENTS AND TAX FORMS
IMPRESS Plus COLD provides the client with on-line access to shareholder and
broker statements and tax forms. The print mail output stream is stored on
optical platters for retrieval and printing later. The forms and statements can
be searched for on-line through a common browse window integrated with the
IMPRESS Plus Imaging application. Daily output journals can also be migrated to
on-line access eliminating microfiche.
TECHNICAL OVERVIEW
IMPRESS Plus Cold is a high-speed, electronic document storage and retrieval
system which utilizes the high-density, low-cost storage capabilities of optical
and RAID disks. IMPRESS Plus COLD operates in a true client-server environment
and has the capability to simultaneously store multiple document types in a
single system. Among these document types are traditional Line Data; AFP;
Metacode; DJDE; Scanned Images, etc. Each of these data types can be stored on a
single system and are all viewed with a common viewer.
IMPRESS Plus utilizes third-party Metacode composition software from Gentext,
Inc. and third-party viewing software from CDP for local viewing and Adobe
Intranet/Internet viewing.
<PAGE> 11
EXHIBIT 2.3 OF SCHEDULE C
IMPRESS PLUS COLD
EQUIPMENT LIST AND NETWORK CONFIGURATION
<TABLE>
<CAPTION>
QUANTITY CATEGORY DESCRIPTION
=================================================================================
<S> <C> <C>
1 JUKEBOX Phillips 12Gb Tower Drive w/onsite installation
- ---------------------------------------------------------------------------------
2 JUKEBOX Phillips 6000 series media (10 to a box)
- ---------------------------------------------------------------------------------
1 JUKEBOX Cygnet 1802-2 with Philips Drives and SCSI Robotics
- ---------------------------------------------------------------------------------
1 JUKEBOX COLD Feet
- ---------------------------------------------------------------------------------
1 SUN CPU SUN Ultra 3000 base, CD-ROM, Solaris license, Cooling
package, (2) 25OMHZ Cpu's 4mb Cache, (1) CPU/Memory
Board/SharedApp
- ---------------------------------------------------------------------------------
2 SUN CPU SUN Sbus I/0 Board
- ---------------------------------------------------------------------------------
2 SUN CPU SUN 256Mb RAM Kit
- ---------------------------------------------------------------------------------
2 SUN CPU SUN 7200 RPM 9.1Gb Internal Hard Drive
- ---------------------------------------------------------------------------------
2 SUN CPU Enterprise Power/Cooling Module 300W
- ---------------------------------------------------------------------------------
1 SUN CPU Second Peripheral Power Supply
- ---------------------------------------------------------------------------------
2 SUN CPU X1052A Fast Differential/Buffered E-Net Card (SCSI
Controller)
- ---------------------------------------------------------------------------------
2 SUN CPU X1062A fast Wide Differential Sbus Card (SCSI Controller)
- ---------------------------------------------------------------------------------
1 SUN CPU SUN 17" Color Monitor and TGX Card
- ---------------------------------------------------------------------------------
1 SUN CPU SUN DLT7000 35-7OGb External Tape Drive w/50-68 pin
cable
- ---------------------------------------------------------------------------------
1 IBM Netfiniity Rack Cabinet with Power Supply
- ---------------------------------------------------------------------------------
1 DISK SUB Data General Clarion 2900D Raid Array w/2 SPs, and 3 PS's
(20) Drive Chassis
- ---------------------------------------------------------------------------------
1 DISK SUB DG Clarion 64mb mirrored cache upgrade
- ---------------------------------------------------------------------------------
2 DISK SUB Solaris Interface Kit
- ---------------------------------------------------------------------------------
5 DISK SUB Data General 7200 RPM 18Gb Disk Drives
- ---------------------------------------------------------------------------------
1 UPS Exide Electronics Powerware Plus 12 10 Kva UPS for SUN
CPU, DISK SUB and JUKEBOX
- ---------------------------------------------------------------------------------
1 UPS Exide Power Distribution Module for Powerware Plus 12
W/(1) L5.30 and (3) 5-15 receptacles
- ---------------------------------------------------------------------------------
1 NDM NOM TCP-IP 2 Concurrent Sessions SUN
- ---------------------------------------------------------------------------------
3 PREPRO PC Config #1
- ---------------------------------------------------------------------------------
1 SUPPORT PC Config #1/software/modem
- ---------------------------------------------------------------------------------
2 CABLES 25' Differential SCSI Cables (M) HD68 Thumbscrews (M)
- ---------------------------------------------------------------------------------
2 CABLES Active Differential Terminators Min DB-50
=================================================================================
</TABLE>
<PAGE> 1
EXHIBIT j
CONSENT OF COUNSEL
AIM ADVISOR FUNDS, INC.
We hereby consent to the use of our name and to the reference to our
firm under the caption "Miscellaneous Information - Legal Matters" in the
Statement of Additional Information for AIM Advisor Flex Fund, AIM Advisor
International Value Fund, AIM Advisor Large Cap Value Fund, AIM Advisor
MultiFlex Fund and AIM Advisor Real Estate Fund, which is included in
Post-Effective Amendment No. 35 to the Registration Statement under the
Securities Act of 1933, as amended (No. 2-87377) and Amendment No. 36 to the
Registration Statement under the Investment Company Act of 1940, as amended
(No. 811-3886) on Form N-1A of AIM Advisor Funds, Inc.
/s/ BALLARD SPAHR ANDREWS & INGERSOLL, LLP
------------------------------------------
Ballard Spahr Andrews & Ingersoll, LLP
Philadelphia, Pennsylvania
February 16, 1999
<PAGE> 1
EXHIBIT (m) (3)
MASTER DISTRIBUTION PLAN
OF
AIM ADVISOR FUNDS, INC.
(Class B Shares)
(Securitization Feature)
SECTION 1. AIM Advisor Funds, Inc. (the "Fund"), on behalf of the
series of common stock set forth in Schedule A to this plan (the "Portfolios"),
may pay for distribution of the Class B Shares of such Portfolios (the "Shares")
which the Fund issues from time to time, pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (the "1940 Act"), according to the terms of this
Distribution Plan (the "Plan").
SECTION 2. The Fund may incur expenses for and pay any institution
selected to act as the Fund's agent for distribution of the Shares of any
Portfolio from time to time (each, a "Distributor") at the rates set forth on
Schedule A hereto based on the average daily net assets of each class of Shares
subject to any applicable limitations imposed by the Conduct Rules of the
National Association of Securities Dealers, Inc. in effect from time to time
(the "Conduct Rules"). All such payments are the legal obligation of the Fund
and not of any Distributor or its designee.
SECTION 3.
(a) Amounts set forth in Section 2 may be used to
finance any activity which is primarily intended to result in
the sale of the Shares, including, but not limited to,
expenses of organizing and conducting sales seminars and
running advertising programs, payment of finders fees,
printing of prospectuses and statements of additional
information (and supplements thereto) and reports for other
than existing shareholders, preparation and distribution of
advertising material and sales literature, payment of overhead
and supplemental payments to dealers and other institutions as
asset-based sales charges. Amounts set forth in Section 2 may
also be used to finance payments of service fees under a
shareholder service arrangement, which may be established by
each Distributor in accordance with Section 4, the costs of
administering the Plan. To the extent that amounts paid
hereunder are not used specifically to reimburse the
Distributor for any such expense, such amounts may be treated
as compensation for the Distributor's distribution-related
services. No provision of this Plan shall be interpreted to
prohibit any payments by the Fund during periods when the Fund
has suspended or otherwise limited sales.
(b) Subject to the provisions of Sections 8 and 9
hereof, amounts payable pursuant to Section 2 in respect of
Shares of each Portfolio shall be paid by the Fund to the
Distributor in respect of such Shares or, if more than one
institution has acted or is acting as Distributor in respect
of such Shares, then amounts payable pursuant to Section 2 in
respect of such Shares shall be paid to each such Distributor
in proportion to the number of such Shares sold by or
attributable to such Distributor's distribution efforts in
respect of such Shares in accordance with allocation
provisions of each Distributor's distribution agreement (the
"Distributor's
<PAGE> 2
12b-1 Share") notwithstanding that such Distributor's
distribution agreement with the Fund may have been terminated.
That portion of the amounts paid under the Plan that is not
paid or advanced by the Distributor to dealers or other
institutions that provide personal continuing shareholder
service as a service fee pursuant to Section 4 shall be deemed
an asset-based sales charge.
(c) Any Distributor may assign, transfer or pledge
("Transfer") to one or more designees (each an "Assignee"),
its rights to all or a designated portion of its Distributor's
12b-1 Share from time to time (but not such Distributor's
duties and obligations pursuant hereto or pursuant to any
distribution agreement in effect from time to time, if any,
between such Distributor and the Fund), free and clear of any
offsets or claims the Fund may have against such Distributor.
Each such Assignee's ownership interest in a Transfer of a
specific designated portion of a Distributor's 12b-1 Share is
hereafter referred to as an "Assignee's 12b-1 Portion." A
Transfer pursuant to this Section 3(c) shall not reduce or
extinguish any claims of the Fund against the Distributor.
(d) Each Distributor shall promptly notify the Fund
in writing of each such Transfer by providing the Fund with
the name and address of each such Assignee.
(e) A Distributor may direct the Fund to pay an
Assignee's 12b-1 Portion directly to such Assignee. In such
event, the Distributor shall provide the Fund with a monthly
calculation of the amount of (i) the Distributor's 12b-1
Share, and (ii) each Assignee's 12b-1 Portion, if any, for
such month (the "Monthly Calculation"). In such event, the
Fund shall, upon receipt of such notice and Monthly
Calculation from the Distributor, make all payments required
under such distribution agreement directly to the Assignee in
accordance with the information provided in such notice and
Monthly Calculation upon the same terms and conditions as if
such payments were to be paid to the Distributor.
(f) Alternatively, in connection with a Transfer, a
Distributor may direct the Fund to pay all of such
Distributor's 12b-1 Share from time to time to a depository or
collection agent designated by any Assignee, which depository
or collection agent may be delegated the duty of dividing such
Distributor's 12b-1 Share between the Assignee's 12b-1 Portion
and the balance of the Distributor's 12b-1 Share (such
balance, when distributed to the Distributor by the depository
or collection agent, the "Distributor's 12b-1 Portion"), in
which case only the Distributor's 12b-1 Portion may be subject
to offsets or claims the Fund may have against such
Distributor.
SECTION 4.
(a) Amounts expended by the Fund under the Plan shall
be used in part for the implementation by the Distributor of
shareholder service arrangements with respect to the Shares.
The maximum service fee payable to any provider of such
shareholder service shall be twenty-five one-hundredths of one
percent (0.25%) per annum of the average daily net assets of
the Shares attributable to the customers of such service
provider. All such payments are the legal obligation of the
Fund and not of any Distributor or its designee.
- 2 -
<PAGE> 3
(b) Pursuant to this Plan, the Distributor may enter
into agreements substantially in the form attached hereto as
Exhibit A ("Service Agreements") with such broker-dealers
("Dealers") as may be selected from time to time by the
Distributor for the provision of continuing shareholder
services in connection with Shares held by such Dealers'
clients and customers ("Customers") who may from time to time
directly or beneficially own Shares. The personal continuing
shareholder services to be rendered by Dealers under the
Service Agreements may include, but shall not be limited to,
some or all of the following: (i) distributing sales
literature; (ii) answering routine Customer inquiries
concerning the Fund and the Shares; (iii) assisting Customers
in changing dividend options, account designations and
addresses, and enrolling in any of several retirement plans
offered in connection with the purchase of Shares; (iv)
assisting in the establishment and maintenance of Customer
accounts and records, and in the processing of purchase and
redemption transactions; (v) investing dividends and capital
gains distributions automatically in Shares; (vi) performing
sub-accounting; (vii) providing periodic statements showing a
Customer's shareholder account balance and the integration of
such statements with those of other transactions and balances
in the Customer's account serviced by such institution; (viii)
forwarding applicable prospectuses, proxy statements, and
reports and notices to Customers who hold Shares; and (ix)
providing such other information and administrative services
as the Fund or the Customer may reasonably request.
(c) The Distributor may also enter into Bank
Shareholder Service Agreements substantially in the form
attached hereto as Exhibit B ("Bank Agreements") with selected
banks and financial institutions acting in an agency capacity
for their customers ("Banks"). Banks acting in such capacity
will provide some or all of the shareholder services to their
customers as set forth in the Bank Agreements from time to
time.
(d) The Distributor may also enter into Shareholder
Service Agreements substantially in the form attached hereto
as Exhibit C ("Bank Trust Department Agreements and Brokers
for Bank Trust Department Agreements") with selected bank
trust departments and brokers for bank trust departments. Such
bank trust departments and brokers for bank trust departments
will provide some or all of the shareholder services to
customers as set forth in the Bank Trust Department Agreements
and Brokers for Bank Trust Department Agreements from time to
time.
SECTION 5. This Plan shall not take effect until (i) it has been
approved, together with any related agreements, by votes of the majority of both
(a) the Board of Directors of the Fund, and (b) those directors of the Fund who
are not "interested persons" of the Fund (as defined in the 1940 Act) and have
no direct or indirect financial interest in the operation of this Plan or any
agreements related to it (the "Dis-interested Directors"), cast in person at a
meeting called for the purpose of voting on this Plan or such agreements, and
(ii) the execution by the Fund and A I M Distributors, Inc. of a Master
Distribution Agreement in respect of the Shares.
SECTION 6. Unless sooner terminated pursuant to Section 8, this Plan
shall continue in effect until March 3, 1999 and thereafter shall continue in
effect so long as such continuance is specifically approved, at least annually,
in the manner provided for approval of this Plan in Section 5.
- 3 -
<PAGE> 4
SECTION 7. Each Distributor shall provide to the Fund's Board of
Directors and the Board of Directors shall review, at least quarterly, a written
report of the amounts expended for distribution of the Shares and the purposes
for which such expenditures were made.
SECTION 8. This Plan may be terminated with respect to the Shares of
any Portfolio at any time by vote of a majority of the Dis-interested Directors,
or by vote of a majority of outstanding Shares of such Portfolio. Upon
termination of this Plan with respect to any or all such Classes, the obligation
of the Fund to make payments pursuant to this Plan with respect to such Classes
shall terminate, and the Fund shall not be required to make payments hereunder
beyond such termination date with respect to expenses incurred in connection
with Shares sold prior to such termination date, provided, in each case that
each of the requirements of a Complete Termination of this Plan in respect of
such class, as defined below, are met. A termination of this Plan with respect
to any or all Shares of any or all Portfolios shall not affect the obligation of
the Fund to withhold and pay to any Distributor contingent deferred sales
charges to which such distributor is entitled pursuant to any distribution
agreement. For purposes of this Section 8 a "Complete Termination" of this Plan
in respect of any Portfolio shall mean a termination of this Plan in respect of
such Portfolio, provided that: (i) the Dis-interested Directors of the Fund
shall have acted in good faith and shall have determined that such termination
is in the best interest of the Fund and the shareholders of such Portfolio; (ii)
and the Fund does not alter the terms of the contingent deferred sales charges
applicable to Shares outstanding at the time of such termination; and (iii)
unless the applicable Distributor at the time of such termination was in
material breach under the distribution agreement in respect of such Portfolio,
the Fund shall not, in respect of such Portfolio, pay to any person or entity,
other than such Distributor or its designee, either the asset-based sales charge
or the service fee (or any similar fee) in respect of the Shares sold by such
Distributor prior to such termination.
SECTION 9. Any agreement related to this Plan shall be made in writing,
and shall provide:
(a) that such agreement may be terminated with
respect to the Shares of any or all Portfolios at any time,
without payment of any penalty, by vote of a majority of the
Dis-interested Directors or by a vote of the majority of the
outstanding Shares of such Portfolio, on not more than sixty
(60) days' written notice to any other party to the agreement;
and
(b) that such agreement shall terminate automatically
in the event of its assignment; provided, however, that,
subject to the provisions of Section 8 hereof, if such
agreement is terminated for any reason, the obligation of the
Fund to make payments of (i) the Distributor's Share in
accordance with the directions of the Distributor pursuant to
Section 3(e) or (f) hereof if there exist Assignees for all or
any portion of such Distributor's 12b-1 Share, and (ii) the
remainder of such Distributor's 12b-1 Share to such
Distributor if there are no Assignees for such Distributor's
Share, pursuant to such agreement and this Plan will continue
with respect to the Shares until such Shares are redeemed or
automatically converted into another class of shares of the
Fund.
- 4 -
<PAGE> 5
SECTION 10. This Plan may not be amended to increase materially the
amount of distribution expenses provided for in Section 2 hereof unless such
amendment is approved by a vote of at least a "majority of the outstanding
voting securities" (as defined in the 1940 Act) of the Shares, and no material
amendment to the Plan shall be made unless approved in the manner provided for
in Section 5 hereof.
AIM ADVISOR FUNDS, INC.
(on behalf of its Class B Shares)
Attest: /s/ P. MICHELLE GRACE By: /s/ ROBERT H. GRAHAM
------------------------------- --------------------------------
Assistant Secretary President
Effective as of March 3, 1998.
- 5 -
<PAGE> 6
SCHEDULE A
TO
MASTER DISTRIBUTION PLAN
OF
AIM ADVISOR FUNDS, INC.
(DISTRIBUTION FEE)
<TABLE>
<CAPTION>
MAXIMUM
ASSET-BASED SERVICE AGGREGATE
FUND SALES CHARGE FEE ANNUAL FEE
---- ------------ ------- ----------
<S> <C> <C> <C>
AIM Advisor Flex Fund 0.75% 0.25% 1.00%
(Class B Shares)
AIM Advisor International Value Fund 0.75% 0.25% 1.00%
(Class B Shares)
AIM Advisor Large Cap Value Fund 0.75% 0.25% 1.00%
(Class B Shares)
AIM Advisor MultiFlex Fund 0.75% 0.25% 1.00%
(Class B Shares)
AIM Advisor Real Estate Fund 0.75% 0.25% 1.00%
(Class B Shares)
</TABLE>
- 6 -
<PAGE> 1
EXHIBIT m(4)
[LOGO ONLY]
A I M DISTRIBUTORS, INC.
SHAREHOLDER SERVICE AGREEMENT
FOR SALE OF SHARES
OF THE AIM MUTUAL FUNDS
This Shareholder Service Agreement (the "Agreement") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940, by each of the
AIM-managed mutual funds (or designated classes of such funds) listed in
Schedule A, which may be amended from time to time by AIM Distributors, Inc.
("Distributors") to this Agreement (the "Funds"), under a Distribution Plan (the
"Plan") adopted pursuant to said Rule. This Agreement, being made between
Distributors, solely as agent for such Funds and the undersigned authorized
dealer, defines the services to be provided by the authorized dealer for which
it is to receive payments pursuant to the Plan adopted by each of the Funds. The
Plan and the Agreement have been approved by a majority of the directors of each
of the Funds, including a majority of the directors who are not interested
persons of such Funds, and who have no direct or indirect financial interest in
the operation of the Plan or related agreements (the "Dis-interested
Directors"), by votes cast in person at a meeting called for the purpose of
voting on the Plan. Such approval included a determination that in the exercise
of their reasonable business judgement and in light of their fiduciary duties,
there is a reasonable likelihood that the Plan will benefit such Fund and its
shareholders.
1. To the extent that you provide distribution-related and continuing
personal shareholder services to customers who may, from time to time,
directly or beneficially own shares of the Funds, including but not
limited to, distributing sales literature, answering routine customer
inquiries regarding the Funds, assisting customers in changing dividend
options, account designations and addresses, and in enrolling into any
of several special investment plans offered in connection with the
purchase of the Funds' shares, assisting in the establishment and
maintenance of customer accounts and records and in the processing of
purchase and redemption transactions, investing dividends and capital
gains distributions automatically in shares and providing such other
services as the Funds or the customer may reasonably request, we,
solely as agent for the Funds, shall pay you a fee periodically or
arrange for such fee to be paid to you.
2. The fee paid with respect to each Fund will be calculated at the end of
each payment period (as indicated in Schedule A) for each business day
of the Fund during such payment period at the annual rate set forth in
Schedule A as applied to the average net asset value of the shares of
such Fund purchased or acquired through exchange on or after the Plan
Calculation Date shown for such Fund on Schedule A. Fees calculated in
this manner shall be paid to you only if your firm is the dealer of
record at the close of business on the last business day of the
applicable payment period, for the account in which such shares are
held (the "Subject Shares"). In cases where Distributors has advanced
payment to you of the first year's fee for shares sold at net asset
value and subject to a contingent deferred sales charge, no additional
payments will be made to you during the first year the Subject Shares
are held.
1/99
<PAGE> 2
3. The total of the fees calculated for all of the Funds listed on
Schedule A for any period with respect to which calculations are made
shall be paid to you within 45 days after the close of such period.
4. We reserve the right to withhold payment with respect to the Subject
Shares purchased by you and redeemed or repurchased by the Fund or by
us as Agent within seven (7) business days after the date of our
confirmation of such purchase. We reserve the right at any time to
impose minimum fee payment requirements before any periodic payments
will be made to you hereunder.
5. This Agreement and Schedule A does not require any broker-dealer to
provide transfer agency and recordkeeping related services as nominee
for its customers.
6. You shall furnish us and the Funds with such information as shall
reasonably be requested either by the directors of the Funds or by us
with respect to the fees paid to you pursuant to this Agreement.
7. We shall furnish the directors of the Funds, for their review on a
quarterly basis, a written report of the amounts expended under the
Plan by us and the purposes for which such expenditures were made.
8. Neither you nor any of your employees or agents are authorized to make
any representation concerning shares of the Funds except those
contained in the then current Prospectus or Statement of Additional
Information for the Funds, and you shall have no authority to act as
agent for the Funds or for Distributors.
9. We may enter into other similar Shareholder Service Agreements with any
other person without your consent.
10. This Agreement may be amended at any time without your consent by
Distributors mailing a copy of an amendment to you at address set forth
below. Such amendment shall become effective on the date specified in
such amendment unless you elect to terminate this Agreement within
thirty (30) days of your receipt of such amendment.
11. This Agreement may be terminated with respect to any Fund at any time
without payment of any penalty by the vote of a majority of the
directors of such Fund who are Dis-interested Directors or by a vote of
a majority of the Fund's outstanding shares, on sixty (60) days'
written notice. It will be terminated by any act which terminates
either the Selected Dealer Agreement between your firm and us or the
Fund's Distribution Plan, and in any event, it shall terminate
automatically in the event of its assignment as that term is defined in
the 1940 Act.
12. The provisions of the Distribution Agreement between any Fund and us,
insofar as they relate to the Plan, are incorporated herein by
reference. This Agreement shall become effective upon execution and
delivery hereof and shall continue in full force and effect as long as
the continuance of the Plan and this related Agreement are approved at
least annually by a vote of the directors, including a majority of the
Dis-interested Directors, cast in person at a meeting called for the
purpose of voting thereon. All communications to us should be sent to
the address of Distributors as shown at the bottom of this
1/99
<PAGE> 3
Agreement. Any notice to you shall be duly given if mailed or
telegraphed to you at the address specified by you below.
13. You represent that you provide to your customers who own shares of the
Funds personal services as defined from time to time in applicable
regulations of the National Association of Securities Dealers, Inc.,
and that you will continue to accept payments under this Agreement only
so long as you provide such services.
14. This Agreement shall be construed in accordance with the laws of the
State of Texas.
A I M DISTRIBUTORS, INC.
Date: By:
----------------------- --------------------------------------------
The undersigned agrees to abide by the foregoing terms and conditions.
Date: By:
----------------------- --------------------------------------------
Signature
--------------------------------------------
Print Name Title
--------------------------------------------
Dealer's Name
--------------------------------------------
Address
--------------------------------------------
City State Zip
--------------------------------------------
Telephone
Please sign both copies and return one copy of each to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
1/99
<PAGE> 4
SCHEDULE "A" TO
SHAREHOLDER SERVICE AGREEMENT
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
---- -------- ---------------------
<S> <C> <C>
AIM Advisor Flex Fund A Shares 0.25 August 4, 1997
AIM Advisor Flex Fund B Shares 0.25 March 3, 1998
AIM Advisor Flex Fund C Shares 1.00** August 4, 1997
AIM Advisor International Value Fund A Shares 0.25 August 4, 1997
AIM Advisor International Value Fund B Shares 0.25 March 3, 1998
AIM Advisor International Value Fund C Shares 1.00** August 4, 1997
AIM Advisor Large Cap Value Fund A Shares 0.25 August 4, 1997
AIM Advisor Large Cap Value Fund B Shares 0.25 March 3, 1998
AIM Advisor Large Cap Value Fund C Shares 1.00** August 4, 1997
AIM Advisor MultiFlex Fund A Shares 0.25 August 4, 1997
AIM Advisor MultiFlex Fund B Shares 0.25 March 3, 1998
AIM Advisor MultiFlex Fund C Shares 1.00** August 4, 1997
AIM Advisor Real Estate Fund A Shares 0.25 August 4, 1997
AIM Advisor Real Estate Fund B Shares 0.25 March 3, 1998
AIM Advisor Real Estate Fund C Shares 1.00** August 4, 1997
AIM Aggressive Growth Fund A Shares 0.25 July 1, 1992
AIM Aggressive Growth Fund B Shares 0.25 March 1, 1999
AIM Aggressive Growth Fund C Shares 1.00** March 1, 1999
AIM Asian Growth Fund A Shares 0.25 November 1, 1997
AIM Asian Growth Fund B Shares 0.25 November 1, 1997
AIM Asian Growth Fund C Shares 1.00** November 1, 1997
AIM Balanced Fund A Shares 0.25 October 18, 1993
AIM Balanced Fund B Shares 0.25 October 18, 1993
AIM Balanced Fund C Shares 1.00** August 4, 1997
AIM Blue Chip Fund A Shares 0.25 June 3, 1996
AIM Blue Chip Fund B Shares 0.25 October 1, 1996
AIM Blue Chip Fund C Shares 1.00** August 4, 1997
AIM Capital Development Fund A Shares 0.25 June 17, 1996
AIM Capital Development Fund B Shares 0.25 October 1, 1996
AIM Capital Development Fund C Shares 1.00** August 4, 1997
AIM Charter Fund A Shares 0.25 November 18, 1986
AIM Charter Fund B Shares 0.25 June 15, 1995
AIM Charter Fund C Shares 1.00** August 4, 1997
AIM Constellation Fund A Shares 0.25 September 9, 1986
AIM Constellation Fund B Shares 0.25 November 3, 1997
AIM Constellation Fund C Shares 1.00** August 4, 1997
AIM European Development Fund A Shares 0.25 November 1, 1997
AIM European Development Fund B Shares 0.25 November 1, 1997
AIM European Development Fund C Shares 1.00** November 1, 1997
AIM Global Aggressive Growth Fund A Shares 0.50** September 15, 1994
AIM Global Aggressive Growth Fund B Shares 0.25 September 15, 1994
AIM Global Aggressive Growth Fund C Shares 1.00** August 4, 1997
AIM Global Growth Fund A Shares 0.50** September 15, 1994
AIM Global Growth Fund B Shares 0.25 September 15, 1994
</TABLE>
1/99
<PAGE> 5
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
---- -------- ---------------------
<S> <C> <C>
AIM Global Growth Fund C Shares 1.00** August 4, 1997
AIM Global Income Fund A Shares 0.50** September 15, 1994
AIM Global Income Fund B Shares 0.25 September 15, 1994
AIM Global Income Fund C Shares 1.00** August 4, 1997
AIM Global Utilities Fund A Shares 0.25 July 1, 1992
AIM Global Utilities Fund B Shares 0.25 September 1, 1993
AIM Global Utilities Fund C Shares 1.00** August 4, 1997
AIM High Income Municipal Fund A Shares 0.25 December 22, 1997
AIM High Income Municipal Fund B Shares 0.25 December 22, 1997
AIM High Income Municipal Fund C Shares 1.00** December 22, 1997
AIM High Yield Fund A Shares 0.25 July 1, 1992
AIM High Yield Fund B Shares 0.25 September 1, 1993
AIM High Yield Fund C Shares 1.00** August 4, 1997
AIM High Yield Fund II A Shares 0.25 October 1, 1998
AIM High Yield Fund II B Shares 0.25 November 20, 1998
AIM High Yield Fund II C Shares 1.00** November 20, 1998
AIM Income Fund A Shares 0.25 July 1, 1992
AIM Income Fund B Shares 0.25 September 1, 1993
AIM Income Fund C Shares 1.00** August 4, 1997
AIM Intermediate Government Fund A Shares 0.25 July 1, 1992
AIM Intermediate Government Fund B Shares 0.25 September 1, 1993
AIM Intermediate Government Fund C Shares 1.00** August 4, 1997
AIM International Equity Fund A Shares 0.25 May 21, 1992
AIM International Equity Fund B Shares 0.25 September 15, 1994
AIM International Equity Fund C Shares 1.00** August 4, 1997
AIM Large Cap Growth Fund A Shares 0.25 March 1, 1999
AIM Large Cap Growth Fund B Shares 0.25 March 1, 1999
AIM Large Cap Growth Fund C Shares 1.00** March 1, 1999
AIM Limited Maturity Treasury Fund 0.15 December 2, 1987
AIM Money Market Fund B Shares 0.25 October 18, 1993
AIM Money Market Fund C Shares 1.00** August 4, 1997
AIM Money Market Fund Cash Reserve Shares 0.25 October 18, 1993
AIM Municipal Bond Fund A Shares 0.25 July 1, 1992
AIM Municipal Bond Fund B Shares 0.25 September 1, 1993
AIM Municipal Bond Fund C Shares 1.00** August 4, 1997
AIM Select Growth Fund A Shares 0.25 July 1, 1992
AIM Select Growth Fund B Shares 0.25 September 1,1993
AIM Select Growth Fund C Shares 1.00** August 4, 1997
AIM Small Cap Opportunities Fund A Shares 0.25 June 29, 1998
AIM Small Cap Opportunities Fund B Shares 0.25 July 13, 1998
AIM Small Cap Opportunities Fund C Shares 1.00** December 30, 1998
AIM Tax-Exempt Bond Fund of Connecticut A Shares 0.25 July 1, 1992
AIM Tax-Exempt Cash Fund A Shares 0.10 July 1, 1992
AIM Value Fund A Shares 0.25 July 1, 1992
AIM Value Fund B Shares 0.25 October 18, 1993
AIM Value Fund C Shares 1.00** August 4, 1997
AIM Weingarten Fund A Shares 0.25 September 9, 1986
AIM Weingarten Fund B Shares 0.25 June 15, 1995
AIM Weingarten Fund C Shares 1.00** August 4, 1997
</TABLE>
1/99
<PAGE> 6
*Frequency of Payments: Quarterly, B and C share payments begin after an initial
12 month holding period. Where the broker dealer or financial institution waives
the 1% up-front commission on Class C shares, payments commence immediately.
**Of this amount, 0.25% is paid as a shareholder servicing fee and the remainder
is paid as an asset-based sales charge, as those terms are defined under the
rules of the National Association of Securities Dealers, Inc.
Minimum Payments: $50 (with respect to all funds in the aggregate.)
No payment pursuant to this Schedule is payable to a dealer, bank or other
service provider for the first year with respect to sales of $1 million or more,
at no load, in cases where A I M Distributors, Inc. has advanced the service fee
to the dealer, bank or other service provider.
THE FOLLOWING FUNDS ARE ADDED AS OF THE CLOSE OF BUSINESS MAY 29, 1998:
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
---- -------- ---------------------
<S> <C> <C>
AIM Basic Value Fund A Shares 0.25 May 29, 1998
AIM Basic Value Fund B Shares 0.25 May 29, 1998
AIM Basic Value Fund C Shares 1.00** May 3, 1999
AIM Developing Markets Fund A Shares 0.25 May 29, 1998
AIM Developing Markets Fund B Shares 0.25 May 29, 1998
AIM Developing Markets Fund C Shares 1.00** March 1, 1999
AIM Europe Growth Fund A Shares 0.25 May 29, 1998
AIM Europe Growth Fund B Shares 0.25 May 29, 1998
AIM Europe Growth Fund C Shares 1.00** May 3, 1999
AIM Global Consumer Products and
Services Fund A Shares 0.40** May 29, 1998
AIM Global Consumer Products and
Services Fund B Shares 0.25 May 29, 1998
AIM Global Consumer Products and
Services Fund C Shares 1.00** March 1, 1999
AIM Global Financial Services Fund A Shares 0.40** May 29, 1998
AIM Global Financial Services Fund B Shares 0.25 May 29, 1998
AIM Global Financial Services Fund C Shares 1.00** March 1, 1999
AIM Global Government Income Fund A Shares 0.25 May 29, 1998
AIM Global Government Income Fund B Shares 0.25 May 29, 1998
AIM Global Government Income Fund C Shares 1.00** March 1, 1999
AIM Global Growth & Income Fund A Shares 0.25 May 29, 1998
AIM Global Growth & Income Fund B Shares 0.25 May 29, 1998
AIM Global Growth & Income Fund C Shares 1.00** March 1, 1999
AIM Global Health Care Fund A Shares 0.40** May 29, 1998
AIM Global Health Care Fund B Shares 0.25 May 29, 1998
AIM Global Health Care Fund C Shares 1.00** March 1, 1999
AIM Emerging Markets Debt Fund A Shares 0.25 May 29, 1998
AIM Emerging Markets Debt Fund B Shares 0.25 May 29, 1998
AIM Emerging Markets Debt Fund C Shares 1.00** March 1, 1999
AIM Global Infrastructure Fund A Shares 0.40** May 29, 1998
AIM Global Infrastructure Fund B Shares 0.25 May 29, 1998
AIM Global Infrastructure Fund C Shares 1.00** March 1, 1999
AIM Global Resources Fund A Shares O.40** May 29, 1998
AIM Global Resources Fund B Shares O.25 May 29, 1998
AIM Global Resources Fund C Shares 1.00** March 1, 1999
AIM Global Telecommunications Fund A Shares 0.40** May 29, 1998
AIM Global Telecommunications Fund B Shares 0.25 May 29, 1998
AIM Global Telecommunications Fund C Shares 1.00** March 1, 1999
</TABLE>
1/99
<PAGE> 7
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
---- -------- ---------------------
<S> <C> <C>
AIM Japan Growth Fund A Shares 0.25 May 29, 1998
AIM Japan Growth Fund B Shares 0.25 May 29, 1998
AIM Japan Growth Fund C Shares 1.00** March 1, 1999
AIM Latin American Growth Fund A Shares 0.40** May 29, 1998
AIM Latin American Growth Fund B Shares 0.25 May 29, 1998
AIM Latin American Growth Fund C Shares 1.00** May 3, 1999
AIM Mid Cap Equity Fund A Shares 0.25 May 29, 1998
AIM Mid Cap Equity Fund B Shares 0.25 May 29, 1998
AIM Mid Cap Equity Fund C Shares 1.00** May 3, 1999
AIM Global Trends Fund A Shares 0.40** May 29, 1998
AIM Global Trends Fund B Shares 0.25 May 29, 1998
AIM Global Trends Fund C Shares 1.00** May 29, 1998
AIM New Pacific Growth Fund A Shares 0.25 May 29, 1998
AIM New Pacific Growth Fund B Shares 0.25 May 29, 1998
AIM New Pacific Growth Fund C Shares 1.00** May 3, 1999
AIM Small Cap Growth Fund A Shares 0.25 May 29, 1998
AIM Small Cap Growth Fund B Shares 0.25 May 29, 1998
AIM Small Cap Growth Fund C Shares 1.00** May 3, 1999
AIM Strategic Income Fund A Shares 0.25 May 29, 1998
AIM Strategic Income Fund B Shares 0.25 May 29, 1998
AIM Strategic Income Fund C Shares 1.00** March 1, 1999
</TABLE>
*Frequency of Payments:
EFFECTIVE UNTIL JUNE 30, 1998: Class A and B share payments commence immediately
and are paid quarterly. Class C share payments commence after an initial twelve
month holding period and are paid quarterly.
**Of this amount, 0.25% is paid as a shareholder servicing fee and the remainder
is paid as an asset-based sales charge, as those terms are defined under the
rules of the National Association of Securities Dealers, Inc.
EFFECTIVE JULY 1, 1998: B share payments, like C share payments, will begin
after an initial 12 month holding period and are paid quarterly. Where the
broker dealer or financial institution waives the 1% up-front commission on
Class C shares, payments commence immediately.
**Of this amount, 0.25% is paid as a shareholder servicing fee and the remainder
is paid as an asset-based sales charge, as those terms are defined under the
rules of the National Association of Securities Dealers, Inc.
Minimum Payments: $50 (with respect to all funds in the aggregate.)
No payment pursuant to this Schedule is payable to a dealer, bank or other
service provider for the first year with respect to sales of $1 million or more,
at no load, in cases where A I M Distributors, Inc. has advanced the service fee
to the dealer, bank or other service provider.
1/99
<PAGE> 1
EXHIBIT m(5)
[LOGO ONLY]
A I M DISTRIBUTORS, INC.
BANK SHAREHOLDER
SERVICE AGREEMENT
We desire to enter into an Agreement with A I M Distributors, Inc. (the
"Company") acting as agent for the "AIM Funds", for servicing of our agency
clients who are shareholders of, and the administration of such shareholder
accounts in the shares of the AIM Funds (hereinafter referred to as the
"Shares"). Subject to the Company's acceptance of this Agreement, the terms and
conditions of this Agreement shall be as follows:
1. We shall provide continuing personal shareholder and administration
services for holders of the Shares who are also our clients. Such
services to our clients may include, without limitation, some or all of
the following: answering shareholder inquires regarding the Shares and
the AIM Funds; performing subaccounting; establishing and maintaining
shareholder accounts and records; processing and bunching customer
purchase and redemption transactions; providing periodic statements
showing a shareholder's account balance and the integration of such
statements with those of other transactions and balances in the
shareholder's other accounts serviced by us; forwarding applicable AIM
Funds prospectuses, proxy statements, reports and notices to our
clients who are holders of Shares; and such other administrative
services as you reasonably may request, to the extent we are permitted
by applicable statute, rule or regulations to provide such services. We
represent that we shall accept fees hereunder only so long as we
continue to provide personal shareholder services to our clients.
2. Shares purchased by us as agents for our clients will be registered
(choose one) (in our name or in the name of our nominee) (in the names
of our clients). The client will be the beneficial owner of the Shares
purchased and held by us in accordance with the client's instructions
and the client may exercise all applicable rights of a holder of such
Shares. We agree to transmit to the AIM Funds' transfer agent in a
timely manner, all purchase orders and redemption requests of our
clients and to forward to each client any proxy statements, periodic
shareholder reports and other communications received from the Company
by us on behalf of our clients. The Company agrees to pay all
out-of-pocket expenses actually incurred by us in connection with the
transfer by us of such proxy statements and reports to our clients as
required by applicable law or regulation. We agree to transfer record
ownership of a client's Shares to the client promptly upon the request
of a client. In addition, record ownership will be promptly transferred
to the client in the event that the person or entity ceases to be our
client.
3. Within three (3) business days of placing a purchase order we agree to
send (i) a cashiers check to the Company, or (ii) a wire transfer to
the AIM Funds' transfer agent, in an amount equal to the amount of all
purchase orders placed by us on behalf of our clients and accepted by
the Company.
4. We agree to make available to the Company, upon the Company's request,
such information relating to our clients who are beneficial owners of
Shares and their transactions in such Shares as may be required by
applicable laws and regulations or as may be reasonably requested by
the
1/99
<PAGE> 2
Bank Shareholder Service Agreement Page 2
Company. The names of our customers shall remain our sole property and
shall not be used by the Company for any other purpose except as needed
for servicing and information mailings in the normal course of business
to holders of the Shares.
5. We shall provide such facilities and personnel (which may be all or any
part of the facilities currently used in our business, or all or any
personnel employed by us) as may be necessary or beneficial in carrying
out the purposes of this Agreement.
6. Except as may be provided in a separate written agreement between the
Company and us, neither we nor any of our employees or agents are
authorized to assist in distribution of any of the AIM Funds' shares
except those contained in the then current Prospectus applicable to the
Shares; and we shall have no authority to act as agent for the Company
or the AIM Funds. Neither the AIM Funds, A I M Advisors, Inc. nor A I M
Distributors, Inc. will be a party, nor will they be represented as a
party, to any agreement that we may enter into with our clients.
7. In consideration of the services and facilities described herein, we
shall receive from the Company on behalf of the AIM Funds an annual
service fee, payable at such intervals as may be set forth in Schedule
A hereto, of a percentage of the aggregate average net asset value of
the Shares owned beneficially by our clients during each payment
period, as set forth in Schedule A hereto, which may be amended from
time to time by the Company. We understand that this Agreement and the
payment of such service fees has been authorized and approved by the
Boards of Directors/Trustees of the AIM Funds, and is subject to
limitations imposed by the National Association of Securities Dealers,
Inc. In cases where the Company has advanced payments to us of the
first year's fee for shares sold with a contingent deferred sales
charge, no payments will be made to us during the first year the
subject Shares are held.
8. The AIM Funds reserve the right, at their discretion and without
notice, to suspend the sale of any Shares or withdraw the sale of
Shares.
9. We understand that the Company reserves the right to amend this
Agreement or Schedule A hereto at any time without our consent by
mailing a copy of an amendment to us at the address set forth below.
Such amendment shall become effective on the date specified in such
amendment unless we elect to terminate this Agreement within thirty
(30) days of our receipt of such amendment.
10. This Agreement may be terminated at any time by the Company on not less
than 15 days' written notice to us at our principal place of business.
We, on 15 days' written notice addressed to the Company at its
principal place of business, may terminate this Agreement, said
termination to become effective on the date of mailing notice to
Company of such termination. The Company's failure to terminate for any
cause shall not constitute a waiver of the Company's right to terminate
at a later date for any such cause. This Agreement shall terminate
automatically in the event of its assignment, the term "assignment" for
this purpose having the meaning defined in Section 2(a)(4) of the
Investment Company Act of 1940, as amended.
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<PAGE> 3
Bank Shareholder Service Agreement Page 3
11. All communications to the Company shall be sent to it at Eleven
Greenway Plaza, Suite 100, Houston, Texas, 77046-1173. Any notice to us
shall be duly given if mailed or telegraphed to us at this address
shown on this Agreement.
12. This Agreement shall become effective as of the date when it is
executed and dated below by the Company. This Agreement and all rights
and obligations of the parties hereunder shall be governed by and
construed under the laws of the State of Texas.
A I M DISTRIBUTORS, INC.
Date: By: X
-------------------- ----------------------------------------------
The undersigned agrees to abide by the foregoing terms and conditions.
Date: By: X
-------------------- ----------------------------------------------
Signature
----------------------------------------------
Print Name Title
----------------------------------------------
Dealer's Name
----------------------------------------------
Address
----------------------------------------------
City State Zip
Please sign both copies and return one copy of each to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
1/99
<PAGE> 4
Bank Shareholder Service Agreement Page 4
SCHEDULE "A" TO
SHAREHOLDER SERVICE AGREEMENT
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
---- -------- ---------------------
<S> <C> <C>
AIM Advisor Flex Fund A Shares 0.25 August 4, 1997
AIM Advisor Flex Fund B Shares 0.25 March 3, 1998
AIM Advisor Flex Fund C Shares 1.00** August 4, 1997
AIM Advisor International Value Fund A Shares 0.25 August 4, 1997
AIM Advisor International Value Fund B Shares 0.25 March 3, 1998
AIM Advisor International Value Fund C Shares 1.00** August 4, 1997
AIM Advisor Large Cap Value Fund A Shares 0.25 August 4, 1997
AIM Advisor Large Cap Value Fund B Shares 0.25 March 3, 1998
AIM Advisor Large Cap Value Fund C Shares 1.00** August 4, 1997
AIM Advisor MultiFlex Fund A Shares 0.25 August 4, 1997
AIM Advisor MultiFlex Fund B Shares 0.25 March 3, 1998
AIM Advisor MultiFlex Fund C Shares 1.00** August 4, 1997
AIM Advisor Real Estate Fund A Shares 0.25 August 4, 1997
AIM Advisor Real Estate Fund B Shares 0.25 March 3, 1998
AIM Advisor Real Estate Fund C Shares 1.00** August 4, 1997
AIM Aggressive Growth Fund A Shares 0.25 July 1, 1992
AIM Aggressive Growth Fund B Shares 0.25 March 1, 1999
AIM Aggressive Growth Fund C Shares 1.00** March 1, 1999
AIM Asian Growth Fund A Shares 0.25 November 1, 1997
AIM Asian Growth Fund B Shares 0.25 November 1, 1997
AIM Asian Growth Fund C Shares 1.00** November 1, 1997
AIM Balanced Fund A Shares 0.25 October 18, 1993
AIM Balanced Fund B Shares 0.25 October 18, 1993
AIM Balanced Fund C Shares 1.00** August 4, 1997
AIM Blue Chip Fund A Shares 0.25 June 3, 1996
AIM Blue Chip Fund B Shares 0.25 October 1, 1996
AIM Blue Chip Fund C Shares 1.00** August 4, 1997
AIM Capital Development Fund A Shares 0.25 June 17, 1996
AIM Capital Development Fund B Shares 0.25 October 1, 1996
AIM Capital Development Fund C Shares 1.00** August 4, 1997
AIM Charter Fund A Shares 0.25 November 18, 1986
AIM Charter Fund B Shares 0.25 June 15, 1995
AIM Charter Fund C Shares 1.00** August 4, 1997
AIM Constellation Fund A Shares 0.25 September 9, 1986
AIM Constellation Fund B Shares 0.25 November 3, 1997
AIM Constellation Fund C Shares 1.00** August 4, 1997
AIM European Development Fund A Shares 0.25 November 1, 1997
AIM European Development Fund B Shares 0.25 November 1, 1997
AIM European Development Fund C Shares 1.00** November 1, 1997
AIM Global Aggressive Growth Fund A Shares 0.50** September 15, 1994
AIM Global Aggressive Growth Fund B Shares 0.25 September 15, 1994
</TABLE>
1/99
<PAGE> 5
Bank Shareholder Service Agreement Page 5
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
---- -------- ---------------------
<S> <C> <C>
AIM Global Aggressive Growth Fund C Shares 1.00** August 4, 1997
AIM Global Growth Fund A Shares 0.50 September 15, 1994
AIM Global Growth Fund B Shares 0.25 September 15, 1994
AIM Global Growth Fund C Shares 1.00** August 4, 1997
AIM Global Income Fund A Shares 0.50 September 15, 1994
AIM Global Income Fund B Shares 0.25 September 15, 1994
AIM Global Income Fund C Shares 1.00** August 4, 1997
AIM Global Utilities Fund A Shares 0.25 July 1, 1992
AIM Global Utilities Fund B Shares 0.25 September 1, 1993
AIM Global Utilities Fund C Shares 1.00** August 4, 1997
AIM High Income Municipal Fund A Shares 0.25 December 22, 1997
AIM High Income Municipal Fund B Shares 0.25 December 22, 1997
AIM High Income Municipal Fund C Shares 1.00** December 22, 1997
AIM High Yield Fund A Shares 0.25 July 1, 1992
AIM High Yield Fund B Shares 0.25 September 1, 1993
AIM High Yield Fund C Shares 1.00** August 4, 1997
AIM High Yield Fund II A Shares 0.25 October 1, 1998
AIM High Yield Fund II B Shares 0.25 November 20, 1998
AIM High Yield Fund II C Shares 1.00** November 20, 1998
AIM Income Fund A Shares 0.25 July 1, 1992
AIM Income Fund B Shares 0.25 September 1, 1993
AIM Income Fund C Shares 1.00** August 4, 1997
AIM Intermediate Government Fund A Shares 0.25 July 1, 1992
AIM Intermediate Government Fund B Shares 0.25 September 1, 1993
AIM Intermediate Government Fund C Shares 1.00** August 4, 1997
AIM International Equity Fund A Shares 0.25 May 21, 1992
AIM International Equity Fund B Shares 0.25 September 15, 1994
AIM International Equity Fund C Shares 1.00** August 4, 1997
AIM Large Cap Growth Fund A Shares 0.25 March 1, 1999
AIM Large Cap Growth Fund B Shares 0.25 March 1, 1999
AIM Large Cap Growth Fund C Shares 1.00** March 1, 1999
AIM Limited Maturity Treasury Fund 0.15 December 2, 1987
AIM Money Market Fund B Shares 0.25 October 18, 1993
AIM Money Market Fund C Shares 1.00** August 4, 1997
AIM Money Market Fund Cash Reserve Shares 0.25 October 18, 1993
AIM Municipal Bond Fund A Shares 0.25 July 1, 1992
AIM Municipal Bond Fund B Shares 0.25 September 1, 1993
AIM Municipal Bond Fund C Shares 1.00** August 4, 1997
AIM Select Growth Fund A Shares 0.25 July 1, 1992
AIM Select Growth Fund B Shares 0.25 September 1,1993
AIM Select Growth Fund C Shares 1.00** August 4, 1997
AIM Small Cap Opportunities Fund A Shares 0.25 June 29, 1998
AIM Small Cap Opportunities Fund B Shares 0.25 July 13, 1998
AIM Small Cap Opportunities Fund C Shares 1.00** December 30, 1998
</TABLE>
1/99
<PAGE> 6
Bank Shareholder Service Agreement Page 6
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
---- -------- ---------------------
<S> <C> <C>
AIM Tax-Exempt Bond Fund of Connecticut A Shares 0.25 July 1, 1992
AIM Tax-Exempt Cash Fund A Shares 0.10 July 1, 1992
AIM Value Fund A Shares 0.25 July 1, 1992
AIM Value Fund B Shares 0.25 October 18, 1993
AIM Value Fund C Shares 1.00** August 4, 1997
AIM Weingarten Fund A Shares 0.25 September 9, 1986
AIM Weingarten Fund B Shares 0.25 June 15, 1995
AIM Weingarten Fund C Shares 1.00** August 4, 1997
</TABLE>
*Frequency of Payments: Quarterly, B and C share payments begin after an initial
12 month holding period. Where the broker dealer or financial institution waives
the 1% up-front commission on Class C shares, payments commence immediately.
**Of this amount, 0.25% is paid as a shareholder servicing fee and the remainder
is paid as an asset-based sales charge, as those terms are defined under the
rules of the National Association of Securities Dealers, Inc.
Minimum Payments: $50 (with respect to all funds in the aggregate.)
No payment pursuant to this Schedule is payable to a dealer, bank or other
service provider for the first year with respect to sales of $1 million or more,
at no load, in cases where A I M Distributors, Inc. has advanced the service fee
to the dealer, bank or other service provider.
THE FOLLOWING FUNDS ARE ADDED AS OF THE CLOSE OF BUSINESS MAY 29, 1998:
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
---- -------- ---------------------
<S> <C> <C>
AIM Basic Value Fund A Shares 0.25 May 29, 1998
AIM Basic Value Fund B Shares 0.25 May 29, 1998
AIM Basic Value Fund C Shares 1.00** May 3, 1999
AIM Developing Markets Fund A Shares 0.25 May 29, 1998
AIM Developing Markets Fund B Shares 0.25 May 29, 1998
AIM Developing Markets Fund C Shares 1.00** March 3, 1999
AIM Europe Growth Fund A Shares 0.25 May 29, 1998
AIM Europe Growth Fund B Shares 0.25 May 29, 1998
AIM Europe Growth Fund C Shares 1.00** May 3, 1999
AIM Global Consumer Products and
Services Fund A Shares 0.40** May 29, 1998
AIM Global Consumer Products and
Services Fund B Shares 0.25 May 29, 1998
AIM Global Consumer Products and
Services Fund C Shares 1.00** March 1, 1999
</TABLE>
1/99
<PAGE> 7
Bank Shareholder Service Agreement Page 7
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
---- -------- ---------------------
<S> <C> <C>
AIM Global Financial Services Fund A Shares 0.40** May 29, 1998
AIM Global Financial Services Fund B Shares 0.25 May 29, 1998
AIM Global Financial Services Fund C Shares 1.00** March 1, 1999
AIM Global Government Income Fund A Shares 0.25 May 29, 1998
AIM Global Government Income Fund B Shares 0.25 May 29, 1998
AIM Global Government Income Fund C Shares 1.00** March 1, 1999
AIM Global Growth & Income Fund A Shares 0.25 May 29, 1998
AIM Global Growth & Income Fund B Shares 0.25 May 29, 1998
AIM Global Growth & Income Fund C Shares 1.00** March 1, 1999
AIM Global Health Care Fund A Shares 0.40** May 29, 1998
AIM Global Health Care Fund B Shares 0.25 May 29, 1998
AIM Global Health Care Fund C Shares 1.00** March 1, 1999
AIM Emerging Markets Debt Fund A Shares 0.25 May 29, 1998
AIM Emerging Markets Debt Fund B Shares 0.25 May 29, 1998
AIM Emerging Markets Debt Fund C Shares 1.00** March 1, 1999
AIM Global Infrastructure Fund A Shares 0.40** May 29, 1998
AIM Global Infrastructure Fund B Shares 0.25 May 29, 1998
AIM Global Infrastructure Fund C Shares 1.00** March 1, 1999
AIM Global Resources Fund A Shares 0.40** May 29, 1998
AIM Global Resources Fund B Shares 0.25 May 29, 1998
AIM Global Resources Fund C Shares 1.00** March 1, 1999
AIM Global Telecommunications Fund A Shares 0.40** May 29, 1998
AIM Global Telecommunications Fund B Shares 0.25 May 29, 1998
AIM Global Telecommunications Fund C Shares 1.00** March 1, 1999
AIM Japan Growth Fund A Shares 0.25 May 29, 1998
AIM Japan Growth Fund B Shares 0.25 May 29, 1998
AIM Japan Growth Fund C Shares 1.00** May 3, 1999
AIM Latin American Growth Fund A Shares 0.40** May 29, 1998
AIM Latin American Growth Fund B Shares 0.25 May 29, 1998
AIM Latin American Growth Fund C Shares 1.00** March 1, 1999
AIM Mid Cap Equity Fund A Shares 0.25 May 29, 1998
AIM Mid Cap Equity Fund B Shares 0.25 May 29, 1998
AIM Mid Cap Equity Fund C Shares 1.00** May 3, 1999
AIM Global Trends Fund A Shares 0.40** May 29, 1998
AIM Global Trends Fund B Shares 0.25 May 29, 1998
AIM Global Trends Fund C Shares 1.00** May 29, 1998
AIM New Pacific Growth Fund A Shares 0.25 May 29, 1998
AIM New Pacific Growth Fund B Shares 0.25 May 29, 1998
AIM New Pacific Growth Fund C Shares 1.00** May 3, 1999
AIM Small Cap Growth Fund A Shares 0.25 May 29, 1998
AIM Small Cap Growth Fund B Shares 0.25 May 29, 1998
AIM Small Cap Growth Fund C Shares 1.00** May 3, 1999
AIM Strategic Income Fund A Shares 0.25 May 29, 1998
AIM Strategic Income Fund B Shares 0.25 May 29, 1998
AIM Strategic Income Fund C Shares 1.00** March 1, 1999
</TABLE>
*Frequency of Payments:
1/99
<PAGE> 8
Bank Shareholder Service Agreement Page 8
EFFECTIVE UNTIL JUNE 30, 1998: Class A and B share payments commence immediately
and are paid quarterly. Class C share payments commence after an initial twelve
month holding period and are paid quarterly.
**Of this amount, 0.25% is paid as a shareholder servicing fee and the remainder
is paid as an asset-based sales charge, as those terms are defined under the
rules of the National Association of Securities Dealers, Inc.
EFFECTIVE JULY 1, 1998: B share payments, like C share payments, will begin
after an initial 12 month holding period and are paid quarterly. Where the
broker dealer or financial institution waives the 1% up-front commission on
Class C shares, payments commence immediately.
Minimum Payments: $50 (with respect to all funds in the aggregate.)
No payment pursuant to this Schedule is payable to a dealer, bank or other
service provider for the first year with respect to sales of $1 million or more,
at no load, in cases where A I M Distributors, Inc. has advanced the service fee
to the dealer, bank or other service provider.
1/99
<PAGE> 1
EXHIBIT m(6)
VARIABLE GROUP ANNUITY CONTRACTHOLDER SERVICE AGREEMENT
This Variable Group Annuity Contractholder Service Agreement (the
"Agreement") has been adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (the "1940 Act") under a Distribution Plan adopted pursuant
to said Rule. This Agreement, being made between A I M Distributors, Inc.
("Distributors") and the authorized insurance company, sets forth the terms for
the provision of specialized services to holders of Group Annuity Contracts (the
"Contracts") issued by insurance company separate accounts to employers for
their pension, stock bonus or profit-sharing plans qualified under Section
401(a) of the Internal Revenue Code of 1986, as amended (the "Plans"), where
amounts contributed under such plans are invested pursuant to the Contracts in
shares of one or more of the series portfolios of the AIM - managed mutual funds
(or designated classes of such funds) (the "Fund(s)") listed in Appendix A,
attached hereto, which may be amended from time to time by Distributors.
Distributors' role in these arrangements will be solely as agent for the Funds.
1. To the extent you provide specialized services to holders of
Contracts who have selected the Fund(s) for purposes of their Group Annuity
Contracts ("Contractholders") you will receive payment pursuant to the
distribution plan adopted by each of the Funds. Such services to Group
Contractholders may include, without limitation, some or all of the
following: answering inquiries regarding the Fund(s); performing
sub-accounting for Contractholders; establishing and maintaining
Contractholder accounts and records; processing and bunching purchase and
redemption transactions; providing periodic statements of Contract account
balances; forwarding such reports and notices to Contractholders relative
to the Fund(s) as we deem necessary; generally, facilitating communications
with Contractholders concerning investments in the Fund(s) on behalf of
Plan participants; and performing such other administrative services as we
deem to be necessary or desirable, to the extent permitted by applicable
statute, rule or regulation. You represent that you will accept a fee
hereunder only so long as you continue to provide personal services to
Contractholders.
2. Shares of the Fund(s) purchased by you will be registered in your
name and you may exercise all applicable rights of a holder of such Shares.
You agree to transmit to the Funds, in a timely manner, all purchase orders
and redemption requests and to forward to each of your Contractholders as
you deem necessary, periodic shareholder reports and other communications
received from the Funds.
3. You agree to wire to the Fund(s)' custodian bank, within three (3)
business days of the placing of a purchase order, federal funds in an
amount equal to the amount of all purchase orders placed by you on behalf
of your Contractholders and accepted by the Funds (net of any redemption
orders placed by you on behalf of your Contractholders).
C-1
<PAGE> 2
4. You shall provide such facilities and personnel (which may be all
or any part of the facilities currently used in your business, or all or
any personnel employed by you) as may be necessary or beneficial in
carrying out the purposes of this Agreement.
5. Except as may be provided in a separate written agreement between
Distributors and you, neither you nor any of your employees or agents are
authorized to assist in the distribution of any shares of the Fund(s) to
the public or to make any representations to Contractholders concerning the
Fund(s) except those contained in the then current prospectus applicable to
the Fund(s). Neither the Funds, A I M Advisors, Inc. ("Advisors"),
Distributors nor any of their affiliates will be a party, nor will they be
represented as a party, to any Group Annuity Contract agreement between you
and the Contractholders nor shall the Funds, Advisors, Distributors or any
of their affiliates participate, directly or indirectly, in any
compensation that you may receive from Contractholders and their Plans'
participants.
6. In consideration of the services and facilities described herein,
you shall receive an annual fee, payable quarterly, as set forth in
Appendix A, of the aggregate average net asset value of shares of the
Fund(s) owned by you during each quarterly period for the benefit of
Contractholders' Plans' participants. You understand that this Agreement
and the payment of such distribution fees have been authorized and approved
by the Boards of Directors/Trustees of the Fund(s). You further understand
that this Agreement and the fees payable hereunder are subject to
limitations imposed by applicable rules of the National Association of
Securities Dealers, Inc.
7. The Funds reserve the right, at their discretion and without
notice, to suspend the sale of their shares or to withdraw the sale of
their shares.
8. This Agreement may be amended at any time without your consent by
mailing a copy of an amendment to you at the address set forth below. Such
amendment shall become effective on the date set forth in such amendment
unless you terminate this Agreement as set forth below within thirty (30)
days of your receipt of such amendment.
9. This Agreement may be terminated at any time by us on not less than
60 days' written notice to you at your principal place of business. You may
terminate this Agreement on 60 days' written notice addressed to us at our
principal place of business. We may also terminate this Agreement for cause
on violation by you of any of the provisions of this Agreement, said
termination to become effective on the date of mailing notice to you of
such termination. Our failure to terminate for any cause shall not
constitute a waiver of our right to terminate at a later date for any such
cause.
This Agreement may be terminated with respect to any Fund at any
time without payment of any penalty by the vote of a majority of the
directors/trustees of such Fund who are Dis-interested Directors/Trustees,
as defined in the 1940 Act, or by a vote of a majority of the Fund's
outstanding shares, on sixty (60) days' written notice. It will be
terminated by any act which terminates either the Fund's Distribution
Agreement with us, the Selected Dealer Agreement between your firm and us
or the Fund's Distribution Plan, and in any event, it shall terminate
automatically in the event of its assignment as that term is defined in the
1940 Act.
C-2
<PAGE> 3
10. All communications to us shall be sent to 11 Greenway Plaza, Suite
100, Houston, Texas 77046. Any notice to you shall be duly given if mailed,
telegraphed or sent by facsimile to you at the address shown on this
Agreement.
11. This Agreement shall become effective as of the date when it is
executed and dated below by us. This Agreement and all rights and
obligations of the parties hereunder shall be governed by and construed
under the laws of the State of Texas.
A I M DISTRIBUTORS, INC.
Date: By:
----------------------------- -------------------------------------
Signature
-------------------------------------
Print Name
The undersigned agrees to abide by the foregoing terms and conditions.
Date:
----------------------------- ----------------------------------------
(Firm Name)
----------------------------------------
(Address)
----------------------------------------
(City) / (State) / (County)
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
C-3
<PAGE> 4
APPENDIX A
TO
VARIABLE GROUP ANNUITY CONTRACTHOLDER SERVICE AGREEMENT
FUND FEE RATE*
- ---- --------
AIM Advisor Funds, Inc. (Class A and Class C Shares)
AIM Advisor Flex Fund .25%
AIM Advisor International Value Fund .25%
AIM Advisor Large Cap Value Fund .25%
AIM Advisor MultiFlex Fund .25%
AIM Advisor Real Estate Fund .25%
AIM Equity Funds, Inc. (Class A and Class C Shares)
AIM Aggressive Growth Fund .25%
AIM Blue Chip Fund .25%
AIM Capital Development Fund .25%
AIM Charter Fund .25%
AIM Constellation Fund .25%
AIM Large Cap Growth Fund .25%
AIM Weingarten Fund .25%
AIM Funds Group (Class A and Class C Shares)
AIM Balanced Fund .25%
AIM Global Utilities Fund .25%
AIM High Yield Fund .25%
AIM Income Fund .25%
AIM Intermediate Government Fund .25%
AIM Municipal Bond Fund .25%
AIM Select Growth Fund .25%
AIM Value Fund .25%
AIM International Funds, Inc. (Class A and Class C Shares)
AIM Asian Growth Fund .25%
AIM European Development Fund .25%
AIM Global Aggressive Growth Fund .25%
AIM Global Growth Fund .25%
AIM Global Income Fund .25%
AIM International Equity Fund .25%
AIM Investment Securities Funds (Class A and Class C Shares)
AIM Limited Maturity Treasury Fund** .15%
AIM High Yield Fund II .25%
AIM Special Opportunities Funds (Class A and Class C Shares)
AIM Small Cap Opportunities Fund .25%
- ---------------
* Frequency of Payments: Quarterly.
** AIM Limited Maturity Treasury Fund currently offer Class A Shares only.
C-4
<PAGE> 1
EXHIBIT m(7)
AGENCY PRICING AGREEMENT
(THE AIM FAMILY OF FUNDS--Registered Trademark--)
This Agreement is entered into as of the ___ of _________, 19__,
between______________(the "Plan Provider") and A I M Distributors, Inc. (the
"Distributor").
RECITAL
Plan Provider acts as a trustee and/or servicing agent for defined
contribution plans and/or deferred compensation plans (the "Plans") and invests
and reinvests such Plans' assets as specified by an investment advisor, sponsor
or administrative committee of the Plan (a "Plan Representative") generally upon
the direction of Plan beneficiaries (the "Participants").
Plan Provider and Distributor desire to facilitate the purchase and
redemption of shares (the "Shares") of the funds listed on Exhibit A hereto
which may be amended from time to time by Distributor (the "Fund" or "Funds"),
registered investment companies distributed by Distributor, on behalf of the
Plans, through one or more accounts (not to exceed one per Plan) in each Fund
(individually an "Account" and collectively the "Accounts"), subject to the
terms and conditions of this Agreement. Distributor shall, on behalf of the
Funds, pay to Plan Provider a fee in accordance with Exhibit A hereto.
AGREEMENT
1. SERVICES
Plan Provider shall provide shareholder and administration services for
the Plans and/or their Participants, including, without limitation:
answering questions about the Funds; assisting in changing dividend
options, account designations and addresses; establishing and
maintaining shareholder accounts and records; and assisting in
processing purchase and redemption transactions (the "Services"). Plan
Provider shall comply with all applicable laws, rules and regulations,
including requirements regarding prospectus delivery and maintenance
and preservation of records. To the extent allowed by law, Plan
Provider shall provide Distributor with copies of all records that
Distributor may reasonably request. Distributor or its affiliate will
recognize each Plan as an unallocated account in each Fund, and will
not maintain separate accounts in each Fund for each Participant.
Except to the extent provided in Section 3, all Services performed by
Plan Provider shall be as an independent contractor and not as an
employee or agent of Distributor or any of the Funds. Plan Provider and
Plan Representatives, and not Distributor, shall take all necessary
action so that the transactions contemplated by this Agreement shall
not be "Prohibited Transactions" under section 406 of the Employee
Retirement Income Security Act of 1974, or section 4975 of the Internal
Revenue Code.
2. PRICING INFORMATION
Each Fund or its designee will furnish Plan Provider on each business
day that the New York Stock Exchange is open for business ("Business
Day"), with (i) net asset value information as of the close of trading
(currently 4:00 p.m. Eastern Time) on the New York
<PAGE> 2
Stock Exchange or as at such later times at which a Fund's net asset
value is calculated as specified in such Fund's prospectus ("Close of
Trading"), (ii) dividend and capital gains information as it becomes
available, and (iii) in the case of income Funds, the daily accrual or
interest rate factor (mil rate). The Funds shall use their best efforts
to provide such information to Plan Provider by 6:00 p.m. Central Time
on the same Business Day.
Distributor or its affiliate will provide Plan Provider (a) daily
confirmations of Account activity within five Business Days after each
day on which a purchase or redemption of Shares is effected for the
particular Account, (b) if requested by Plan Provider, quarterly
statements detailing activity in each Account within fifteen Business
Days after the end of each quarter, and (c) such other reports as may
be reasonably requested by Plan Provider.
3. ORDERS AND SETTLEMENT
If Plan Provider receives instructions in proper form from Participants
or Plan Representatives before the Close of Trading on a Business Day,
Plan Provider will process such instructions that same evening. On the
next Business Day, Plan Provider will transmit orders for net purchases
or redemptions of Shares to Distributor or its designee by 9:00 a.m.
Central Time and wire payment for net purchases by 2:00 p.m. Central
Time. Distributor or its affiliate will wire payment for net
redemptions on the Business Day following the day the order is executed
for the Accounts. In doing so, Plan Provider will be considered the
Funds' agent, and Shares will be purchased and redeemed as of the
Business Day on which Plan Provider receives the instructions. Plan
Provider will record time and date of receipt of instructions and will,
upon request, provide such instructions and other records relating to
the Services to Distributor's auditors. If Plan Provider receives
instructions in proper form after the Close of Trading on a Business
Day, Plan Provider will treat the instructions as if received on the
next Business Day.
4. REPRESENTATIONS WITH RESPECT TO THE DISTRIBUTOR AND THE FUNDS
Plan Provider and its agents shall limit representations concerning a
Fund or Shares to those contained in the then current prospectus of
such Fund, in current sales literature furnished by Distributor to Plan
Provider, in publicly available databases, such as those databases
created by Standard & Poor's and Morningstar, and in current sales
literature created by Plan Provider and submitted to and approved in
writing by Distributor prior to its use.
5. USE OF NAMES
Plan Provider and its affiliates will not, without the prior written
approval of Distributor, make public references to A I M Management
Group Inc. or any of its subsidiaries, or to the Funds. For purposes of
this provision, the public does not include Plan Providers'
representatives who are actively engaged in promoting the Funds. Any
brochure or other communication to the public that mentions the Funds
shall be submitted to Distributor for written approval prior to use.
Plan Provider shall provide copies of its regulatory filings that
include any reference to A I M Management Group Inc. or its
subsidiaries or the Funds to Distributor. If Plan Provider or its
affiliates should make unauthorized references or representations, Plan
Provider agrees to indemnify and hold harmless the Funds, A I M
Management Group
-2-
<PAGE> 3
Inc. and its subsidiaries from any claims, losses, expenses or
liability arising in any way out of or connected in any way with such
references or representations.
6. TERMINATION
(a) This Agreement may be terminated with respect to any Fund at
any time without any penalty by the vote of a majority of the
directors of such Fund who are "disinterested directors", as
that term is defined in the Investment Company Act of 1940, as
amended (the "1940 Act"), or by a vote of a majority of the
Fund's outstanding shares, on sixty (60) days' written notice.
It will be terminated by any act which terminates either the
Fund's Distribution Plan, or any related agreement thereunder,
and in any event, it shall terminate automatically in the
event of its assignment as that term is defined in the 1940
Act.
(b) Either party may terminate this Agreement upon ninety (90)
days' prior written notice to the other party at the address
specified below.
7. INDEMNIFICATION
(a) Plan Provider agrees to indemnify and hold harmless the
Distributor, its affiliates, the Funds, the Funds' investment
advisors, and each of their directors, officers, employees,
agents and each person, if any, who controls them within the
meaning of the Securities Act of 1933, as amended (the
"Securities Act"), (the "Distributor Indemnitees") against any
losses, claims, damages, liabilities or expenses to which a
Distributor Indemnitee may become subject insofar as those
losses, claims, damages, liabilities or expenses or actions in
respect thereof, arise out of or are based upon (i) Plan
Provider's negligence or willful misconduct in performing the
Services, (ii) any breach by Plan Provider of any material
provision of this Agreement, or (iii) any breach by Plan
Provider of a representation, warranty or covenant made in
this Agreement; and Plan Provider will reimburse the
Distributor Indemnitee for any legal or other expenses
reasonably incurred, as incurred, by them in connection with
investigating or defending such loss, claim or action. This
indemnity agreement will be in addition to any liability which
Plan Provider may otherwise have.
(b) Distributor agrees to indemnify and hold harmless Plan
Provider and its affiliates, and each of its directors,
officers, employees, agents and each person, if any, who
controls Plan Provider within the meaning of the Securities
Act (the "Plan Provider Indemnitees") against any losses,
claims, damages, liabilities or expenses to which a Plan
Provider Indemnitee may become subject insofar as such losses,
claims, damages, liabilities or expenses (or actions in
respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact
contained in the Registration Statement or Prospectus of a
Fund, or the omission or the alleged omission to state therein
a material fact required to be stated therein or necessary to
make statements therein not misleading, (ii) any breach by
Distributor of any material provision of this Agreement, (iii)
Distributor's negligence or willful misconduct in carrying out
its duties and responsibilities under this Agreement, or (iv)
any breach by Distributor of a representation, warranty or
covenant made in this Agreement; and Distributor will
reimburse the Plan Provider Indemnitees for any
-3-
<PAGE> 4
legal or other expenses reasonably incurred, as incurred, by
them, in connection with investigating or defending any such
loss, claim or action. This indemnity agreement will be in
addition to any liability which Distributor may otherwise
have.
(c) If any third party threatens to commence or commences any
action for which one party (the "Indemnifying Party") may be
required to indemnify another person hereunder (the
"Indemnified Party"), the Indemnified Party shall promptly
give notice thereof to the Indemnifying Party. The
Indemnifying Party shall be entitled, at its own expense and
without limiting its obligations to indemnify the Indemnified
Party, to assume control of the defense of such action with
counsel selected by the Indemnifying Party which counsel shall
be reasonably satisfactory to the Indemnified Party. If the
Indemnifying Party assumes the control of the defense, the
Indemnified Party may participate in the defense of such claim
at its own expense. Without the prior written consent of the
Indemnified Party, which consent shall not be withheld
unreasonably, the Indemnifying Party may not settle or
compromise the liability of the Indemnified Party in such
action or consent to or permit the entry of any judgment in
respect thereof unless in connection with such settlement,
compromise or consent each Indemnified Party receives from
such claimant an unconditional release from all liability in
respect of such claim.
8. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Texas applicable to agreements fully
executed and to be performed therein.
9. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each party represents that it is free to enter into this Agreement and
that by doing so it will not breach or otherwise impair any other
agreement or understanding with any other person, corporation or other
entity. Each party represents that it has full power and authority
under applicable law, and has taken all action necessary to enter into
and perform this Agreement and the person executing this Agreement on
its behalf is duly authorized and empowered to execute and deliver this
Agreement. Additionally, each party represents that this Agreement,
when executed and delivered, shall constitute its valid, legal and
binding obligation, enforceable in accordance with its terms.
Plan Provider further represents, warrants, and covenants that:
(a) it is registered as a transfer agent pursuant to Section 17A
of the Securities Exchange Act of 1934, as amended (the "1934
Act"), or is not required to be registered as such;
(b) the arrangements provided for in this Agreement will be
disclosed to the Plan Representatives; and
(c) it is registered as a broker-dealer under the 1934 Act or any
applicable state securities laws, or, including as a result of
entering into and performing the services set forth in this
Agreement, is not required to be registered as such.
-4-
<PAGE> 5
Distributor further represents, warrants and covenants, that:
(a) it is registered as a broker-dealer under the 1934 Act and any
applicable state securities laws; and
(b) the Funds' advisors are registered as investment advisors
under the Investment Advisers Act of 1940, the Funds are
registered as investment companies under the 1940 Act and Fund
Shares are registered under the Securities Act.
10. MODIFICATION
This Agreement and Exhibit A may be amended at any time by Distributor
without Plan Provider's consent by Distributor mailing a copy of an
amendment to Plan Provider at the address set forth below. Such
amendment shall become effective thirty (30) days from the date of
mailing unless this Agreement is terminated by the Plan Provider within
such thirty (30) days.
11. ASSIGNMENT
This Agreement shall not be assigned by a party hereto, without the
prior written consent of the other parties hereto, except that a party
may assign this Agreement to an affiliate having the same ultimate
ownership as the assigning party without such consent.
12. SURVIVAL
The provisions of Sections 1, 5 and 7 shall survive termination of this
Agreement.
-5-
<PAGE> 6
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their duly
authorized officers as of the date first above written.
-------------------------------------
(PLAN PROVIDER)
By:
----------------------------------
Print Name:
--------------------------
Title:
-------------------------------
Address:
-----------------------------
A I M DISTRIBUTORS, INC.
(DISTRIBUTOR)
By:
----------------------------------
Print Name:
--------------------------
Title:
-------------------------------
11 Greenway Plaza
Suite 100
Houston, Texas 77210
-6-
<PAGE> 7
EXHIBIT A
For the term of this Agreement, Distributor, or its affiliates, shall
pay Plan Provider the following amounts for each of the following Funds with
respect to the average daily net asset value of the Class A Shares of the Plans'
balances for the prior quarter:
<TABLE>
<CAPTION>
FUND ANNUAL FEE
- ---- ----------
<S> <C>
AIM Advisor Funds, Inc. (Class A Shares Only)
AIM Advisor Flex Fund .25%
AIM Advisor International Value Fund .25%
AIM Advisor Large Cap Value Fund .25%
AIM Advisor MultiFlex Fund .25%
AIM Advisor Real Estate Fund .25%
AIM Equity Funds, Inc. (Class A Shares Only)
AIM Aggressive Growth Fund .25%
AIM Blue Chip Fund .25%
AIM Capital Development Fund .25%
AIM Charter Fund .25%
AIM Constellation Fund .25%
AIM Large Cap Growth Fund .25%
AIM Weingarten Fund .25%
AIM Funds Group (Class A Shares Only)
AIM Balanced Fund .25%
AIM Global Utilities Fund .25%
AIM High Yield Fund .25%
AIM Income Fund .25%
AIM Intermediate Government Fund .25%
AIM Municipal Bond Fund .25%
AIM Select Growth Fund .25%
AIM Value Fund .25%
AIM Growth Series (Class A Shares Only)
AIM Basic Value Fund .25%
AIM Europe Growth Fund .25%
AIM Japan Growth Fund .25%
AIM Mid Cap Equity Fund .25%
AIM New Pacific Growth Fund .25%
AIM Small Cap Growth Fund .25%
</TABLE>
<PAGE> 8
<TABLE>
<S> <C>
AIM International Funds, Inc. (Class A Shares Only)
AIM Asian Growth Fund .25%
AIM European Development Fund .25%
AIM Global Aggressive Growth Fund .25%
AIM Global Growth Fund .25%
AIM Global Income Fund .25%
AIM International Equity Fund .25%
AIM Investment Funds (Class A Shares Only)
AIM Emerging Markets Fund .25%
AIM Emerging Markets Debt Fund .25%
AIM Global Consumer Products and Services Fund .25%
AIM Global Financial Services Fund .25%
AIM Global Government Income Fund .25%
AIM Global Growth & Income Fund .25%
AIM Global Health Care Fund .25%
AIM Global Infrastructure Fund .25%
AIM Global Resources Fund .25%
AIM Global Telecommunications Fund .25%
AIM Latin American Growth Fund .25%
AIM Strategic Income Fund .25%
AIM Investment Securities Funds (Class A Shares Only)
AIM High Yield Fund II .25%
AIM Limited Maturity Treasury Fund .15%
AIM Series Trust (Class A Shares Only)
AIM Global Trends Fund .25%
AIM Special Opportunities Funds (Class A Shares Only)
AIM Small Cap Opportunities Fund .25%
</TABLE>
Distributor or its affiliates shall calculate the amount of quarterly
payment and shall deliver to Plan Provider a quarterly statement showing the
calculation of the quarterly amounts payable to Plan Provider. Distributor
reserves the right at any time to impose minimum fee payment requirements before
any quarterly payments will be made to Plan Provider. Payment to Plan Provider
shall occur within 30 days following the end of each quarter. All parties agree
that the payments referred to herein are for record keeping and administrative
services only and are not for legal, investment advisory or distribution
services.
Minimum Payments: $50 (with respect to all Funds in the aggregate.)
<PAGE> 1
EXHIBIT m(8)
[LOGO ONLY]
A I M DISTRIBUTORS, INC.
A I M DISTRIBUTORS, INC.
SHAREHOLDER SERVICE AGREEMENT
(BANK TRUST DEPARTMENTS)
____________, 19__
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
Gentlemen:
We desire to enter into an Agreement with A I M Distributors, Inc. ("AIM
Distributors") as agent on behalf of the funds listed on Schedule A hereto (the
"Funds"), for the servicing of our clients who are shareholders of, and the
administration of accounts in, the Funds. We understand that this Shareholder
Service Agreement (the "Agreement") has been adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940 (the "1940 Act") by each of the Funds,
under a Distribution Plan (the "Plan") adopted pursuant to said Rule, and is
subject to applicable rules of the National Association of Securities Dealers,
Inc. ("NASD"). This Agreement defines the services to be provided by us for
which we are to receive payments pursuant to the Plan. The Plan and the
Agreement have been approved by a majority of the directors or trustees of the
applicable Fund, including a majority of directors or trustees who are not
interested persons of the applicable Fund, and who have no direct or indirect
financial interest in the operation of the Plan or related agreements, by votes
cast in person at a meeting called for the purpose of voting on the Plan. Such
approval included a determination by the directors or trustees of the applicable
Fund, in the exercise of their reasonable business judgement and in light of
their fiduciary duties, that there is a reasonable likelihood that the Plan will
benefit the Fund and the holders of its Shares. The terms and conditions of this
Agreement shall be as follows:
1. To the extent that we provide continuing personal shareholder services
and administrative support services to our customers who may from time
to time own shares of the Funds of record or beneficially, including
but not limited to, forwarding sales literature, answering routine
customer inquiries regarding the Funds, assisting customers in changing
dividend options, account designations and addresses, and in enrolling
into any of several special investment plans offered in connection with
the purchase of the Funds' shares, assisting in the establishment and
maintenance of customer accounts and records and in the processing of
purchase and redemption transactions, investing dividends and capital
gains distributions automatically in shares of the Funds and providing
such other services as AIM Distributors or the customer may reasonably
request, you shall pay us a fee periodically. We represent that we
shall accept fees hereunder only so long as we continue to provide such
personal shareholder services.
2. We agree to transmit to AIM Distributors in a timely manner, all
purchase orders and redemption requests of our clients and to forward
to each client all proxy statements, periodic shareholder reports and
other communications received from AIM Distributors by us relating
<PAGE> 2
Shareholder Service Agreement Page 2
(Bank Trust Departments)
to shares of the Funds owned by our clients. AIM Distributors, on behalf
of the Funds, agrees to pay all out-of-pocket expenses actually incurred
by us in connection with the transfer by us of such proxy statements and
reports to our clients as required under applicable laws or regulations.
3. We agree to make available upon AIM Distributors's request, such
information relating to our clients who are beneficial owners of Fund
shares and their transactions in such shares as may be required by
applicable laws and regulations or as may be reasonably requested by AIM
Distributors.
4. We agree to transfer record ownership of a client's Fund shares to the
client promptly upon the request of a client. In addition, record
ownership will be promptly transferred to the client in the event that
the person or entity ceases to be our client.
5. Neither we nor any of our employees or agents are authorized to make
any representation to our clients concerning the Funds except those
contained in the then current prospectuses applicable to the Funds,
copies of which will be supplied to us by AIM Distributors; and we
shall have no authority to act as agent for any Fund or AIM
Distributors. Neither a Fund, nor A I M Advisors, Inc. ("AIM") will be
a party, nor will they be represented as a party, to any agreement that
we may enter into with our clients and neither a Fund nor AIM shall
participate, directly or indirectly, in any compensation that we may
receive from our clients in connection with our acting on their behalf
with respect to this Agreement.
6. In consideration of the services and facilities described herein, we
shall receive a maximum annual service fee and asset-based sales charge,
payable monthly, as set forth on Schedule A hereto. We understand that
this Agreement and the payment of such service fees and asset-based
sales charge has been authorized and approved by the Board of Directors
or Trustees of the applicable Fund, and that the payment of fees
thereunder is subject to limitations imposed by the rules of the NASD.
7. AIM Distributors reserves the right, in its discretion and without
notice, to suspend the sale of any Fund or withdraw the sale of shares
of a Fund, or upon notice to us, to amend this Agreement. We agree that
any order to purchase shares of the Funds placed by us after notice of
any amendment to this Agreement has been sent to us shall constitute our
agreement to any such amendment.
8. All communications to AIM Distributors shall be duly given if mailed to
A I M Distributors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas
77046-1173. Any notice to us shall be duly given if mailed to us at the
address specified by us in this Agreement or to such other address as we
shall have designated in writing to AIM Distributors.
9. This Agreement may be terminated at any time by AIM Distributors on not
less than 60 days' written notice to us at our principal place of
business. We, on 60 days' written notice addressed to AIM Distributors
at its principal place of business, may terminate this Agreement. AIM
Distributors may also terminate this Agreement for cause on violation by
us of any of the provisions of this Agreement, said termination to
become effective on the date of mailing notice to us of such
termination. AIM Distributors's failure to terminate for any cause shall
not constitute a waiver of AIM Distributors's right to terminate at a
later date for
<PAGE> 3
Shareholder Service Agreement Page 3
(Bank Trust Departments)
any such cause. This Agreement may be terminated with respect to any
Fund at any time by the vote of a majority of the directors or trustees
of such Fund who are disinterested directors or by a vote of a majority
of the Fund's outstanding shares, on not less than 60 days' written
notice to us at our principal place of business. This Agreement will be
terminated by any act which terminates the Agreement for Purchase of
Shares of The AIM Family of Funds--Registered Trademark-- between us and
AIM Distributors or a Fund's Distribution Plan, and in any event, it
shall terminate automatically in the event of its assignment by us, the
term "assignment" for this purpose having the meaning defined in Section
2(a)(4) of the 1940 Act.
10. We represent that our activities on behalf of our clients and pursuant
to this Agreement either (i) are not such as to require our registration
as a broker-dealer in the state(s) in which we engage in such
activities, or (ii) we are registered as a broker-dealer in the state(s)
in which we engage in such activities. We represent that we are
registered as a broker-dealer with the NASD if required under applicable
law.
11. This Agreement and the Agreement for Purchase of Shares of The AIM
Family of Funds--Registered Trademark-- through Bank Trust Departments
constitute the entire agreement between us and AIM Distributors and
supersede all prior oral or written agreements between the parties
hereto. This Agreement may be executed in counterparts, each of which
shall be deemed an original but all of which shall constitute the same
instrument.
12. This Agreement and all rights and obligations of the parties hereunder
shall be governed by and construed under the laws of the State of Texas.
13. This Agreement shall become effective as of the date when it is executed
and dated by AIM Distributors.
<PAGE> 4
Shareholder Service Agreement Page 4
(Bank Trust Departments)
The undersigned agrees to abide by the foregoing terms and conditions.
-----------------------------------
(Firm Name)
-----------------------------------
(Address)
-----------------------------------
City/State/Zip/County
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Dated:
-----------------------------
ACCEPTED:
A I M DISTRIBUTORS, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Dated:
-----------------------------
Please sign both copies and return to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
<PAGE> 5
Shareholder Service Agreement Page 5
(Bank Trust Departments)
SCHEDULE A
<TABLE>
<CAPTION>
Funds Fees
----- ----
<S> <C> <C>
AIM Advisor Funds, Inc.
AIM Advisor Flex Fund
AIM Advisor International Value Fund
AIM Advisor Large Cap Value Fund
AIM Advisor MultiFlex Fund
AIM Advisor Real Estate Fund
AIM Equity Funds, Inc.
AIM Aggressive Growth Fund
AIM Blue Chip Fund
AIM Capital Development Fund
AIM Charter Fund (Retail Class)
AIM Constellation Fund (Retail Class)
AIM Large Cap Growth Fund
AIM Weingarten Fund (Retail Class)
AIM Funds Group
AIM Balanced Fund
AIM Global Utilities Fund
AIM High Yield Fund
AIM Income Fund
AIM Intermediate Government Fund
AIM Money Market Fund
AIM Municipal Bond Fund
AIM Select Growth Fund
AIM Value Fund
AIM Growth Series
AIM Basic Value Fund
AIM Europe Growth Fund
AIM Japan Growth Fund
AIM Mid Cap Equity Fund
AIM New Pacific Growth Fund
AIM Small Cap Growth Fund
AIM International Funds, Inc.
AIM Asian Growth Fund
AIM European Development Fund
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Global Income Fund
AIM International Equity Fund
</TABLE>
<PAGE> 6
Shareholder Service Agreement Page 6
(Bank Trust Departments)
<TABLE>
<S> <C>
AIM Investment Funds
AIM Developing Markets Fund
AIM Emerging Markets Debt Fund
AIM Global Consumer Products and Services Fund
AIM Global Financial Services Fund
AIM Global Government Income Fund
AIM Global Growth & Income Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Telecommunications Fund
AIM Latin American Growth Fund
AIM Strategic Income Fund
AIM Investment Securities Funds
AIM Limited Maturity Treasury Fund
AIM High Yield Fund II
AIM Series Trust
AIM Global Trends Fund
AIM Special Opportunities Funds
AIM Small Cap Opportunities Fund
AIM Tax-Exempt Funds, Inc.
AIM High Income Municipal Fund
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut
</TABLE>
<PAGE> 7
[LOGO ONLY]
A I M Distributors, Inc.
A I M DISTRIBUTORS, INC.
SHAREHOLDER SERVICE AGREEMENT
(BROKERS FOR BANK TRUST DEPARTMENTS)
__________________ , 19__
A I M Distributors, Inc.
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
Gentlemen:
We desire to enter into an Agreement with A I M Distributors, Inc.
("AIM Distributors") as agent on behalf of the funds listed on Schedule A
hereto, which may be amended from time to time by AIM Distributors (the
"Funds"), for the servicing of our clients who are shareholders of, and the
administration of accounts in, the Funds. We understand that this Shareholder
Service Agreement (the "Agreement") has been adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940 (the "1940 Act") by each of the Funds,
under a Distribution Plan (the "Plan") adopted pursuant to said Rule, and is
subject to applicable rules of the National Association of Securities Dealers,
Inc. ("NASD"). This Agreement defines the services to be provided by us for
which we are to receive payments pursuant to the Plan. The Plan and the
Agreement have been approved by a majority of the directors or trustees of the
applicable Fund, including a majority of directors or trustees who are not
interested persons of the applicable Fund, and who have no direct or indirect
financial interest in the operation of the Plan or related agreements, by votes
cast in person at a meeting called for the purpose of voting on the Plan. Such
approval included a determination by the directors or trustees of the
applicable Fund, in the exercise of their reasonable business judgement and in
light of their fiduciary duties, that there is a reasonable likelihood that the
Plan will benefit the Fund and the holders of its Shares. The terms and
conditions of this Agreement shall be as follows:
1. To the extent that we provide continuing personal shareholder services
and administrative support services to our customers who may from
time to time own shares of the Funds of record or beneficially,
including but not limited to, forwarding sales literature, answering
routine customer inquiries regarding the Funds, assisting customers
in changing dividend options, account designations and addresses, and
in enrolling into any of several special investment plans offered in
connection with the purchase of the Funds' shares, assisting in the
establishment and maintenance of customer accounts and records and in
the processing of purchase and redemption transactions, investing
dividends and capital gains distributions automatically in shares of
the Funds and providing such other services as AIM Distributors or
the customer may reasonably request, you shall pay us a fee
periodically. We represent that we shall accept fees hereunder only
so long as we continue to provide such personal shareholder services.
2. We agree to transmit to AIM Distributors in a timely manner, all
purchase orders and redemption requests of our clients and to forward
to each client all proxy statements, periodic
<PAGE> 8
Shareholder Service Agreement Page 2
(Brokers for Bank Trust Departments)
shareholder reports and other communications received from AIM
Distributors by us relating to shares of the Funds owned by our
clients. AIM Distributors, on behalf of the Funds, agrees to pay all
out-of-pocket expenses actually incurred by us in connection with the
transfer by us of such proxy statements and reports to our clients as
required under applicable laws or regulations.
3. We agree to transfer to AIM Distributors in a timely manner as set
forth in the applicable prospectus, federal funds in an amount equal
to the amount of all purchase orders placed by us and accepted by AIM
Distributors. In the event that AIM Distributors fails to receive such
federal funds on such date (other than through the fault of AIM
Distributors), we shall indemnify the applicable Fund and AIM
Distributors against any expense (including overdraft charges)
incurred by the applicable Fund and/or AIM Distributors as a result of
the failure to receive such federal funds.
4. We agree to make available upon AIM Distributors's request, such
information relating to our clients who are beneficial owners of Fund
shares and their transactions in such shares as may be required by
applicable laws and regulations or as may be reasonably requested by
AIM Distributors.
5. We agree to transfer record ownership of a client's Fund shares to the
client promptly upon the request of a client. In addition, record
ownership will be promptly transferred to the client in the event that
the person or entity ceases to be our client.
6. Neither we nor any of our employees or agents are authorized to make
any representation to our clients concerning the Funds except those
contained in the then current prospectuses applicable to the Funds,
copies of which will be supplied to us by AIM Distributors; and we
shall have no authority to act as agent for any Fund or AIM
Distributors. Neither a Fund, nor A I M Advisors, Inc. ("AIM") will
be a party, nor will they be represented as a party, to any agreement
that we may enter into with our clients and neither a Fund nor AIM
shall participate, directly or indirectly, in any compensation that
we may receive from our clients in connection with our acting on
their behalf with respect to this Agreement.
7. In consideration of the services and facilities described herein, we
shall receive a maximum annual service fee and asset-based sales
charge, payable monthly, as set forth on Schedule A hereto. We
understand that this Agreement and the payment of such service fees
and asset-based sales charge has been authorized and approved by the
Board of Directors or Trustees of the applicable Fund, and that the
payment of fees thereunder is subject to limitations imposed by the
rules of the NASD.
8. AIM Distributors reserves the right, in its discretion and without
notice, to suspend the sale of any Fund or withdraw the sale of shares
of a Fund, or upon notice to us, to amend this Agreement. We agree
that any order to purchase shares of the Funds placed by us after
notice of any amendment to this Agreement has been sent to us shall
constitute our agreement to any such amendment.
9. All communications to AIM Distributors shall be duly given if mailed
to
<PAGE> 9
Shareholder Service Agreement Page 3
(Brokers for Bank Trust Departments)
A I M Distributors, Inc., 11 Greenway Plaza, Suite 1919, Houston,
Texas 77046-1173. Any notice to us shall be duly given if mailed to us
at the address specified by us in this Agreement or to such other
address as we shall have designated in writing to AIM Distributors.
10. This Agreement may be terminated at any time by AIM Distributors on
not less than 60 days' written notice to us at our principal place of
business. We, on 60 days' written notice addressed to AIM
Distributors at its principal place of business, may terminate this
Agreement. AIM Distributors may also terminate this Agreement for
cause on violation by us of any of the provisions of this Agreement,
said termination to become effective on the date of mailing notice to
us of such termination. AIM Distributors's failure to terminate for
any cause shall not constitute a waiver of AIM Distributors's right
to terminate at a later date for any such cause. This Agreement may
be terminated with respect to any Fund at any time by the vote of a
majority of the directors or trustees of such Fund who are
disinterested directors or by a vote of a majority of the Fund's
outstanding shares, on not less than 60 days' written notice to us at
our principal place of business. This Agreement will be terminated by
any act which terminates the Selected Dealer Agreement between us and
AIM Distributors or a Fund's Distribution Plan, and in any event,
shall terminate automatically in the event of its assignment by us,
the term "assignment" for this purpose having the meaning defined in
Section 2(a)(4) of the 1940 Act.
11. We represent that our activities on behalf of our clients and pursuant
to this Agreement either (I) are not such as to require our
registration as a broker-dealer in the state(s) in which we engage in
such activities, or (ii) we are registered as a broker-dealer in the
state(s) in which we engage in such activities. We represent that we
are registered as a broker-dealer with the NASD if required under
applicable law.
12. This Agreement and all rights and obligations of the parties hereunder
shall be governed by and construed under the laws of the State of
Texas. This Agreement may be executed in counterparts, each of which
shall be deemed an original but all of which shall constitute the same
instrument. This Agreement shall not relieve us or AIM Distributors
from any obligations either may have under any other agreements
between us.
13. This Agreement shall become effective as of the date when it is
executed and dated by AIM Distributors.
<PAGE> 10
Shareholder Service Agreement Page 4
(Brokers for Bank Trust Departments)
The undersigned agrees to abide by the foregoing terms and conditions.
_____________________________________________
(Firm Name)
_____________________________________________
(Address)
_____________________________________________
City/State/Zip/County
By: ________________________________________
Name:________________________________________
Title:_______________________________________
Dated:_______________________________________
ACCEPTED:
A I M DISTRIBUTORS, INC.
By: ______________________________
Name: ______________________________
Title:______________________________
Dated:______________________________
Please sign both copies and return to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
<PAGE> 11
Shareholder Service Agreement Page 5
(Brokers for Bank Trust Departments)
SCHEDULE A
Funds Fees
----- ----
AIM Advisor Funds, Inc.
AIM Advisor Flex Fund
AIM Advisor International Value Fund
AIM Advisor Large Cap Value Fund
AIM Advisor MultiFlex Fund
AIM Advisor Real Estate Fund
AIM Equity Funds, Inc.
AIM Blue Chip Fund
AIM Capital Development Fund
AIM Charter Fund (Retail Class)
AIM Constellation Fund (Retail Class)
AIM Weingarten Fund (Retail Class)
AIM Aggressive Growth Fund
AIM Funds Group
AIM Balanced Fund
AIM Global Utilities Fund
AIM High Yield Fund
AIM Income Fund
AIM Intermediate Government Fund
AIM Money Market Fund
AIM Municipal Bond Fund
AIM Select Growth Fund
AIM Value Fund
AIM Growth Series
AIM Basic Value Fund
AIM Europe Growth Fund
AIM International Growth Fund
AIM Japan Growth Fund
AIM Mid Cap Equity Fund
AIM New Pacific Growth Fund
AIM Small Cap Growth Fund
AIM Worldwide Growth Fund
AIM International Funds, Inc.
AIM Asian Growth Fund
AIM European Development Fund
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Global Income Fund
AIM International Equity Fund
<PAGE> 12
Shareholder Service Agreement Page 6
(Brokers for Bank Trust Departments)
AIM Investment Funds
AIM Developing Markets Fund
AIM Emerging Markets Fund
AIM Emerging Markets Debt Fund
AIM Global Consumer Products and Services Fund
AIM Global Financial Services Fund
AIM Global Government Income Fund
AIM Global Growth & Income Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Telecommunications Fund
AIM Latin American Growth Fund
AIM Strategic Income Fund
AIM Investment Securities Funds
AIM Limited Maturity Treasury Fund
AIM High Yield Fund II
AIM Series Trust
AIM Global Trends Fund
AIM Special Opportunities Funds
AIM Small Cap Opportunities Fund
AIM Tax-Exempt Funds, Inc.
AIM High Income Municipal Fund
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut
