<PAGE> 1
As filed with the Securities and Exchange Commission on November 17, 1995
1933 Act Reg. No. 33-39519
1940 Act Reg. No. 811-5686
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
---
Pre-Effective Amendment No. _____
---
Post-Effective Amendment No. 6 X
---
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 10 ---
(Check appropriate box or boxes.)
AIM INVESTMENT SECURITIES FUNDS
- --------------------------------------------------------------------------------
(Exact name of Registrant as Specified in Charter)
11 Greenway Plaza, Suite 1919, Houston, TX 77046
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code (713) 626-1919
--------------
Charles T. Bauer
11 Greenway Plaza, Suite 1919, Houston, TX 77046
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(Name and Address of Agent for Service)
Copy to:
David L. Kite, Esquire Martha J. Hays, Esquire
A I M Advisors, Inc. Ballard Spahr Andrews & Ingersoll
11 Greenway Plaza, Suite 1919 1735 Market Street, 51st Floor
Houston, Texas 77046 Philadelphia, Pennsylvania 19103-7599
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Amendment
It is proposed that this filing will become effective (check appropriate box)
X immediately upon filing pursuant to paragraph (b)
_____ on (date) pursuant to paragraph (b)
_____ 60 days after filing pursuant to paragraph (a)(i)
_____ on (date), pursuant to paragraph (a)(i)
_____ 75 days after filing pursuant to paragraph a(ii)
_____ on (date) pursuant to paragraph (a)(ii) of rule 485.
(Continued on Next Page)
<PAGE> 2
If appropriate, check the following box:
_____ this post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
Registrant continues its election to register an indefinite number of
its shares pursuant to Rule 24f-2 under the Investment Company Act of 1940 and
filed its Rule 24f-2 Notice for the fiscal year ended July 31, 1995 on
September 28, 1995.
<PAGE> 3
CROSS-REFERENCE SHEET
(AS REQUIRED BY RULE 495)
I. LIMITED MATURITY TREASURY PORTFOLIO - AIM LIMITED MATURITY TREASURY
SHARES
PART A - PROSPECTUS
<TABLE>
<CAPTION>
Item No. Prospectus Location
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<S> <C>
1. Cover Page Cover Page
2. Synopsis Summary; Table of Fees and Expenses
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Cover Page; Summary; Investment Program;
Management; Organization of the Trust;
Dividends, Distributions and Tax Matters;
General Information
5. Management of the Fund Summary; Management; General Information
5A. Management's Discussion of Fund Performance Performance
6. Capital Stock and Other Securities Cover Page; Summary; Management;
Organization of the Trust; Dividends;
Distributions and Tax Matters
7. Purchase of Securities Being Offered Summary; How to Purchase Shares; Terms and
Conditions of Purchase of the AIM Funds;
Special Plans; Exchange Privilege;
Determination of Net Asset Value
8. Redemption or Repurchase Summary; How to Redeem Shares
9. Pending Legal Proceedings Not Applicable
PART B - STATEMENT OF ADDITIONAL INFORMATION
Statement of Additional
Item No. Information Location
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10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Introduction; General Information About the
Trust; Miscellaneous Information
13. Investment Objectives and Policies Portfolio Transactions and Brokerage
Allocation-Portfolio Turnover; Investment
Objectives and Policies; Investment
Restrictions
14. Management of the Fund Management
15. Control Persons and Principal Holders of Securities Miscellaneous Information
16. Investment Advisory and Other Services Management
17. Brokerage Allocation and Other Practices Portfolio Transactions and Brokerage
Allocation
18. Capital Stock and Other Securities General Information About the Trust;
Description of Fund Shares
19. Purchase, Redemption and Pricing of How to Purchase and Redeem Shares; Net Asset
Securities Being Offered Value Determination
20. Tax Status Dividends, Distributions and Tax Matters
21. Underwriters Management; The Distribution Agreement
22. Calculations of Performance Data Performance Information
23. Financial Statements Financial Statements
</TABLE>
<PAGE> 4
II. LIMITED MATURITY TREASURY PORTFOLIO - INSTITUTIONAL SHARES
PART A - PROSPECTUS
<TABLE>
<CAPTION>
Item No. Prospectus Location
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<S> <C>
1. Cover Page Cover Page
2. Synopsis Summary; Table of Fees and Expenses
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Cover Page; Summary; Suitability For
Investors; General Information; Investment
Program
5. Management of the Fund Management of the Trust; Portfolio
Transactions and Brokerage Allocation;
General Information
5A. Management's Discussion of Fund Performance Performance Information
6. Capital Stock and Other Securities Suitability for Investors; General
Information; Dividends and Distributions;
Taxes
7. Purchase of Securities Being Offered Summary; Purchase of Shares; Net Asset Value
8. Redemption or Repurchase Summary; Redemption of Shares
9. Pending Legal Proceedings Not Applicable
PART B - STATEMENT OF ADDITIONAL INFORMATION
Statement of Additional
Item No. Information Location
- -------- --------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History General Information About the Fund
13. Investment Objectives and Policies Investment Program and Restrictions
14. Management of the Fund General Information About the Fund -
Trustees and Officers
15. Control Persons and Principal Holders of Securities General Information About the Fund -
Principal Holders of Securities
16. Investment Advisory and Other Services General Information About the Fund
17. Brokerage Allocation and Other Practices Portfolio Transactions
18. Capital Stock and Other Securities General Information About the Fund - The
Fund and its Shares
19. Purchase, Redemption and Pricing of Securities Purchase and Redemptions
Being Offered
20. Tax Status Taxes
21. Underwriters Purchases and Redemptions - The Distribution
Agreement
22. Calculation of Performance Data Performance Information
23. Financial Statements Financial Statements
</TABLE>
<PAGE> 5
[AIM LOGO APPEARS HERE] THE AIM FAMILY OF FUNDS(R)
AIM Investment Securities Funds
AIM LIMITED MATURITY TREASURY SHARES
PROSPECTUS
NOVEMBER 17, 1995
AIM INVESTMENT SECURITIES FUNDS (the "Trust") is an
open-end, series, management investment company. Pursuant
to this Prospectus, the Trust offers shares of beneficial
interest in one portfolio:
LIMITED MATURITY TREASURY PORTFOLIO (the "Fund") is a
portfolio whose investment objective is to seek
liquidity with minimum fluctuation of principal value,
and, consistent with this objective, the highest total
return achievable. The Fund seeks to achieve this
objective by investing in an actively managed
portfolio of U.S. Treasury notes and other direct
obligations of the U.S. Treasury.
THERE CAN BE NO ASSURANCE THAT THE FUND WILL ACHIEVE ITS
OBJECTIVES. THE NET ASSET VALUE OF THE FUND VARIES
DEPENDING ON THE MARKET VALUE OF ITS ASSETS. THE FUND'S
SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND THE FUND'S SHARES ARE NOT
FEDERALLY INSURED OR GUARANTEED BY THE U.S. GOVERNMENT,
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND
INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
This Prospectus sets forth basic information about the
Fund that prospective investors should know before
investing. It should be read and retained for future
reference. A Statement of Additional Information, dated
November 17, 1995, has been filed with the United States
Securities and Exchange Commission (the "SEC") and is
incorporated herein by reference. The Statement of
Additional Information is available without charge upon
written request to the Trust at P.O. Box 4333, Houston,
TX 77210-4333.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE> 6
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE PAGE
---- ----
<S> <C> <C> <C>
SUMMARY............................... 2 How to Purchase Shares.............. A-1
THE FUND.............................. 4 Terms and Conditions of Purchase of
Table of Fees and Expenses.......... 4 the AIM Funds.................... A-2
Financial Highlights................ 5 Special Plans....................... A-7
Performance......................... 6 Exchange Privilege.................. A-8
Investment Program.................. 6 How to Redeem Shares................ A-10
Management.......................... 8 Determination of Net Asset Value.... A-13
Organization of the Trust........... 9 Dividends, Distributions and Tax
INVESTOR'S GUIDE TO THE AIM FAMILY OF Matters.......................... A-13
FUNDS............................... A-1 General Information................. A-15
Introduction to The AIM Family of APPLICATION INSTRUCTIONS.............. B-1
Funds............................ A-1
</TABLE>
SUMMARY
- --------------------------------------------------------------------------------
THE FUND. AIM Investment Securities Funds (the "Trust") is a Delaware
business trust organized as an open-end, series, management investment company.
Currently, the Trust offers one investment portfolio: LIMITED MATURITY TREASURY
PORTFOLIO ("the "Fund"). The Fund consists of two classes: AIM Limited Maturity
Treasury Shares (the "Retail Class") and the Institutional Shares (the
"Institutional Class"). This Prospectus relates solely to shares of the Retail
Class of the Fund.
Shares of the Institutional Class of the Fund are offered to investors
pursuant to a separate prospectus. The Retail Class and the Institutional Class
may have differing fees and expenses, which may affect performance. To obtain
information about the Institutional Class, please call (800) 659-1005.
The investment objective of the Fund is to seek liquidity with minimum
fluctuation in principal value and, consistent with this investment objective,
the highest total return achievable. To achieve its objective, the Fund will
invest in U.S. Treasury notes and other direct obligations of the U.S. Treasury
and may (but does not currently intend to) engage in repurchase agreement
transactions with respect to such obligations. THERE IS NO ASSURANCE THAT THE
INVESTMENT OBJECTIVES OF THE FUND WILL BE ACHIEVED. For more complete
information on the Fund's investment objective and policies, see "Investment
Program."
THE ADVISOR. A I M Advisors, Inc. ("AIM") serves as the Fund's investment
advisor pursuant to a Master Investment Advisory Agreement (the "Advisory
Agreement"). AIM acts as manager or advisor to 37 investment company portfolios.
As of November 1, 1995, the total assets advised or managed by AIM or its
affiliates were approximately $39.5 billion. Under the terms of the Advisory
Agreement AIM supervises all aspects of the Fund's operations and provides
investment advisory services to the Fund. As compensation for these services,
AIM receives a fee based on the Fund's average daily net assets. Under a Master
Administrative Services Agreement, AIM may be reimbursed by the Fund for its
costs in performing, or arranging for the performance of, certain accounting,
shareholder servicing and other administrative services for the Fund. Under a
Transfer Agency and Service Agreement, A I M Fund Services, Inc. ("AFS"), AIM's
wholly-owned subsidiary and a registered transfer agent, receives a fee for its
provision of transfer agency, dividend distribution and disbursement, and
shareholder services to the Fund. See "Management".
PURCHASING SHARES. Shares of the Retail Class are offered by this
Prospectus at the net asset value of the Fund plus a maximum sales charge of
1.00% of the public offering price, which sales charge is reduced on purchases
of $100,000 or more. Initial investments in the Retail Class generally must be
at least $500, and subsequent investments must be at least $50. The distributor
of the shares of the Retail Class is A I M Distributors, Inc. ("AIM
Distributors"), P.O. Box 4333, Houston, Texas 77210-4333. See "How to Purchase
Shares" and "Special Plans."
EXCHANGE PRIVILEGE. The Retail Class is one of several mutual funds
distributed by AIM Distributors (collectively, "The AIM Family of Funds").
Shares of the Retail Class may be exchanged for shares of any other funds in The
AIM Family of Funds in the manner and subject to the policies and charges set
forth herein. See "Exchange Privilege."
REDEEMING SHARES. Shareholders may redeem all or a portion of their shares
at their net asset value, generally without charge. See "How to Redeem Shares."
If the value of a shareholder's account is less than $500, the Trust may cause
the shares in the account to be redeemed at their net asset value.
2
<PAGE> 7
DISTRIBUTIONS. The Fund currently declares dividends from net investment
income on a daily basis and pays such dividends on a monthly basis.
Distributions by the Fund from short-term capital gains, if any, are paid
quarterly and distributions from long-term capital gains, if any, are paid
annually. Dividends and distributions of the Fund may be reinvested at their net
asset value (without payment of a sales charge) in the Fund's shares or, subject
to certain conditions, in shares of another fund in The AIM Family of Funds. See
"Dividends, Distributions and Tax Matters" and "Special Plans."
AIM, AIM INSTITUTIONAL FUNDS, AIM LINK, THE AIM FAMILY OF FUNDS, THE AIM
FAMILY OF FUNDS AND DESIGN (I.E., THE AIM LOGO), AND AIM AND DESIGN ARE
REGISTERED SERVICE MARKS OF A I M MANAGEMENT GROUP INC.
3
<PAGE> 8
THE FUND
- --------------------------------------------------------------------------------
TABLE OF FEES AND EXPENSES
The following table is designed to help an investor in the Retail Class of
the Fund understand the various costs that the investor will bear, both directly
and indirectly. The fees and expenses set forth in this table are based on the
average net assets of the Retail Class of the Fund for the fiscal year ended
July 31, 1995. The rules and regulations of the SEC require that the maximum
sales charge be reflected in the table, even though certain investors may
qualify for reduced sales charges. See "How to Purchase Shares."
<TABLE>
<CAPTION>
RETAIL
CLASS
-------
<S> <C>
Shareholder Transaction Expenses
Maximum sales load imposed on purchase of shares (as a % of offering price)........ 1.00%
Maximum sales load on reinvested dividends and distributions (as a % of offering
price).......................................................................... None
Deferred sales load (as a % of original purchase price or redemption proceeds,
as applicable).................................................................. None
Redemption fee (as a % of amount redeemed, as applicable).......................... None
Exchange fee*...................................................................... None
Annual Fund Operating Expenses
(as a % of average net assets)
Management fees.................................................................... 0.20%
Rule 12b-1 distribution plan payments**............................................ 0.15%
Other expenses..................................................................... 0.16%
Total fund operating expenses................................................... 0.51%
</TABLE>
- ------------
* No fee will be charged for exchanges among The AIM Family of Funds; however,
a $5 service fee may be charged for exchanges by accounts of market timers.
** It is possible that as a result of Rule 12b-1 fees, long-term shareholders
may pay more than the economic equivalent of the maximum front-end sales
charges permitted under rules of the National Association of Securities
Dealers, Inc. Given the Rule 12b-1 fee of the Retail Class, however, it is
estimated that it would take a substantial number of years for a shareholder
to exceed such maximum front-end sales charges.
EXAMPLES. An investor in the Fund would pay the following expenses on a $1,000
investment in shares of the Retail Class of the Fund, assuming (1) a 5% annual
return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
RETAIL
CLASS
-------
<S> <C>
1 year................................................................ $15
3 years............................................................... $26
5 years............................................................... $38
10 years............................................................... $73
</TABLE>
THE ABOVE EXAMPLES SHOULD NOT BE CONSIDERED TO BE REPRESENTATIVE OF THE
SHARES OF THE RETAIL CLASS OF THE FUND'S ACTUAL OR FUTURE EXPENSES, WHICH MAY BE
GREATER OR LESS THAN THOSE SHOWN. IN ADDITION, WHILE THE EXAMPLES ASSUME A 5%
ANNUAL RETURN, THE ACTUAL PERFORMANCE OF THE RETAIL CLASS WILL VARY AND MAY
RESULT IN AN ACTUAL RETURN THAT IS GREATER OR LESS THAN 5%. THE EXAMPLES ASSUME
REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS AND THAT THE PERCENTAGE AMOUNTS
FOR TOTAL FUND OPERATING EXPENSES REMAIN THE SAME FOR EACH YEAR.
4
<PAGE> 9
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights during the fiscal year
ended July 31, 1995, the eleven months ended July 31, 1994, each of the years in
the five-year period ended August 31, 1993 and for the period December 15, 1987
(date operations commenced) through August 31, 1988. All data have been audited
by KPMG Peat Marwick LLP, independent auditors, whose report on the financial
statements and notes appears in the Statement of Additional Information.
<TABLE>
<CAPTION>
JULY 31, AUGUST 31,
--------------------- ---------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988
-------- -------- -------- ------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period... $ 9.96 $ 10.24 $ 10.21 $ 10.01 $ 9.79 $ 9.78 $ 9.80 $ 9.92
Income from investment
operations:
Net investment
income.............. 0.54 0.35 0.42 0.58 0.72 0.77 0.84 0.52
Net gains (losses) on
securities
(both realized and
unrealized)............. 0.07 (0.20) 0.05 0.29 0.22 0.01 (0.02) (0.12)
-------- -------- -------- -------- -------- ------- ------- -------
Total from
investment
operations...... 0.61 0.15 0.47 0.87 0.94 0.78 0.82 0.40
-------- -------- -------- -------- -------- ------- ------- -------
Less distributions:
Dividends from net
investment income... (0.54) (0.35) (0.42) (0.58) (0.72) (0.77) (0.84) (0.52)
Distributions from net
realized capital
gains............... -- (0.08) (0.02) (0.09) -- -- -- --
-------- -------- -------- -------- -------- ------- ------- -------
Total
distributions... (0.54) (0.43) (0.44) (0.67) (0.72) (0.77) (0.84) (0.52)
-------- -------- -------- -------- -------- ------- ------- -------
Net asset value, end of
period................ $ 10.03 $ 9.96 $ 10.24 $ 10.21 $ 10.01 $ 9.79 $ 9.78 $ 9.80
======== ======== ======== ======== ======== ======= ======= =======
Total return(a)......... 6.36% 1.52% 4.65% 8.93% 9.95% 8.32% 8.71% 4.11%
======== ======== ======== ======== ======== ======= ======= =======
Ratios/supplemental data
Net assets, end of
period (000s
omitted)............ $274,480 $329,942 $348,937 $260,454 $131,880 $79,871 $70,781 $62,342
======== ======== ======== ======== ======== ======= ======= =======
Ratio of expenses to
average net
assets.............. 0.51%(b) 0.47%(c) 0.46% 0.48% 0.54% 0.50%(d) 0.45%(e) 0.35%(c)(e)
======== ======== ======== ======== ======== ======= ======= =======
Ratio of net
investment income to
average net
assets.............. 5.44%(b) 3.75%(c) 4.07% 5.60% 7.25% 7.90%(d) 8.59%(e) 7.02%(c)(e)
======== ======== ======== ======== ======== ======= ======= =======
Portfolio turnover
rate................ 120.01% 120.40% 122.99% 119.62% 214.74% 192.46% 219.53% 140.83%
======== ======== ======== ======== ======== ======= ======= =======
Borrowings for the
period;
Amount of debt
outstanding at end
of period (000s
omitted)............ -- -- -- -- -- -- $ 9,943 $19,232
Average amount of debt
outstanding during
the period (000s
omitted)(f)......... -- -- -- -- -- $ 5,101 $14,301 $ 4,110
Average number of
shares outstanding
during the period
(000s omitted)(f)... 28,337 34,101 30,416 18,378 10,559 7,389 7,295 2,429
Average amount of debt
per share during the
period.............. -- -- -- -- -- $ 0.69 $ 1.96 $ 1.69
</TABLE>
- ------------
(a) Does not deduct sales charges and for periods of less than one year, total
return is not annualized.
(b) Ratios are based on average net assets of $280,789,286.
(c) Annualized.
(d) After waiver of advisory fees.
(e) After waiver of advisory fees and expense reimbursements.
(f) Averages computed on a daily basis.
5
<PAGE> 10
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PERFORMANCE
The Fund's performance may be quoted in advertising in terms of yield or
total return. Both types of performance are based on historical results and are
not intended to indicate future performance. All advertisements of the Fund will
disclose the maximum sales charge imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge, such
advertisement will disclose that the sales charge has not been deducted in
computing the performance data, and that, if reflected, the maximum sales charge
would reduce the performance quoted. See the Statement of Additional Information
for further details concerning performance comparisons used in advertisements by
the Fund. Further information regarding the Fund's performance is contained in
the Fund's annual report to shareholders, which is available upon request and
without charge.
A Fund's yield is a way of showing the rate of income the Fund earns on its
investments as a percentage of the share price. In order to calculate yield, a
Fund takes the interest income earned from its portfolio of investments for a
30-day period (net of expenses), divides such interest by the number of the
Fund's shares, and expresses the result as an annualized percentage rate based
on the Fund's offering price (including the 1.00% maximum sales charge) at the
end of the 30-day period. Yields are calculated according to accounting methods
that are standardized for all stock and bond funds. Because yield accounting
methods differ from the methods used for other accounting purposes, a Fund's
yield may not equal the income paid to an investor's account or the income
reported in the Fund's financial statements.
A Fund may also quote its distribution rate, which is calculated by
dividing dividends declared during a specified period by the Fund's maximum
offering price at the end of the period and annualizing the result.
A Fund's total return shows its overall change in value, including changes
in share price assuming all of the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical annually compounded return that would have produced
the same cumulative total return if the Fund's performance had been constant
over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, a Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
From time to time and in its discretion, AIM may waive all or a portion of
its advisory fees and/or assume certain expenses of the Fund. Such a practice
will have the effect of increasing the Fund's yield and total return. The
performance of the Fund will vary from time to time and past results are not
necessarily representative of future results. A Fund's performance is a function
of its portfolio management in selecting the type and quality of portfolio
securities and is affected by the operating expenses of the Fund and general
market conditions.
- --------------------------------------------------------------------------------
INVESTMENT PROGRAM
INVESTMENT OBJECTIVE. The investment objective of the Fund is to seek
liquidity with minimum fluctuation in principal value, and, consistent with this
objective, the highest total return achievable. There can be no assurance that
the Fund will achieve its investment objective. The Fund's investment objective
is a fundamental policy, which may be changed only by the affirmative vote of
the holders of a majority of the outstanding shares of beneficial interest of
the Fund.
INVESTMENT POLICIES. The Fund will attempt to achieve its objective by
investing in an actively managed portfolio of U.S. Treasury notes and other
direct obligations of the U.S. Treasury.
The Fund will attempt to enhance its total return through capital
appreciation when market factors, such as economic and market conditions and the
prospects for interest rate changes, indicate that capital appreciation may be
available without significant risk to principal. The Fund will only purchase
securities whose maturities do not exceed three (3) years. The Fund's policy of
investing in securities with remaining maturities of three (3) years or less
will result in high portfolio turnover. Under normal circumstances, the average
portfolio maturity of the Fund will range between one-and-one-half (1 1/2) and
two (2) years. Since brokerage commissions are not normally paid on investments
of the type made by the Fund, the high turnover rate should not adversely affect
the net income of the Fund.
U.S. TREASURY SECURITIES. The Fund may invest in U.S. Treasury obligations,
which are direct obligations of the U.S. Treasury and which differ only in their
interest rates, maturities, and times of issuance, including U.S. Treasury
bills, U.S. Treasury notes and U.S. Treasury bonds.
LOANS OF PORTFOLIO SECURITIES. The Fund may from time to time loan
securities from its portfolio to brokers, dealers and financial institutions and
receive collateral in cash or U.S. Treasury obligations which will be maintained
at all times in an amount equal to at least 100% of the current market value of
the loaned securities; provided, however, that such loans are made according to
the guidelines of the SEC and the Trust's Board of Trustees. The Fund will be
entitled to the interest paid upon investment of the cash collateral in its
permitted investments or to the payment of a premium or fee for the loan. The
Fund may at any time call such loans
6
<PAGE> 11
and obtain the securities loaned. However, if the borrower of the securities
should default on its obligation to return the securities borrowed, the value of
the collateral may be insufficient to permit the Fund to reestablish its
position by making a comparable investment due to changes in market conditions.
The Fund may pay reasonable fees to persons unaffiliated with the Fund in
connection with the arranging of such loans. The Fund will only engage in
securities lending transactions with broker-dealers registered with the SEC, or
with federally-supervised banks or savings and loan associations.
WHEN-ISSUED OR DELAYED DELIVERY TRADING. The Fund may purchase U.S.
Treasury obligations on a when-issued basis, and it may purchase or sell such
securities for delayed delivery. These transactions occur when securities are
purchased or sold by the Fund with payment and delivery to take place in the
future in order to secure what is considered an advantageous yield and price to
the Fund at the time of entering into the transaction. The value of the security
on the delivery date may be more or less than its purchase price. The Fund's
custodian bank will segregate cash or short-term U.S. Treasury obligations in an
aggregate amount equal to the amount of its commitments in connection with such
delayed delivery and when-issued purchase transactions. No delayed delivery or
when-issued commitments will be made if, as a result, more than 25% of the
Fund's net assets would be so committed.
BORROWING. Subject to its investment restrictions (see "Investment
Restrictions"), the Fund may borrow money from banks for temporary or emergency
purposes to meet redemption requests which might otherwise require the untimely
disposition of securities. The Fund may not borrow for the purpose of increasing
income. If there are unusually heavy redemptions because of changes in interest
rates or for any other reason, the Fund may have to sell a portion of its
investment portfolio at a time when it may be disadvantageous to do so. Selling
Fund securities under these circumstances may result in a lower net asset value
per share or decreased dividend income, or both. The Fund believes that, in the
event of abnormally heavy redemption requests, its borrowing provisions would
help to mitigate any such effects and could make the forced sale of its
portfolio securities less likely.
REVERSE REPURCHASE AGREEMENTS. A reverse repurchase agreement involves the
sale of securities held by the Fund, with an agreement that the Fund will
repurchase such securities at an agreed-upon price, date and interest payment.
It is the current operating policy of the Fund to enter into reverse repurchase
agreements (which are considered to be borrowings under the Investment Company
Act of 1940 (the "1940 Act") only for temporary or emergency purposes and not as
a means to increase income, even though the Fund's investment restrictions
permit the Fund to engage in reverse repurchase agreements for income
enhancement. The Fund will enter into a reverse repurchase agreement only when
the interest income to be earned from the investment of the proceeds of the
transaction is greater than the interest expense of the transaction. During the
time a reverse repurchase agreement is outstanding, the Fund will maintain a
segregated custodial account containing U.S. Treasury obligations having a value
equal to the repurchase price under such reverse repurchase agreement. Any
investment gains made by the Fund with monies borrowed through reverse
repurchase agreements will cause the net asset value of the Fund's shares to
rise faster than would be the case if the Fund had no such borrowings. On the
other hand, if the investment performance resulting from the investment of
borrowings obtained through reverse repurchase agreements fails to cover the
cost of such borrowings to the Fund, the net asset value of the Fund will
decrease faster than would otherwise be the case.
ILLIQUID SECURITIES. The Fund will limit its investment in illiquid
securities to no more than 15% of its net assets, including repurchase
agreements with remaining maturities in excess of seven (7) days.
The investment policies described above may be changed by the Board of
Trustees without the affirmative vote of a majority of the outstanding shares of
beneficial interest of the Fund.
INVESTMENT RESTRICTIONS. The Fund's investment program is subject to a
number of investment restrictions which reflect self-imposed standards as well
as federal and state regulatory limitations. These restrictions are designed to
minimize certain risks associated with investing in certain types of securities
or engaging in certain transactions. The most significant of these restrictions
provide that the Fund will not:
(1) purchase any security unless the security is a direct obligation
of the U.S. Treasury or is a repurchase agreement with respect to a direct
obligation of the U.S. Treasury;
(2) issue senior securities in the form of indebtedness, borrow money,
except from banks for temporary or emergency purposes, such as to meet
redemption requests (not for the purpose of increasing income), or borrow
through reverse repurchase agreements (which may be entered into for the
purpose of increasing income) if, as a result of any such borrowings, the
amount borrowed would exceed 33-1/3% of the value of the Fund's assets
(including the proceeds of such securities issued or money borrowed) less
its liabilities (not including the liabilities incurred in connection with
such issuance or borrowing);
(3) make loans of money other than (a) through the purchase of debt
securities in accordance with the Fund's investment program, and (b) by
entering into repurchase agreements; or
(4) lend any portfolio securities if the value of the securities
loaned by it would exceed an amount equal to one-third of its total assets.
The foregoing investment restrictions (as well as certain others set forth in
the Statement of Additional Information) are matters of fundamental policy which
may not be changed without the affirmative vote of the holders of a majority of
the outstanding shares of beneficial interest of the Fund.
7
<PAGE> 12
- --------------------------------------------------------------------------------
MANAGEMENT
The overall management of the business and affairs of the Fund is vested in
the Trust's Board of Trustees. The Board of Trustees approves all significant
agreements between the Fund and persons or companies furnishing services to the
Fund, including the investment advisory agreement with AIM, the administrative
services agreement with AIM, the distribution agreement with AIM Distributors
regarding distribution of shares of the Retail Class, the agreement with The
Bank of New York as custodian and the agreement with AFS as transfer agent for
the Retail Class of the Fund. The day-to-day operations of the Fund are
delegated to the Trust's officers and to AIM, subject always to the objectives
and policies of the Fund and to the general supervision of the Trust's Board of
Trustees. Certain trustees and officers of the Trust are affiliated with AIM and
A I M Management Group Inc. ("AIM Management"), the parent corporation of AIM.
AIM Management is a holding company engaged in the financial services business.
Information concerning the Board of Trustees may be found in the Statement of
Additional Information.
INVESTMENT ADVISOR. A I M Advisors, Inc., 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046, serves as the investment advisor to the Fund pursuant to a
Master Investment Advisory Agreement, dated October 18, 1993 (the "Advisory
Agreement"). AIM was organized in 1976 and, together with its affiliates,
manages or advises 37 investment company portfolios (including the Fund). As of
November 1, 1995, the total assets of the investment company portfolios were
approximately $39.5 billion. AIM is a wholly-owned subsidiary of AIM Management.
Under the terms of the Advisory Agreement, AIM supervises all aspects of
the Fund's operations and provides investment advisory services to the Fund. AIM
obtains and evaluates economic, statistical and financial information to
formulate and implement investment programs for the Fund. The Advisory Agreement
also provides that, upon the request of the Board of Trustees, AIM may perform
or arrange for the performance of certain accounting, shareholder servicing and
other administrative services for the Fund which are not required to be
performed by AIM under the Advisory Agreement. The Board of Trustees has made
such a request. As a result, AIM and the Fund have entered into a Master
Administrative Services Agreement, dated as of October 18, 1993, pursuant to
which AIM is entitled to receive from the Fund reimbursement of its costs or
such reasonable compensation as may be approved by the Board of Trustees.
Currently, AIM is reimbursed for the services of the Fund's principal financial
officer and his staff, and any expenses related to such services, as well as the
services of staff responding to various shareholder inquires. In addition, the
Fund and A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a
wholly-owned subsidiary of AIM and registered transfer agent, receives a fee
pursuant to a Transfer Agency and Service Agreement for its provision of
transfer agency, dividend distribution and disbursement, and shareholder
services to the Fund.
For a discussion of AIM's brokerage allocation policies and practices, see
"Portfolio Transactions and Brokerage Allocation" in the Statement of Additional
Information. In accordance with policies established by the trustees, AIM may
take into account sales of shares of the Fund and other funds advised by AIM in
selecting broker-dealers to effect portfolio transactions on behalf the Fund.
FEES AND EXPENSES. Pursuant to the Advisory Agreement, the Trust pays AIM a
fee with respect to the Fund calculated at the annual rate of 0.20% of the first
$500 million of the Fund's average daily net assets plus 0.175% of the Fund's
average daily net assets in excess of $500 million. For the year ended July 31,
1995, the Fund paid 0.20% of its average daily net assets to AIM for its
advisory services, and the Retail Class' total expenses of the same period,
stated as a percentage of average daily net assets of the Fund, was 0.51%.
For the year ended July 31, 1995, the Fund paid 0.02% of its average daily
net assets to AIM for reimbursement for administrative services.
FEE WAIVERS. In order to increase the yield to investors, AIM may from time
to time voluntarily waive or reduce its fee, while retaining its ability to be
reimbursed for such fee prior to the end of such fiscal year. Fee waivers or
reductions and waivers of expense reimbursements, other than those set forth in
the Advisory Agreement, may be rescinded at any time without notice to
investors.
PORTFOLIO MANAGEMENT. AIM uses a team approach and disciplined investment
strategy in providing investment advisory services to all its accounts,
including the Fund. AIM's investment staff consists of 95 individuals. While
individual members of AIM's investment staff are assigned primary responsibility
for the day-to-day management of each of AIM's accounts, all accounts are
reviewed on a regular basis by AIM's Investment Policy Committee to ensure that
they are being invested in accordance with the accounts' and AIM's investment
policies. The individuals on the investment team who are primarily responsible
for the day-to day management of the Fund are Karen Dunn Kelley and Meggan M.
Walsh. Ms. Kelley is Senior Vice President of A I M Capital Management, Inc.
("AIM Capital"), a wholly-owned subsidiary of AIM; Vice President of AIM and of
the Trust; and has been responsible for the Fund since 1992. Ms. Kelly has been
associated with AIM since 1989 and has a total of 13 years of experience as an
investment professional. Ms. Walsh is Vice President of AIM Capital and has been
responsible for the Fund since 1992. Ms. Walsh has been associated with AIM
since 1991 and has a total of eight years of experience as an investment
professional. Prior to 1991, Ms. Walsh was Manager of Short-Term U.S. Commercial
Paper and Euro-Commercial Paper Programs at Nationale-Nederlanden North America
Corporation.
DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement,
dated October 15, 1993, relating to the shares of the Retail Class (the
"Distribution Agreement") with AIM Distributors, a registered broker-dealer and
a wholly-owned subsidiary of
8
<PAGE> 13
AIM, to act as the distributor of shares of the Retail Class. The address of AIM
Distributors is P.O. Box 4333, Houston, Texas 77210-4333. Certain trustees and
officers of the Trust are affiliated with AIM Distributors. The Distribution
Agreement provides AIM Distributors with the exclusive right to distribute
shares of the Retail Class through affiliated broker-dealers and through other
broker-dealers with whom AIM Distributors has entered into selected dealer
agreements.
DISTRIBUTION PLAN. The Trust has adopted a Master Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the 1940 Act with respect to the Retail
Class. Under the Plan the Fund with respect to the Retail Class will pay
compensation of 0.15% per annum of the average daily net assets of the Retail
Class to AIM Distributors for the purpose of financing any activity which is
primarily intended to result in the sale of shares of the Retail Class. The Plan
is designed to compensate AIM Distributors for certain promotional and other
sales-related costs, and to implement an incentive program which provides for
periodic payments to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
shares of the Retail Class.
Under the Plan, AIM Distributors may in its discretion from time to time
agree to waive voluntarily all or a portion of its fee, while retaining its
ability to be reimbursed for such fee prior to the end of the fiscal year.
Activities that may be financed under the Plan include, but are not limited
to, the following: preparation and distribution of advertising material and
sales literature, printing of prospectuses and statements of additional
information (and supplements thereto) and reports for other than existing
shareholders, supplemental payments made to dealers and other institutions such
as asset-based sales charges or as payments of service fees under shareholder
services arrangements and the cost of administering the Plan.
The Plan does not obligate the Retail Class to reimburse AIM Distributors
for the actual expenses AIM Distributors may incur in fulfilling its obligations
under the Plan. Thus, even if AIM Distributors' actual expenses exceed the fee
payable to AIM Distributors thereunder at any given time, the Retail Class will
not be obligated to pay more than that fee, but if AIM Distributors' expenses
are less than the fee it receives, AIM Distributors will retain the full amount
of the fee.
The Plan provides that it will continue in effect so long as it is
specifically approved at least annually by a majority of the Trust's entire
Board of Trustees, including a majority of the trustees who are not "interested
persons" (as defined in the 1940 Act) of the Trust and who have no direct or
indirect financial interest in the operation of the Plan or in any agreements
related to the Plan ("Qualified Trustees"), unless terminated by vote of a
majority of the Qualified Trustees, or by vote of the holders of a majority of
the outstanding shares of the Retail Class. The Plan may not be amended to
increase materially the limit upon distribution expenses described above unless
approved by shareholders of the Retail Class, as applicable, and no other
material amendment to the Plan may be made unless approved by a majority of the
Board of Trustees, including a majority of the Qualified Trustees. While the
Plan is in effect, the selection and nomination of Qualified Trustees will be at
the discretion of the Qualified Trustees.
Under the Plan, certain financial institutions which have entered into
service agreements and which sell shares of the Retail Class on an agency basis,
may receive payments from the Retail Class pursuant to the Plan. AIM
Distributors does not act as principal, but rather as agent, for the Retail
Class in making such payments. The Retail Class will obtain a representation
from such financial institutions that they will either be licensed as dealers as
required under applicable state law; or that they will not engage in activities
which would constitute acting as a "dealer" as defined under applicable state
law.
Payments pursuant to the Plan are subject to any applicable limitations
imposed by rules of the National Association of Securities Dealers, Inc.
("NASD"). The Plan conforms to rules of the NASD by limiting payments made to
dealers and other financial institutions who provide continuing personal
shareholder services to their customers who purchase and own shares of the
Retail Class to no more than 0.25% per annum of the average daily net assets of
the Retail Class attributable to the customers of such dealers of financial
institutions. The Plan also imposes a cap on the total amount of sales charges,
including asset-based sales charges, that may be paid by the Retail Class. The
Plan requires the officers of the Trust to provide the Board of Trustees at
least quarterly with a written report of the amounts expended pursuant to the
Plan and the purposes for which such expenditures were made. The Board of
Trustees shall review these reports in connection with their decisions with
respect to the Plan.
- --------------------------------------------------------------------------------
ORGANIZATION OF THE TRUST
The Trust is organized as a Delaware business trust pursuant to an
Agreement and Declaration of Trust, dated May 5, 1993, as amended (the "Trust
Agreement"). The Trust is an open-end, series, management investment company,
and may consist of one or more series portfolios as authorized from time to time
by the Board of Trustees. The Trust was originally organized as a Maryland
corporation on November 4, 1988 and on October 15, 1993 was reorganized as a
Delaware business trust.
All shares of the Trust have equal rights with respect to voting, except
that (i) the holders of shares of all classes of a particular portfolio of the
Trust (a "Portfolio") voting together will have the exclusive right to vote on
matters (such as advisory fees) pertaining solely to that Portfolio, and (ii)
the holders of shares of a particular class will have the exclusive right to
vote on matters pertaining to distribution plans or shareholder service plans,
if any such plans are adopted, relating solely to such class. There are no
9
<PAGE> 14
preemptive or conversion rights applicable to any of the Trust's shares. The
Trust's shares, when issued, will be fully paid and non-assessable.
The Retail Class and Institutional Class have different shareholders and
are allocated certain differing class expenses, such as those associated with
the shareholder servicing of their shares. To obtain information about the
Institutional Class, please call Fund Management Company ("FMC"), a registered
broker-dealer and a wholly-owned subsidiary of A I M Advisors, Inc., at (800)
659-1005. FMC is the exclusive distributor of the Institutional Class.
The Trust is not required to hold annual or regular meetings of
shareholders. Meetings of shareholders of a class will be held from time to time
to consider matters requiring a vote of such shareholders in accordance with the
requirements of the 1940 Act, state law or the provisions of the Trust
Agreement. It is not expected that shareholder meetings will be held annually.
The Trust Agreement provides that the trustees of the Trust shall hold
office during the existence of the Trust, except as follows: (a) any trustee may
resign or retire; (b) any trustee may be removed by a vote of the majority of
the outstanding shares of the Trust, or at any time by written instrument signed
by at least two-thirds of the trustees and specifying when such removal becomes
effective; or (c) any trustee who has died or become incapacitated and is unable
to serve may be removed by a written instrument signed by a majority of the
trustees.
Under Delaware law, a shareholder of the Trust enjoys the same limitations
of liability extended to shareholders of private, for-profit corporations. There
is a remote possibility, however, that under certain circumstances shareholders
of the Trust may be held personally liable for the Trust's obligations. However,
the Trust Agreement disclaims shareholder liability for acts or obligations of
the Trust and requires that notice of such disclaimer be given in each
agreement, obligation or instrument entered into or executed by the Trust or a
trustee. The Trust Agreement provides for indemnification from the Trust
property for all losses and expenses of any shareholder held personally liable
for the Trust's obligations. Thus, the risk of a shareholder incurring financial
loss on account of such liability is limited to circumstances in which the Trust
itself would be unable to meet its obligations and where the other party was
held not to be bound by the disclaimer.
10
<PAGE> 15
THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND SHAREHOLDER
ASSISTANCE IS
(800) 959-4246 (7:30 A.M. TO 5:30 P.M. CENTRAL TIME).
INVESTOR'S GUIDE
TO THE AIM FAMILY OF FUNDS(R)
- --------------------------------------------------------------------------------
INTRODUCTION TO THE AIM FAMILY OF FUNDS
THE AIM FAMILY OF FUNDS consists of the following mutual funds:
<TABLE>
<S> <C>
AIM AGGRESSIVE GROWTH FUND AIM INTERMEDIATE GOVERNMENT FUND+
AIM BALANCED FUND+ AIM INTERNATIONAL EQUITY FUND+
AIM CHARTER FUND+ AIM LIMITED MATURITY TREASURY SHARES
AIM CONSTELLATION FUND AIM MONEY MARKET FUND*+
AIM GLOBAL AGGRESSIVE GROWTH AIM MUNICIPAL BOND FUND+
FUND+ AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
AIM GLOBAL GROWTH FUND+ AIM TAX-EXEMPT CASH FUND*
AIM GLOBAL INCOME FUND+ AIM TAX-FREE INTERMEDIATE SHARES
AIM GLOBAL UTILITIES FUND+ AIM VALUE FUND+
AIM GROWTH FUND+ AIM WEINGARTEN FUND+
AIM HIGH YIELD FUND+
AIM INCOME FUND+
</TABLE>
* Shares of AIM TAX-EXEMPT CASH FUND, and Class C Shares of AIM MONEY MARKET
FUND, are offered to investors at net asset value, without payment of a sales
charge, as described below.
+ Shares of different classes of these funds, including the Class A and Class B
Shares of AIM MONEY MARKET FUND, are offered to investors at different sales
charges pursuant to a Multiple Distribution System. For more information
consult the prospectus of any of these funds.
IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
HOW TO PURCHASE SHARES
HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM Family
of Funds ("AIM Funds"), an investor must submit a fully completed New Account
Application form directly to A I M Fund Services, Inc. ("AFS" or the "Transfer
Agent") or through any dealer authorized by A I M Distributors, Inc. ("AIM
Distributors") to sell shares of the AIM Funds.
Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed IRS Form W-8 (for non-resident aliens) or Form
W-9 (certifying exempt status) accompanying the registration information will be
subject to backup withholding. See the Account Application for applicable
Internal Revenue Service penalties. The minimum initial investment is $500,
except for accounts initially established through an Automatic Investment Plan,
which requires a special authorization form (see "Special Plans") and for
certain retirement accounts. The minimum initial investment for accounts
established with an Automatic Investment Plan is $50. The minimum initial
investment for an IRA account is $250. There are no minimum initial investment
requirements applicable to money-purchase/profit-sharing plans, 401(k) plans,
IRA/SEP, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such plans is $25), or
for investment of dividends and distributions of any of the AIM Funds into any
existing AIM Funds account.
AFS' mailing address is:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
For additional information or assistance, investors should call the Client
Services Department of AFS at one of the following telephone numbers:
(713) 626-1919 Extension 5224 (in Houston)
(800) 959-4246 (elsewhere)
Shares of any AIM Funds not named on the cover of this Prospectus are offered
pursuant to separate prospectuses. Copies of other prospectuses may be obtained
by calling (713) 626-1919, Extension 5001 (in Houston) or (800) 347-4246
(elsewhere).
HOW TO PURCHASE ADDITIONAL SHARES. The minimum investment for subsequent
purchases is $50. The minimum employee salary deferral investment for
participants in money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or
457 plans is $25. There are no such minimum investment requirements for
investment of dividends and distributions of any of the AIM Funds into any other
existing AIM Funds account.
RET 11/95
A-1
<PAGE> 16
Additional shares may be purchased directly through AIM Distributors or
through any dealer who has entered into an agreement with AIM Distributors.
Direct investments may be made by mail or by wiring payment to AFS, as follows:
SUBSEQUENT PURCHASES BY MAIL: Investors must indicate their account number and
the name of the Fund being purchased. The remittance slip from a confirmation
statement should be used for this purpose, and sent to AFS.
PURCHASES BY WIRE: To insure prompt credit to his account, an investor or his
dealer should call AFS' Client Services Department at (800) 959-4246 prior to
sending a wire to receive a reference number for the wire. The following wire
instructions should be used:
Texas Commerce Bank
ABA 113000609
Attn: AIM Wire Purchase
DDA 00100366807
Fund Name/Reference Number
Shareholder Name
Shareholder Account Number
If wires are received after 4:15 p.m. Eastern Time or during a bank holiday,
purchases will be confirmed at the price determined on the next business day of
the applicable AIM Fund.
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
Shares of the AIM Funds may be purchased at their respective net asset value
plus a sales charge as indicated below, except that shares of AIM TAX-EXEMPT
CASH FUND and Class C Shares of AIM MONEY MARKET FUND (the "No Load Funds") are
sold without a sales charge. For information on purchasing any of the AIM Funds
and to receive a prospectus, please call (713) 626-1919, Extension 5001 (in
Houston) or (800) 347-4246 (elsewhere). As described below, the sales charge
otherwise applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value." The following tables show the sales charge and dealer concession
at various investment levels for the AIM Funds.
SALES CHARGES AND DEALER CONCESSIONS
GROUP 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 AGGRESSIVE GROWTH FUND, AIM
CHARTER FUND, AIM CONSTELLATION FUND, AIM GLOBAL UTILITIES FUND, AIM GROWTH
FUND, AIM INTERNATIONAL EQUITY FUND, AIM MONEY MARKET FUND, AIM VALUE FUND and
AIM WEINGARTEN 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> <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>
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. Purchases of $1,000,000 or more are at net asset value, subject to
a contingent deferred sales charge of 1% if shares are redeemed prior to 18
months from the date of purchase, as described under the caption "How to Redeem
Shares -- Contingent Deferred Sales Charge Program for Large Purchases."
RET 11/95
A-2
<PAGE> 17
GROUP 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 AIM TAX-EXEMPT BOND FUND OF CONNECTICUT; and the Class A
shares of each of AIM BALANCED FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM HIGH YIELD FUND, AIM INCOME
FUND, AIM INTERMEDIATE GOVERNMENT FUND, and AIM MUNICIPAL BOND 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> <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>
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. Purchases of $1,000,000 or more are at net asset value, subject to
a contingent deferred sales charge of 1% if shares are redeemed prior to 18
months from the date of purchase, as described under the caption "How to Redeem
Shares -- Contingent Deferred Sales Charge Program for Large Purchases."
GROUP 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 AIM LIMITED MATURITY TREASURY SHARES and AIM TAX-FREE
INTERMEDIATE SHARES.
<TABLE>
<CAPTION> DEALER
INVESTOR'S SALES CHARGE CONCESSION
------------------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE PUBLIC OF THE NET OF THE PUBLIC
AMOUNT OF INVESTMENT IN OFFERING AMOUNT OFFERING
SINGLE TRANSACTION PRICE INVESTED PRICE
----------------------- ------------- ---------- -------------
<S> <C> <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.
ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
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. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. 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 AIM LIMITED MATURITY TREASURY SHARES and AIM TAX-FREE INTERMEDIATE
SHARES 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 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 .10% of such purchases of shares of AIM LIMITED MATURITY TREASURY
SHARES, and in an amount up to .25% of such purchases of shares of AIM TAX-FREE
INTERMEDIATE SHARES.
RET 11/95
A-3
<PAGE> 18
The Sub-Advisory Agreement among CIGNA Investments, Inc., AIM and AIM Funds
Group terminated effective September 20, 1995. As of that date, AIM assumed sole
responsibility for providing investment advice to AIM High Yield Fund.
TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than the Money Market Funds, as described below) received by dealers
prior to 4:15 p.m. Eastern Time on any business day of an AIM Fund and either
received by AIM Distributors in its Houston, Texas office prior to 5:00 p.m.
Central Time on that day or transmitted by dealers to the Transfer Agent through
the facilities of the National Securities Clearing Corporation ("NSCC") by 7:00
p.m. Eastern Time on that day, will be confirmed at the price determined as of
the close of that day. Orders received by dealers after 4:15 p.m. Eastern Time
will be confirmed at the price determined on the next business day of the AIM
Fund. It is the responsibility of the dealer to ensure that all orders are
transmitted on a timely basis to AIM Distributors or to the Transfer Agent
through the facilities of NSCC. Any loss resulting from the dealer's failure to
submit an order within the prescribed time frame will be borne by that dealer.
Please see "How to Purchase Shares -- Purchases by Wire" for information on
obtaining a reference number for wire orders, which will facilitate the handling
of such orders and ensure prompt credit to an investor's account. A "business
day" of an AIM Fund is any day on which the New York Stock Exchange is open for
business. It is expected that the New York Stock Exchange will be closed during
the next twelve months on Saturdays and Sundays and on the days on which New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day are observed by the New York Stock
Exchange.
An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
SPECIAL INFORMATION RELATING TO MONEY MARKET FUNDS. Shares of AIM MONEY MARKET
FUND or AIM TAX-EXEMPT CASH FUND (the "Money Market Funds") are purchased or
exchanged at the net asset value next determined after acceptance of an order
for purchase or exchange in proper form, except for Class A shares of AIM MONEY
MARKET FUND, which are sold with a sales charge. Net asset value is normally
determined at 12:00 noon and 4:15 p.m. Eastern Time on each business day of AIM
MONEY MARKET FUND and at 4:15 p.m. Eastern Time on each business day of AIM
TAX-EXEMPT CASH FUND. Because each Money Market Fund uses the amortized cost
method of valuing the securities it holds and rounds its per share net asset
value to the nearest whole cent, it is anticipated that the net asset value of
the shares of such funds will remain constant at $1.00 per share. However, there
is no assurance that either Money Market Fund can maintain a $1.00 net asset
value per share. In order to earn dividends with respect to AIM MONEY MARKET
FUND on the same day that a purchase is made, purchase payments in the form of
federal funds must be received by the Transfer Agent before 12:00 noon Eastern
Time on that day. See "How to Purchase Shares -- Purchases by Wire." Purchases
made by payments in any other form, or payments in the form of federal funds
received after such time, will begin to earn dividends on the next business day
following the date of purchase. The Money Market Funds generally will not issue
share certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise such shares will be held on the shareholder's behalf by the applicable
AIM Fund(s) and be recorded on the books of such fund(s). See "Exchange
Privilege -- Exchanges by Telephone" and "How to Redeem Shares -- Redemptions by
Telephone" for restrictions applicable to shares issued in certificate form.
Please note that certificates will not be issued for shares held in prototype
retirement plans.
MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500.
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 (except for
the No Load Funds, which are sold without payment of a sales charge) provided
that such purchases are made by a "purchaser" as hereinafter defined.
The term "purchaser" means:
o an individual and his or her spouse and minor 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 Individual Retirement Account
("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);
RET 11/95
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<PAGE> 19
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"), provided that:
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;
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, a Simplified Employee Pension ("SEP"), Salary Reduction and other
Elective Simplified Employee Pension Accounts ("SARSEP")) and 457 plans,
although more than one beneficiary or participant is involved;
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; or
o the discretionary advised accounts of A I M Advisors, Inc. or A I M Capital
Management, Inc.
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) the No
Load Funds and (ii) Class B Shares of funds offered pursuant to a Multiple
Distribution System) 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 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 escrowed shares, to make up such difference
within 60 days of the expiration date. Full shares and any cash proceeds for a
fractional share remaining after such redemption will be released from escrow.
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) the No Load Funds
and (ii) Class B Shares
RET 11/95
A-5
<PAGE> 20
of funds offered pursuant to a Multiple Distribution System) 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) the No Load Funds and (ii) Class B Shares of funds offered
pursuant to a Multiple Distribution System) 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 AIM Distributors
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
(see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares of
certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
The following persons may purchase shares of the AIM Funds through AIM
Distributors without payment of an initial sales charge: (a) AIM Management and
its affiliated companies; (b) any current or retired officer, director, trustee
or employee, or any member of the immediate family (including spouse, minor
children, parents and parents of spouse) of any such person, of AIM Management
or its affiliates or of certain mutual funds which are advised or managed by
AIM, or any trust established exclusively for the benefit of such persons; (c)
any employee benefit plan established for employees of AIM Management or its
affiliates; (d) any current or retired officer, director, trustee or employee,
or any member of the immediate family (including spouse, minor children, parents
and parents of spouse) of any such person, or of CIGNA Corporation or of any of
its affiliated companies, or of The Shareholders Services Group, Inc., a
wholly-owned subsidiary of First Data Corporation; (e) any investment company
sponsored by CIGNA Investments, Inc. or any of its affiliated companies for the
benefit of its directors' deferred compensation plans; (f) discretionary advised
clients of AIM or AIM Capital; (g) registered representatives and employees of
dealers who have entered into agreements with AIM Distributors (or financial
institutions that have arrangements with such dealers with respect to the sale
of shares of the AIM Funds) and any member of the immediate family (including
spouse, minor children, parents and parents of spouse) of any such person,
provided that purchases at net asset value are permitted by the policies of such
person's employer; and (h) certain broker-dealers, investment advisers or bank
trust departments that provide asset allocation or similar specialized
investment services to their customers, that charge a minimum annual fee for
such services, and that have entered into an agreement with AIM Distributors
with respect to their use of the AIM Funds in connection with such services.
In addition, shares of any AIM Fund may be purchased at net asset value,
without payment of a sales charge, by pension, profit-sharing or other employee
benefit plans created pursuant to a plan qualified under Section 401 of the Code
or plans under Section 457 of the Code, or employee benefit plans created
pursuant to Section 403(b) of the Code and sponsored by nonprofit organizations
defined under Section 501(c)(3) of the Code. Such plans will qualify for
purchases at net asset value provided that (1) the initial amount invested in
the fund(s) is at least $1,000,000, (2) the sponsor signs a $1,000,000 LOI, or
(3) such shares are purchased by an employer-sponsored plan with at least 100
eligible employees. Section 403(b) plans sponsored by public educational
institutions will not be eligible for net asset value purchases based on the
aggregate investment made by the plan or the number of eligible employees.
Participants in such plans will be eligible for reduced sales charges based
solely on the aggregate value of their individual investments in the applicable
AIM Fund. PLEASE NOTE THAT TAX-EXEMPT FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR
SUCH PLANS. AIM Distributors may pay investment dealers or other financial
service firms up to 1.00% of the net asset value of any shares of the Load
Funds, up to 0.10% of the net asset value of any shares of AIM LIMITED MATURITY
TREASURY SHARES, and up to 0.25% of the net asset value of any shares of all
other AIM Funds sold at net asset value to an employee benefit plan in
accordance with this paragraph.
Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend
RET 11/95
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<PAGE> 21
income or other income received by such trusts; (b) distributions of any net
capital gains received in respect of Class A shares of AIM WEINGARTEN FUND or
AIM CONSTELLATION FUND and proceeds of the sale of Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such trusts;
and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone number of the dealer who sold to the unit holder the units to be
redeemed or repurchased; and (ii) states that the investment in Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by
the proceeds from the redemption or repurchase of units of such trusts.
FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
- --------------------------------------------------------------------------------
SPECIAL PLANS
Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AIM Distributors at the address
provided under "How to Purchase Shares," or by calling the Client Services
Department of AFS at the phone numbers provided under "How to Purchase Shares."
IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE PLANS DESCRIBED
HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN SUCH A PLAN.
SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a shareholder
can arrange for monthly, quarterly or annual checks in any amount (but not less
than $50) to be drawn against the balance of his account in the designated AIM
Fund. Payment of this amount is normally made on or about the tenth or the
twenty-fifth day of each month in which a payment is to be made. A minimum
account balance of $5,000 is required to establish a Systematic Withdrawal Plan,
but there is no requirement thereafter to maintain any minimum investment.
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, it
is disadvantageous to effect such purchases while a Systematic Withdrawal Plan
is in effect.
The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make monthly investments
may establish an Automatic Investment Plan. Under this plan, on or about the
tenth and/or the twenty-fifth day of each month, a draft is drawn on the
shareholder's bank account in the amount specified by the shareholder (minimum
$50 per investment, per account). The proceeds of the draft are invested in
shares of the designated AIM Fund at the applicable offering price determined on
the date of the draft. An Automatic Investment Plan may be discontinued upon 10
days' prior notice to the Transfer Agent or AIM Distributors.
AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into
RET 11/95
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<PAGE> 22
another AIM Fund. An authorization may be given on the account application or on
an authorization form available from AIM Distributors. An AIM Fund will waive
the $5,000 minimum account value requirement if the shareholder has an account
in the fund selected to receive the dividends and distributions with a value of
at least $500.
DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, provided that the exchange otherwise meets the requirements described
under "Exchange Privilege -- Terms and Conditions of Exchange." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program, and exchanges made pursuant to this program are not subject
to an exchange fee. Sales charges may apply, as described under the caption
"Exchange Privilege."
PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM TAX-FREE
INTERMEDIATE SHARES, AIM TAX-EXEMPT CASH FUND, AIM MUNICIPAL BOND FUND and AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the following prototype
retirement plans available to corporations, individuals and employees of
non-profit organizations and public schools: combination money-
purchase/profit-sharing plans; 403(b) plans; IRA plans; and SEP plans
(collectively, "retirement accounts"). Information concerning these plans,
including the custodian's fees and the forms necessary to adopt such plans, can
be obtained by calling or writing the AIM Funds or AIM Distributors. Shares of
the AIM Funds are also available for investment through existing 401(k) plans
(for both individuals and employers) adopted under the Code. The plan custodian
currently imposes an annual $10 maintenance fee with respect to each retirement
account for which it serves as the custodian. This fee is generally charged in
December. Each AIM Fund and/or the custodian reserve the right to change this
maintenance fee and to initiate an establishment fee (not to exceed its cost).
- --------------------------------------------------------------------------------
EXCHANGE PRIVILEGE
TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange 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. AIM Distributors acts as distributor for the AIM Funds,
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions," shares of certain of the AIM
Funds, referred to herein as the "Load Funds," are sold at a public offering
price that includes a maximum sales charge of 5.50% or 4.75% of the public
offering price of such shares; shares of certain of the AIM Funds, referred to
herein as the "Lower Load Funds," are sold at a public offering price that
includes a maximum sales charge of 1.00% of the public offering price of such
shares; and shares of certain other funds, referred to herein as the "No Load
Funds," are sold at net asset value, without payment of a sales charge.
<TABLE>
<S> <C> <C>
LOAD FUNDS: LOWER LOAD FUNDS:
----------- -----------------
AIM AGGRESSIVE GROWTH AIM INCOME FUND -- CLASS A AIM LIMITED MATURITY TREASURY
FUND -- CLASS A AIM INTERMEDIATE GOVERNMENT SHARES
AIM BALANCED FUND -- CLASS A FUND -- CLASS A AIM TAX-FREE INTERMEDIATE SHARES
AIM CHARTER FUND -- CLASS A AIM INTERNATIONAL EQUITY
AIM CONSTELLATION FUND -- CLASS A FUND -- CLASS A NO LOAD FUNDS:
AIM GLOBAL AGGRESSIVE GROWTH AIM MONEY MARKET --------------
FUND -- CLASS A FUND - CLASS A AIM MONEY MARKET FUND -- CLASS C
AIM GLOBAL GROWTH FUND -- CLASS A AIM MUNICIPAL BOND AIM TAX-EXEMPT CASH FUND
AIM GLOBAL INCOME FUND -- CLASS A FUND -- CLASS A
AIM GLOBAL UTILITIES FUND -- AIM TAX-EXEMPT BOND FUND
CLASS A OF CONNECTICUT
AIM GROWTH FUND -- CLASS A AIM VALUE FUND -- CLASS A
AIM HIGH YIELD AIM WEINGARTEN FUND -- CLASS A
FUND -- CLASS A
</TABLE>
Shares of any AIM Fund may be exchanged for shares of any other AIM Fund,
except that (i) Load Funds share purchases of $1,000,000 or more which are
subject to a contingent deferred sales charge may not be exchanged for Lower
Load Funds or for AIM TAX-EXEMPT CASH FUND; and (ii) Lower Load Funds share
purchases of $1,000,000 or more and No Load Fund purchases may be exchanged for
Load Fund shares in amounts of $1,000,000 or more which will then be subject to
a contingent deferred sales charge; however, for purposes of calculating the
contingent deferred sales charge on the Load Fund shares acquired, the 18-month
period shall be computed from the date of such exchange. For shares purchased
prior to November 20, 1995, these exchange conditions will apply effective
January 16, 1996. DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE
IS BEING MADE, SHARES
RET 11/95
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<PAGE> 23
BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR AT
THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
<TABLE>
<CAPTION>
LOWER LOAD NO LOAD
FROM: TO: LOAD FUNDS FUNDS FUNDS
- ----- ----------------- ---------- -------
<S> <C> <C> <C>
Load Funds.......... Net Asset Value Net Asset Value Net Asset
Value
Lower Load Funds.... Net Asset Value if shares were held for at Net Asset Value Net Asset
least 30 days; or if shares were acquired Value
upon exchange of any Load Fund; or if shares
were acquired upon exchange from any Lower
Load Fund and such shares were held for at
least 30 days. (No exchange privilege is
available for the first 30 days following the
purchase of the Lower Load Fund shares.)
No Load Funds....... Offering Price if No Load shares were Net Asset Value Net Asset Value
directly purchased. Net Asset Value if No if No Load shares
Load shares were acquired upon exchange of were acquired
shares of any Load Fund or any Lower Load upon exchange of
Fund; Net Asset Value if No Load shares were shares of any
acquired upon exchange of Lower Load Fund Load Fund or any
shares and were held at least 30 days Lower Load Fund;
following the purchase of the Lower Load Fund otherwise, Of-
shares. (No exchange privilege is available fering Price.
for the first 30 days following the
acquisition of the Lower Load Fund shares.)
</TABLE>
FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE IS
REVISED AS FOLLOWS:
<TABLE>
<CAPTION>
LOWER LOAD NO LOAD
FROM: TO: LOAD FUNDS FUNDS FUNDS
- ----- ----------------- ---------- -------
<S> <C> <C> <C>
Load Funds.......... Net Asset Value Net Asset Value Net Asset Value
Lower Load Funds.... Net Asset Value if shares were acquired upon Net Asset Value Net Asset
exchange of any Load Fund. Otherwise, Value
difference in sales charge will apply.
No Load Funds....... Offering Price if No Load shares were Net Asset Value Net Asset Value
directly purchased. Net Asset Value if No if No Load shares
Load shares were acquired upon exchange of were acquired
shares of any Load Fund. Difference in sales upon exchange of
charge will apply if No Load shares were shares of any
acquired upon exchange of Lower Load shares. Load Fund or any
Lower Load Fund;
otherwise, Of-
fering Price.
</TABLE>
An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the fund acquired through such exchange; (b) the
shares of the fund acquired through exchange must be qualified for sale in the
state in which the shareholder resides; (c) the exchange must be made between
accounts having identical registrations and addresses; (d) the full amount of
the purchase price for the shares being exchanged must have already been
received by the fund; (e) the account from which shares have been exchanged must
be coded as having a certified taxpayer identification number on file or, in the
alternative, an appropriate IRS Form W-8 (certificate of foreign status) or Form
W-9 (certifying exempt status) must have been received by the fund; (f) newly
acquired shares (through either an initial or subsequent investment) are held in
an account for at least ten business days, and all other shares are held in an
account for at least one day, prior to the exchange; (g) certificates
representing shares must be returned before shares can be exchanged; and (h) if
the fund offers more than one class of shares, the exchange must be between the
same class of shares.
THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
There is no fee for exchanges among the AIM Funds. A service fee of $5 per
transaction may, however, be charged by AIM Distributors on accounts of market
timing investment firms to help to defray the costs of maintaining an automated
exchange service. This service fee will be charged against the market timing
account from which shares are being exchanged.
Shares to be exchanged are redeemed at their net asset value as determined at
the close of business on the day that an exchange request in proper form
(described below) is received by AFS in its Houston, Texas office, provided that
such request is received prior
RET 11/95
A-9
<PAGE> 24
to 4:15 p.m. Eastern Time. Exchange requests received after this time will
result in the redemption of shares at their net asset value as determined at the
close of business on the next business day. Normally, shares of an AIM Fund to
be acquired by exchange are purchased at their net asset value or applicable
offering price, as the case may be, determined on the date that such request is
received by AIM Distributors, but under unusual market conditions such purchases
may be delayed for up to five business days if it is determined that a fund
would be materially disadvantaged by an immediate transfer of the proceeds of
the exchange. If a shareholder is exchanging into a fund paying daily dividends
(see "Dividends, Distributions and Tax Matters -- Dividends and Distributions,"
below), 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. Shares purchased by check may not be
exchanged until it is determined that the check has cleared, which may take up
to ten business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
AIM Distributors reserves the right to reject any exchange request, if, in the
judgment of AIM Distributors, the number of requests or the total value of the
shares that are the subject of the exchange places a material burden on a fund.
For example, the number of exchanges by investment managers making market timing
exchanges may be limited.
EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
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 the appropriate telephone number indicated under the
caption "How to Purchase Shares." 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 applicable fund(s) as long as such request is received prior
to 4:15 p.m. Eastern Time. The Transfer Agent and AFS will not be liable for any
loss, expense or cost arising out of any telephone exchange request that they
reasonably believe 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 transaction.
- --------------------------------------------------------------------------------
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 fund(s) named on the cover page to redeem
shares, AIM Distributors also repurchases shares. Although a contingent deferred
sales charge may be applicable to certain redemptions, as described below, there
is no redemption fee imposed when shares are redeemed or repurchased; however,
dealers may charge service fees for handling repurchase transactions.
CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of shares of Lower Load Funds and No Load Funds, a contingent deferred
sales charge of 1% applies to purchases of $1,000,000 or more that are redeemed
within 18 months of the date of purchase. For a description of the AIM Funds
participating in this program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gain distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-month period (i) shares of any Load
Fund or Class C shares of AIM MONEY MARKET FUND which were acquired through an
exchange of shares which previously were subject to the 1% contingent deferred
sales charge will be credited with the period of time such exchanged shares were
held, and (ii) shares of any Load Fund which are subject to the 1% contingent
deferred sales charge and which were acquired through an exchange of shares of a
Lower Load Fund or a No Load Fund which previously were not subject to the 1%
contingent deferred sales charge will not be credited with the period of time
such exchanged shares were held. The charge will be waived in the following
circumstances:
(1) redemptions of shares by employee benefit plans ("Plans")
qualified under Sections 401 or 457 of the Code, or Plans created under
Section 403(b) of the Code and sponsored by nonprofit organizations as
defined under Section 501(c)(3)
RET 11/95
A-10
<PAGE> 25
of the Code, where (a) the initial amount invested by a Plan in one or more
of the AIM Funds is at least $1,000,000, (b) the sponsor of a Plan signs a
letter of intent to invest at least $1,000,000 in one or more of the AIM
Funds, or (c) the shares being redeemed were purchased by an
employer-sponsored Plan with at least 100 eligible employees; provided,
however, that Plans created under Section 403(b) of the Code which are
sponsored by public educational institutions shall qualify under (a), (b)
or (c) above 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;
(2) redemptions of shares following the registered shareholder's (or
in the case of joint accounts, all registered joint owners') death or
disability, as defined in Section 72(m)(7) of the Code; and
(3) redemptions of shares purchased at net asset value by private
foundations or endowment funds where the initial amount invested was at
least $1,000,000.
REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnerships, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
In addition to these requirements, shareholders who have invested in a fund to
establish an IRA, should include the following information along with a written
request for either partial or full liquidation of fund shares: (a) a statement
as to whether or not the shareholder has attained age 59 1/2; and (b) a
statement as to whether or not the shareholder elects to have federal income tax
withheld from the proceeds of the liquidation.
REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
his account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or wired to the pre-authorized bank
account as indicated on the account application; (b) there has been no change of
address of record on the account within the preceding 30 days; (c) the shares to
be redeemed are not in certificate form; (d) the person requesting the
redemption can provide proper identification information; and (e) the proceeds
of the redemption do not exceed $50,000. Accounts in AIM Distributors' prototype
retirement plans (such as IRA and IRA-SEP) or 403(b) plans are not eligible for
the telephone redemption option. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth at that item of the account application if they reasonably believe such
request to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions. 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 transaction. The telephone redemption privilege is not
available on accounts where the address has been changed within 30 days prior to
a redemption. The redemption proceeds will not be mailed or wired except to the
address of record or bank of record.
EXPEDITED REDEMPTIONS (AIM MONEY MARKET FUND ONLY). If a redemption order is
received prior to 11:30 a.m. Eastern Time, the redemption will be effective on
that day and AIM MONEY MARKET FUND will endeavor to transmit payment on that
same business day. If the redemption order is received after 11:30 a.m. and
prior to 4:15 p.m. Eastern Time, the redemption will be made at the net asset
value determined at 4:15 p.m. Eastern Time and payment will be generally
transmitted on the next business day.
REDEMPTIONS BY CHECK (NO LOAD FUNDS). After completing the appropriate
authorization form, shareholders may use checks to effect redemptions from the
No Load Funds. Checks may be drawn in any amount of $250 or more. This privilege
does not apply to retirement accounts or qualified plans. Checks drawn against
insufficient shares in the account, against shares held less than ten business
days, or in amounts of less than the applicable minimum will be returned to the
payee. The payee of the check may cash or deposit it in the same way as an
ordinary bank check. When a check is presented to the Transfer Agent for
payment, the Transfer Agent will cause a sufficient number of shares of such
fund to be redeemed to cover the amount of the check. Shareholders are entitled
to dividends on the shares redeemed through the day on which the check is
presented to the Transfer Agent for payment.
TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds are
redeemed at their net asset value next computed after a request for redemption
in proper form (including signature guarantees and other required documentation
for written
RET 11/95
A-11
<PAGE> 26
redemptions) is received by the Transfer Agent, except that shares which are
subject to a contingent deferred sales charge program for large purchases
described above may be subject to the imposition of deferred sales charges that
will be deducted from the redemption proceeds. See "Contingent Deferred Sales
Charge Program for Large Purchases." Orders for the redemption of shares
received in proper form by dealers prior to 4:15 p.m. Eastern Time on any
business day of an AIM Fund and either received by the Transfer Agent in its
Houston, Texas office prior to 5:00 p.m. Central Time on that day or transmitted
by dealers to the Transfer Agent through the facilities of NSCC by 7:00 p.m.
Eastern Time on that day, will be confirmed at the price determined as of the
close of that day. Orders received by dealers after 4:15 p.m. Eastern Time will
be confirmed at the price determined on the next business day of an AIM Fund. It
is the responsibility of the dealer to ensure that all orders are transmitted on
a timely basis to the Transfer Agent through the facilities of NSCC. Any
resulting loss from the dealer's failure to submit a request for redemption
within the prescribed time frame will be borne by that dealer. Telephone
redemption requests must be made by 4:15 p.m. Eastern Time on any business day
of an AIM Fund and will be confirmed at the price determined as of the close of
that day. No AIM Fund will accept requests which specify a particular date for
redemption or which specify any special conditions.
Payment of the proceeds of redeemed shares is normally mailed within seven
days following the redemption date. However, in the event of a redemption of
shares purchased by check, the investor may be required to wait up to ten
business days before the redemption proceeds are sent. See "Timing of Purchase
Orders." A charge for special handling (such as wiring of funds or expedited
delivery services) may be made by the Transfer Agent. The right of redemption
may not be suspended or the date of payment upon redemption postponed except
under unusual circumstances such as when trading on the New York Stock Exchange
is restricted or suspended. Payment of the proceeds of redemptions relating to
shares for which checks sent in payment have not yet cleared will be delayed
until it is determined that the check has cleared, which may take up to ten
business days from the date that the check is received.
SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent by wire to
other than the bank of record for the account; (4) redemptions requesting
proceeds to be sent to a new address or an address that has been changed within
the past 30 days; (5) requests to transfer the registration of shares to another
owner; (6) telephone exchange and telephone redemption authorization forms; (7)
changes in previously designated wiring instructions; and (8) 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. These requirements may be waived or modified upon notice to
shareholders.
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 United States
Securities and Exchange Commission ("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 New York Stock Exchange
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.
REINSTATEMENT PRIVILEGE. Within 90 days of a redemption, a shareholder may
invest all or part of the redemption proceeds in shares of the AIM Fund from
which the redemption was made, at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested. The shareholder
must ask the Transfer Agent for such privilege at the time of reinvestment. A
realized gain on the redemption is taxable, and reinvestment will not alter any
capital gains payable. If there has been a loss on the redemption, all of the
loss may not be tax deductible, depending on the timing and amount reinvested.
Under the Code, if the redemption proceeds of fund shares on which a sales
charge was paid are reinvested in (or exchanged for) shares of the same fund
within 90 days of the payment of the sales charge, the shareholder's basis in
the fund shares redeemed may not include the amount of the sales charge paid,
thereby reducing the loss or increasing the gain recognized from the redemption.
Each AIM Fund may amend, suspend or cease offering this privilege at any time as
to shares redeemed after the date of such amendment, suspension or cessation.
This privilege may only be exercised once each year by a shareholder with
respect to each AIM Fund.
Shareholders who are assessed a contingent deferred sales charge in connection
with the redemption of shares of any AIM Fund, and who subsequently reinvest a
portion or all of the value of the redeemed shares in shares of the same AIM
Fund within 90 days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment.
RET 11/95
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<PAGE> 27
- --------------------------------------------------------------------------------
DETERMINATION OF NET ASSET VALUE
The net asset value per share (or share price) of each AIM Fund is determined
as of 4:15 p.m. Eastern Time (12:00 noon and 4:15 p.m. Eastern Time with respect
to AIM MONEY MARKET FUND), on each "business day" of a fund as previously
defined. In the event the New York Stock Exchange (the "NYSE"), closes early
(i.e., before 4:00 p.m. Eastern Time) on a particular day, the net asset value
of an AIM Fund's share will be determined 15 minutes following the close of the
NYSE on such day. The net asset value per share is calculated by subtracting a
fund's liabilities from its assets and dividing the result by the total number
of fund shares outstanding. The determination of each fund's net asset value per
share is made in accordance with generally accepted accounting principles. Among
other items, a fund's liabilities include accrued expenses and dividends
payable, and its total assets include portfolio securities valued at their
market value, as well as income accrued but not yet received. Securities for
which market quotations are not readily available are valued at fair value as
determined in good faith by or under the supervision of the fund's officers and
in accordance with methods which are specifically authorized by its governing
Board of Directors or Trustees. Short-term obligations with maturities of 60
days or less, and the securities held by the Money Market Funds, are valued at
amortized cost as reflecting fair value. AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT
BOND FUND OF CONNECTICUT and AIM TAX-FREE INTERMEDIATE SHARES 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.
Generally, trading in foreign securities, 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 an AIM 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 the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund.
- --------------------------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
Each AIM Fund's policy regarding the payment of dividends and distributions is
set forth below.
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
OF NET OF NET
DIVIDENDS FROM REALIZED REALIZED
NET INVESTMENT SHORT-TERM LONG-TERM
FUND INCOME CAPITAL GAINS CAPITAL GAINS
---- -------------- ------------- -------------
<S> <C> <C> <C>
AIM AGGRESSIVE GROWTH FUND................ declared and paid annually annually annually
AIM BALANCED FUND......................... declared and paid quarterly annually annually
AIM CHARTER FUND.......................... declared and paid quarterly annually annually
AIM CONSTELLATION FUND.................... declared and paid annually annually annually
AIM GLOBAL AGGRESSIVE GROWTH FUND......... declared and paid quarterly annually annually
AIM GLOBAL GROWTH FUND.................... declared and paid annually annually annually
AIM GLOBAL INCOME FUND.................... declared daily; paid monthly annually annually
AIM GLOBAL UTILITIES FUND................. declared daily; paid monthly annually annually
AIM GROWTH FUND........................... declared and paid annually annually annually
AIM HIGH YIELD FUND....................... declared daily; paid monthly annually annually
AIM INCOME FUND........................... declared daily; paid monthly annually annually
AIM INTERMEDIATE GOVERNMENT FUND.......... declared daily; paid monthly annually annually
AIM INTERNATIONAL EQUITY FUND............. declared and paid annually annually annually
AIM LIMITED MATURITY TREASURY SHARES...... declared daily; paid monthly quarterly annually
AIM MONEY MARKET FUND..................... declared daily; paid monthly at least annually annually
AIM MUNICIPAL BOND FUND................... declared daily; paid monthly annually annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT... declared daily; paid monthly annually annually
AIM TAX-EXEMPT CASH FUND.................. declared daily; paid monthly at least annually annually
AIM TAX-FREE INTERMEDIATE SHARES.......... declared daily; paid monthly annually annually
AIM VALUE FUND............................ declared and paid annually annually annually
AIM WEINGARTEN FUND....................... declared and paid annually annually annually
</TABLE>
RET 11/95
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<PAGE> 28
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.
All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment. 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. Shareholders may elect, by written notice to the Transfer
Agent, to receive such distributions, or the dividend portion thereof, in cash,
or to invest such dividends and distributions in shares of another fund in the
AIM Funds. Investors who have not previously selected such a reinvestment option
on the account application form may contact the Transfer Agent at any time to
obtain a form to authorize such reinvestments in another AIM Fund. Such
reinvestments into the AIM Funds are not subject to sales charges, and shares so
purchased are automatically credited to the account of the shareholder.
Changes in the form of dividend and distribution payments may be made by the
shareholder at any time 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, as
discussed below.
TAX MATTERS
Each AIM Fund has qualified or intends to qualify for treatment as a regulated
investment company under Subchapter M of the Code. As long as a fund qualifies
for this tax treatment, it is not subject to federal income taxes on net
investment income and capital gains that are distributed to shareholders. Each
fund, for purposes of determining taxable income, distribution requirements and
other requirements of Subchapter M, is treated as a separate corporation.
Therefore, no fund may offset its gains against another fund's losses and each
fund must individually comply with all of the provisions of the Code which are
applicable to its operations.
TAX TREATMENT OF DISTRIBUTIONS -- GENERAL. Because each AIM Fund intends to
distribute substantially all of its net investment income and net realized
capital gains to its shareholders, it is not expected that any such fund will be
required to pay any federal income tax. Each AIM Fund also intends to meet the
distribution requirements of the Code to avoid the imposition of a
non-deductible 4% excise tax calculated as a percentage of certain undistributed
amounts of taxable ordinary income and capital gain net income. Nevertheless,
shareholders normally are subject to federal income taxes, and any applicable
state and local income taxes, on the dividends and distributions received by
them from a fund whether in the form of cash or additional shares of a fund,
except for tax-exempt dividends paid by AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT
BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE
FUND SHARES (the "Tax-Exempt Funds") which are exempt from federal tax.
Dividends paid by a fund (other than capital gain distributions) may qualify for
the federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM GLOBAL
AGGRESSIVE GROWTH FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM HIGH
YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM LIMITED MATURITY TREASURY SHARES, AIM MONEY MARKET FUND, AIM
MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT
CASH FUND or AIM TAX-FREE INTERMEDIATE SHARES will qualify for this dividends
received deduction. Shortly after the end of each year, shareholders will
receive information regarding the amount and federal income tax treatment of all
distributions paid during the year.
For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, SHAREHOLDERS OF A FUND MUST
FURNISH THE FUND WITH THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER
PENALTIES OF PERJURY THAT THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT
SUBJECT TO BACKUP WITHHOLDING FOR ANY REASON.
Under existing provisions of the Code, nonresident alien individuals, foreign
partnerships and foreign corporations may be subject to federal income tax
withholding at a 30% rate on income dividends (other than exempt-interest
dividends and capital gain dividends) 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.
Certain states exempt from state income taxes dividends paid by mutual funds
out of interest on U.S. Treasury and certain other U.S. Government obligations,
and investors should consult with their own tax advisors concerning the
availability of such exemption.
RET 11/95
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<PAGE> 29
DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE OR LOCAL TAX
LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES DISCUSSED HEREIN.
ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE STATEMENT OF ADDITIONAL
INFORMATION.
TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be required
to include the "exempt-interest" portion of dividends paid by the Tax-Exempt
Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may give rise to a federal alternative minimum tax liability, may
affect the amount of social security benefits subject to federal income tax, may
affect the deductibility of interest on certain indebtedness of the shareholder,
and may have other collateral federal income tax consequences. The Tax-Exempt
Funds may invest in Municipal Securities the interest on which will constitute
an item of tax preference and which therefore could give rise to a federal
alternative minimum tax liability for shareholders, and may invest up to 20% of
their net assets in such securities and other taxable securities. For additional
information concerning the alternative minimum tax and certain collateral tax
consequences of the receipt of exempt-interest dividends, see the Statements of
Additional Information applicable to the Tax-Exempt Funds.
The Tax-Exempt Funds may pay dividends to shareholders which are taxable, but
will endeavor to avoid investments which would result in taxable dividends. The
percentage of dividends which constitute exempt-interest dividends, and the
percentage thereof (if any) which constitute an item of tax preference, will be
determined annually. To the extent that dividends are derived from taxable
investments or net realized short-term capital gains, they will constitute
ordinary income for federal income tax purposes, whether received in cash or
additional shares. Distributions of net long-term capital gains will be taxable
as long-term capital gains, whether received in cash or additional shares, and
regardless of the length of time a particular shareholder may have held his
shares.
From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
AIM INTERMEDIATE GOVERNMENT FUND AND AIM LIMITED MATURITY TREASURY
SHARES -- SPECIAL TAX INFORMATION. Certain states exempt from state income taxes
dividends paid by mutual funds out of interest on U.S. Treasury and certain
other U.S. Government obligations, and investors should consult with their own
tax advisors concerning the availability of such exemption.
AIM INTERNATIONAL EQUITY FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL INCOME FUND AND AIM GLOBAL UTILITIES FUND -- SPECIAL TAX
INFORMATION. For taxable years in which it is eligible to do so, each of these
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.
- --------------------------------------------------------------------------------
GENERAL INFORMATION
CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM LIMITED MATURITY
TREASURY SHARES, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF
CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AND AIM TAX-EXEMPT CASH FUND, for which
The Bank of New York, 110 Washington Street, New York, New York 10286, serves as
custodian. Texas Commerce Bank National Association, P.O. Box 2558, Houston,
Texas 77252-8084, serves as Sub-Custodian for retail purchases of the AIM Funds.
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a
wholly-owned subsidiary of AIM, serves as each AIM Fund's transfer agent and as
dividend payment agent.
LEGAL COUNSEL. The law firm of Ballard Spahr Andrews & Ingersoll,
Philadelphia, Pennsylvania, serves as counsel to the AIM Funds and has passed
upon the legality of the shares offered pursuant to this Prospectus.
SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an AFS Client Services Representative by calling (713) 626-1919
(extension 5224) (in Houston), or toll-free at (800) 959-4246 (elsewhere). 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.
RET 11/95
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<PAGE> 30
OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. A Statement of Additional Information has been filed with the SEC and is
available upon request and without charge, by calling (713) 626-1919, Extension
5001 (in Houston) or (800) 347-4246 (elsewhere). This Prospectus omits certain
information contained in the registration statement filed with the SEC. Copies
of the registration statement, including items omitted from this Prospectus, may
be obtained from the SEC by paying the charges prescribed under its rules and
regulations.
RET 11/95
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<PAGE> 31
APPLICATION INSTRUCTIONS
SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> | <C> <C>
GIVE SOCIAL SECURITY | GIVE TAXPAYER I.D.
ACCOUNT TYPE NUMBER OF: | ACCOUNT TYPE NUMBER OF:
- ------------ ---------- | ------------ ------------------
Individual Individual | Trust, Estate, Pension Trust, Estate, Pension
| Plan Trust Plan Trust and not
| personal TIN of fiduciary
|
Joint Individual First individual listed in the |
"Account Registration" portion |
of the Application |
|
Unif. Gifts to Minors/Unif. Minor | Corporation, Partnership, Corporation, Partnership,
Transfers to Minors | Other Organization Other Organization
|
Legal Guardian Ward, Minor or |
Incompetent |
|
Sole Proprietor Owner of Business | Broker/Nominee Broker/Nominee
|
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed Internal Revenue Service ("IRS") Form W-8.
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 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
(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 and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions accompanying 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 Investment
Company Act of 1940
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 Internal Revenue Code of 1986,
as amended.
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 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
RET 11/95
B-1
<PAGE> 32
calendar years beginning with the calendar year in which it is received by the
Fund. Such shareholders may, however, be subject to appropriate withholding as
described in the Prospectus under "Dividends, Distributions and Tax Matters."
SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the New
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney 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 Family of 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 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 Family of 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. 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 agent subject to this appointment,
and AIM Distributors reserves the right to modify or terminate the telephone
exchange privilege at any time without notice.
SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
New Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney 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 agent 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. Then any
exchanges must be effected in writing by the investor (see the applicable Fund's
prospectus under the caption "Exchange Privilege -- Exchanges by Mail").
RET 11/95
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<PAGE> 33
[THIS PAGE INTENTIONALLY LEFT BLANK]
RET 11/95
B-3
<PAGE> 34
[AIM LOGO APPEARS HERE] THE AIM FAMILY OF FUNDS(R)
Investment Advisor
A I M Advisors, Inc.
11 Greenway Plaza, Suite 1919
Houston, TX 77046-1173
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
Custodian
The Bank of New York
110 Washington Street, 8th Floor
New York, NY 10286
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4333
Houston, TX 77210-4333
Independent Accountants
KPMG Peat Marwick LLP
700 Louisiana
NationsBank Building
Houston, TX 77002
For more complete information about any other fund in The AIM Family of Funds,
including charges and expenses, please call (713) 626-1919, Extension 5001 (in
Houston) or (800) 347-4246 (elsewhere), or write to A I M Distributors, Inc. and
request a free prospectus. Please read the prospectus carefully before you
invest or send money.
<PAGE> 35
STATEMENT OF
ADDITIONAL INFORMATION
AIM INVESTMENT SECURITIES FUNDS
_______________________
AIM LIMITED MATURITY TREASURY SHARES
(A CLASS OF THE LIMITED MATURITY TREASURY PORTFOLIO)
11 GREENWAY PLAZA
SUITE 1919
HOUSTON, TEXAS 77046-1173
(713) 626-1919
_______________________
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS, AND
IT SHOULD BE READ IN CONJUNCTION WITH A PROSPECTUS OF THE ABOVE-NAMED FUND,
A COPY OF WHICH MAY BE OBTAINED FREE OF CHARGE FROM AUTHORIZED DEALERS OR
BY WRITING
A I M DISTRIBUTORS, INC., P.O. BOX 4333,
HOUSTON, TEXAS 77210-4333
OR BY CALLING (713) 626-1919, EXTENSION 5001 (IN HOUSTON)
OR (800) 347-4246 (ELSEWHERE).
_______________________
STATEMENT OF ADDITIONAL INFORMATION DATED: NOVEMBER 17, 1995
RELATING TO PROSPECTUS DATED: NOVEMBER 17, 1995
<PAGE> 36
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
GENERAL INFORMATION ABOUT THE TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Trust and its Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PERFORMANCE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Yield Calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Total Return Calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Historical Portfolio Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Portfolio Turnover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Additional Investment Restrictions of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Investing in Securities Owned by Trustees and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Investing for Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trustees and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Remuneration of Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
AIM Funds Retirement Plan for Eligible Directors/Trustees . . . . . . . . . . . . . . . . . . . . . . . . . 12
Deferred Compensation Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Investment Advisory and Other Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Distribution Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
THE DISTRIBUTION AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
HOW TO PURCHASE AND REDEEM SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
NET ASSET VALUE DETERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Reinvestment of Dividends and Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Qualification as a Regulated Investment Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Excise Tax on Regulated Investment Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Fund Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Sale or Redemption of Fund Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Foreign Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Effect of Future Legislation; Local Tax Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
DESCRIPTION OF FUND SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
MISCELLANEOUS INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Audit Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>
i
<PAGE> 37
<TABLE>
<S> <C>
Custodian and Transfer Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Principal Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
</TABLE>
ii
<PAGE> 38
INTRODUCTION
AIM Investment Securities Funds (formerly, AIM Investment Securities
Funds, Inc.) (the "Trust") 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 with certain information
concerning the activities of the fund being considered for investment. This
information is included in a Prospectus (the "Prospectus"), dated November 17,
1995 which relates to the Trust's AIM Limited Maturity Treasury Shares (the
"Retail Class"), a class of the Limited Maturity Treasury Portfolio (the
"Fund"). Copies of the Prospectus and additional copies of this Statement of
Additional Information may be obtained without charge by writing the principal
distributor of the shares of the Retail Class, A I M Distributors, Inc. ("AIM
Distributors"), P.O. Box 4333, Houston, Texas 77210-4333, or by calling (713)
626-1919, Extension 5001 (in Houston) or (800) 347-4246 (elsewhere). Investors
must receive and should read a Prospectus before they invest in any Fund.
This Statement of Additional Information is intended to furnish
investors with additional information concerning the Fund. Some of the
information set forth in this Statement of Additional Information is also
included in the Prospectus. Additionally, the Prospectus and this Statement of
Additional Information omit certain information contained in the Trust'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 TRUST
THE TRUST AND ITS SHARES
The Trust was previously incorporated as a Maryland corporation on
November 4, 1888. Pursuant to an Agreement and Plan of Reorganization, the
Fund was reorganized on October 15, 1993, as a portfolio of AIM Investment
Securities Funds, a Delaware business trust. A copy of the Trust's Agreement
and Declaration of Trust dated May 5, 1993, as amended (the "Trust Agreement")
is on file with the SEC. Under the Trust Agreement, the Board of Trustees is
authorized to create new series of shares without the necessity of a vote of
shareholders of the Trust.
On October 15, 1993, the Fund succeeded to the assets and assumed the
liabilities of a fund with a corresponding name (the "Predecessor Fund") of
Short-Term Investments Co., a Massachusetts business trust ("STIC"), pursuant
to an Agreement and Plan of Reorganization between the Trust and STIC. All
historical financial information and other information contained in this
Statement of Additional Information for periods prior to October 15, 1993
relating to the Fund (or a class thereof) is that of the Predecessor Fund (or
corresponding class thereof). Shares of beneficial interest of the Trust are
redeemable at their net asset value at the option of the shareholder or at the
option of the Trust in certain circumstances. For information concerning the
methods of redemption and the rights of share ownership, investors should
consult the Prospectus under the captions "Organization of the Trust" and "How
to Redeem Shares."
The assets received by the Trust for the issuance or sale of shares of
each class, and all income, earnings, profits, losses and proceeds therefrom,
subject only to the rights of creditors, will be allocated to that Fund. They
constitute the underlying assets of the Fund, are required to be segregated on
the Trust's books of account, and are to be charged with the expenses with
respect to the Fund and its respective classes. Any general expenses of the
Trust not readily identifiable as belonging to a particular Fund are allocated
by or under the direction of the Board of Trustees, primarily on the basis of
relative net assets, or other relevant factors.
1
<PAGE> 39
Each share of beneficial interest of the Fund represents an equal
proportionate interest in the Fund with each other share and is entitled to such
dividends and distributions out of the income belonging to the Fund as are
declared by the Board. The Fund offers two separate classes of shares: AIM
Limited Maturity Treasury Shares, a retail class, and Institutional Shares, an
institutional class. Each class represents interests in the same portfolio of
investments but, as further described in the Prospectus, each such class is
subject to differing sales charges (if applicable) and expenses, which
differences will result in differing net asset values and dividends and
distributions. Upon any liquidation of the Trust, shareholders of each class
are entitled to share pro rata in the net assets belonging to the Fund available
for distribution.
PERFORMANCE INFORMATION
YIELD CALCULATIONS
Yields for the Fund used in advertising are computed as follows: (a)
divide the Fund's income for a given 30 day or one month period, net of
expenses, by the average number of shares entitled to receive dividends during
the period; (b) divide the figure arrived at in step (a) by the Fund's offering
price (including the maximum sales charge) at the end of the period; and (c)
annualize the result (assuming compounding of income) in order to arrive at an
annual percentage rate. For purposes of yield quotation, income is calculated
in accordance with standardized methods applicable to all stock and bond mutual
funds. In general, interest income is reduced with respect to bonds trading at
a premium over their par value by subtracting a portion of the premium from
income on a daily basis, and is increased with respect to bonds trading at a
discount by adding a portion of the discount to daily income. Capital gains
and losses are excluded from the calculation.
A Fund may also quote its distribution rate, which expresses the
historical amount of income the Fund paid as dividends to its shareholders as a
percentage of the Fund's offering price. The distribution rates for the Retail
Class for the thirty day period ended July 31, 1995 was 5.91%. These
distribution rates were calculated by dividing dividends declared over the
thirty days ended July 31, 1995, as applicable, by the applicable Fund's
maximum offering price at the end of those periods and annualizing the results.
Income calculated for the purposes of calculating a Fund's yield
differs from income as determined for other accounting purposes. Because of
the different accounting methods used, and because of the compounding assumed
in yield calculations, the yield quoted for a Fund may differ from the rate of
distributions the Fund paid over the same period or the rate of income reported
in the Fund's financial statements.
TOTAL RETURN CALCULATIONS
Total returns quoted in advertising reflect all aspects of a Fund's
return, including the effect of reinvesting dividends and capital gain
distributions, and any changes in the Fund's net asset value per share over the
period. Average annual returns are calculated by determining the growth or
decline in value of a hypothetical investment in a Fund over a stated period,
and then calculating the annual compounded percentage rate that would have
produced the same result if the rate of growth or decline in value had been
constant over the period. While average annual returns are a convenient means
of comparing investment alternatives, investors should realize that a Fund's
performance is not constant over time, but changes from year to year, and that
average annual returns do not represent the actual year-to-year performance of
the Fund.
In addition to average annual total return, a Fund may quote
unaveraged or cumulative total return reflecting the simple change in value of
an investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, and/or a series of
redemptions over any time period. Total returns may
2
<PAGE> 40
be broken down into their components of income and capital (including capital
gains and changes in share price) in order to illustrate the relationship of
these factors and their contributions to total return. Total returns, yields
and other performance information may be quoted numerically or in a table,
graph or similar illustration. Total returns may be quoted with or without
taking any applicable maximum sales charge into account. If quoted without the
sales charge, the performance quotation will be noted by an asterisk or other
conspicuous footnote disclosing this fact. Excluding a Fund's sales charge
from a total return calculation produces a higher total return figure.
HISTORICAL PORTFOLIO RESULTS
A Fund's performance may be compared in advertising to the performance
of other mutual funds in general, or of particular types of mutual funds,
especially those with similar objectives. Such performance data may be
prepared by Lipper Analytical Services, Inc. and other independent services
which monitor the performance of mutual funds. A Fund may also advertise
mutual fund performance rankings which have been assigned to it by such
monitoring services.
A Fund's performance may also be compared in advertising to the
performance of comparative benchmarks such as the Consumer Price Index, the
Standard & Poor's 500 Stock Index, and fixed-price investments such as bank
certificates of deposit and/or savings accounts. In addition, a Fund's
long-term performance may be described in advertising in relation to
historical, political and/or economic events. An investor should be aware that
an investment in a Fund is subject to risks not present in ownership of a
certificate of deposit, due to possible greater risk of loss of capital.
From time to time, the Fund's sales literature and/or advertisements
may discuss generic topics pertaining to the mutual fund industry. These
topics include, but are not limited to, literature addressing general
information about mutual funds, variable annuities, dollar-cost averaging,
stocks, bonds, money markets, certificates of deposit, retirement, retirement
plans, asset allocation, tax-free investing, college planning and inflation.
From time to time sales literature and/or advertisements may disclose
(i) top holdings included in the Fund's portfolio, (ii) certain selling group
members and/or (iii) certain institutional shareholders.
The following chart shows the total returns for the Retail Class for
the one and five year periods ended July 31, 1995, and the period beginning
December 15, 1987 (date operations commenced) through July 31, 1995.
<TABLE>
<CAPTION>
AVERAGE
ANNUAL RETURN CUMULATIVE RETURN
------------- -----------------
<S> <C> <C>
One year ended 07/31/95 5.30% 5.30%
Five year ended 07/31/95 6.08% 34.34%
12/15/87 through 07/31/95 6.72% 64.24%
</TABLE>
The 30-day yield for the Retail Class as of July 31, 1995 was 5.30%
During the one-year period ended July 31, 1995, a hypothetical $1,000
investment in the Retail Class at the beginning of such period would have been
worth $1,052.99. During the five-year period ended July 31, 1995, a
hypothetical $1,000 investment in the Retail Class at the beginning of such
period would have been worth $1,343.44. For the period from December 15, 1987
(date operations commenced) through July 31, 1995, a hypothetical $1,000
investment in the Retail Class would have been worth $1,642.40. Each of these
figures assume the maximum sales charge was paid and all distributions were
reinvested.
3
<PAGE> 41
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION
Subject to policies established by the Board of Trustees of the Trust,
A I M Advisors, Inc. ("AIM") is responsible for decisions to buy and sell
securities for the Fund, for the selection of broker-dealers, for the execution
of the Fund's investment portfolio transactions, for the allocation of
brokerage fees in connection with such transactions, and where applicable, for
the negotiation of commissions and spreads on transactions. Since purchases
and sales of portfolio securities by the Fund are usually principal
transactions, the Fund incurs little or no brokerage commissions. Portfolio
securities are normally purchased directly from the issuer or from a market
maker for the securities. The purchase price paid to dealers serving as market
makers may include a spread between the bid and asked prices. The Fund may
also purchase securities from underwriters at prices that include a commission
paid by the issuer to the underwriter.
AIM's primary consideration in effecting a security transaction is to
obtain the best net price and the most favorable execution of the order. To
the extent that the execution and prices offered by more than one dealer are
comparable, AIM may, in its discretion, effect transactions with dealers that
furnish statistical, research or other information or services which AIM deems
to be beneficial to the Fund's investment program. Such research services
supplement AIM's own research. Research services may include the following:
statistical and background information on the U.S. economy, industry groups and
individual companies; forecasts and interpretations with respect to the U.S.
money market, fixed income markets, equity markets, specific industry groups
and individual companies; information on federal, state, local and foreign
political developments; portfolio management strategies; performance
information on securities, indices and investment accounts; information
concerning prices of securities; the providing of equipment used to communicate
research information; the arranging of meetings with management of companies;
and the providing of access to consultants who supply research information.
Certain research services furnished by dealers may be useful to AIM with
clients other than the Fund. Similarly, any research services received by AIM
through placement of portfolio transactions of other clients may be of value to
AIM in fulfilling its obligations to the Fund. AIM is of the opinion that the
material received is beneficial in supplementing AIM's research and analysis;
and therefore, it may benefit the Fund by improving the quality of AIM's
investment advice. The advisory fee paid by the Fund is not reduced because
AIM receives such services, however, because AIM must evaluate information
received as a result of such services, and receipt of such services does not
reduce AIM's workload.
Provisions of the Investment Company Act of 1940, as amended (the
"1940 Act") and rules and regulations thereunder have been construed to
prohibit the Fund from purchasing securities or instruments from, or selling
securities or instruments to, any holder of 5% or more of the voting securities
of any investment company managed or advised by AIM. The Fund has obtained an
order of exemption from the SEC which permits the fund to engage in certain
transactions with such 5% holder, if the Fund complies with conditions and
procedures designed to ensure that such transactions are executed at fair
market value and present no conflicts of interest.
AIM and its affiliates manage several other investment companies (the
"AIM Funds"), some of which may have investment objectives similar to those of
the Fund. It is possible that, at times, identical securities will be
appropriate for investment by the Fund and by one or more of the AIM Funds.
The position of each account, however, in the securities of the same issue, may
vary and the length of time that each account may choose to hold its investment
in the securities of the same issue may likewise vary. The timing and amount
of purchase by each account will also be determined by its cash position. If
the purchase or sale of securities consistent with the investment policies of
the Fund and one or more of the AIM Funds is considered at or about the same
time, transactions in such securities will be allocated among the Fund and the
AIM Funds in a manner deemed equitable by AIM. AIM may combine such
transactions, in accordance with applicable laws and regulations, in order to
obtain the best net price and most favorable execution. Simultaneous
transactions could, however, adversely affect the ability of the Fund to obtain
or dispose of the full amount of a security which it seeks to purchase or sell.
4
<PAGE> 42
Under the 1940 Act, persons affiliated with the Fund are prohibited
from dealing with the Fund as principal in any purchase or sale of securities
unless an exemptive order allowing such transactions is obtained from the SEC.
The Board of Trustees has adopted procedures pursuant to Rule 17a-7 under the
1940 Act related to portfolio transactions between the Fund and the AIM Funds
and the Fund may from time to time enter into transactions in accordance with
such Rule and procedures.
From time to time, an identical security may be sold by an AIM Fund or
another investment account advised by AIM or A I M Capital Management, Inc.
("AIM Capital") and simultaneously purchased by another investment account
advised by AIM or AIM Capital, when such transactions comply with applicable
rules and regulations and are deemed consistent with the investment
objective(s) and policies of the investment accounts advised by AIM or AIM
Capital. Procedures pursuant to Rule 17a-7 under the 1940 Act regarding
transactions between investment accounts advised by AIM or AIM Capital have
been adopted by the Boards of Directors/Trustees of the various AIM Funds,
including the Fund. Although such transactions may result in custodian, tax or
other related expenses, no brokerage commissions or other direct transaction
costs are generated by transactions among the investment accounts advised by
AIM or AIM Capital.
In some cases, the procedure for allocating portfolio transactions
among the Fund and the AIM Funds could have an adverse effect on the price or
amount of securities available to the Fund. In making such allocations, the
main factors considered by AIM are the respective investment objectives and
policies of the Fund and the AIM Funds, 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.
Subject to the overall objective of obtaining the best price and most
favorable execution for the Fund, AIM may also consider sales of shares of the
Fund and of the other AIM Funds as a factor in the selection of broker-dealers
to execute portfolio transactions for the Fund.
The Fund paid no brokerage commissions to brokers affiliated with the
Fund during the past three fiscal years of the Fund.
PORTFOLIO TURNOVER
High portfolio turnover involves corresponding greater transaction
costs which are borne directly by the Fund, and may increase capital gains
which are taxable as ordinary income when distributed to shareholders.
Changes in the portfolio holdings of the Fund are made without regard
to whether a sale would result in a profit or loss. The turnover rates of the
Fund for the fiscal year ended July 31, 1995, the eleven month period ended
July 31, 1994 and the fiscal year ended August 31, 1993 were 120.01%, 120.40%,
and 122.99%, respectively.
INVESTMENT OBJECTIVES AND POLICIES
The following discussion of investment policies supplements the
discussion of the investment objectives and policies set forth in the
Prospectus under the heading "Investment Programs" and should be read only in
conjunction with the Prospectus. There can be no assurance that the Fund will
achieve its investment objective. The values of the securities in which the
Fund invests fluctuate based upon interest rates and market factors.
REPURCHASE AGREEMENTS. The Fund's investment policies permit it to
invest in repurchase agreements with banks and broker-dealers pertaining to
U.S. Treasury obligations. However, in order to maximize the Fund's dividends
which are exempt from state income taxation, as a matter of operating policy,
5
<PAGE> 43
the Fund does not currently invest in repurchase agreements. A repurchase
agreement involves the purchase by the Fund of an investment contract from a
financial institution, such as a bank or broker-dealer, which contract is
secured by U.S. Treasury obligations of the type described above whose value is
equal to or greater than the value of the repurchase agreement, including the
agreed-upon interest. The agreement provides that the seller will repurchase
the underlying securities at an agreed-upon time and price. The total amount
received on repurchase will exceed the price paid by the Fund, reflecting the
agreed-upon rate of interest for the period from the date of the repurchase
agreement to the settlement date. This rate of return is not related to the
interest rate on the underlying securities. The difference between the total
amount received upon the repurchase of the securities and the price paid by the
Fund upon their acquisition is accrued daily as interest. Investments in
repurchase agreements may involve risks not associated with investments in the
underlying securities. If the seller defaulted on its repurchase obligations,
the Fund would incur a loss to the extent that the proceeds from a sale of the
underlying securities were less than the repurchase price under the agreement.
The Fund will limit repurchase agreements to transactions with sellers believed
by AIM to present minimal credit risk. Securities subject to repurchase
agreements will be held by the Fund's custodian or in the custodian's account
with the Federal Reserve Treasury Book-Entry System. Although the securities
subject to repurchase agreements might bear maturities in excess of one year,
the Fund will not enter into a repurchase agreement with an agreed-upon
repurchase date in excess of seven (7) calendar days from the date of
acquisition by the Fund, unless the Fund has the right to require the selling
institution to repurchase the underlying securities within seven (7) days of
the date of acquisition.
INVESTMENT RESTRICTIONS
The most significant investment restrictions applicable to the Fund's
investment program are set forth in the Prospectus. The percentage limitations
set forth in such restrictions are calculated by giving effect to the purchase
in question and are based upon values at the time of purchase. The Fund may,
however, retain any security purchased in accordance with such restrictions
irrespective of changes in the values of the Fund's assets occurring subsequent
to the time of purchase.
Additionally, as a matter of fundamental policy which may not be
changed without the affirmative vote of the holders of a majority of the
outstanding shares of beneficial interest of all classes of the Fund, the Fund
will not:
(1) mortgage, pledge or hypothecate any assets except to
secure permitted borrowings of money from banks for temporary or
emergency purposes and then only in amounts not in excess of 33-1/3%
of the value of its total assets at the time of such borrowing;
(2) underwrite securities issued by any other person, except
to the extent that the purchase of securities and the later
disposition of such securities in accordance with the Fund's
investment program may be deemed an underwriting;
(3) invest in real estate;
(4) purchase or sell commodities or commodity futures
contracts, engage in arbitrage transactions, purchase securities on
margin, make short sales or invest in puts or calls;
(5) purchase oil, gas or mineral interests;
(6) invest in any obligation not payable as to principal and
interest in United States currency;
(7) invest 25% or more of the value of its total assets in
securities of issuers engaged in any one industry (excluding
securities which are a direct obligation of the U.S. Treasury or are
repurchase agreements with respect to a direct obligation of the U.S.
Treasury);
6
<PAGE> 44
(8) acquire any security having a remaining term to maturity
greater than three years; or
(9) acquire for value the securities of any other investment
company, except in connection with a merger, consolidation,
reorganization or acquisition of assets.
The Trust has obtained an opinion of Dechert Price & Rhoads, special
counsel to the Trust, that shares of the Fund are eligible for investment by a
federal credit union. In order to ensure that shares of the Fund meet the
requirements for eligibility for investment by federal credit unions, the Fund
has adopted the following policies:
(1) The Fund will enter into repurchase agreements only with:
(i) banks insured by the Federal Deposit Insurance Corporation (FDIC);
(ii) savings and loan associations insured by the FDIC; or (iii)
registered broker-dealers. The Fund will only enter into repurchase
transactions pursuant to a master repurchase agreement in writing with
the Fund's counterparty. Under the terms of a written agreement with
its custodian, the Fund receives on a daily basis written confirmation
of each purchase of a security subject to a repurchase agreement and a
receipt from the Fund's custodian evidencing each transaction. In
addition, securities subject to a repurchase agreement may be recorded
in the Federal Reserve Book - Entry System on behalf of the Fund by
its custodian. The Fund purchases securities subject to a repurchase
agreement only when the purchase price of the security acquired is
equal to or less than its market price at the time of the purchase.
(2) The Fund will only enter into reverse repurchase
agreements and purchase additional securities with the proceeds when
such proceeds are used to purchase other securities that either mature
on a date simultaneous with or prior to the expiration date of the
reverse repurchase agreement, or are subject to an agreement to resell
such securities within that same time period.
(3) The Fund will only enter into securities lending
transactions that comply with the same counterparty, safekeeping,
maturity and borrowing restrictions that the Fund observes when
participating in repurchase and reverse repurchase transactions.
(4) The Fund will enter into when-issued and delayed delivery
transactions only when the time period between trade date and
settlement date does not exceed 120 days, and only when settlement is
on a cash basis. When the delivery of securities purchased in such
manner is to occur within 30 days of the trade date, the Fund will
purchase the securities only at their market price as of the trade
date.
In addition, in order to comply with regulations governing the
liquidity requirements applicable to federal savings and loan associations, as
a matter of fundamental policy, the Fund will only invest in eligible
securities having a remaining term to maturity of three years or less.
ADDITIONAL INVESTMENT RESTRICTIONS OF THE FUND
The Fund's investment programs are also subject to a number of
investment restrictions which reflect self-imposed standards as well as federal
and state regulatory limitations. These restrictions are not matters of
fundamental policy and may be changed at any time by the trustees without the
approval of shareholders.
INVESTING IN SECURITIES OWNED BY TRUSTEES AND OFFICERS
The Fund will purchase securities of an issuer if the officers and
trustees of the Trust and the officers and directors of the Fund's investment
advisor collectively own beneficially over 5% of the outstanding voting
securities of such issuer, in each case excluding holdings of any officer,
trustee or director of less than 1/2 of 1% of the outstanding voting securities
of such issuer.
7
<PAGE> 45
INVESTING FOR CONTROL
The Fund will not invest in companies for purposes of exercising
control or management.
In order to permit the sale of the Fund's shares in certain states,
the Fund may from time to time make commitments more restrictive than the
restrictions described herein. These restrictions are not matters of
fundamental policy, and should the Fund determine that any such commitment is
no longer in the best interest of their respective shareholders, they will
revoke the commitment by terminating sales of their shares in the states
involved.
MANAGEMENT
TRUSTEES AND OFFICERS
The trustees and officers of the Trust and their principal occupations
during the last five years are set forth below. Unless otherwise indicated,
the address of each trustee and officer is 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046.
*CHARLES T. BAUER, Trustee and Chairman (76)
Director, Chairman and Chief Executive Officer, A I M Management Group
Inc.; Chairman of the Board of Directors, A I M Advisors, Inc., A I M Capital
Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc., A I M
Global Associates, Inc., A I M Global Holdings, Inc., A I M Institutional Fund
Services, Inc. and Fund Management Company; and Director, AIM Global Advisors
Limited, A I M Global Management Company Limited and AIM Global Ventures Co.
BRUCE L. CROCKETT, Trustee (51)
COMSAT Corporation
6560 Rock Spring Drive
Bethesda, MD 20817
Director, President and Chief Executive Officer, COMSAT Corporation
(includes COMSAT World Systems, COMSAT Mobile Communications, COMSAT Video
Enterprises and COMSAT RSI and COMSAT International Ventures). Previously,
President and Chief Operating Officer, COMSAT Corporation; President, World
Systems Division, COMSAT Corporation; and Chairman, Board of Governors of
INTELSAT; (each of the COMSAT companies listed above is an international
communication, information and entertainment-distribution services company).
OWEN DALY II, Trustee (71)
Six Blythewood Road
Baltimore, MD 21210
Director, Cortland Trust Inc. (investment company). Formerly,
Director, CF & I Steel Corp., Monumental Life Insurance Company and Monumental
General Insurance Company; and Chairman of the Board of Equitable
Bancorporation.
__________________________________
* A trustee who is an "interested person" of the Trust and AIM as
defined in the 1940 Act.
8
<PAGE> 46
*CARL FRISCHLING, Trustee (58)
919 Third Avenue
New York, NY 10022
Partner, Kramer, Levin, Naftalis, Nessen, Kamin & Frankel (law firm).
Formerly, Partner, Reid & Priest (law firm); and, prior thereto, Partner,
Spengler Carlson Gubar Brodsky & Frischling (law firm).
**ROBERT H. GRAHAM, Trustee and President (48)
Director, President and Chief Operating Officer, A I M Management
Group Inc.; Director and President, A I M Advisors, Inc.; Director and
Executive Vice President, A I M Distributors, Inc.; Director and Senior Vice
President, A I M Capital Management, Inc., A I M Fund Services, Inc., A I M
Global Associates, Inc., A I M Global Holdings, Inc., AIM Global Ventures Co.,
A I M Institutional Fund Services, Inc. and Fund Management Company; and Senior
Vice President, AIM Global Advisors Limited.
JOHN F. KROEGER, Trustee (71)
24875 Swan Road - Martingham
Box 464
St. Michaels, MD 21663
Director, Flag Investors International Fund, Inc., Flag Investors
Emerging Growth Fund, Inc., Flag Investors Telephone Income Fund, Inc., Flag
Investors Equity Partners Fund, Inc., Total Return U.S. Treasury Fund, Inc.,
Flag Investors Intermediate Term Income Fund, Inc., Managed Municipal Fund,
Inc., Flag Investors Value Builder Fund, Inc., Flag Investors Maryland
Intermediate Tax-Free Income Fund, Inc., Flag Investors Real Estate Securities
Fund, Inc., Alex. Brown Cash Reserve Fund, Inc. and North American Government
Bond Fund, Inc. (investment companies). Formerly, Consultant, Wendell &
Stockel Associates, Inc. (consulting firm).
LEWIS F. PENNOCK, Trustee (53)
8955 Katy Freeway, Suite 204
Houston, TX 77024
Attorney in private practice in Houston, Texas.
IAN W. ROBINSON, Trustee (72)
183 River Drive
Tequesta, FL 33469
Formerly, Executive Vice President and Chief Financial Officer, Bell
Atlantic Management Services, Inc. (provider of centralized management
services to telephone companies); Executive Vice President, Bell Atlantic
Corporation (parent of seven telephone companies); and Vice President and Chief
Financial Officer, Bell Telephone Company of Pennsylvania and Diamond State
Telephone Company.
__________________________________
* A trustee who is an "interested person" of the Trust as defined in the
1940 Act.
** A trustee who is an "interested person" of the Trust and AIM as
defined in the 1940 Act.
9
<PAGE> 47
LOUIS S. SKLAR, Trustee (56)
Transco Tower, 50th Floor
2800 Post Oak Blvd.
Houston, TX 77056
Executive Vice President, Development and Operations, Hines Interests
Limited Partnership (real estate development).
***JOHN J. ARTHUR, Senior Vice President and Treasurer (51)
Senior Vice President and Treasurer, A I M Advisors, Inc.; Vice
President and Treasurer, A I M Management Group Inc., A I M Capital Management,
Inc., A I M Distributors, Inc., A I M Fund Services, Inc., A I M Institutional
Fund Services, Inc. and Fund Management Company; and Vice President, AIM Global
Advisors Limited, A I M Global Associates, Inc., A I M Global Holdings, Inc.,
and AIM Global Ventures Co.
GARY T. CRUM, Senior Vice President (48)
Director and President, A I M Capital Management, Inc.; Director and
Senior Vice President, A I M Management Group Inc., A I M Advisors, Inc., A I M
Global Associates, Inc., A I M Global Holdings, Inc. and AIM Global Ventures
Co.; Director, A I M Distributors, Inc.; and Senior Vice President, AIM Global
Advisors Limited.
***CAROL F. RELIHAN, Vice President and Secretary (41)
Senior Vice President, Secretary and General Counsel, A I M
Advisors, Inc.; Vice President, General Counsel and Secretary, A I M Management
Group Inc.; Vice President and Secretary, A I M Global Associates, Inc. and
A I M Global Holdings, Inc.; Vice President and Assistant Secretary, AIM Global
Advisors Limited and AIM Global Ventures Co.; Vice President, A I M Capital
Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc., A I M
Institutional Fund Services, Inc. and Fund Management Company.
DANA R. SUTTON, Vice President and Assistant Treasurer (36)
Vice President and Fund Controller, A I M Advisors, Inc.; and
Assistant Vice President and Assistant Treasurer, Fund Management Company.
MELVILLE B. COX, Vice President (52)
Vice President, A I M Advisors, Inc., A I M Capital Management, Inc.,
A I M Fund Services, Inc. and A I M Institutional Fund Services, Inc.; and
Assistant Vice President, A I M Distributors, Inc. and Fund Management Company.
Formerly, Vice President, Charles Schwab & Co., Inc.; Assistant Secretary,
Charles Schwab Family of Funds and Schwab Investments; Chief Compliance
Officer, Charles Schwab Investment Management, Inc.; and Vice President,
Integrated Resources Life Insurance Co. and Capitol Life Insurance Co.
__________________________________
*** Mr. Arthur and Ms. Relihan are married.
10
<PAGE> 48
KAREN DUNN KELLEY, Vice President (35)
Director, A I M Global Management Company Limited; Senior Vice
President, A I M Capital Management, Inc. and AIM Global Advisors Limited; and
Vice President, A I M Advisors, Inc. and AIM Global Ventures Co.
The standing committees of the Board of Trustees are the Audit
Committee, the Investments Committee, and the Nominating and Compensation
Committee.
The members of the Audit Committee are Messrs. Daly, Kroeger
(Chairman), Pennock and Robinson. The Audit Committee is responsible for
meeting with the Trust'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 trustees as a whole with respect to the Trust's fund accounting or its
internal accounting controls, or for considering such matters as may from time
to time be set forth in a charter adopted by the Board of Trustees and such
committee.
The members of the Investments Committee are Messrs. Bauer, Crockett,
Daly (Chairman), Kroeger and Pennock. 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 Trustees and such committee.
The members of the Nominating and Compensation Committee are Messrs.
Crockett, Daly, Kroeger, Pennock (Chairman) and Sklar. The Nominating and
Compensation Committee is responsible for considering and nominating
individuals to stand for election as trustees who are not interested persons as
long as the Trust maintains a distribution plan pursuant to Rule 12b-1 under
the 1940 Act, reviewing from time to time the compensation payable to the
disinterested trustees, and considering such matters as may from time to time
be set forth in a charter adopted by the Board of Trustees and such committee.
All of the trustees of the Trust also serve as directors or trustees
of some or all of the other AIM Funds. Certain of the Trust's executive
officers hold similar offices with some or all of the other AIM Funds.
REMUNERATION OF TRUSTEES
Set forth below is information regarding compensation paid or accrued
during the fiscal year ended July 31, 1995 for each trustee of the Fund:
11
<PAGE> 49
<TABLE>
<CAPTION>
============================================================================================
RETIREMENT
AGGREGATE BENEFITS TOTAL
COMPENSATION ACCRUED COMPENSATION
FROM THE BY ALL FROM ALL
DIRECTOR FUND(1) AIM FUNDS(2) AIM FUNDS(3)
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Charles T. Bauer $ 0 $ 0 $ 0
--------------------------------------------------------------------------------------------
Bruce L. Crockett (4) 1,027 2,814 45,094
--------------------------------------------------------------------------------------------
Owen Daly II (5) 1,022 14,375 45,844
--------------------------------------------------------------------------------------------
Carl Frischling (4) 1,027 7,542 45,094
--------------------------------------------------------------------------------------------
Robert H. Graham 0 0 0
--------------------------------------------------------------------------------------------
John F. Kroeger (5) 1,022 20,517 45,844
--------------------------------------------------------------------------------------------
Lewis F. Pennock (5) 1,022 5,093 45,844
--------------------------------------------------------------------------------------------
Ian W. Robinson (4) 1,017 10,396 45,094
--------------------------------------------------------------------------------------------
Louis S. Sklar (4) 1,017 4,682 45,094
============================================================================================
</TABLE>
______________________
(1) The total amount of compensation deferred by all Trustees of the Fund
during the fiscal year ended July 31, 1995, including interest earned
thereon, was $4,268.
(2) During the fiscal year ended July 31, 1995, the total amount of
expenses allocated to the Fund in respect of such retirement benefits
was $1,231. Data reflects compensation earned for the calendar year
ended December 31, 1994.
(3) Messrs. Bauer, Daly, Graham, Kroeger and Pennock each serves as a
Director or Trustee of a total of 11 AIM Funds. Messrs. Crockett,
Frischling, Robinson and Sklar each serves as a Director or Trustee of
a total of 10 AIM Funds. Data reflects compensation earned for the
calendar year ended December 31, 1994.
(4) Messrs. Crockett, Frischling, Robinson and Sklar also each received
$221 as compensation from the Trust during the fiscal year ended July
31, 1995, which represents compensation from AIM Adjustable Rate
Government Fund ("ARM"). ARM was a portfolio of the Trust until
November 18, 1994, when it was merged into AIM Intermediate Government
Fund, which is a portfolio of the AIM Funds Group, a Delaware business
trust.
(5) Messrs. Daly, Kroeger and Pennock also each received $219 as
compensation from the Trust during the fiscal year ended July 31,
1995, which represents compensation from ARM.
AIM FUNDS RETIREMENT PLAN FOR ELIGIBLE DIRECTORS/TRUSTEES
Under the terms of the AIM Funds Retirement Plan for Eligible
Directors/Trustees (the "Plan"), each trustee (who is not an 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 Trustees.
Pursuant to the Plan, the normal retirement date is the date on which the
eligible trustee has attained age 65 and has completed at least five years of
continuous service with one or more of the regulated investment companies
12
<PAGE> 50
managed, administered or distributed by AIM or its affiliates (the "AIM
Funds"). Each eligible trustee is entitled to receive an annual benefit from
the AIM Funds commencing on the first day of the calendar quarter coincident
with or following his date of retirement equal to 5% of such Trustee's
compensation paid by the AIM Funds multiplied by the number of such Trustee's
years of service (not in excess of 10 years of service) completed with respect
to any of the AIM Funds. Such benefit is payable to each eligible trustee in
quarterly installments for a period of no more than five years. If an eligible
trustee dies after attaining the normal retirement date but before receipt of
any benefits under the Plan commences, the trustee's surviving spouse (if any)
shall receive a quarterly survivor's benefit equal to 50% of the amount payable
to the deceased trustee, for no more than five years beginning the first day of
the calendar quarter following the date of the trustee'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 trustee upon retirement assuming various compensation
and years of service classifications. The estimated credited years of service
as of December 31, 1994 for Messrs. Crockett, Daly, Frischling, Kroeger,
Pennock, Robinson and Sklar are 7, 8, 17, 17, 13, 7, and 5 years, respectively.
<TABLE>
<CAPTION>
Annual Compensation Paid By
All AIM Funds
$60,000 $65,000
=========================================
<S> <C> <C> <C>
Number of 10 $30,000 $32,500
Years of -----------------------------------------
Service With 9 $27,000 $29,250
the AIM Funds -----------------------------------------
8 $24,000 $26,000
-----------------------------------------
7 $21,000 $22,750
-----------------------------------------
6 $18,000 $19,500
-----------------------------------------
5 $15,000 $16,250
=========================================
</TABLE>
DEFERRED COMPENSATION AGREEMENTS
Messrs. Daly, Frischling, Kroeger, Robinson and Sklar (for purposes of
this paragraph only, the "deferring trustees") have each executed a Deferred
Compensation Agreement (collectively, the "Agreements"). Pursuant to the
Agreements, the deferring trustees may elect to defer receipt of up to 100% of
their compensation payable by the Fund, and such amounts are placed into a
deferral account. Currently, the deferring trustees may select various AIM
Funds in which all or part of his deferral account shall be deemed to be
invested. Distributions from the deferring trustees' deferral accounts will be
paid in cash, in generally equal quarterly installments over a period of five
years beginning on the date the deferring trustee's retirement benefits
commence under the Plan. The Fund's Board of Trustees, in its sole discretion,
may accelerate or extend the distribution of such deferral accounts after the
deferring director's termination of service as a trustee of the Fund. If a
deferring trustee 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 trustee's death. The Agreements are not funded and, with
respect to the payments of amounts held in the deferral accounts, the deferring
trustees have the status of unsecured creditors of the Fund and of each other
AIM Fund from which they are deferring compensation.
During the fiscal year ended July 31, 1995 the Fund paid $2,245 in
legal fees to Reid & Priest, the law firm in which Mr. Frischling, a trustee of
the Trust, was a partner. During the fiscal year ended July 31, 1995 the Fund
paid $1,044 to Kramer, Levin, Naftalis, Nessen, Kamin & Frankel, the law firm
in which
13
<PAGE> 51
Mr. Frischling, a trustee of the Trust, is a partner.
INVESTMENT ADVISORY AND OTHER SERVICES
AIM is a wholly-owned subsidiary of A I M Management Group Inc. ("AIM
Management"), 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173. AIM
Management is a holding company that has been engaged in the financial services
business since 1976. Certain of the directors and officers of AIM are also
executive officers of the Fund and their affiliations are shown under "Trustees
and Officers". AIM Capital, a wholly-owned subsidiary of AIM, is engaged in
the business of providing investment advisory services to investment companies,
corporations, institutions and other accounts.
AIM was organized in 1976, and advises or manages 37 investment
company portfolios. As of November 1, 1995, the total assets of the investment
company portfolios advised or managed by AIM and its affiliates were
approximately $39.5 billion.
AIM and the Fund have adopted a Code of Ethics which requires
investment personnel (a) to pre-clear all personal securities transactions, (b)
to file reports regarding such transactions, and (c) to refrain from personally
engaging in (i) short-term trading of a security, (ii) transactions involving a
security within seven days of an AIM Fund transaction involving the same
security, and (iii) transactions involving securities being considered for
investment by an AIM Fund. The Code of Ethics also prohibits investment
personnel from purchasing securities in an initial public offering. Personal
trading reports are reviewed periodically by AIM, and the Board of Trustees
reviews annually such reports (including information on any substantial
violations of the Code of Ethics). Violations of the Code of Ethics may result
in censure, monetary penalties, suspension or termination of employment.
The Trust, on behalf of the Fund, has entered into a Master Investment
Advisory Agreement (the "Advisory Agreement") and a Master Administrative
Services Agreement (the "Administrative Services Agreement") with AIM. See
"Management" in the Prospectus.
The Advisory Agreement provides that the Fund will pay or cause to be
paid all expenses of the Fund not assumed by AIM, including, without
limitation: brokerage commissions; taxes, legal, accounting, auditing or
governmental fees; the cost of preparing share certificates; custodian,
transfer and shareholder service agent costs; expenses of issue, sale,
redemption and repurchase of shares; expenses of registering and qualifying
shares for sale; expenses relating to trustees and shareholder meetings; the
cost of preparing and distributing reports and notices to shareholders; the
fees and other expenses incurred by the Trust on behalf of the Fund in
connection with membership in investment company organizations; the cost of
printing copies of prospectuses and statements of additional information
distributed to the Fund's shareholders; and all other charges and costs of the
Fund's operations unless otherwise explicitly provided.
The Advisory Agreement provides that if, for any fiscal year, the
total of all ordinary business expenses of a Fund, including all investment
advisory fees, but excluding brokerage commissions and fees, taxes, interest
and extraordinary expenses, such as litigation costs, exceed the applicable
expense limitations imposed by state securities regulations in any state in
which the Fund's shares are qualified for sale, as such limitations may be
raised or lowered from time to time, the aggregate of all such investment
advisory fees shall be reduced by the amount of such excess. The amount of any
such reduction to be borne by AIM shall be deducted from the monthly investment
advisory fee otherwise payable to AIM during such fiscal year. If required
pursuant to such state securities regulations, AIM will reimburse the Fund, no
later than the last day of the first month of the next succeeding fiscal year,
for any such annual operating expenses (after reduction of all investment
advisory fees in excess of such limitation).
The Advisory Agreement became effective on October 18, 1993 and will
continue in effect until June 30, 1996 and from year to year thereafter only if
such continuance is specifically approved at least annually by the Trust's
Board of Trustees or the vote of a "majority of the outstanding voting
securities" of
14
<PAGE> 52
the Fund (as defined in the 1940 Act) and (ii) the affirmative vote of a
majority of the trustees who are not parties to the Advisory Agreement or
"interested persons" of any such party (the "Non-Interested Trustees") by votes
cast in person at a meeting called for such purpose. The Fund or AIM may
terminate the Advisory Agreement on sixty (60) days' written notice without
penalty. The Advisory Agreement terminates automatically in the event of its
assignment. Under the Advisory Agreement, AIM is entitled to receive from the
Fund a fee calculated at the annual rate of 0.20% of the first $500 million of
the average daily net assets, plus 0.175% of the average daily net assets in
excess of $500 million.
For the fiscal year ended July 31, 1995, the eleven-month period ended
July 31, 1994 and the fiscal years ended August 31, 1993 and 1992, AIM received
advisory fees of $809,449, $942,205, $819,683 and $495,425, respectively.
The Administrative Services Agreement for the Fund provides that AIM
may provide or arrange for the performance of certain accounting, shareholder
servicing and other administrative services to the Fund which are not required
to be performed by AIM under the Advisory Agreement. For such services, AIM
would be entitled to receive from the Fund reimbursement of AIM's costs or such
reasonable compensation as may be approved by AIM and the Board of Trustees.
The Administrative Services Agreement provides that such agreement will
continue in effect until June 30, 1996, and shall continue in effect from year
to year thereafter if such continuance is specifically approved at least
annually by (i) the Trust's Board of Trustees or the vote of a "majority of the
outstanding voting securities" of the Fund (as defined in the 1940 Act) and
(ii) the affirmative vote of a majority of the Non-Interested Trustees, by
votes cast in person at a meeting called for such purpose. The Administrative
Services Agreement was approved by the Board of Trustees (including the
Non-Interested Trustees) and became effective on October 18, 1993.
For the fiscal year ended July 31, 1995, the eleven-month period ended
July 31, 1994 and the fiscal years ended August 31, 1993 and 1992, the Fund
reimbursed AIM for certain accounting, shareholder servicing and administrative
services $82,199, $91,445, $90,365 and $39,024, respectively.
In addition, a sub-contract effective October 18, 1993 through October
31, 1994 between AIM and A I M Funds Services, Inc. ("AFS"), a registered
transfer agent and a wholly-owned subsidiary of AIM, provided that AFS perform
certain shareholder services for the Fund which are not required to be
performed by AIM under the Advisory Agreement. For such services, AFS was
entitled to receive from AIM such reimbursement of its costs associated with
providing those services.
For the eleven month period ended July 31, 1994 and the period August
1, 1994 through October 31, 1994, AFS received shareholder services fees from
AIM with respect to the Retail Class in the amount of $47,173 and $21,079
respectively.
In addition, the Transfer Agency and Service Agreement, which became
effective November 1, 1994, provides that AFS will perform certain shareholder
services for the Fund for a fee per account serviced. The Transfer Agency and
Service Agreement provides that AFS will receive a per account fee plus
out-of-pocket expenses to process orders for purchases, redemptions and
exchanges of shares, prepare and transmit payments for dividends and
distributions declared by the Fund, maintain shareholder accounts and provide
shareholders with information regarding the Fund and other accounts.
For the period November 1, 1994 through July 31, 1995, AFS received
from the Fund transfer agency and shareholder services fees with respect to the
Retail Class in the amount of $91,753.
DISTRIBUTION PLAN
The Trust has adopted a Master Distribution Plan (the "Plan") pursuant
to Rule 12b-1 under the 1940 Act relating to the Retail Class. The Plan
provides that the Retail Class pay a fee to AIM Distributors for distribution-
related services performed by AIM Distributors, including, but not limited to,
expenses of
15
<PAGE> 53
organizing and conducting sales seminars, 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 and costs of administering the Plan. Under the
Plan, AIM Distributors is entitled to receive a distribution fee, which is
accrued daily and paid monthly, of 0.15% on an annualized basis of the average
daily net assets of the Retail Class. Such amounts are intended to compensate
AIM Distributors for expenses incurred by it in performing activities which are
primarily intended to result in the sale of shares of the Retail Class. The
terms of the Plan are discussed in the Prospectus.
AIM Distributors is a wholly-owned subsidiary of AIM, which is a
wholly-owned subsidiary of AIM Management.
The Plan requires the officers of the Trust to provide the Board of
Trustees at least quarterly with a written report of the amounts expended
pursuant to the Plan and the purposes for which such expenditures were made.
The Trust's Board of Trustees reviews these reports in connection with their
decisions with respect to the Plan.
As required by Rule 12b-1 under the 1940 Act, the Plan was approved by
the Board of Trustees, including a majority of the trustees who are not
"interested persons" (as defined in the 1940 Act) of the Trust and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreements related to the Plan ("Qualified Trustees") on July 19, 1993. In
approving the Plan in accordance with the requirements of Rule 12b-1, the
trustees considered various factors and determined that there is a reasonable
likelihood that the Plan would benefit the Retail Class and its shareholders.
The Plan, unless terminated earlier in accordance with its terms,
shall continue in effect until June 30, 1996, and each year thereafter as long
as such continuance is specifically approved at least annually by the Trust's
Board of Trustees, including a majority of the Qualified Trustees.
The Plan may be terminated by a vote of a majority of the Qualified
Trustees, or, with respect to a Retail Class, by a vote of a majority of the
holders of the outstanding voting securities of the Retail Class. Any change
in the Plan that would increase materially the distribution expenses paid by
the Retail Class requires shareholder approval; otherwise the Plan may be
amended by the Trust's Board of Trustees, including a majority of the Qualified
Trustees, by votes cast in person at a meeting called for the purpose of voting
upon such amendment. As long as the Plan is in effect, the selection or
nomination of the Qualified Trustees is committed to the discretion of the
Qualified Trustees.
For the fiscal year ended July 31, 1995, the eleven-month period ended
July 31, 1994 and the fiscal years ended August 31, 1993 and 1992, AIM
Distributors received fees in the amount of $421,183, $465,792, $465,992 and
$277,921, respectively, which constituted 0.15%, 0.15% (annualized), 0.15% and
0.15%, respectively, of the average daily net assets of the Retail Class. The
fees paid by the Retail Class during the fiscal year ended July 31, 1995, the
eleven-month period ended July 31, 1994 and the fiscal years ended August 31,
1993 and 1992 were estimated to be spent as follows:
<TABLE>
<CAPTION>
1995 1994 1993 1992
---- ---- ---- ----
<S> <C> <C> <C> <C>
Advertising $ 61,000 $ 0 $ 0 $ 5,645
Printing and mailing 101,000 18,632 102,518 104,635
Shareholder Service Agreements 409,000 447,160 363,474 262,570
</TABLE>
Pursuant to an incentive program, AIM Distributors may enter into
agreements ("Shareholder Service Agreements") with investment dealers selected
by AIM Distributors from time to time to provide distribution assistance in
connection with the sale of the shares of the Retail Class to such dealers'
customers, and to provide continuing personal shareholder services to customers
who may, from time to time, directly or beneficially own shares of the Retail
Class. The distribution assistance and continuing personal shareholder
16
<PAGE> 54
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 Retail Class;
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 shares of the Retail Class; 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 shares of the Retail Class;
and providing such other information and services as the Retail Class or the
customer may reasonably request.
Under the Plan, in addition to the Shareholder Service Agreements
authorizing payments to selected dealers, banks may enter into Shareholder
Service Agreements authorizing payments under the Plan 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 a Retail
Class 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 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 Retail Class shares; and such other administrative
services as a Retail Class reasonably may request, to the extent permitted by
applicable statute, rule or regulation.
The Plan is subject to any applicable limitations imposed from time to
time by rules of the National Association of Securities Dealers, Inc.
AIM Distributors does not act as principal, but rather as agent for
the Retail Class, in making dealer incentive and shareholder servicing payments
under the Plan. These payments are an obligation of the Retail Class and not
of AIM Distributors. Similar agreements may be permitted under the Plan for
institutions which provide recordkeeping for and administrative services to
401(k) plans.
THE DISTRIBUTION AGREEMENT
Information concerning AIM Distributors and the continuous offering of
shares of the Retail Class is set forth in the Prospectus under the caption
"How to Purchase Shares" and "Terms and Conditions of Purchase of the AIM
Funds." The Distribution Agreement (the "Distribution Agreement") became
effective on October 18, 1993. The Distribution Agreement provides that AIM
Distributors will bear the expenses of printing from the final proof and
distributing prospectuses and statements of additional information of the
Retail Class relating to public offerings made by AIM Distributors pursuant to
the Distribution Agreement (other than those prospectuses and statements of
additional information distributed to existing shareholders of the Retail
Class), and any promotional or sales literature used by AIM Distributors or
furnished by AIM Distributors to dealers in connection with the public offering
of shares of the Retail Class, including expenses of advertising in connection
with such public offerings. AIM Distributors has not undertaken to sell any
specified number of shares of the Retail Class.
The Distribution Agreement will continue in effect until June 30, 1996
and from year to year thereafter only if such continuation is specifically
approved at least annually by (i) the Board of Trustees or the vote of a
"majority of the outstanding voting securities" of the Fund (as defined in the
1940 Act) and (ii) the affirmative vote of a majority of the Non-Interested
Directors by votes cast in person at a meeting called for such purpose. The
Fund or AIM Distributors may terminate the Distribution Agreement on sixty (60)
days' written notice without penalty. The Distribution Agreement will
terminate automatically in the event of its "assignment," as defined under the
1940 Act.
17
<PAGE> 55
For the fiscal year ended July 31, 1995, the eleven-month period
ended July 31, 1994 and the fiscal years ended August 31, 1993 and 1992, the
total sales charges paid in connection with the sale of shares of the Retail
Class of the Fund were $377,682, $384,784, $643,871 and $1,196,449,
respectively, of which AIM Distributors retained $89,885, $98,879, $186,658 and
$228,718, respectively.
HOW TO PURCHASE AND REDEEM SHARES
A complete description of the manner by which shares of the Retail
Class may be purchased appears in the Prospectus under the caption "How to
Purchase Shares", "Terms and Conditions of Purchase of the AIM Funds" and
"Special Plans."
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 the Fund not reasonably practicable.
The sales charge normally deducted on purchases of shares of the
Retail Class 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 Retail Class or with AIM and its affiliates, are familiar with the
Retail Class (e.g., due to the size of the transaction and shareholder records
required), AIM Distributors believes that it is appropriate and in the Fund's
best interests that such persons, and certain other persons whose purchases
result in relatively low expenses of distribution, be permitted to purchase
shares of the Retail Class through AIM Distributors without payment of a sales
charge. The persons who may purchase shares of the Retail Class without a
sales charge are set forth in the Prospectus under the caption "Terms and
Conditions of Purchase of the AIM Funds".
Complete information concerning the method of exchanging shares of the
Retail Class for shares of the other mutual funds managed or advised by AIM is
set forth in the Prospectus under the caption "Exchange Privilege."
Information concerning redemption of shares of the Retail Class is set
forth in the Prospectus under the caption "How to Redeem Shares." In addition
to the Fund's obligations 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 (in Houston) or (800) 949-4246 (elsewhere)) and guarantee delivery of
all required documents in good order. A repurchase is effected at the net
asset value of per share of the Retail Class next determined after such order
is received. Such arrangement is subject to timely receipt by AFS, transfer
agent for the Retail Class, 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
Fund or by AIM Distributors when shares are redeemed or repurchased, dealers
may charge a fair service fee for handling the transaction.
The Trust agrees to redeem shares of a Fund, or any other future
portfolios of the Trust, solely in cash up to the lesser of $250,000 or 1% of
the Fund's net assets during any 90-day period for any one shareholder. In
consideration of the best interests of the remaining shareholders, the Trust
reserves the right to pay any redemption price exceeding this amount in whole
or in part by a distribution in kind of securities held by the Fund in lieu of
cash. It is highly unlikely that shares would ever be redeemed in kind. If
shares are redeemed in kind, however, the redeeming shareholder should expect
to incur transaction costs upon the disposition of the securities received in
the distribution.
18
<PAGE> 56
NET ASSET VALUE DETERMINATION
Shares of the Funds offered by the Prospectus are sold at their net
asset value plus a sales charge of 1.00% of the public offering price per share
(1.01% of the amount invested), scaled down on purchases of $100,000 or more.
Shareholders may at any time redeem all or a portion of their shares at net
asset value without charge. The investor's price for purchase or redemption
will be determined by the net asset value of the relevant Fund's shares next
determined following the receipt of an order to purchase or a request to redeem
shares. The net asset value of the Funds vary depending on the market value of
their respective assets.
In accordance with the current SEC rules and regulations, the net
asset value of a share of a Fund is determined once daily as of 4:15 p.m.
Eastern Time on each business day of the Fund by subtracting the Fund's
liabilities (e.g., accrued expenses and dividends payable) from the value of
Fund's securities, cash and other assets (including interest accrued but not
collected), and dividing the result by the total number of Fund shares
outstanding. Determination of a Fund's net asset value per share is made in
accordance with generally accepted accounting principles. 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 15 minutes following the close of
the NYSE on such day. Determination of the Fund's net asset value per share is
made in accordance with generally accepted accounting principles.
Securities will be valued on the basis of prices provided by an
independent pricing service. Prices provided by the pricing service may be
determined without exclusive reliance on quoted prices, and may reflect
appropriate factors such as yield, type of issue, coupon rate, maturity and
seasoning differential. Securities for which prices are not provided by the
pricing service are valued at the mean between the last bid and asked prices or
yield equivalent based upon quotes furnished by market makers for such
securities. Securities for which market quotations are not readily available
are valued at fair value as determined in good faith by or under the
supervision of the Trust's officers in accordance with methods which are
specifically authorized by the Board of Trustees. Short-term obligations
having 60 days or less to maturity are valued at amortized cost, which
approximates fair market value.
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS
Income dividends and capital gains distributions are automatically
reinvested in additional shares of the same class of the Fund unless the
shareholder has requested in writing to receive such dividends and
distributions in cash or that they be invested in shares of another AIM Fund.
TAX MATTERS
The following is only a summary of certain additional tax
considerations generally affecting the Fund and its shareholders that are not
described in the Prospectus. No attempt is made to present a detailed
explanation of the tax treatment of the Fund or its shareholders, and the
discussion here and in the Prospectus is not intended as a substitute for
careful tax planning. Investors are urged to consult their tax advisors with
specific reference to their own tax situation.
QUALIFICATION AS A REGULATED INVESTMENT COMPANY
The Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). As
a regulated investment company, the Fund is not subject to federal income tax
on the portion of its net investment income (i.e., its taxable interest,
dividends and other taxable ordinary income, net of expenses) and realized
capital gain net income (i.e., the excess
19
<PAGE> 57
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 satisfy certain other requirements of the Code that are
described below. Distributions by a Fund made during the taxable year or,
under specified circumstances, within 12 months after the close of the taxable
year, will be considered distributions of income and gains of the taxable year
and can therefore satisfy the Distribution Requirement.
In addition to satisfying the Distribution Requirement, the Fund must
(1) derive at least 90% of its gross income from dividends, interest, certain
payments with respect to securities loans, gains from the sale or other
disposition of stock or securities or foreign currencies (to the extent such
currency gains are ancillary to the Fund's principal business of investing in
stock or securities) and other income (including but not limited to gains from
options, futures or forward contracts) derived with respect to its business of
investing in such stock, securities or currencies (the "Income Requirement");
and (2) derive less than 30% of its gross income (exclusive of certain gains on
designated hedging transactions that are offset by realized or unrealized
losses on offsetting positions) from the sale or other disposition of stock,
securities or foreign currencies (or options, futures or forward contracts
thereon) held for less than three months (the "Short-Short Gain Test").
However, foreign currency gains, including those derived from options, futures
and forward contracts, will not be characterized as Short-Short Gain if they
are directly related to the Fund's principal business of investing in stock or
securities (or options or futures thereon). Because of the Short-Short Gain
Test, the Fund may have to limit the sale of appreciated securities that it has
held for less than three months. However, the Short-Short Gain Test will not
prevent the Fund from disposing of investments at a loss, since the recognition
of a loss before the expiration of the three-month holding period is
disregarded. Interest (including original issue discount) received by the Fund
at maturity or upon the disposition of a security held for less than three
months will not be treated as gross income derived from the sale or other
disposition of such security within the meaning of the Short-Short Gain Test.
However, income that is attributable to realized market appreciation will be
treated as gross income from the sale or other disposition of securities for
this purpose.
In general, gain or loss recognized by 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. In
addition, if a Fund purchases a debt obligation that was originally issued at a
discount, the Fund is generally required to include in gross income each year
the portion of the original issue discount which accrues during such year.
In general, for purposes of determining whether capital gain or loss
recognized by a Fund on the disposition of an asset is long-term or short-term,
the holding period of the asset may be affected if (i) the asset is used to
close a "short sale" (which includes for certain purposes the acquisition of a
put option) or is substantially identical to another asset so used, (ii) the
asset is otherwise held by the Fund as part of a "straddle" (which term
generally excludes a situation where the asset is stock and the Fund grants a
"qualified covered call option" with respect thereto) or (iii) the asset is
stock and the Fund grants an in-the-money qualified covered call option with
respect thereto. However, for purposes of the Short-Short Gain Test, the
holding period of the asset disposed of may be reduced only in the case of
clause (i) above. In addition, 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 be treated as a short-term capital gain or loss. For
purposes of the Short-Short Gain Test, the holding period of an option written
by a Fund will commence on the date it is written and end on the date it lapses
or the date a closing transaction is entered into. Accordingly, a Fund may be
limited in its ability to write options which expire within three months and to
enter into closing transactions at a gain within three months of the writing of
options.
20
<PAGE> 58
Transactions that may be engaged in by a Fund (such as regulated
futures contracts and options on stock indexes and futures contracts) 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 is recognized as a consequence of the year-end deemed
disposition of Section 1256 contracts is taken into account for the taxable
year together with any other gain or loss that was previously recognized upon
the termination of Section 1256 contracts during that taxable year. Any
capital gain or loss for the taxable year (including any capital gain or loss
arising as a consequence of the year-end deemed sale of such contracts) is
treated as 60% long-term capital gain or loss and 40% short-term capital gain
or loss. A Fund may elect not to have this special tax treatment apply to
Section 1256 contracts that are part of a "mixed straddle" with other
investments of the Fund that are not Section 1256 contracts. The Internal
Revenue Service ("IRS") has held in several private rulings that gains arising
from Section 1256 contracts will be treated for purposes of Short-Short Gain
Test as being derived from securities held not less than three months if the
gains arise as a result of a constructive sale under Code Section 1256.
A Fund may enter into notional principal contracts, including interest
rate swaps, caps, floors and collars. Under Treasury regulations, in general,
the net income or deduction from a notional principal contract for a taxable
year is included in or deducted from gross income for that taxable year. The
net income or deduction from a notional principal contract for a taxable year
equals the total of all of the periodic payments (generally, payments that are
payable or receivable at fixed periodic intervals of one year or less during
the entire term of the contract) that are recognized from that contract for the
taxable year and all of the non-periodic payments (including premiums for caps,
floors and collars), even if paid in periodic installments, that are recognized
from that contract for the taxable year. A periodic payment is recognized
ratably over the period to which it relates. In general, a non-periodic
payment must be recognized over the term of the notional principal contract in
a manner that reflects the economic substance of the contract. A non-periodic
payment that relates to an interest rate swap, cap, floor or collar shall be
recognized over the term of the contract by allocating it in accordance with
the values of a series of cash-settled forward or option contracts that reflect
the specified index and notional principal amount upon which the notional
principal contract is based (or, in the case of a swap or of a cap or floor
that hedges a debt instrument, under alternative methods contained in the
regulations and, in the case of other notional principal contracts, under
alternative methods that the IRS may provide in a revenue procedure).
Treasury regulations permit a regulated investment company, in
determining its investment company taxable income and net capital gain (i.e.,
the excess of net long-term capital gain over net short-term capital loss) for
any taxable year, to elect (unless it has made a taxable year election for
excise tax purposes as discussed below) to treat all or part of any net capital
loss, any net long-term capital loss or any net foreign currency loss incurred
after October 31 as if it had been incurred in the succeeding year.
In addition to satisfying the requirement described above, a Fund must
satisfy an asset diversification test in order to qualify as a regulated
investment company. Under this test, at the close of each quarter of the
Fund's taxable year, at least 50% of the value of the Fund's assets must
consist of cash and cash items, U.S. Government securities, securities of other
regulated investment companies, and securities of other issuers (as to which
the Fund has not invested more than 5% of the value of the Fund's total assets
in securities of such issuer and as to which the Fund does not hold more than
10% of the outstanding voting securities of such issuer), and no more than 25%
of the value of its total assets may be invested in the securities of any one
issuer (other than U.S. Government securities and securities of other regulated
investment companies), or in two or more issuers which the Fund controls and
which are engaged in the same or similar trades or businesses.
If for any taxable year 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
21
<PAGE> 59
of the 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.
EXCISE TAX ON REGULATED INVESTMENT COMPANIES
A 4% non-deductible excise tax is imposed on regulated investment
companies that fail to distribute in each calendar year an amount equal to 98%
of ordinary taxable income for the calendar year and 98% of capital gain net
income for the one year period ended on October 31 of such calendar year (or,
at the election of a regulated investment company having a taxable year ending
November 30 or December 31, for its taxable year (a "taxable year election")).
The balance of such income must be distributed during the next calendar year.
For the foregoing purposes, a regulated investment company is treated as having
distributed any amount on which it is subject to income tax for any taxable
year ending in such calendar year.
For purposes of the excise tax, a regulated investment company shall
(1) 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 (2) exclude
Section 988 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).
The Fund intends to make sufficient distributions or deemed
distributions of its ordinary taxable income and capital gain net income prior
to the end of each calendar year to avoid liability for the excise tax.
However, investors should note that the Fund may in certain circumstances be
required to liquidate portfolio investments to make sufficient distributions to
avoid excise tax liability.
FUND DISTRIBUTIONS
The Fund anticipates distributing substantially all of its investment
company taxable income and short-term capital gains for each taxable year.
Such distributions will be taxable to shareholders as ordinary income and
treated as dividends for federal income tax purposes, but they will not qualify
for the 70% dividends received deduction for corporations.
The Fund may either retain or distribute to shareholders its net
long-term capital gain for each taxable year. The Fund currently intends to
distribute any such amounts. If net capital gain is distributed and designated
as a capital gain dividend, it will be taxable to shareholders as long-term
capital gain, regardless of the length of time the shareholder has held his
shares or whether such gain was recognized by the Fund prior to the date on
which the shareholder acquired his shares. Conversely, if a Fund elects to
retain its net capital gain, the Fund will be taxed thereon (except to the
extent of any available capital loss carryovers) at the 35% corporate tax rate.
If a Fund elects to retain net capital gain, it is expected that the Fund also
will elect to have shareholders treated as if each received a distribution of
its pro rata share of such gain, with the result that each shareholder will be
required to report its pro rata share of such gain on its tax return as
long-term capital gain, will receive a refundable tax credit for its pro rata
share of tax paid by the Fund on the gain, and will increase the tax basis for
its shares by an amount equal to the deemed distribution less the tax credit.
Distributions by a Fund that do not constitute ordinary income
dividends or capital gain dividends will be treated as a return of capital to
the extent of (and in reduction of) the shareholder's tax basis in his shares;
any excess will be treated as gain from the sale of his shares, as discussed
below.
Distributions by a Fund will be treated in the manner described above
regardless of whether such distributions are paid in cash or reinvested in
additional shares of the Fund (or any other fund in The AIM Family of Funds).
Shareholders receiving a distribution in the form of additional shares will be
treated as receiving a distribution in an amount equal to the fair market value
of the shares received, determined as
22
<PAGE> 60
of the reinvestment date. In addition, if the net asset value at the time a
shareholder purchases shares of a Fund reflects undistributed net investment
income or recognized capital gain net income, or unrealized appreciation in the
value of the assets of the Fund, distributions of such amounts will be taxable
to the shareholder in the manner described above, although such distributions
economically constitute a return of capital to the shareholder.
Ordinarily, shareholders are required to take distributions by a Fund
into account in the year in which the distributions are made. However,
dividends declared in October, November or December of any year and payable to
shareholders of record on a specified date in such a month will be deemed to
have been received by the shareholders (and made by the Fund) on December 31 of
such calendar year if such dividends are actually paid in January of the
following year. Shareholders will be advised annually as to the U.S. federal
income tax consequences of distributions made (or deemed made in certain cases)
during the year.
The Fund is required in certain cases to withhold and remit to the
U.S. Treasury 31% of ordinary income dividends and capital gain dividends, and
the proceeds of redemption of shares, paid to any shareholder (1) who has
provided either an incorrect tax identification number or no number at all, (2)
who is subject to backup withholding by the Internal Revenue Service for
failure to report the receipt of interest or dividend income properly, or (3)
who has failed to certify to the Fund that it is not subject to backup
withholding or that it is a corporation or other "exempt recipient."
SALE OR REDEMPTION OF FUND SHARES
A shareholder will recognize gain or loss on the sale or redemption of
shares of a Fund in an amount equal to the difference between the proceeds of
the sale or redemption and the shareholder's adjusted tax basis in the shares.
In general, any gain or loss arising from (or treated as arising from) the sale
or redemption of shares of a Fund will be considered capital gain or loss and
will be long-term capital gain or loss if the shares were held for longer than
one year. However, any capital loss arising from the sale or redemption of
shares held for six months or less will be treated as a long-term capital loss
to the extent of the amount of capital gain dividends received on such shares.
For this purpose, the special holding period rules of Code Section 246(c)(3)
and (4) generally will apply in determining the holding period of shares.
Long-term capital gains of non-corporate taxpayers are currently taxed at a
maximum rate 11.6% lower than the maximum rate applicable to ordinary income.
Capital losses in any year are deductible only to the extent of capital gains
plus, in the case of a noncorporate taxpayer, $3,000 of ordinary income.
If a shareholder (i) incurs a sales load in acquiring shares of a
Fund, (ii) disposes of such shares less than 91 days after they are acquired
and (iii) subsequently acquires shares of the same or another Fund at a reduced
sales load pursuant to a right to reinvest at such reduced sales load acquired
in connection with the acquisition of the shares disposed of, then the sales
load on the shares disposed of (to the extent of the reduction in the sales
load on the shares subsequently acquired) shall not be taken into account in
determining gain or loss on the shares disposed of but shall be treated as
incurred on the acquisition of the shares subsequently acquired.
FOREIGN SHAREHOLDERS
Taxation of a shareholder who, as to the United States, is a
nonresident alien individual, foreign trust or estate, foreign corporation, or
foreign partnership ("foreign shareholder"), depends on whether the income from
a Fund is "effectively connected" with a U.S. trade or business carried on by
such shareholder.
If the income from a Fund is not effectively connected with a U.S.
trade or business carried on by a foreign shareholder, ordinary income
dividends and return of capital distributions (other than capital gains
dividends) will be subject to U.S. withholding tax at the rate of 30% (or lower
treaty rate) upon the gross amount of the distribution. Such a foreign
shareholder would generally be exempt from U.S. federal income
23
<PAGE> 61
tax on gains realized on the sale or redemption of shares of a Fund, capital
gain dividends and amounts retained by the Fund that are designated as
undistributed net capital gains.
If the income from a Fund is effectively connected with a U.S. trade
or business carried on by a foreign shareholder, then ordinary income
dividends, capital gain dividends and any gains realized upon the sale or
redemption of shares of a Fund will be subject to U.S. federal income tax at
the rates applicable to U.S. citizens or domestic corporations.
In the case of foreign non-corporate shareholders, a Fund may be
required to withhold U.S. federal income tax at a rate of 31% on distributions
that are otherwise exempt from withholding tax (or taxable at a reduced treaty
rate) unless such shareholders furnish the Fund with proper notification of
their foreign status.
The tax consequences to a foreign shareholder entitled to claim the
benefits of an applicable tax treaty may be different from those described
herein. Foreign shareholders are urged to consult their own tax advisors with
respect to the particular tax consequences to them of an investment in the
Fund, including the applicability of foreign taxes.
EFFECT OF FUTURE LEGISLATION; LOCAL TAX CONSIDERATIONS
The foregoing general discussion of U.S. federal income tax
consequences is based on the Code and regulations issued thereunder as in
effect on the date of this Statement of Additional Information. Future
legislative or administrative changes or court decisions may significantly
change the conclusions expressed herein, and any such changes or decisions may
have a retroactive effect with respect to the transactions contemplated herein.
Rules of state and local taxation of ordinary income dividends and
capital gain dividends from regulated investment companies often differ from
the rules for U.S. federal income taxation described above. The tax treatment
of foreign investors may also differ from the treatment for U.S. investors
described above. Shareholders are urged to consult their tax advisors as to
the consequences of these and other state and local tax rules affecting
investments in the Fund.
DESCRIPTION OF FUND SHARES
Each share of the Fund is entitled to one vote, to participate equally
in dividends and distributions declared with respect to shares of the Fund and,
upon liquidation of the Fund, to participate in its proportionate share of the
net assets remaining after satisfaction of outstanding liabilities. Shares of
the Fund are fully paid, non-assessable and fully transferable when issued and
have no preemptive, conversion or exchange rights. Fractional shares have
proportionately the same rights, including voting rights, as are provided for a
full share.
MISCELLANEOUS INFORMATION
AUDIT REPORTS
The Board of Trustees will issue to the shareholders at least
semi-annually the Fund's financial statement. Financial statements, audited by
independent auditors, will be issued annually. The firm of KPMG Peat Marwick
LLP serves as the auditors of the Fund.
24
<PAGE> 62
LEGAL MATTERS
Legal matters of the Trust are passed upon by Ballard Spahr Andrews &
Ingersoll, Philadelphia, Pennsylvania.
CUSTODIAN AND TRANSFER AGENT
The Bank of New York (the "Custodian"), 110 Washington Street, 8th
Floor, New York, New York 10286, is custodian of all securities and cash of the
Fund. The custodian attends to the collection of principal and income, pays
and collects all monies for securities bought and sold by a Fund, and performs
certain other ministerial duties. A I M Fund Services, Inc. (the "Transfer
Agent"), P.O. Box 4739, Houston, Texas 77210-4739, is transfer and dividend
disbursing agent for the Retail Class. The Fund pays the Custodian and the
Transfer Agent such compensation as may be agreed upon from time to time.
PRINCIPAL HOLDERS OF SECURITIES
As of November 1, 1995, the trustees and officers of the Trust as a
group owned less than 1% of the outstanding shares of any class of the Trust.
RETAIL CLASS:
- -------------
To the best of the Trust's knowledge, the names and addresses of the
holders of 5% or more of the outstanding shares of the Retail Class, as of
November 1, 1995 and the percent of outstanding shares owned by such
shareholders are as follows:
<TABLE>
<CAPTION>
Percent
Name and Address Owned of
of Record Owner Record Only*
--------------- -----------
<S> <C>
Merrill Lynch Pierce Fenner & Smith 13.9%
AIDS/Street Account
Mutual Fund Operations
Attn: Private Client Group
P. O. Box 45286
Jacksonville, FL 32232-5286
BHC Securities Inc. 7.8%
FBO CB Clients
Trade House Account
2005 Market Street
Philadelphia, PA 19103
Bob & Co
c/o Bank of Boston 5.2%
Attn: Mutual Funds
P. O. Box 1809
Boston, MA 02105
</TABLE>
__________________________________
* The Trust has no knowledge as to whether all or any portion of
the shares owned of record are also owned beneficially.
25
<PAGE> 63
INSTITUTIONAL CLASS:
- --------------------
To the best of the Trust's knowledge, the names and addresses of the
holders of 5% or more of the outstanding shares of the Institutional Class, as
of November 1, 1995 and the percent of outstanding shares owned by such
shareholders are as follows:
<TABLE>
<CAPTION>
Percent
Name and Address Owned of
of Record Owner Record Only*
--------------- -----------
<S> <C>
Mellon Bank, N.A. 58.18%**
Three Mellon Center
Pittsburgh, PA 15259
The Northern Trust Co. 14.86%
P. O. Box 92956
Chicago, IL 60675
Frost National Bank 10.20%
P. O. Box 1600
San Antonio, TX 78296
U. S. Bank of Washington 8.18%
P. O. Box 3168
Portland, OR 97208
</TABLE>
__________________________________
* The Trust has no knowledge as to whether all or any portion of the
shares owned of record are also owned beneficially.
** A shareholder who holds more than 25% of the oustanding shares of a class
may be presumed to be in "control" of such class of shares, as defined
in the 1940 Act.
26
<PAGE> 64
FINANCIAL STATEMENTS
F-1
<PAGE> 65
o INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of
AIM Investment Securities Funds
We have audited the accompanying statement of assets
and liabilities of the Limited Maturity Treasury
Portfolio (a series of AIM Investment Securities
Funds), including the schedule of investments, as of
July 31, 1995, and the related statement of operations
for the year then ended, the statements of changes in
net assets for the year then ended and the eleven
months ended July 31, 1994 and the financial highlights
for the year then ended, the eleven months ended July
31, 1994, each of the years in the five-year period
ended August 31, 1993 and the period December 15, 1987
(date operations commenced) through August 31, 1988.
These financial statements and financial highlights are
the responsibility of the Fund's management. Our
responsibility is to express an opinion on these
financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with
generally accepted auditing standards. Those standards
require that we plan and perform the audit to obtain
reasonable assurance about whether the financial
statements and financial highlights are free of
material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our
procedures included confirmation of securities owned
as of July 31, 1995, by correspondence with the
custodian. An audit also includes assessing the
accounting principles used and significant estimates
made by management, as well as evaluating the
overall financial statement presentation. We believe
that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and
financial highlights referred to above present fairly,
in all material respects, the financial position of the
Limited Maturity Treasury Portfolio as of July 31,
1995, the results of its operations for the year then
ended, the changes in its net assets for the year then
ended and the eleven months ended July 31, 1994, and
the financial highlights for the year then ended, the
eleven months ended July 31, 1994, each of the years in
the five-year period ended August 31, 1993 and the
period December 15, 1987 (date operations commenced)
through August 31, 1988 in conformity with generally
accepted accounting principles.
/s/ KPMG PEAT MARWICK LLP
KPMG Peat Marwick LLP
September 1, 1995
Houston, Texas
F-2
<PAGE> 66
SCHEDULE OF INVESTMENTS
July 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
MATURITY (000S) VALUE
<S> <C> <C> <C>
U. S. TREASURY SECURITIES
U. S. TREASURY NOTES-98.55%
6.25% 08/31/96 $ 33,760 $ 33,922,723
- ---------------------------------------------------------------------------------------------
6.50% 09/30/96 32,480 32,749,259
- ---------------------------------------------------------------------------------------------
6.875% 10/31/96 32,800 33,227,384
- ---------------------------------------------------------------------------------------------
7.25% 11/30/96 32,635 33,225,041
- ---------------------------------------------------------------------------------------------
7.50% 12/31/96 32,725 33,472,439
- ---------------------------------------------------------------------------------------------
7.50% 01/31/97 33,000 33,786,720
- ---------------------------------------------------------------------------------------------
6.875% 02/28/97 32,590 33,100,034
- ---------------------------------------------------------------------------------------------
6.625% 03/31/97 33,185 33,593,507
- ---------------------------------------------------------------------------------------------
6.50% 04/30/97 32,780 33,124,846
- ---------------------------------------------------------------------------------------------
6.125% 05/31/97 32,700 32,832,762
- ---------------------------------------------------------------------------------------------
5.625% 06/30/97 32,725 32,590,500
- ---------------------------------------------------------------------------------------------
5.875% 07/31/97 32,500 32,511,700
- ---------------------------------------------------------------------------------------------
Total U.S. Treasury Securities 398,136,915
- ---------------------------------------------------------------------------------------------
TOTAL INVESTMENTS-98.55% 398,136,915
- ---------------------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-1.45% 5,873,459
- ---------------------------------------------------------------------------------------------
NET ASSETS-100.00% $404,010,374
=============================================================================================
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE> 67
STATEMENT OF ASSETS AND LIABILITIES
July 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost $394,125,287) $398,136,915
- ---------------------------------------------------------------------------------------------
Cash 18,054
- ---------------------------------------------------------------------------------------------
Receivables for:
Fund shares sold 2,041,751
- ---------------------------------------------------------------------------------------------
Interest 5,497,050
- ---------------------------------------------------------------------------------------------
Investment in deferred compensation plan 7,430
- ---------------------------------------------------------------------------------------------
Other assets 195,658
- ---------------------------------------------------------------------------------------------
Total assets 405,896,858
- ---------------------------------------------------------------------------------------------
LIABILITIES:
Payables for:
Fund shares reacquired 786,696
- ---------------------------------------------------------------------------------------------
Dividends 947,839
- ---------------------------------------------------------------------------------------------
Deferred compensation 7,430
- ---------------------------------------------------------------------------------------------
Accrued advisory fees 67,358
- ---------------------------------------------------------------------------------------------
Accrued distribution fees 34,365
- ---------------------------------------------------------------------------------------------
Accrued transfer agent fees 19,330
- ---------------------------------------------------------------------------------------------
Accrued operating expenses 23,466
- ---------------------------------------------------------------------------------------------
Total liabilities 1,886,484
- ---------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $404,010,374
=============================================================================================
</TABLE>
<TABLE>
<CAPTION>
INSTITUTIONAL AIM
SHARES SHARES FUND
<S> <C> <C> <C>
NET ASSETS: $129,530,358 $274,480,016 $404,010,374
=============================================================================================
Shares outstanding, $0.01 par value
per share 12,915,909 27,369,326 40,285,235
=============================================================================================
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE $ 10.03
=============================================================================================
OFFERING PRICE PER SHARE:
(Net asset value of $10.03 divided by 99.00%) $ 10.13
=============================================================================================
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE> 68
STATEMENT OF OPERATIONS
For the year ended July 31, 1995
<TABLE>
<CAPTION>
INSTITUTIONAL AIM
SHARES SHARES FUND
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 7,406,926 $ 16,714,505 $ 24,121,431
- -------------------------------------------------------------------------------------------------------
EXPENSES:
Advisory fees 247,821 561,628 809,449
- -------------------------------------------------------------------------------------------------------
Administrative service fees 20,670 61,529 82,199
- -------------------------------------------------------------------------------------------------------
Custodian fees 7,205 9,215 16,420
- -------------------------------------------------------------------------------------------------------
Transfer agent fees 2,064 196,628 198,692
- -------------------------------------------------------------------------------------------------------
Trustees' fees and expenses 2,380 5,774 8,154
- -------------------------------------------------------------------------------------------------------
Distribution fees -- 421,183 421,183
- -------------------------------------------------------------------------------------------------------
Other 60,872 170,765 231,637
- -------------------------------------------------------------------------------------------------------
Total expenses 341,012 1,426,722 1,767,734
- -------------------------------------------------------------------------------------------------------
Net investment income $ 7,065,914 $ 15,287,783 22,353,697
- -------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) on sales of investment securities (7,239,070)
- -------------------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 9,384,912
- -------------------------------------------------------------------------------------------------------
Net gain on investment securities 2,145,842
- -------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 24,499,539
=======================================================================================================
</TABLE>
See Notes to Financial Statements.
F-5
<PAGE> 69
STATEMENT OF CHANGES IN NET ASSETS
For the year ended July 31, 1995 and
the eleven months ended July 31, 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
OPERATIONS:
Net investment income $ 22,353,697 $ 18,105,773
- ------------------------------------------------------------------------------------------------------
Net realized gain (loss) on sales of investment securities (7,239,070) (2,745,439)
- ------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investment securities 9,384,912 (8,181,235)
- ------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 24,499,539 7,179,099
- ------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Institutional Shares (7,065,914) (6,248,089)
- ------------------------------------------------------------------------------------------------------
AIM Shares (15,287,783) (11,857,684)
- ------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAINS ON
INVESTMENT SECURITIES -- (4,076,018)
- ------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS-NET:
Institutional Shares (6,229,532) 9,581,280
- ------------------------------------------------------------------------------------------------------
AIM Shares (56,819,839) (9,292,096)
- ------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (60,903,529) (14,713,508)
- ------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 464,913,903 479,627,411
- ------------------------------------------------------------------------------------------------------
End of period $404,010,374 $464,913,903
======================================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $410,024,906 $473,074,277
- ------------------------------------------------------------------------------------------------------
Undistributed realized gain (loss) on sales of investment
securities (10,026,160) (2,787,090)
- ------------------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities 4,011,628 (5,373,284)
- ------------------------------------------------------------------------------------------------------
$404,010,374 $464,913,903
======================================================================================================
</TABLE>
See Notes to Financial Statements.
F-6
<PAGE> 70
NOTES TO FINANCIAL STATEMENTS
July 31, 1995
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Investment Securities Funds (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company. The Trust is organized as a Delaware business
trust consisting of one portfolio, the Limited Maturity Treasury Portfolio (the
"Fund"). The Fund currently offers two different classes of shares: the AIM
Limited Maturity Treasury Shares (the "AIM Shares") and the Institutional
Shares. Matters affecting each class are voted on exclusively by such
shareholders.
The following is a summary of the significant accounting policies followed by
the Fund in the preparation of its financial statements.
A. Security Valuations--Debt obligations that are issued or guaranteed by the
U.S. Treasury are valued on the basis of prices provided by an independent
pricing service. Prices provided by the pricing service may be determined
without exclusive reliance on quoted prices, and may reflect appropriate
factors such as yield, type of issue, coupon rate and maturity date.
Securities for which market prices are not provided by the pricing service
are valued at the mean between last bid and asked prices based upon quotes
furnished by independent sources. Securities for which market quotations are
not readily available are valued at fair value as determined in good faith by
or under the supervision of the Trust's officers in a manner specifically
authorized by the Board of Trustees. Securities with a remaining maturity of
60 days or less are valued at amortized cost which approximates market value.
B. Securities Transactions and Investment Income--Securities transactions are
accounted for on a trade date basis. Interest income, adjusted for
amortization of discounts on investments, is earned from settlement date and
is recorded on the accrual basis. It is the policy of the Fund not to
amortize bond premiums for financial reporting purposes. Interest income is
allocated to each class daily, based upon each class' pro-rata share of the
total shares of the Fund outstanding. Realized gains and losses from
securities transactions are recorded on the identified cost basis.
C. Dividends and Distributions to Shareholders--It is the policy of the Fund to
declare daily dividends from net investment income. Such dividends are paid
monthly. Net realized short-term capital gains, if any, are distributed
quarterly. Net realized long-term capital gains, if any, are distributed
annually.
D. Federal Income Taxes--The Fund intends to comply with the requirements of the
Internal Revenue Code necessary to qualify as a regulated investment company
and, as such, will not be subject to federal income taxes on otherwise
taxable income (including net realized capital gains) which is distributed to
shareholders. Therefore, no provision for federal income taxes is recorded in
the financial statements. The Fund has a capital loss carryforward (which may
be carried forward to offset future taxable capital gains, if any) of
$5,819,679, which expires, if not previously utilized, in the year 2003.
E. Expenses--Operating expenses directly attributable to a class of shares are
charged to that class' operations. Expenses which are applicable to more than
one class, e.g., advisory fees, are allocated between them.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM") with respect to the Fund. Under the terms of the master
investment advisory agreement, the Fund pays AIM an advisory fee at the annual
rate of 0.20% of the first $500 million of the Fund's average daily net assets
plus 0.175% of the Fund's average daily net assets in excess of $500 million.
This agreement requires AIM to reduce its fee or, if necessary, make payments to
the extent required to satisfy any expense limitations imposed by the securities
laws or regulations thereunder of any state in which the Fund shares are
qualified for sale.
F-7
<PAGE> 71
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES - (continued)
The Fund, pursuant to a master administrative services agreement with AIM,
has agreed to reimburse AIM for certain costs incurred in providing accounting
services to the Fund. During the year ended July 31, 1995, the Fund reimbursed
AIM $58,818 for such services.
During the year ended July 31, 1995, the Fund paid A I M Institutional Fund
Services, Inc. ("AIFS") $3,349 for shareholder and transfer agency services.
Effective July 1, 1995, AIFS became the exclusive transfer agent of the
Institutional Shares of the Fund. Effective November 1, 1994, A I M Fund
Services, Inc. ("AFS") became the transfer agent for the AIM Shares and was paid
$91,753 for such services for the nine months ended July 31, 1995.
The Trust has entered into a master distribution agreement with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the AIM
Shares and a master distribution agreement with Fund Management Company ("FMC")
to serve as the distributor for the Institutional Shares. The Trust has adopted
a Plan pursuant to Rule 12b-1 under the 1940 Act (the "Plan") with respect to
the AIM Shares. The Fund pays AIM Distributors compensation at an annual rate of
0.15% of the average net assets attributable to the AIM Shares. The Plan is
designed to compensate AIM Distributors for certain promotional and other sales
related costs, and to implement a program which provides periodic payments to
selected dealers and financial institutions who furnish continuing personal
shareholder services to their customers who purchase and own AIM Shares of the
Fund. Any amounts not paid as a service fee under such Plan would constitute an
asset-based sales charge. The Plan also imposes a cap on the total amount of
sales charges, including asset-based sales charges, that may be paid by the
Fund. During the year ended July 31, 1995, the AIM Shares paid AIM Distributors
$421,183 as compensation under the Plan.
AIM Distributors received commissions of $89,885 during the year ended July
31, 1995 from sales of AIM Shares. Such commissions are not an expense of the
Fund. They are deducted from, and are not included in, proceeds from sales of
AIM shares. Certain officers and trustees of the Trust are officers and
directors of AIM, AIM Distributors, FMC, AFS and AIFS.
The Fund paid legal fees of $2,245 for services rendered by Reid & Priest as
counsel to the Board of Trustees. In September 1994, the firm Kramer, Levin,
Naftalis, Nessen, Kamin & Frankel was appointed as counsel to the Board of
Trustees. The Fund paid legal fees of $1,044 for services rendered by that firm
as counsel. A member of that firm is a trustee of the Trust and, prior to
September 1994, was a member of Reid & Priest.
F-8
<PAGE> 72
NOTE 3-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended July 31, 1995 was
$488,664,643 and $599,080,810, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
on a tax basis as of July 31, 1995 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities $ 4,010,459
- -----------------------------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (94,232)
- -----------------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities $ 3,916,227
=====================================================================================================
</TABLE>
Cost of investments for tax purposes is $394,220,688.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is not
an "interested person" of AIM. The Trust may invest trustees' fees, if so
elected by a trustee, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 5-SHARE INFORMATION
Changes in the AIM Shares outstanding during the year ended July 31, 1995 and
the eleven months ended July 31, 1994 were as follows:
<TABLE>
<CAPTION>
1995 1994
---------------------------- ----------------------------
Shares Amount Shares Amount
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Sold 15,641,151 $ 155,346,148 13,894,980 $ 140,244,403
- -------------------------------------------------------------------------------- ----------------------------
Issued as reinvestment of dividends 1,083,758 10,758,338 910,943 9,102,831
- -------------------------------------------------------------------------------- ----------------------------
Reacquired (22,488,544) (222,924,325) (15,751,905) (158,639,330)
- -------------------------------------------------------------------------------- ----------------------------
(5,763,635) $ (56,819,839) (945,982) $ (9,292,096)
================================================================================ ============================
</TABLE>
F-9
<PAGE> 73
NOTE 6-FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share of AIM
Shares outstanding during the year ended July 31, 1995, the eleven months ended
July 31, 1994, each of the years in the five-year period ended August 31, 1993
and the period December 15, 1987 (date operations commenced) through August 31,
1988.
<TABLE>
<CAPTION>
JULY 31, AUGUST 31,
---------------------- --------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period $ 9.96 $ 10.24 $ 10.21 $ 10.01 $ 9.79 $ 9.78 $ 9.80 $ 9.92
- -------------------- --------- --------- --------- --------- --------- --------- --------- ---------
Income from
investment
operations:
Net investment
income 0.54 0.35 0.42 0.58 0.72 0.77 0.84 0.52
- -------------------- --------- --------- --------- --------- --------- --------- --------- ---------
Net gains (losses)
on securities
(both realized
and unrealized) 0.07 (0.20) 0.05 0.29 0.22 0.01 (0.02) (0.12)
- -------------------- --------- --------- --------- --------- --------- --------- --------- ---------
Total from
investment
operations 0.61 0.15 0.47 0.87 0.94 0.78 0.82 0.40
- -------------------- --------- --------- --------- --------- --------- --------- --------- ---------
Less distributions:
Dividends from net
investment income (0.54) (0.35) (0.42) (0.58) (0.72) (0.77) (0.84) (0.52)
- -------------------- --------- --------- --------- --------- --------- --------- --------- ---------
Distributions from
net realized
capital gains -- (0.08) (0.02) (0.09) -- -- -- --
- -------------------- --------- --------- --------- --------- --------- --------- --------- ---------
Total
distributions (0.54) (0.43) (0.44) (0.67) (0.72) (0.77) (0.84) (0.52)
- -------------------- --------- --------- --------- --------- --------- --------- --------- ---------
Net asset value, end
of period $ 10.03 $ 9.96 $ 10.24 $ 10.21 $ 10.01 $ 9.79 $ 9.78 $ 9.80
==================== ========= ========= ========= ========= ========= ========= ========= =========
Total return(a) 6.36% 1.52% 4.65% 8.93% 9.95% 8.32% 8.71% 4.11%
==================== ========= ========= ========= ========= ========= ========= ========= =========
Ratios/supplemental
data:
Net assets, end of
period (000s
omitted) $274,480 $329,942 $348,937 $260,454 $131,880 $ 79,871 $ 70,781 $ 62,342
==================== ========= ========= ========= ========= ========= ========= ========= =========
Ratio of expenses to
average net assets 0.51%(b) 0.47%(c) 0.46% 0.48% 0.54% 0.50%(d) 0.45%(e) 0.35%(c)(e)
==================== ========= ========= ========= ========= ========= ========= ========= =========
Ratio of net
investment income
to average net
assets 5.44%(b) 3.75%(c) 4.07% 5.60% 7.25% 7.90%(d) 8.59%(e) 7.02%(c)(e)
==================== ========= ========= ========= ========= ========= ========= ========= =========
Portfolio turnover
rate 120.01% 120.40% 122.99% 119.62% 214.74% 192.46% 219.53% 140.83%
==================== ========= ========= ========= ========= ========= ========= ========= =========
Borrowings for the
period:
Amount of debt
outstanding at
end of period
(000s omitted) -- -- -- -- -- -- $ 9,943 $ 19,232
- -------------------- --------- --------- --------- --------- --------- --------- --------- ---------
Average amount of
debt outstanding
during the period
(000s omitted)(f) -- -- -- -- -- $ 5,101 $ 14,301 $ 4,110
- -------------------- --------- --------- --------- --------- --------- --------- --------- ---------
Average number of
shares
outstanding
during the period
(000s omitted)(f) 28,337 34,101 30,416 18,378 10,559 7,389 7,295 2,429
- -------------------- --------- --------- --------- --------- --------- --------- --------- ---------
Average amount of
debt per share
during the period -- -- -- -- -- $ 0.69 $ 1.96 $ 1.69
- -------------------- --------- --------- --------- --------- --------- --------- --------- ---------
</TABLE>
(a) Does not deduct sales charges and for periods less than one year,
total return is not annualized.
(b) Ratios are based on average net assets of $280,789,286.
(c) Annualized.
(d) After waiver of advisory fees.
(e) After waiver of advisory fees and expense reimbursements.
(f) Averages computed on a daily basis.
F-10
<PAGE> 74
AIM INVESTMENT
SECURITIES FUNDS
PROSPECTUS
- --------------------------------------------------------------------------------
LIMITED The Limited Maturity Treasury Portfolio (the
MATURITY "Fund"), a portfolio of AIM Investment Securities Funds
TREASURY (the "Trust"), is an open-end, series, management
PORTFOLIO mutual fund designed for institutions seeking liquidity
with minimum fluctuation in principal value, and,
INSTITUTIONAL consistent with this investment objective, the highest
SHARES total return achievable. To achieve its objective, the
Fund will invest in an actively managed portfolio of
NOVEMBER 17, 1995 U.S. Treasury notes and other direct obligations of the
U.S. Treasury.
THERE CAN BE NO ASSURANCE THAT THE FUND WILL
ACHIEVE ITS OBJECTIVE. THE NET ASSET VALUE OF THE FUND
VARIES DEPENDING ON THE MARKET VALUE OF ITS ASSETS. THE
FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND THE FUND'S
SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY THE
U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
This Prospectus sets forth basic information that
investors should know about the Fund prior to investing
and should be read and retained for future reference. A
Statement of Additional Information, dated November 17,
1995, has been filed with the United States Securities
and Exchange Commission (the "SEC") and is hereby
incorporated by reference. For a copy of the Statement
of Additional Information, write to the address below
or call (800) 659-1005.
This Prospectus relates solely to the
Institutional Shares of the Fund. Shares of a Retail
Class of the Fund are offered pursuant to a separate
prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
[AIM LOGO APPEARS HERE]
Fund Management Company
11 Greenway Plaza
Suite 1919
Houston, Texas 77046-1173
(800) 659-1005
<PAGE> 75
SUMMARY
THE FUND AND ITS INVESTMENT OBJECTIVE
AIM Investment Securities Funds (the "Trust") is a Delaware business trust
organized as an open-end, series, management investment company and currently
has one portfolio: the Limited Maturity Treasury Portfolio (the "Fund"). The
Fund consists of two classes: AIM Limited Maturity Treasury Shares (the "Retail
Class") and the Institutional Shares (the "Institutional Shares"). This
Prospectus relates solely to the Institutional Shares.
Shares of the Retail Class are offered to investors pursuant to a separate
prospectus. To obtain information about the Retail Class, please call (713)
626-1919, Extension 5001 (in Houston) or (800) 347-4246 (elsewhere).
Because the Trust declares dividends for each class of the Fund on a daily
basis, each class of the Fund is expected to have the same net asset value
(proportionate interest in the net assets of the Fund). Moreover, each class
bears equally those expenses, such as the advisory fee, that are allocated to
the Fund as a whole. Both classes of shares of the Fund share a common
investment objective and portfolio of investments. However, each of the classes
of the Fund have different shareholders and are separately allocated certain
class expenses, such as those associated with the shareholder servicing of their
shares. For example, a shareholder servicing fee of up to 0.15% of the average
daily net assets of the Fund attributable to the Retail Class will be allocated
to such class; such fee, however, will not be allocated to the Institutional
Shares. Therefore, assuming that the allocations of other class-related expenses
to the Institutional Shares and the Retail Class are the same, the yield of the
Institutional Shares will be higher than the yield of the Retail Class in an
amount which reflects such shareholder servicing fee.
The investment objective of the Fund is to seek liquidity with minimum
fluctuation in principal value and, consistent with this investment objective,
the highest total return achievable. To achieve its objective, the Fund will
invest in U.S. Treasury notes and other direct obligations of the U.S. Treasury,
and may (but does not currently intend to) engage in repurchase agreement
transactions with respect to such obligations. The Fund will attempt to enhance
its total return through capital appreciation when market factors, such as
economic and market conditions and the prospects for interest rate changes,
indicate that capital appreciation may be available without significant risk to
principal. The Fund will only purchase securities whose remaining maturities,
measured from the date of settlement, do not exceed three (3) years. Under
normal circumstances, the average portfolio maturity of the U.S. Treasury notes
and other direct obligations of the U.S. Treasury owned by the Fund will range
between one-and-one-half (1 1/2) and two (2) years.
INVESTORS IN INSTITUTIONAL SHARES
The Institutional Shares are designed to be a convenient and economical
vehicle through which institutions ("Institutions"), acting for themselves or on
behalf of clients for whom they exercise investment discretion, can invest in a
portfolio consisting of U.S. Treasury notes and other U.S. Treasury obligations
with remaining maturities of three (3) years or less. Although the Institutional
Shares may not be purchased by individuals directly, Institutions may purchase
such shares for themselves or on a discretionary basis for accounts they
maintain on behalf of their customers. The Institutional Shares may be
particularly appropriate for Institutions investing short-term cash reserves for
the benefit of customer accounts with respect to which Institutions exercise
substantial investment discretion. Institutions may charge their customers a
record keeping, account maintenance or other fee in connection with their
accounts, and such customers should consult with their Institutions to obtain a
schedule of applicable fees. See "Suitability For Investors."
PURCHASE OF SHARES
Institutional Shares are sold at net asset value. No purchase or redemption
charges are imposed by the Fund. Institutions may charge fees to their customers
for services provided in connection with the maintenance of customer accounts
with the Institutions, and customers should consult with their Institutions to
obtain a schedule of any applicable fees. The minimum initial investment in the
Institutional Shares is $1,000,000. There is no minimum amount for subsequent
investments. Payment for shares purchased must be in federal funds or other
funds immediately available to the Fund. See "Purchase of Shares."
REDEMPTION OF SHARES
Redemptions of the Institutional Shares may be made without charge at net
asset value. Payment for redeemed shares for which redemption orders are
received prior to 4:15 p.m. Eastern Time will normally be made in federal funds
on the next business day. See "Redemption of Shares."
DIVIDENDS AND DISTRIBUTIONS
The net investment income of the Fund is declared as a dividend daily to
shareholders of record immediately prior to 4:15 p.m. Eastern Time. Dividends
are paid monthly by check or wire transfer unless the shareholder has previously
elected to
2
<PAGE> 76
have such dividends automatically reinvested in additional shares of the
Institutional Shares. Distributions of short-term capital gains, if any, are
made quarterly and distributions of long-term capital gains, if any, are made
annually. See "Dividends and Distributions."
INVESTMENT ADVISOR
A I M Advisors, Inc. ("AIM") serves as the Fund's investment advisor pursuant
to a Master Investment Advisory Agreement with the Trust (the "Advisory
Agreement"). AIM acts as manager or advisor to 37 investment company portfolios.
As of November 1, 1995, the total assets advised or managed by AIM or its
affiliates were approximately $39.5 billion. Under the Advisory Agreement, AIM
receives a fee for its services based on the Fund's average daily net assets.
Under a separate administrative services agreement, AIM is permitted to receive
reimbursement of its costs in performing certain accounting and other
administrative services for the Fund. Under a Transfer Agency and Service
Agreement, A I M Institutional Fund Services, Inc. ("Transfer Agent" or "AIFS"),
AIM's wholly-owned subsidiary and a registered transfer agent, receives a fee
for its provision of transfer agency, dividend distribution and disbursement,
and shareholder services to the Fund. See "Management of the Trust."
DISTRIBUTOR
Fund Management Company ("FMC") acts as the exclusive distributor of the
Institutional Shares. FMC does not receive any fee from the Fund. See "Purchase
of Shares" and "Management of the Trust -- Distribution of Shares."
SPECIAL CONSIDERATIONS
The Fund's price per share will fluctuate inversely with changes in interest
rates. However, the price changes in the Fund's shares due to changes in
interest rates should be more moderate than the per share fluctuations of a fund
which invests in longer-term bonds. This is because debt securities with longer
maturities generally tend to produce higher yields but are subject to greater
market fluctuation as a result of changes in interest rates than debt securities
with shorter maturities. The Fund is designed for the investor who seeks a
higher yield and greater stability of income than a money market fund offers,
and less capital fluctuation than a long-term bond fund might provide.
AIM, AIM INSTITUTIONAL FUNDS, AIM LINK, THE AIM FAMILY OF FUNDS, THE AIM
FAMILY OF FUNDS AND DESIGN (I.E., THE AIM LOGO), AND AIM AND DESIGN ARE
REGISTERED SERVICE MARKS OF A I M MANAGEMENT GROUP INC.
3
<PAGE> 77
TABLE OF FEES AND EXPENSES
The following table is designed to help an investor understand the various
costs and expenses that an investor in the Institutional Shares will bear
directly or indirectly. The fees and expenses set forth in this table are based
on the average net assets of the Institutional Shares of the Fund for the fiscal
period ended July 31, 1995.
<TABLE>
<S> <C> <C>
Shareholder Transaction Expenses
Maximum sales load imposed on purchase of shares (as a % of
offering price)................................................ None
Maximum sales load on reinvested dividends (as a % of offering
price)......................................................... None
Deferred sales load (as a % of original purchase price or
redemption proceeds,
as applicable)................................................. None
Redemption fees (as a % of amount redeemed, if applicable)........ None
Exchange fee...................................................... None
Annual Fund Operating Expenses
(as a % of average net assets)
Management fees................................................... .20%
12b-1 fees........................................................ None
Other expenses:
Custodian fees................................................. .01%
Other.......................................................... .07%
----
Total other expenses......................................... .08%
-----
Total fund operating expenses..................................... .28%
=====
</TABLE>
EXAMPLE
An investor would pay the following expenses on a $1,000 investment, assuming
(1) a 5% annual return and (2) redemption at the end of each time period.
<TABLE>
<CAPTION>
INSTITUTIONAL
SHARES
------
<S> <C>
1 year....................................................... $ 3
3 years...................................................... $ 9
5 years...................................................... $16
10 years...................................................... $36
</TABLE>
THE ABOVE EXAMPLES SHOULD NOT BE CONSIDERED TO BE REPRESENTATIVE OF THE SHARES
OF THE INSTITUTIONAL SHARES OF THE FUND'S ACTUAL OR FUTURE EXPENSES, WHICH MAY
BE GREATER OR LESSER THAN THOSE SHOWN. IN ADDITION, WHILE THE EXAMPLES ASSUME A
5% ANNUAL RETURN, THE ACTUAL PERFORMANCE OF THE INSTITUTIONAL SHARES WILL VARY
AND MAY RESULT IN AN ACTUAL RETURN THAT IS GREATER OR LESS THAN 5%. THE EXAMPLES
ASSUME REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS AND THAT THE PERCENTAGE
AMOUNT FOR TOTAL FUND OPERATING EXPENSES REMAINS THE SAME FOR EACH YEAR.
4
<PAGE> 78
FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights during the fiscal year
ended July 31, 1995, the eleven months ended July 31, 1994, each of the years in
the six-year period ended August 31, 1993 and the period July 13, 1987 (date
operations commenced) through August 31, 1987. All data have been audited by
KPMG Peat Marwick LLP, independent auditors, whose reports on the financial
statements and the related notes appear in the Statement of Additional
Information.
<TABLE>
<CAPTION>
JULY 31, AUGUST 31,
-------------------- ------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987
-------- -------- -------- -------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning
of period........... $ 9.96 $ 10.24 $ 10.21 $ 10.01 $ 9.79 $ 9.78 $ 9.80 $ 9.92 $ 10.00
Income from
investment
operations:
Net investment
income............ 0.57 0.37 0.44 0.60 0.73 0.79 0.85 0.73 0.09
Net gains
(losses) on
securities
(both realized
and unrealized)... 0.07 (0.20) 0.05 0.29 0.22 0.01 (0.02) (0.12) (0.08)
-------- -------- -------- -------- ------- ------- ------- ------- -------
Total from
investment
operations..... 0.64 0.17 0.49 0.89 0.95 0.80 0.83 0.61 0.01
-------- -------- -------- -------- ------- ------- ------- ------- -------
Less distributions:
Dividends
from net
investment income (0.57) (0.37) (0.44) (0.60) (0.73) (0.79) (0.85) (0.73) (0.09)
Distributions
from net realized
capital gains.... -- (0.08) (0.02) (0.09) -- -- -- -- --
-------- -------- -------- -------- ------- ------- ------- ------- -------
Total
distributions.. (0.57) (0.45) (0.46) (0.69) (0.73) (0.79) (0.85) (0.73) (0.09)
-------- -------- -------- -------- ------- ------- ------- ------- -------
Net asset
value, end
of period.......... $ 10.03 $ 9.96 $ 10.24 $ 10.21 $ 10.01 $ 9.79 $ 9.78 $ 9.80 $ 9.92
======== ======= ======= ======== ======= ======= ======= ======= =======
Total return (a)..... 6.61% 1.72% 4.88% 9.14% 10.08% 8.52% 8.87% 6.34% 0.14%
======== ======= ======= ======== ======= ======= ======= ======= =======
Ratios/supplemental
data:
Net assets,
end of period
(000s omitted)... $129,530 $134,971 $130,690 $ 89,352 $25,528 $10,378 $16,065 $35,310 $ 4,202
======== ======== ======== ======== ======= ======= ======= ======= =======
Ratio of
expenses
to average
net assets....... 0.28%(b) 0.25%(c) 0.24% 0.28% 0.41%(d) 0.31%(e) 0.31%(f) 0.31%(f) 0.25%(c)(f)
======== ======= ======= ======== ======= ======= ======= ======= =======
Ratio of
net investment
income to average
net assets....... 5.70%(b) 3.98%(c) 4.30% 5.76% 7.36%(d) 8.12%(e) 8.69%(f) 7.46%(f) 6.98%(c)(f)
======== ======= ======= ======== ======= ======= ======= ======= =======
Portfolio
turnover rate.... 120.01% 120.40% 122.99% 119.62% 214.74% 192.46% 219.53% 140.83% 28.29%
======== ======= ======= ======== ======= ======= ======= ======= =======
Borrowings
for the period:
Amount of
debt outstanding
at end of period
(000s omitted)... -- -- -- -- -- $ 2,257 $10,892 --
Average
amount of debt
outstanding
during the
period (000s
omitted) (g)..... -- -- -- -- -- $ 834 $ 3,562 $ 3,754 --
Average
number of shares
outstanding
during the
period (000s
omitted) (g)..... 12,540 16,864 9,785 6,097 1,477 1,208 1,817 2,118 390
Average
amount of debt
per share during
the period... -- -- -- -- -- $ 0.69 $ 1.96 $ 1.69 --
</TABLE>
- ---------------
(a) For periods less than one year, total returns are not annualized.
(b) Ratios are based on average net assets of $123,910,861.
(c) Annualized.
(d) After expense reimbursements.
(e) After waiver of advisory fees and expense reimbursements.
(f) After waiver of advisory fees.
(g) Averages computed on a daily basis.
5
<PAGE> 79
SUITABILITY FOR INVESTORS
The Institutional Shares are designed to be a convenient and economical
vehicle through which Institutions can invest in a portfolio consisting of U.S.
Treasury notes and other direct obligations of the U.S. Treasury with remaining
maturities of three (3) years or less. Although shares of Institutional Shares
may not be purchased directly by individuals, Institutions may purchase such
shares for themselves or for accounts they maintain on behalf of their
customers. The Institutional Shares may be particularly appropriate for
Institutions investing short-term cash reserves for the benefit of customer
accounts with respect to which Institutions exercise substantial investment
discretion. It is the responsibility of a prospective institutional investor to
determine if an investment in the Institutional Shares is consistent with the
objectives of an account and with applicable state and federal laws and
regulations.
Each share of beneficial interest of the Fund, regardless of class, has the
same net asset value (proportionate interest in the net assets of the Fund) and
bears equally those expenses, such as the advisory fee, that are allocated to
the Fund as a whole. All classes of the Fund share a common investment objective
and portfolio of investments. However, each class of the Fund has different
shareholders and is separately allocated certain class expenses.
An investment in the Fund may relieve the Institution of many of the
investment and administrative burdens encountered when investing in a portfolio
of debt instruments directly. These functions include: selection of portfolio
investments; surveying the market for the best price at which to buy and sell;
valuation of portfolio securities; selection and scheduling of maturities;
receipt and delivery and safekeeping of securities; and portfolio recordkeeping.
It is anticipated that most Institutions will perform their own sub-accounting.
The price per share of the Fund's shares will fluctuate inversely with changes
in interest rates. However, the price changes in the Fund's shares due to
changes in interest rates should be more moderate than the per share
fluctuations of a fund which invests in longer-term obligations. The Fund is
designed for the investor who seeks a higher yield and greater stability of
income than a money market fund offers, and less capital fluctuation than a
long-term bond fund might provide.
INVESTMENT PROGRAM
INVESTMENT POLICIES
The investment objective of the Fund is to seek liquidity with minimum
fluctuation in principal value, and, consistent with this investment objective,
the highest total return achievable. There can be no assurance, however, that
the Fund will achieve its objective.
To achieve its objective, the Fund will invest in an actively managed
portfolio of U.S. Treasury notes and other direct obligations of the U.S.
Treasury. The Fund may invest in U.S. Treasury obligations, which are direct
obligations of the U.S. Treasury and which differ only in their interest rates,
maturities, and times of issuance, including U.S. Treasury bills, U.S. Treasury
notes and U.S. Treasury bonds. The Fund will attempt to enhance its total return
through capital appreciation when market factors, such as economic and market
conditions and the prospects for interest rate changes, indicate that capital
appreciation may be available without significant risk to principal. The Fund
will only purchase securities whose maturities do not exceed three (3) years.
Under normal circumstances, the average portfolio maturity of the Fund will
range between one-and-one-half (1 1/2) and two (2) years. Since brokerage
commissions are not normally paid on investments of the type made by the Fund,
the high turnover rate should not adversely affect the net income of the Fund.
Loans of Portfolio Securities. Subject to its investment restrictions (see
"Investment Restrictions") the Fund may from time to time loan securities from
its portfolio to brokers, dealers and financial institutions and receive
collateral in cash or U.S. Treasury obligations which will be maintained at all
times in an amount equal to at least 100% of the current market value of the
loaned securities; provided, however, that such loans are made according to the
guidelines of the SEC and the Trust's Board of Trustees. The Fund will be
entitled to the interest paid upon investment of the cash collateral in its
permitted investments, or to the payment of a premium or fee for the loan. The
Fund may at any time call such loans and obtain the securities loaned. However,
if the borrower of the securities should default on its obligation to return the
securities borrowed, the value of the collateral may be insufficient to permit
the Fund to reestablish its position by making a comparable investment due to
changes in market conditions. The Fund may pay reasonable fees to persons
unaffiliated with the Fund in connection with the arranging of such loans. The
Fund will only engage in securities lending transactions with broker-dealers
registered with the SEC, or with federally supervised banks or savings and loan
associations.
When-Issued or Delayed Delivery Trading. The Fund may purchase U.S. Treasury
obligations on a when-issued basis, and it may purchase or sell such securities
for delayed delivery. These transactions occur when securities are purchased or
sold by the Fund with payment and delivery to take place in the future in order
to secure what is considered an advantageous yield and price to the Fund at the
time of entering into the transaction. The value of the security on the delivery
date may be more or less than its purchase price. The Fund's custodian bank will
segregate cash or short-term U.S. Treasury obligations in an aggregate
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amount equal to the amount of its commitments in connection with such delayed
delivery and when-issued purchase transactions. No delayed delivery or
when-issued commitments will be made if, as a result, more than 25% of the
Fund's net assets would be so committed.
Borrowing. Subject to its investment restrictions (see "Investment
Restrictions"), the Fund may borrow money from banks for temporary or emergency
purposes such as to meet redemption requests which might otherwise require the
untimely disposition of securities. The Fund may not borrow for the purpose of
increasing income. If there are unusually heavy redemptions because of changes
in interest rates or for any other reason, the Fund may have to sell a portion
of its investment portfolio at a time when it may be disadvantageous to do so.
Selling Fund securities under these circumstances may result in a lower net
asset value per share or decreased dividend income, or both. The Fund believes
that, in the event of abnormally heavy redemption requests, its borrowing
provisions would help to mitigate any such effects and could make the forced
sale of its portfolio securities less likely.
Reverse Repurchase Agreements. A reverse repurchase agreement involves the
sale of securities held by the Fund, with an agreement that the Fund will
repurchase such securities at an agreed-upon price, date and interest payment.
It is the current operating policy of the Fund to enter into reverse repurchase
agreements (which are considered to be borrowings under the Investment Company
Act of 1940 (the "1940 Act")) only for temporary or emergency purposes and not
as a means to increase income, even though the Fund's investment restrictions
permit the Fund to engage in reverse repurchase agreements for income
enhancement. The Fund will enter into a reverse repurchase agreement only when
the interest income to be earned from the investment of the proceeds of the
transaction is greater than the interest expense of the transaction. During the
time a reverse repurchase agreement is outstanding, the Fund will maintain a
segregated custodial account containing U.S. Treasury obligations having a value
equal to the repurchase price under such reverse repurchase agreement. Any
investment gains made by the Fund with monies borrowed through reverse
repurchase agreements will cause the net asset value of the Fund's shares to
rise faster than would be the case if the Fund had no such borrowings. On the
other hand, if the investment performance resulting from the investment of
borrowings obtained through reverse repurchase agreements fails to cover the
cost of such borrowings to the Fund, the net asset value of the Fund will
decrease faster than would otherwise be the case.
Illiquid Securities. The Fund will limit its investment in illiquid securities
to no more than 15% of its net assets, including repurchase agreements with
remaining maturities in excess of seven days.
The investment policies described above may be changed by the Board of
Trustees without the affirmative vote of a majority of the outstanding shares of
beneficial interest of the Fund.
INVESTMENT RESTRICTIONS
The Fund's investment program is subject to a number of investment
restrictions which reflect self-imposed standards as well as federal and state
regulatory limitations. These restrictions are designed to minimize certain
risks associated with investing in certain types of securities or engaging in
certain transactions. The most significant of these restrictions provide that
the Fund will not:
(1) purchase any security unless the security is a direct obligation
of the U.S. Treasury or is a repurchase agreement with respect to a direct
obligation of the U.S. Treasury;
(2) issue senior securities in the form of indebtedness, borrow money,
except from banks for temporary or emergency purposes, such as to meet
redemption requests (not for the purpose of increasing income), or borrow
through reverse repurchase agreements (which may be entered into for the
purpose of increasing income) if, as a result of any such borrowings, the
amount borrowed would exceed 33 1/3% of the value of the Fund's assets
(including the proceeds of such senior securities issued or money borrowed)
less its liabilities (not including the liabilities incurred in connection
with such issuance or borrowing);
(3) make loans of money other than (a) through the purchase of debt
securities in accordance with the Fund's investment program, and (b) by
entering into repurchase agreements; or
(4) lend any portfolio securities if the value of the securities
loaned by it would exceed an amount equal to one-third of its total assets;
The foregoing investment restrictions (as well as certain others set forth in
the Statement of Additional Information) are matters of fundamental policy which
may not be changed without the affirmative vote of the holders of a majority of
the outstanding shares of beneficial interest of the Fund.
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PURCHASE OF SHARES
The Institutional Shares are sold to Institutions on a continuing basis at the
net asset value of such shares next determined after an order has been accepted
by the Fund. No purchase or redemption charges are imposed by the Fund; however,
Institutions may charge their customers a record keeping, account maintenance or
other fee in connection with their accounts, and such customers should consult
with their Institutions to obtain a schedule of applicable fees. In order to
maximize its income, the Fund attempts to remain as fully invested as
practicable. Accordingly, in order to be accepted for execution, purchase orders
must be received by the Fund prior to the determination of net asset value (4:15
p.m. Eastern Time) on a business day of the Fund, which means any day on which
either the New York Stock Exchange (the "NYSE") or the Fund's custodian bank is
open for business. It is expected that the NYSE will be closed during the next
twelve months on Saturdays and Sundays and on the observed holidays of New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day.
Banks will be required to certify to the Trust that they comply with
applicable state laws regarding registration as broker-dealers, or that they are
exempt from such registration.
To facilitate the investment of the proceeds of purchase orders, the Fund
urges Institutions to place their orders as early in the day as possible.
Subject to the conditions stated above and the Fund's right to reject any
purchase order, purchase orders received by the Fund prior to 4:15 p.m. Eastern
Time on any business day will be accepted on that day (a) when payment for the
shares of the class of the Fund purchased is received by the Bank of New York,
the Fund's custodian bank, in the form described below and notice of such order
is provided to AIFS or (b) at the time the order is placed, if the Fund is
assured of payment, and will be priced at the net asset value determined as of
4:15 p.m. Eastern Time on such day. Payment for such shares must be received by
The Bank of New York, the Fund's custodian, on the next business day of the Fund
following the effective date of purchase. Dividends begin accruing on the first
business day of the Fund following the day on which a purchase order for the
Fund is effective. Purchase orders received by the Fund after 4:15 p.m. Eastern
Time on any business day will be effective on the next business day of the Fund
and will be priced at the net asset value determined at the end of such day.
Payments for shares purchased must be in the form of federal funds or other
funds immediately available to the Fund. Federal Reserve wires should be sent as
early as possible in order to facilitate crediting to the shareholder's account.
Any funds received with respect to an order which is not accepted by the Fund
and any funds received for which an order has not been received will be returned
to the sending Institution. An order to purchase shares must specify which class
of shares of the Fund is being purchased; otherwise any funds received will be
returned to the sending Institution.
The minimum initial investment for the purchase of shares of the Institutional
Shares is $1,000,000. No minimum amount is required for subsequent investments
in the Institutional Shares nor are minimum balances required. Prior to the
initial purchase of shares, an Account Application must be completed and sent to
AIFS, 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173. Account
Applications may be obtained from AIFS. Any changes made to the information
provided in the Account Application must be made in writing or by completing a
new form and providing it to AIFS.
In the interest of economy and convenience, certificates representing shares
of the Fund will not be issued except upon written request to the Fund.
Certificates (in full shares only) will be issued without charge and may be
redeposited at any time.
The Trust reserves the right in its sole discretion to withdraw all or any
part of the offering made by this Prospectus or to reject any purchase order.
REDEMPTION OF SHARES
A shareholder may redeem any or all of its shares at the net asset value next
determined after receipt of the redemption request in proper form by the Fund.
There is no charge for redemption. Since shares of the Fund are not maintained
at a constant net asset value, but fluctuate in value with changes in the market
value of securities held by the Fund, the value of the shares of the Fund on
redemption may be more or less than the shareholder's initial cost, depending
upon the value of the Fund's investments at the time of redemption. Redemption
requests with respect to the Institutional Shares may also be made via AIM
LINK(R), a personal computer application software product. See "Net Asset
Value." Redemption requests with respect to shares for which certificates have
not been issued are normally made by calling AIFS at (800) 659-1005.
Payment for redeemed shares is normally made by Federal Reserve wire to the
commercial bank account designated in the shareholder's Account Application, but
may be remitted by check upon request by a shareholder. If a redemption request
is received by AIFS prior to 4:15 p.m. Eastern Time on a business day of the
Fund, the redemption will be effected at the net asset value determined as of
4:15 p.m. Eastern Time on such day and the shares to be redeemed will receive
the dividend declared on the day the request is received. The proceeds of a
redemption request effected prior to 4:15 p.m. Eastern Time will not be wired to
the redeeming shareholder until the next business day of the Fund. A redemption
request received by AIFS after 4:15 p.m.
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Eastern Time or on other than a business day of the Fund will be effected at the
net asset value of the Fund determined as of 4:15 p.m. Eastern Time on the next
business day of the Fund, and the proceeds of such redemption will normally be
wired on the business day next following such determination, or two (2) business
days after the receipt of the redemption request.
A shareholder may change the bank account designated to receive redemption
proceeds by written notice to the Fund. The authorized signature on such notice
must be guaranteed by a commercial bank or a trust company. Additional
documentation may be required when deemed appropriate by the Fund or AIFS.
Payment for shares redeemed by mail and payment for telephone redemptions in
amounts of under $1,000 will be made by check mailed within seven (7) days after
receipt of the redemption request in proper form. The Fund may make payment for
telephone redemptions in excess of $1,000 by check when it is considered to be
in the Fund's best interest to do so.
The Fund's shares are not redeemable at the option of the Trust unless the
Board of Trustees determines in its sole discretion that failure to so redeem
may have materially adverse consequences to the shareholders of the Fund.
Notwithstanding the foregoing, the Fund is permitted to redeem shares in any
account with a net asset value less than $500.
DIVIDENDS AND DISTRIBUTIONS
Dividends from the net investment income (not including any net short-term
capital gains) earned by the Fund are declared daily and paid monthly.
Distributions from net realized short-term capital gains, if any, are paid
quarterly. Distributions from net realized long-term capital gains, if any, are
paid annually.
The dividends accrued and paid for each class of the Fund's shares will
consist of: (a) interest accrued and discounts earned (including both original
issue and market discount) for the Fund, allocated based upon each class's pro
rata share of the net assets of the Fund, less (b) Trust expenses accrued for
the applicable dividend period attributable to the Fund, such as custodian fees,
trustee's fees, and accounting and legal expenses, allocated based upon each
class's pro rata share of the net assets of the Fund, less (c) expenses directly
attributable to each class which accrued for the applicable dividend period,
such as shareholder servicing plan expenses, if any, transfer agent fees or
registration fees unique to each class.
Dividends are declared to shareholders of record immediately prior to the
determination of the net asset value of the Fund. Accordingly, dividends begin
accruing on the first business day of the Fund following the day on which a
purchase order for shares of the Fund is effective, and accrue through the day
on which a redemption order is effective. Thus, if a purchase order is effective
on a Friday, dividends will begin accruing on the following Monday (unless such
day is not a business day of the Fund).
All dividends declared during a month will be paid by check or wire transfer.
(Wire transfers may only be made in amounts of $1,000 or more.) In such case,
payment will normally be made on the first business day of the following month.
A shareholder may elect to have all dividends and distributions automatically
reinvested in additional full and fractional shares of the Fund at the net asset
value of such shares. Such election, or any revocation thereof, must be made in
writing by the institution to AIFS at 11 Greenway Plaza, Suite 1919, Houston,
Texas 77046-1173 and will become effective with dividends paid after its receipt
by AIFS. If a shareholder redeems all the shares in its account at any time
during the month, all dividends declared through the date of redemption are paid
to the shareholder along with the proceeds of the redemption.
TAXES
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"),
imposes certain requirements that must be met each year for the Fund to qualify
as a regulated investment company. As long as the Fund qualifies for tax
treatment as a regulated investment company, the Fund (but not its shareholders)
will not be subject to income tax on income and capital gains distributed to
shareholders. Consistent with the distribution requirements of the Code, the
Fund's policy is to distribute to its shareholders at least 90% of its
investment company taxable income for each year. The Fund intends to meet the
distribution requirements imposed by the Code in order to avoid the imposition
of a 4% excise tax; to distribute at least 98% of its net investment income for
the calendar year and at least 98% of its net realized capital gains, if any,
for the 12-month period ending on October 31 prior to the end of each calendar
year; and to meet the other requirements of Subchapter M of the Code, including
the requirements with respect to diversification of assets and sources of
income.
Under the Code, dividends paid by the Fund are generally subject to taxation
as of the date of payment, whether received by shareholders in cash or in shares
of the Fund. The Code provides an exception to this general rule; if the Fund
declares a dividend in October, November or December to shareholders of record
and pays the dividend before February 1 of the next year, a shareholder will be
treated for tax purposes as having received the dividend on December 31 of the
year in which it is declared rather than in January of the following year when
it is paid. Dividends paid by the Fund from its net investment income and
realized short term capital gains are taxable to shareholders at ordinary income
tax rates. It is anticipated that no portion of
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dividends paid by the Fund will be eligible for the dividends received deduction
for corporations. Distributions of the Fund's long term capital gains (capital
gains dividends) will be taxable to the shareholder as long-term capital gains
regardless of the length of time the shareholder held his shares.
A portfolio of the Trust (a "Portfolio") will be treated as a separate
corporation for purposes of determining taxable income, distribution
requirements and other requirements of Subchapter M. Therefore one Portfolio may
not offset its gains against the other Portfolio's losses and each Portfolio
must specifically comply with all the provisions of the Code.
Distributions and transactions referred to above may be subject to state,
local or foreign taxes, and the treatment thereof may differ from the federal
income tax consequences discussed herein. Shareholders are advised to consult
with their tax advisors concerning the application of state, local or foreign
taxes. Certain states exempt payments of interest by mutual funds with respect
to U.S. Treasury obligations from state income taxes, and investors should
consult with their own tax advisors concerning the availability of such
exemption in their state.
The foregoing discussion of federal income tax consequences is only a summary
based on tax laws and regulations in effect on the date of this Prospectus,
which laws and regulations are subject to change by legislative or
administrative action. For additional information regarding certain tax
consequences of an investment in the Institutional Shares, see the Statement of
Additional Information.
NET ASSET VALUE
The net asset value per share of the Fund is determined daily as of 4:00 p.m.
Eastern Time on each business day of the Fund by dividing the value of the
Fund's total net assets by the total number of shares outstanding of all classes
of the Fund's shares. Portfolio securities are valued using current market
values, if available. Securities for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
supervision of the Trust's officers in accordance with methods which are
specially authorized by the Board of Trustees of the Trust. Short-term
obligations with maturities of sixty (60) days or less are valued at amortized
cost as reflecting fair value.
PERFORMANCE INFORMATION
Performance information for each class of shares of the Fund can be obtained
by calling the Fund at (800) 659-1005.
The performance of the Institutional Shares may be quoted in advertising in
terms of yield or total return. Both types of performance are based on
historical results and are not intended to indicate future performance. See the
Statement of Additional Information for further details concerning performance
comparisons used in advertisements by the Fund.
The yield of the Institutional Shares is a way of showing the rate of income
the Institutional Shares class earns on its investments as a percentage of the
Institutional Shares' price. In order to calculate yield, the Fund takes the
interest income earned from its portfolio of investments attributable to the
Institutional Shares for a 30-day period (net of expenses), divides such
interest by the number of shares of the Institutional Shares class and expresses
the result as an annualized percentage rate based on the net asset value per
share of the Institutional Shares at the end of the 30-day period. Yields are
calculated according to accounting methods that are standardized for all stock
and bond funds. Because yield accounting methods differ from the methods used
for other accounting purposes, the yield of the Institutional Shares may not
equal the income paid to an investor's account or the income reported in the
financial statements for the Institutional Shares.
The Fund may also quote the distribution rate for the Institutional Shares,
which is calculated by dividing dividends declared during a specified period by
the net asset value per share of the Institutional Shares at the end of the
period and annualizing the results.
The total return of the Institutional Shares shows the overall change in value
of the Institutional Shares, including changes in share price assuming all of
the Institutional Shares' dividends and capital gain distributions are
reinvested. A cumulative total return reflects the performance of the
Institutional Shares over a stated period of time. An average annual total
return reflects the hypothetical annually compounded return that would have
produced the same cumulative total return if the performance of the
Institutional Shares had been constant over the entire period. Because average
annual returns tend to smooth out variations in the return of the Institutional
Shares, investors should recognize that such returns are not the same as actual
year-by-year results. To illustrate the components of overall performance, the
Institutional Shares may separate its cumulative and average annual returns into
income results and capital gain or loss.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such a practice will
have the effect of increasing the Fund's yield and total return. The performance
of the Fund will vary from time to time and past results are not necessarily
indicative of future results. The Fund's performance is a function of
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its portfolio management in selecting the type and quality of portfolio
securities and is affected by operating expenses of the Fund and market
conditions. Further information about the performance of the Fund is contained
in the Fund annual report to shareholders, a copy of which may be obtained
without charge upon written request to the Trust.
REPORTS TO SHAREHOLDERS
The Fund furnishes shareholders with annual and semi-annual reports containing
information about the Fund and its operations, including a list of the
investments held by the Fund and financial statements. The annual financial
statements are audited by the Fund's independent auditors. A copy of the current
list of the investments of the Fund will be sent to shareholders upon request.
Unless otherwise requested by the shareholder, each shareholder will be
provided with a written confirmation for each transaction. Institutions
establishing sub-accounts will receive a written confirmation for each
transaction in a sub-account. Duplicate confirmations may be transmitted to the
beneficial owner of the sub-account if requested by the Institution. The
Institution will receive a periodic statement setting forth, for each
sub-account, the share balance, income earned for the month, income earned for
the year to date and the total current value of the account.
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES
The overall management of the business and affairs of the Fund is vested in
the Trust's Board of Trustees. The Board of Trustees approves all significant
agreements between the Trust and persons or companies furnishing services to the
Fund, including agreements with the Fund's investment advisor, distributor,
custodian and transfer agent. The day-to-day operations of the Fund are
delegated to the Trust's officers and to AIM, subject always to the objectives
and policies of the Fund and to the general supervision of the Trust's Board of
Trustees.
INVESTMENT ADVISOR
A I M Advisors, Inc., 11 Greenway Plaza, Suite 1919, Houston, Texas
77046-1173, acts as the Fund's investment advisor pursuant to a Master
Investment Advisory Agreement, dated October 18, 1993 (the "Advisory
Agreement"). AIM was organized in 1976 and together with its affiliates, manages
or advises 37 investment company portfolios (including the Fund). As of November
1, 1995, the total assets of the investment company portfolios were
approximately $39.5 billion.
AIM is a wholly-owned subsidiary of A I M Management Group Inc. ("AIM
Management"). Certain trustees and officers of the Trust are affiliated with AIM
and AIM Management.
Under the terms of the Advisory Agreement, AIM supervises all aspects of the
Fund's operations and provides investment advisory services to the Fund. AIM
obtains and evaluates economic, statistical and financial information to
formulate and implement investment policies for the Fund. The Advisory Agreement
provides that, upon the request of the Trust's Board of Trustees, AIM may
perform or arrange for the performance of certain accounting, shareholder
servicing and other administrative services for the Fund which are not required
to be performed by AIM under the Advisory Agreement. The Board of Trustees has
made such a request. As a result, AIM and the Fund have entered into a Master
Administrative Services Agreement (the "Administrative Services Agreement"),
dated as of October 18, 1993, pursuant to which AIM is entitled to receive from
the Fund reimbursement of its costs or such reasonable compensation as may be
approved by the Board of Trustees. Currently, AIM is reimbursed for the services
of the Fund's principal financial officer and his staff, and any expenses
related to such services, as well as the services of staff responding to various
shareholder inquiries. In addition, the Fund and A I M Institutional Fund
Services, Inc., a wholly-owned subsidiary of AIM and registered transfer agent,
have entered into the Transfer Agency and Service Agreement, pursuant to which
AIFS provides transfer agency, dividend distribution and disbursement, and
shareholder services to the Fund.
For the fiscal year ended July 31, 1995, the Fund paid 0.20% of its average
daily net assets to AIM for its advisory services, and the Institutional Shares'
total expenses for the same period, stated as a percentage of average daily net
assets of the Fund was 0.28%.
For the fiscal year ended July 31, 1995 the Fund paid 0.02% of its average
daily net assets to AIM for reimbursement for administrative services.
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FEE WAIVERS
In order to increase the yield to investors, AIM may from time to time
voluntarily waive or reduce its fee, while retaining its ability to be
reimbursed for such fee prior to the end of such fiscal year. Fee waivers or
reductions and waivers of expense reimbursements, other than those set forth in
the Advisory Agreement, may be rescinded, at any time, without notice to
investors.
PORTFOLIO MANAGEMENT
AIM uses a team approach and disciplined investment strategy in providing
investment advisory services to all its accounts, including the Fund. AIM's
investment staff consists of 95 individuals. While individual members of AIM's
investment staff are assigned primary responsibility for the day-to-day
management of each of AIM's accounts, all accounts are reviewed on a regular
basis by AIM's Investment Policy Committee to ensure that they are being
invested in accordance with the accounts' and AIM's investment policies. The
individuals on the investment team who are primarily responsible for the
day-to-day management of the Fund are Karen Dunn Kelley and Meggan M. Walsh. Ms.
Kelley is Senior Vice President of A I M Capital Management, Inc. ("AIM
Capital"), a wholly-owned subsidiary of AIM; Vice President of AIM and of the
Trust; and has been responsible for the Fund since 1992. Ms. Kelly has been
associated with AIM since 1989 and has a total of 13 years of experience as an
investment professional. Ms. Walsh is Vice President of AIM Capital and has been
responsible for the Fund since 1992. Ms. Walsh has been associated with AIM
since 1991 and has a total of eight years of experience as an investment
professional. Prior to 1991, Ms. Walsh was Manager of Short-Term U.S. Commercial
Paper and Euro-Commercial Paper Programs at Nationale-Nederlanden North America
Corporation.
DISTRIBUTION OF SHARES
The Trust has entered into a Distribution Agreement, dated October 18, 1993,
relating to the shares of the Institutional Shares (the "Distribution
Agreement") with Fund Management Company, a registered broker-dealer and a
wholly-owned subsidiary of AIM, to act as the distributor of shares of the
Institutional Shares. The address of FMC is 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046-1173. Certain trustees and officers of the Trust are
affiliated with FMC. The Distribution Agreement provides FMC with the exclusive
right to distribute shares of the Institutional Shares either directly or
through other broker-dealers.
FMC may, from time to time, at its expense, pay a bonus or other consideration
or incentive to dealers or banks who sell a minimum dollar amount of shares of
the Institutional Shares during a specific period of time. In some instances,
these incentives may be offered only to certain dealers or institutions who have
sold or may sell significant amounts of shares. The total amount of such
additional bonus payments or other consideration shall not exceed .05% of the
net asset value of the shares of the Institutional Shares sold. Any such bonus
or incentive programs will not change the price paid by investors for the
purchase of shares of the Institutional Shares or the amount received as
proceeds from such sales. Sales of the Institutional Shares may not be used to
qualify for any incentives to the extent that such incentives may be prohibited
by the laws of any jurisdiction.
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION
AIM is responsible for decisions to buy and sell securities for the Fund,
broker-dealer selection and negotiation of commission rates. Since purchases and
sales of portfolio securities by the Fund are usually principal transactions,
the Fund incurs little or no brokerage commissions. Portfolio securities are
normally purchased directly from the issuer or from a market maker for the
securities. The purchase price paid to dealers serving as market makers may
include a spread between the bid and asked prices. The Fund may also purchase
securities from underwriters at prices which include a concession paid by the
issuer to the underwriter.
AIM's primary consideration in effecting a security transaction is to obtain
the best net price and the most favorable execution of the order. To the extent
that the executions and prices offered by more than one dealer are comparable,
AIM may, in its discretion, effect transactions with dealers that furnish
statistical, research or other information or services which are deemed by AIM
to be beneficial to the Fund's investment program. Certain research services
furnished by dealers may be useful to AIM with clients other than the Fund.
Similarly, any research services received by AIM through placement of portfolio
transactions of other clients may be of value to AIM in fulfilling its
obligations to the Fund. In accordance with policies established by the
trustees, AIM may take into account sales of shares of the Fund and other funds
advised by AIM in selecting broker-dealers to effect portfolio transactions on
behalf of the Fund.
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GENERAL INFORMATION
ORGANIZATION OF THE TRUST
The Trust is organized as a Delaware business trust pursuant to an Agreement
and Declaration of Trust, dated May 5, 1993, as amended (the "Trust Agreement").
The Trust is an open-end series, management investment company, and may consist
of one or more series portfolios as authorized from time to time by the Board of
Trustees. The Trust was originally organized as a Maryland corporation on
November 4, 1988 and on October 15, 1993 was reorganized as a Delaware business
trust and the Fund.
DESCRIPTION OF SHARES
All shares of the Trust have equal rights with respect to voting, except that
(i) the holders of shares of all classes of a particular Portfolio, voting
together, will have the exclusive right to vote on matters (such as advisory
fees) pertaining solely to that portfolio, and (ii) the holders of shares of a
particular class will have the exclusive right to vote on matters pertaining to
distribution plans or shareholder service plans, if any such plans are adopted,
relating solely to such class. The holders of each class have distinctive rights
with respect to dividends which are more fully described in the Statement of
Additional Information. In the event of dissolution or liquidation, holders of
each portfolio's shares will receive pro rata, subject to the rights of
creditors, (a) the proceeds of the sale of the assets held in the respective
portfolio to which such shares relate, less (b) the liabilities of the Trust
attributable to the respective portfolio or allocated between the portfolios
based on the respective liquidation values of each such portfolio. The Trust
will not normally hold annual shareholders' meetings. Shareholders may remove
trustees from office by votes cast at a meeting of shareholders called for that
purpose or by written consent, and a meeting of shareholders may be called at
the request of the holders of 10% or more of the Trust's outstanding voting
securities.
The Institutional Class and Retail Class have different shareholders and are
allocated certain differing class expenses, such as those associated with the
shareholder servicing of their shares. To obtain information about the Retail
Class, please call A I M Distributors, Inc. ("AIM Distributors"), a registered
broker-dealer and wholly-owned subsidiary of A I M Advisors, Inc., at (713)
626-1919, Extension 5001 (in Houston) or (800) 347-4246 (elsewhere). AIM
Distributors is the exclusive distributor of the Retail Class.
There are no preemptive or conversion rights applicable to any of the Trust's
shares. The Trust's shares, when issued, will be fully paid and non-assessable.
The Board of Trustees may create additional classes or series of the Trust's
shares without shareholder approval.
TRANSFER AGENT AND CUSTODIAN
A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046-1173, acts as transfer agent and dividend disbursing agent
for the Institutional Shares. The Bank of New York, 110 Washington Street, 8th
Floor, New York, New York 10286, serves as custodian for the Fund's portfolio
securities and cash.
LEGAL COUNSEL
The law firm of Ballard Spahr Andrews & Ingersoll, Philadelphia, Pennsylvania
serves as counsel to the Trust and has passed upon the legality of the Shares.
SHAREHOLDER INQUIRIES
Shareholder inquiries concerning the status of an account should be directed
to the Fund at 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173, or may
be made by calling (800) 659-1005.
OTHER INFORMATION
This Prospectus sets forth basic information that investors should know about
the Fund prior to investing. A Statement of Additional Information has been
filed with the SEC. Copies of the Statement of Additional Information are
available upon request and without charge by writing or calling the Trust or
FMC. This Prospectus omits certain information contained in the registration
statement filed with the SEC. Copies of the registration statement, including
items omitted herein, may be obtained from the SEC by paying the charges
prescribed under its rules and regulations.
13
<PAGE> 87
======================================= ======================================
AIM INVESTMENT SECURITIES FUNDS PROSPECTUS
LIMITED MATURITY TREASURY PORTFOLIO
INSTITUTIONAL SHARES November 17, 1995
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173 AIM
(800) 659-1005 INVESTMENT
SECURITIES FUNDS
INVESTMENT ADVISOR
A I M ADVISORS, INC. --------------------
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173 LIMITED MATURITY
(713) 626-1919 TREASURY PORTFOLIO
DISTRIBUTOR --------------------
FUND MANAGEMENT COMPANY
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
(800) 659-1005 INSTITUTIONAL SHARES
AUDITORS
KPMG PEAT MARWICK LLP
NationsBank Building TABLE OF CONTENTS
700 Louisiana
Houston, Texas 77002 PAGE
----
CUSTODIAN
THE BANK OF NEW YORK Summary........................ 2
110 Washington Street, 8th Floor
New York, New York 10286 Table of Fees and Expenses..... 4
TRANSFER AGENT Financial Highlights........... 5
A I M INSTITUTIONAL FUND SERVICES, INC.
11 Greenway Plaza, Suite 1919 Suitability For Investors...... 6
Houston, Texas 77046-1173
Investment Program............. 6
Purchase of Shares............. 8
Redemption of Shares........... 8
Dividends and Distributions.... 9
NO PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY Taxes.......................... 9
REPRESENTATIONS NOT CONTAINED IN
THIS PROSPECTUS IN CONNECTION WITH Net Asset Value................ 10
THE OFFERING MADE BY THE PROSPECTUS,
AND IF GIVEN OR MADE, SUCH Performance Information........ 10
INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN Reports to Shareholders........ 11
AUTHORIZED BY THE FUND OR THE
DISTRIBUTOR. THIS PROSPECTUS DOES Management of the Trust........ 11
NOT CONSTITUTE AN OFFER IN ANY
JURISDICTION TO ANY PERSON TO WHOM Portfolio Transactions and
SUCH OFFERING MAY NOT LAWFULLY Brokerage Allocation......... 12
BE MADE.
General Information............ 13
======================================= =====================================
<PAGE> 88
STATEMENT OF
ADDITIONAL INFORMATION
AIM INVESTMENT SECURITIES FUNDS
LIMITED MATURITY TREASURY PORTFOLIO
INSTITUTIONAL SHARES
11 GREENWAY PLAZA
SUITE 1919
HOUSTON, TEXAS 77046-1173
(800) 659-1005
---------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND
IT SHOULD BE READ IN CONJUNCTION WITH A PROSPECTUS OF THE
ABOVE-NAMED FUND, A COPY OF WHICH MAY BE OBTAINED FREE
OF CHARGE FROM AUTHORIZED DEALERS OR BY WRITING
FUND MANAGEMENT COMPANY, 11 GREENWAY PLAZA,
SUITE 1919, HOUSTON, TEXAS 77046-1173
OR BY CALLING (800) 659-1005
---------------------
STATEMENT OF ADDITIONAL INFORMATION DATED NOVEMBER 17, 1995
RELATING TO THE PROSPECTUS DATED NOVEMBER 17, 1995
<PAGE> 89
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Introduction....................................................... 1
General Information About the Fund................................. 1
The Fund and its Shares....................................... 1
Trustees and Officers......................................... 2
Remuneration of Trustees...................................... 5
AIM Funds Retirement Plan for Eligible Directors/Trustees..... 5
Deferred Compensation Agreements.............................. 6
The Investment Advisor........................................ 6
Transfer Agent and Custodian.................................. 8
Reports....................................................... 8
Principal Holders of Securities............................... 8
Purchases and Redemptions.......................................... 9
Net Asset Value Determination................................. 9
The Distribution Agreement.................................... 10
Suspension of Redemption Rights............................... 10
Investment Program and Restrictions................................ 10
Investment Program............................................ 10
Investment Restrictions....................................... 11
Performance Information............................................ 12
Yield Calculations............................................ 12
Total Return Calculations..................................... 12
Historical Portfolio Results.................................. 13
Portfolio Transactions............................................. 13
Taxes.............................................................. 14
Qualification as a Regulated Investment Company............... 14
Excise Tax on Regulated Investment Companies.................. 15
Fund Distributions............................................ 15
Effect of Future Legislation; Local Tax Considerations........ 15
Financial Statements............................................... F-1
</TABLE>
i
<PAGE> 90
INTRODUCTION
AIM Investment Securities Funds (the "Trust") (formerly, AIM Investment
Securities Funds, Inc.) is a series mutual fund currently offering one
portfolio: the Limited Maturity Treasury Portfolio (the "Fund"). Currently, the
Fund has two classes of shares, consisting of the Institutional Shares (the
"Institutional Shares") and AIM Limited Maturity Treasury Shares (the "Retail
Class"). This Statement of Additional Information relates solely to the
Institutional Shares of the Fund.
The rules and regulations of the United States Securities and Exchange
Commission (the "SEC") require all mutual funds to furnish prospective investors
certain information concerning the activities of the fund being considered for
investment. This information is included in a Prospectus for the Institutional
Shares (the "Prospectus"), dated November 17, 1995. Copies of the Prospectus and
additional copies of this Statement of Additional Information may be obtained
without charge by writing the principal distributor of the Fund's shares, Fund
Management Company ("FMC"), 11 Greenway Plaza, Suite 1919, Houston, Texas
77046-1173 or by calling (800) 659-1005. Investors must receive a Prospectus
before they invest.
This Statement of Additional Information is intended to furnish prospective
investors with additional information concerning the Institutional Shares. Some
of the information required to be in this Statement of Additional Information is
also included in the current Prospectus; and, in order to avoid repetition,
reference will be made to sections of the Prospectus. Additionally, the
Prospectus and this Statement of Additional Information omit certain information
contained in the registration statement filed with the SEC. Copies of the
registration statement, including items omitted from the Prospectus and this
Statement of Additional Information, may be obtained from the SEC by paying the
charges prescribed under its rules and regulations.
GENERAL INFORMATION ABOUT THE FUND
THE FUND AND ITS SHARES
The Fund is an open-end, series portfolio of the Trust. The Trust is an
open-end, series, management investment company which was originally organized
as a Maryland corporation on November 4, 1988. On October 15, 1993, the Trust
was reorganized as a Delaware business trust and the Fund, which previously had
been a portfolio of another open-end investment company, was redomesticated as a
portfolio of the Trust. A copy of the Trust's Agreement and Declaration of Trust
dated May 5, 1993, as amended (the "Declaration of Trust") is on file with the
SEC.
Shares of beneficial interest of the Fund will be redeemable at the net asset
value thereof at the option of the shareholder, or at the option of the Fund in
certain circumstances.
Shareholders of the Trust do not have cumulative voting rights. Therefore, the
holders of more than 50% of the outstanding shares of all series or classes
voting together for election of trustees may elect all of the members of the
Board of Trustees and in such event, the remaining holders cannot elect any
members of the Board of Trustees.
The Declaration of Trust provides for the perpetual existence of the Trust.
The Trust or any portfolio or class thereof, however, may be terminated at any
time, upon the recommendation of the Board of Trustees, by vote of the holders
of a majority of the outstanding shares of the Trust, such portfolio or such
class, respectively; provided, however, that the Board of Trustees may
terminate, without such shareholder approval, the Trust, any portfolio or any
class thereof with respect to which there are fewer than 100 holders of record.
The Declaration of Trust permits the trustees to issue an unlimited number of
full and fractional shares, $.01 par value, of each class of shares of
beneficial interest of the Trust. The Board of Trustees may establish additional
series or classes of shares from time to time without shareholder approval.
Additional information concerning the rights of share ownership is set forth in
the prospectus applicable to each such class or series of shares of the Trust.
The assets received by the Trust for the issuance or sale of shares of each
class relating to a portfolio and all income, earnings, profits, losses and
proceeds therefrom, subject only to the rights of creditors, will be allocated
to that portfolio, and constitute the underlying assets of that portfolio. The
underlying assets of each portfolio will be segregated and will be charged with
the expenses with respect to that portfolio and with a share of the general
expenses of the Trust. While certain expenses of the Trust will be allocated to
the separate books of account of each portfolio, certain other expenses may be
legally chargeable against the assets of the entire Trust.
Under Delaware law, shareholders of a Delaware business trust shall be
entitled to the same limitations of liability extended to shareholders of
private for-profit corporations. However, there is a remote possibility that
shareholders could, under certain circumstances, be held liable for the
obligations of the Trust to the extent the courts of another state which does
not recognize such limited liability were to apply the laws of such state to a
controversy involving such obligations. However, the Declaration of Trust
disclaims shareholder liability for acts or obligations of the Trust and
requires that notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by the Trust or the trustees to all
parties, and each party
1
<PAGE> 91
thereto must expressly waive all rights of action directly against shareholders
of the Trust. The Declaration of Trust provides for indemnification out of the
Trust's property for all losses and expenses of any shareholder of the Trust
held liable on account of being or having been a shareholder. Thus, the risk of
a shareholder incurring financial loss due to shareholder liability is limited
to circumstances in which the Trust would be unable to meet its obligations and
wherein the complaining party was held not to be bound by the disclaimer.
The Declaration of Trust further provides that the trustees will not be liable
for errors of judgment or mistakes of fact or law. However, nothing in the
Declaration of Trust protects a trustee against any liability to which a trustee
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of his
office. The Declaration of Trust provides for indemnification by the Trust of
the trustees and the officers of the Trust except with respect to any matter as
to which any such person did not act in good faith in the reasonable belief that
his action was in or not opposed to the best interests of the Trust. Such person
may not be indemnified against any liability to the Trust or to the Trust's
shareholders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office. The Declaration of Trust also authorizes
the purchase of liability insurance on behalf of trustees and officers.
As described in the Prospectus, the Trust will not normally hold annual
shareholders' meetings. At such time as less than a majority of the trustees
have been elected by the shareholders, the trustees then in office will call a
shareholders' meeting for the election of trustees. In addition, trustees may be
removed from office by a written instrument signed by at least two-thirds of the
trustees of the Trust or by a vote of the holders of a majority of the shares
present at a meeting of which a quorum is present and which has been duly called
for that purpose, which meeting shall be held upon written request of the
holders of not less than 10% of the outstanding shares of the Trust.
As used herein and in the Prospectus, the term "majority of the outstanding
shares" of beneficial interest of the Trust or a portfolio means, respectively,
the lesser of (i) 67% or more of the shares of beneficial interest of the Trust
or the portfolio present at a meeting, if the holders of more than 50% of the
outstanding shares of beneficial interest of the Trust or the portfolio are
present or represented by proxy, or (ii) more than 50% of the outstanding shares
of beneficial interest of the Trust or the portfolio.
TRUSTEES AND OFFICERS
The trustees and officers of the Trust and their principal occupations during
the last five years are set forth below. Unless otherwise indicated, the address
of each trustee and officer is 11 Greenway Plaza, Suite 1919, Houston, Texas
77046-1173.
*CHARLES T. BAUER, Trustee and Chairman (76)
Director, Chairman and Chief Executive Officer, A I M Management Group
Inc.; Chairman of the Board of Directors, A I M Advisors, Inc., A I M
Capital Management, Inc., A I M Distributors, Inc., A I M Fund Services,
Inc., A I M Global Associates, Inc., A I M Global Holdings, Inc., A I M
Institutional Fund Services, Inc. and Fund Management Company; and
Director, AIM Global Advisors Limited, A I M Global Management Company
Limited and AIM Global Ventures Co.
BRUCE L. CROCKETT, Trustee (51)
COMSAT Corporation
6560 Rock Spring Drive
Bethesda, MD 20817
Director, President and Chief Executive Officer, COMSAT Corporation
(includes COMSAT World Systems, COMSAT Mobile Communications, COMSAT Video
Enterprises and COMSAT RSI and COMSAT International Ventures). Previously,
President and Chief Operating Officer, COMSAT Corporation; President, World
Systems Division, COMSAT Corporation; and Chairman, Board of Governors of
INTELSAT; (each of the COMSAT companies listed above is an international
communication, information and entertainment-distribution services
company).
OWEN DALY II, Trustee (71)
Six Blythewood Road
Baltimore, MD 21210
Director, Cortland Trust Inc. (investment company). Formerly,
Director, CF & I Steel Corp., Monumental Life Insurance Company and
Monumental General Insurance Company; and Chairman of the Board of
Equitable Bancorporation.
- ---------------
* A trustee who is an "interested person" of the Trust and A I M Advisors, Inc.
("AIM"), as defined in the Investment Company Act of 1940 (the "1940 Act").
2
<PAGE> 92
**CARL FRISCHLING, Trustee (58)
919 Third Avenue
New York, NY 10022
Partner, Kramer, Levin, Naftalis, Nessen, Kamin & Frankel (law firm).
Formerly, Partner, Reid & Priest (law firm); and, prior thereto, Partner,
Spengler Carlson Gubar Brodsky & Frischling (law firm).
*ROBERT H. GRAHAM, Trustee and President (48)
Director, President and Chief Operating Officer, A I M Management
Group Inc.; Director and President, A I M Advisors, Inc.; Director and
Executive Vice President, A I M Distributors, Inc.; Director and Senior
Vice President, A I M Capital Management, Inc., A I M Fund Services, Inc.,
A I M Global Associates, Inc., A I M Global Holdings, Inc., AIM Global
Ventures Co., A I M Institutional Fund Services, Inc. and Fund Management
Company; and Senior Vice President, AIM Global Advisors Limited.
JOHN F. KROEGER, Trustee (71)
24875 Swan Road - Martingham
Box 464
St. Michaels, MD 21663
Director, Flag Investors International Fund, Inc., Flag Investors
Emerging Growth Fund, Inc., Flag Investors Telephone Income Fund, Inc.,
Flag Investors Equity Partners Fund, Inc., Total Return U.S. Treasury Fund,
Inc., Flag Investors Intermediate Term Income Fund, Inc., Managed Municipal
Fund, Inc., Flag Investors Value Builder Fund, Inc., Flag Investors
Maryland Intermediate Tax-Free Income Fund, Inc., Flag Investors Real
Estate Securities Fund, Inc., Alex. Brown Cash Reserve Fund, Inc. and North
American Government Bond Fund, Inc. (investment companies). Formerly,
Consultant, Wendell & Stockel Associates, Inc. (consulting firm).
LEWIS F. PENNOCK, Trustee (53)
8955 Katy Freeway, Suite 204
Houston, TX 77024
Attorney in private practice in Houston, Texas.
IAN W. ROBINSON, Trustee (72)
183 River Drive
Tequesta, FL 33469
Formerly, Executive Vice President and Chief Financial Officer, Bell
Atlantic Management Services, Inc. (provider of centralized management
services to telephone companies); Executive Vice President, Bell Atlantic
Corporation (parent of seven telephone companies); and Vice President and
Chief Financial Officer, Bell Telephone Company of Pennsylvania and Diamond
State Telephone Company.
LOUIS S. SKLAR, Trustee (56)
Transco Tower, 50th Floor
2800 Post Oak Blvd.
Houston, TX 77056
Executive Vice President, Development and Operations, Hines Interests
Limited Partnership (real estate development).
***JOHN J. ARTHUR, Senior Vice President and Treasurer (51)
Senior Vice President and Treasurer, A I M Advisors, Inc.; Vice
President and Treasurer, A I M Management Group Inc., A I M Capital
Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc.,
A I M Institutional Fund Services, Inc. and Fund Management Company; and
Vice President, AIM Global Advisors Limited, A I M Global Associates, Inc.,
A I M Global Holdings, Inc., and AIM Global Ventures Co.
- ---------------
* A trustee who is an "interested person" of the Trust and AIM as defined in
the 1940 Act.
** A trustee who is an "interested person" of the Trust as defined in the 1940
Act.
*** Mr. Arthur and Ms. Relihan are married.
3
<PAGE> 93
GARY T. CRUM, Senior Vice President (48)
Director and President, A I M Capital Management, Inc.; Director and
Senior Vice President, A I M Management Group Inc., A I M Advisors, Inc.,
A I M Global Associates, Inc., A I M Global Holdings, Inc. and AIM Global
Ventures Co.; Director, A I M Distributors, Inc.; and Senior Vice
President, AIM Global Advisors Limited.
***CAROL F. RELIHAN, Vice President and Secretary (41)
Senior Vice President, Secretary and General Counsel, A I M Advisors,
Inc.; Vice President, General Counsel and Secretary, A I M Management Group
Inc., and Fund Management Company; Vice President and Secretary, A I M
Capital Management, Inc., A I M Distributors, Inc., A I M Fund Services,
Inc., A I M Global Associates, Inc., A I M Global Holdings, Inc. and A I M
Institutional Fund Services, Inc.; Vice President and Assistant Secretary,
AIM Global Advisors Limited and AIM Global Ventures Co.
DANA R. SUTTON, Vice President and Assistant Treasurer (36)
Vice President and Fund Controller, A I M Advisors, Inc.; and
Assistant Vice President and Assistant Treasurer, Fund Management Company.
MELVILLE B. COX, Vice President (52)
Vice President, A I M Advisors, Inc., A I M Capital Management, Inc.,
A I M Fund Services, Inc. and A I M Institutional Fund Services, Inc.; and
Assistant Vice President, A I M Distributors, Inc. and Fund Management
Company. Formerly, Vice President, Charles Schwab & Co., Inc.; Assistant
Secretary, Charles Schwab Family of Funds and Schwab Investments; Chief
Compliance Officer, Charles Schwab Investment Management, Inc.; and Vice
President, Integrated Resources Life Insurance Co. and Capitol Life
Insurance Co.
KAREN DUNN KELLEY, Vice President (35)
Director, A I M Global Management Company Limited; Senior Vice
President, A I M Capital Management, Inc. and AIM Global Advisors Limited;
and Vice President, A I M Advisors, Inc. and AIM Global Ventures Co.
The standing committees of the Board of Trustees are the Audit Committee, the
Investments Committee and the Nominating and Compensation Committee.
The members of the Audit Committee are Messrs. Daly, Kroger (Chairman),
Pennock and Robinson. The Audit Committee is responsible for meeting with the
Trust'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 trustees as
a whole with respect to the Trust's fund accounting or its internal accounting
controls, or for considering such matters as may from time to time be set forth
in a charter adopted by the Board of Trustees and such committee.
The members of the Investments Committee are Messrs. Bauer, Crockett, Daly
(Chairman), Kroeger and Pennock. The Investments Committee is responsible for
reviewing portfolio compliance, brokerage allocation, portfolio investment
pricing issues, interim dividend and distribution issues, or considering such
matters as may from time to time be set forth in a charter adopted by the board
and such committee.
The members of the Nominating and Compensation Committee are Messrs. Crockett,
Daly, Kroeger, Pennock (Chairman) and Sklar. The Nominating and Compensation
Committee is responsible for considering and nominating individuals to stand for
election as trustees who are not interested persons as long as the Trust
maintains a distribution plan pursuant to Rule 12b-1 under the 1940 Act,
reviewing from time to time the compensation payable to the disinterested
trustees, or considering such matters as may from time to time be set forth in a
charter adopted by the board and such committee.
All of the trustees of the Trust also serve as directors or trustees of some
or all of the other investment companies managed or advised by AIM. Certain of
the executive officers of the Trust hold similar offices with some or all of
such investment companies.
- ---------------
*** Mr. Arthur and Ms. Relihan are married.
4
<PAGE> 94
REMUNERATION OF TRUSTEES
Set forth below is information regarding compensation paid or accrued during
the fiscal year ended July 31, 1995 for each trustee of the Fund:
<TABLE>
<CAPTION>
=================================================================================================================
RETIREMENT
AGGREGATE BENEFITS TOTAL
COMPENSATION ACCRUED COMPENSATION
FROM THE BY ALL FROM ALL
DIRECTOR FUND(1) AIM FUNDS(2) AIM FUNDS(3)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Charles T. Bauer $ 0 $ 0 $ 0
- -----------------------------------------------------------------------------------------------------------------
Bruce L. Crockett 1,027 2,814 45,094
- -----------------------------------------------------------------------------------------------------------------
Owen Daly II 1,022 14,375 45,844
- -----------------------------------------------------------------------------------------------------------------
Carl Frischling 1,027 7,542 45,094
- -----------------------------------------------------------------------------------------------------------------
Robert H. Graham 0 0 0
- -----------------------------------------------------------------------------------------------------------------
John F. Kroeger 1,022 20,517 45,844
- -----------------------------------------------------------------------------------------------------------------
Lewis F. Pennock 1,022 5,093 45,844
- -----------------------------------------------------------------------------------------------------------------
Ian W. Robinson 1,017 10,396 45,094
- -----------------------------------------------------------------------------------------------------------------
Louis S. Sklar 1,017 4,682 45,094
=================================================================================================================
</TABLE>
- ---------------
(1) The total amount of compensation deferred by all Trustees of the Fund
during the fiscal year ended July 31, 1995, including interest earned
thereon, was $4,268.
(2) During the fiscal year ended July 31, 1995, the total amount of expenses
allocated to the Fund in respect of such retirement benefits was $1,231.
Data reflects compensation earned for the calendar year ended December 31,
1994.
(3) Messrs. Bauer, Daly, Graham, Kroeger and Pennock each serves as a Director
or Trustee of a total of 11 AIM Funds. Messrs Crockett, Frischling,
Robinson and Sklar each serves as a Director or Trustee of a total of 10
AIM Funds. Data reflects compensation earned for the calendar year ended
December 31, 1994.
(4) Messrs. Crockett, Frischling, Robinson and Sklar also each received $221 as
compensation from the Trust during the fiscal year ended July 31, 1995,
which represents compensation from AIM Adjustable Rate Government Fund
("ARM"). ARM was a portfolio of the Trust until November 18, 1994, when it
was merged into AIM Intermediate Government Fund, which is a portfolio of
the AIM Funds Group, a Delaware business trust.
(5) Messrs. Daly, Kroeger and Pennock also each received $219 as compensation
from the Trust during the fiscal year ended July 31, 1995, which represents
compensation from ARM.
AIM FUNDS RETIREMENT PLAN FOR ELIGIBLE DIRECTORS/TRUSTEES
Under the terms of the AIM Funds Retirement Plan for Eligible
Directors/Trustees (the "Plan"), each trustee (who is not an 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 Trustees.
Pursuant to the Plan, the normal retirement date is the date on which the
eligible trustee 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 "AIM Funds").
Each eligible trustee is entitled to receive an annual benefit from the AIM
Funds commencing on the first day of the calendar quarter coincident with or
following his date of retirement equal to 5% of such Trustee's compensation paid
by the AIM Funds multiplied by the number of such Trustee's years of service
(not in excess of 10 years of service) completed with respect to any of the AIM
Funds. Such benefit is payable to each eligible trustee in quarterly
installments for a period of no more than five years. If an eligible trustee
dies after attaining the normal retirement date but before receipt of any
benefits under the Plan commences, the trustee's surviving spouse (if any) shall
receive a quarterly survivor's benefit equal to 50% of the amount payable to the
deceased trustee, for no more than five years beginning the first day of the
calendar quarter following the date of the trustee's death. Payments under the
Plan are not secured or funded by any AIM Fund.
5
<PAGE> 95
Set forth below is a table that shows the estimated annual benefits
payable to an eligible trustee upon retirement assuming various compensation
and years of service classifications. The estimated credited years of service
as of December 31, 1994 for Messrs. Crockett, Daly, Frischling, Kroeger,
Pennock, Robinson and Sklar are 7, 8, 17, 17, 13, 7, and 5 years, respectively.
<TABLE>
<CAPTION>
Annual Compensation Paid By
All AIM Funds
$60,000 $65,000
===========================================
<S> <C> <C> <C>
Number of 10 $30,000 $32,000
Years of -------------------------------------------
Service with 9 $27,000 $29,000
The AIM Funds -------------------------------------------
8 $24,000 $26,000
-------------------------------------------
7 $21,000 $22,000
-------------------------------------------
6 $18,000 $19,000
-------------------------------------------
5 $15,000 $16,000
===========================================
</TABLE>
DEFERRED COMPENSATION AGREEMENTS
Messrs. Daly, Frischling, Kroeger, Robinson and Sklar (for purposes of this
paragraph only, the "deferring trustees") have each executed a Deferred
Compensation Agreement (collectively, the "Agreements"). Pursuant to the
Agreements, the deferring trustees may elect to defer receipt of up to 100% of
their compensation payable by the Fund, and such amounts are placed into a
deferral account. Currently, the deferring trustees may select various AIM Funds
in which all or part of his deferral account shall be deemed to be invested.
Distributions from the deferring trustees' deferral accounts will be paid in
cash, in generally equal quarterly installments over a period of five years
beginning on the date the deferring trustee's retirement benefits commence under
the Plan. The Fund's Board of Trustees, in its sole discretion, may accelerate
or extend the distribution of such deferral accounts after the deferring
director's termination of service as a trustee of the Fund. If a deferring
trustee 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 trustee's death. The Agreements are not funded and, with respect to
the payments of amounts held in the deferral accounts, the deferring trustees
have the status of unsecured creditors of the Fund and of each other AIM Fund
from which they are deferring compensation.
During the fiscal year ended July 31, 1995 the Fund paid $2,245 in legal fees
to Reid & Priest, the law firm in which Mr. Frischling, a trustee of the Trust,
was a partner. During the fiscal year ended July 31, 1995 the Fund paid $1,044
to Kramer, Levin, Naftalis, Nessen, Kamin & Frankel, the law firm in which Mr.
Frischling, a trustee of the Trust, is a partner.
THE INVESTMENT ADVISOR
A I M Advisors, Inc. ("AIM"), 11 Greenway Plaza, Suite 1919, Houston, Texas
77046-1173, serves as the investment advisor to the Fund pursuant to a Master
Investment Advisory Agreement with the Trust, dated October 18, 1993 (the
"Advisory Agreement"). AIM was organized in 1976, and together with its
affiliates is the investment advisor or manager of 37 investment company
portfolios. As of November 1, 1995, the total assets of the investment company
portfolios advised or managed by AIM and its affiliates were approximately 39.5
billion.
AIM is a wholly-owned subsidiary of A I M Management Group Inc. ("AIM
Management"), 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173. AIM
Management is a holding company that has been engaged in the financial services
business since 1976. Certain of the directors and officers of AIM are also
executive officers of the Fund and their affiliations are shown under "Trustees
and Officers." A I M Capital Management Inc. ("AIM Capital"), a wholly-owned
subsidiary of AIM, is engaged in the business of providing investment advisory
services to investment companies, corporations, institutions and other accounts.
AIM and the Fund have adopted a Code of Ethics which requires investment
personnel (a) to pre-clear all personal securities transactions, (b) to file
reports regarding such transactions, and (c) to refrain from personally engaging
in (i) short-term trading of a security, (ii) transactions involving a security
within seven days of an AIM Fund transaction involving the same security, and
(iii) transactions involving securities being considered for investment by an
AIM Fund. The Code of Ethics also prohibits investment personnel from purchasing
securities in an initial public offering. Personal trading reports are reviewed
periodically by AIM, and the Board of Trustees reviews annually such reports
(including information on any substantial violations of the Code of Ethics).
Violations of the Code of Ethics may result in censure, monetary penalties,
suspension or termination of employment.
The Advisory Agreement became effective on October 18, 1993 and will continue
in effect until June 30, 1996, and from year to year thereafter only if such
continuance is specifically approved at least annually by (i) the Trust's Board
of Trustees or the
6
<PAGE> 96
vote of a "majority of the outstanding voting securities" of the Fund (as
defined in the 1940 Act) and (ii) the affirmative vote of a majority of the
trustees who are not parties to the Advisory Agreement or "interested persons"
of any such party (the "Non-Interested Trustees") by votes cast in person at a
meeting called for such purpose. The Trust or AIM may terminate the Advisory
Agreement on sixty (60) days' written notice without penalty. The Advisory
Agreement terminates automatically in the event of its "assignment," as defined
in the 1940 Act.
Pursuant to the terms of the Advisory Agreement, AIM manages the investments
of the Fund and obtains and evaluates economic, statistical and financial
information to formulate and implement investment policies for the Fund. Any
investment program undertaken by AIM will at all times be subject to the
policies and control of the Trust's Board of Trustees. AIM shall not be liable
to the Fund or its shareholders for any act or omission by AIM or for any loss
sustained by the Fund or its shareholders except in the case of willful
misfeasance, bad faith, gross negligence or reckless disregard of duty. Pursuant
to the Advisory Agreement, AIM receives a fee as compensation for its services
with respect to the Fund, calculated daily and paid monthly, at an annual rate
equal to 0.20% of the first $500 million of the Fund's aggregate average daily
net assets, plus 0.175% of the Fund's aggregate average daily net assets in
excess of $500 million.
The Advisory Agreement provides that, upon the request of the Trust's Board of
Trustees, AIM may perform or arrange for the performance of certain accounting,
shareholder servicing and other administrative services for the Fund which are
not required to be performed by AIM under the Advisory Agreement. The Board of
Trustees has made such a request. As a result, AIM and the Fund have entered
into a Master Administrative Services Agreement (the "Administrative Services
Agreement"), dated as of October 18, 1993, pursuant to which AIM is entitled to
receive from the Fund reimbursement of its costs or such reasonable compensation
as may be approved by the Board of Trustees. Currently, AIM is reimbursed for
the services of the Fund's principal financial officer and his staff, and any
expenses related to such services, as well as the services of staff responding
to various shareholder inquiries.
In addition to the fees paid to AIM pursuant to the Advisory Agreement and the
Administrative Services Agreement, the Trust, on behalf of the Fund, also pays
or causes to be paid all other expenses attributable to the Fund, including,
without limitation: the charges and expenses of any registrar, any custodian or
depository appointed by the Trust for the safekeeping of cash, portfolio
securities and other property, and any transfer, dividend or accounting agent or
agents; brokers' commissions in connection with portfolio securities
transactions of the Fund; all taxes, including securities issuance and transfer
taxes, and fees payable to federal, state or other governmental agencies; the
cost and expenses of engraving or printing share certificates; all costs and
expenses in connection with registration and maintenance of registration with
the SEC and various states and other jurisdictions (including filing and legal
fees and disbursements of counsel); the costs and expenses of printing,
including typesetting, and distributing proxy statements, reports to
shareholders, prospectuses and statements of additional information of the Fund
and supplements thereto; expenses of shareholders' and trustees' meetings; fees
and travel expenses of trustees and trustee members of any advisory board or
committee; expenses incident to the payment of any dividend, distribution,
withdrawal or redemption, whether in shares or in cash; charges and expenses of
any outside pricing service; fees and expenses of legal counsel, including
counsel to the Non-Interested Trustees of the Trust or AIM, and of independent
accountants; membership dues of industry associations; interest payable on
borrowings; postage; insurance premiums on property or personnel (including
officers and trustees) of the Trust; and extraordinary expenses (including but
not limited to, legal claims and liabilities and litigation costs and any
indemnification related thereto). FMC bears the expenses of printing and
distributing reports to shareholders, prospectuses and statements of additional
information (other than those reports to shareholders, prospectuses and
statements of additional information distributed to existing shareholders of the
Institutional Shares) and any other promotional or sales literature used by FMC
or furnished by FMC to purchasers or dealers in connection with the public
offering of shares of the Institutional Shares.
Expenses of the Trust which are not directly attributable to the operations of
any class of shares or Portfolio of the Trust are prorated among all classes of
the Trust based upon the relative net assets of each class or Portfolio.
Expenses of the Trust which are not directly attributable to a specific class of
shares but are directly attributable to a specific Portfolio are prorated among
all classes of such Portfolio based upon the relative net assets of each such
class. Expenses of the Trust which are directly attributable to a specified
class of shares are charged against the income available for distribution as
dividends to such shares.
During the fiscal year ended July 31, 1995, the eleven-month period ended July
31, 1994, and the fiscal years ended August 31, 1993 and 1992, AIM received
advisory fees of $809,449, $942,205, $819,683 and $495,425, respectively,
pursuant to the Advisory Agreement. During the fiscal year ended July 31, 1995,
the eleven-month period ended July 31, 1994, and the fiscal years ended August
31, 1993 and 1992, AIM was reimbursed $82,199, $91,445, $90,365 and $39,024,
respectively, pursuant to the Administrative Services Agreement.
The Advisory Agreement requires AIM to reduce its fees to the extent required
to satisfy any expense limitations imposed by the securities laws or regulations
thereunder of any state in which the Fund's shares are qualified for sale. As
described in the
7
<PAGE> 97
Prospectus, AIM may voluntarily waive its fees from time to time, while
retaining the ability to be reimbursed by the Fund for such amounts prior to the
end of the fiscal year.
TRANSFER AGENT AND CUSTODIAN
The Bank of New York acts as custodian for the Fund's portfolio securities and
cash. The Bank of New York receives such compensation from the Trust for its
services as is agreed to from time to time by The Bank of New York and the
Trust. The address of The Bank of New York is 110 Washington Street, 8th floor,
New York, New York 10286.
A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046-1173, serves as transfer agent and dividend disbursing
agent for the Institutional Shares. The Fund pays AIFS such compensation as may
be agreed upon from time to time. During the fiscal year ended July 31, 1995,
AIFS received from the Fund transfer agency and shareholder services fees with
respect to the Institutional Shares in the amount of $3,349.
REPORTS
The Trust furnishes holders of the Institutional Shares with semi-annual
reports containing information about the Trust and its operations, including a
schedule of investments held by the Fund and its financial statements. The
annual financial statements are audited by the Fund's independent certified
public accountants. The Board of Trustees has selected KPMG Peat Marwick LLP,
NationsBank Building, 700 Louisiana, Houston, Texas 77002, as the independent
auditors to audit the financial statements and review the tax returns of the
Fund.
PRINCIPAL HOLDERS OF SECURITIES
To the best of the knowledge of the Fund, as of November 1, 1995, the trustees
and officers of the Trust owned less than 1% of the outstanding shares of any
class of the Trust.
INSTITUTIONAL SHARES:
To the best of the Trust's knowledge, the names and addresses of the holders
of 5% or more of the outstanding shares of the Institutional Class, as of
November 1, 1995, and the percent of outstanding shares owned by such
shareholders are as follows:
<TABLE>
<CAPTION>
PERCENT
OWNED OF
NAME AND ADDRESS RECORD
OF RECORD OWNER ONLY*
------------------ -------
<S> <C>
Mellon Bank, N.A. 58.18%**
Three Mellon Center
Pittsburgh, PA 15259
The Northern Trust Co. 14.86%
P.O. Box 92956
Chicago, IL 60675
Frost National Bank 10.20%
P.O. Box 1600
San Antonio, TX 78296
U.S. Bank of Washington 8.18%
P.O. Box 3168
Portland, OR 97208
</TABLE>
- ---------------
* The Trust 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 more than 25% of the outstanding shares of a class
may be presumed to be in "control" of such class of shares, as defined in the
1940 Act.
8
<PAGE> 98
AIM LIMITED MATURITY TREASURY SHARES:
To the best of the Trust's knowledge, the names and addresses of the holders
of 5% or more of the outstanding shares of the Retail Class, as of November 1,
1995, and the percent of outstanding shares owned by such shareholders are as
follows:
<TABLE>
<CAPTION>
PERCENT
OWNED OF
NAME AND ADDRESS RECORD
OF RECORD OWNER ONLY*
--------------- -----
<S> <C>
Merrill Lynch Pierce Fenner & Smith 13.9%
AIDS/Street Account
Mutual Fund Operations
Attn: Private Client Group
P.O. Box 45286
Jacksonville, FL 32232-5286
BHC Securities Inc. 7.8%
FBO CB Clients
Trade House Account
2005 Market Street
Philadelphia, PA 19103
Bob & Co 5.2%
c/o Bank of Boston
Attn: Mutual Funds
P.O. Box 1809
Boston, MA 02105
</TABLE>
- ---------------
* The Trust has no knowledge as to whether all or any portion of the shares
owned of record only are also owned beneficially.
PURCHASES AND REDEMPTIONS
NET ASSET VALUE DETERMINATION
A complete description of the manner by which shares of the Institutional
Shares may be purchased appears in the Prospectus under the caption "Purchase of
Shares."
The Institutional Shares are sold at the net asset value of such shares.
Shareholders may at any time redeem all or a portion of their shares at net
asset value. The investor's price for purchases and redemptions will be the net
asset value next determined following the receipt of an order to purchase or a
request to redeem shares. The net asset value of the Fund varies depending on
the market value of its assets.
In accordance with the current rules and regulations of the SEC, the net asset
value per share of the Fund is determined daily as of 4:15 p.m. Eastern Time on
each business day of the Fund. Net asset value per share is determined by
dividing the value of the Fund's securities, cash and other assets (including
interest accrued but not collected), less all its liabilities (including accrued
expenses and dividends payable), by the total number of shares outstanding of
all classes of the Fund's shares. In the event the New York Stock Exchange
("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 15 minutes following the close
of the NYSE on such day. Determination of the Fund's net asset value per share
is made in accordance with generally accepted accounting principles.
Securities will be valued on the basis of prices provided by an independent
pricing service. Prices provided by the pricing services may be determined
without exclusive reliance on quoted prices, and may reflect appropriate factors
such as yield, type of issue, coupon rate, maturity and seasoning differential.
Securities for which prices are not provided by the pricing service are valued
at the mean between the last bid and asked prices based upon quotes furnished by
market makers for such securities. Securities for which market quotations are
not readily available are valued at fair value as determined in good faith by or
under the supervision of the Trust's officers in accordance with methods which
are specifically authorized by the Board of Trustees of the Trust. Short-term
obligations having sixty (60) days or less to maturity are valued at amortized
cost, which approximates market value. (See also "Purchase of Shares,"
"Redemption of Shares" and "Net Asset Value" in the Prospectus.)
The Trust agrees to redeem shares of the Fund solely in cash up to the lesser
of $250,000 or 1% of the Fund's net assets during any 90-day period for any one
shareholder. In consideration of the best interests of the remaining
shareholders, the Trust reserves the right to pay any redemption price exceeding
this amount in whole or in part by a distribution in kind of securities held by
the Fund in lieu of cash. It is highly unlikely that shares would ever be
redeemed in kind. If shares are redeemed in
9
<PAGE> 99
kind, however, the redeeming shareholder should expect to incur transaction
costs upon the disposition of the securities received in the distribution.
THE DISTRIBUTION AGREEMENT
The Trust has entered into a Distribution Agreement with FMC, dated as of
October 18, 1993 (the "Distribution Agreement"), pursuant to which FMC has
agreed to act as the exclusive distributor of shares of the Institutional
Shares. The address of FMC is 11 Greenway Plaza, Suite 1919, Houston, Texas
77046-1173. The Distribution Agreement provides that FMC has the exclusive right
to distribute the Institutional Shares either directly or through other
broker-dealers. The Distribution Agreement also provides that FMC will pay
promotional expenses, including the incremental costs of printing prospectuses
and statements of additional information, annual reports and other periodic
reports for distribution to persons who are not shareholders of the
Institutional Shares and the costs of preparing and distributing any other
supplemental sales literature. FMC has not undertaken to sell any specified
number of the Institutional Shares. FMC does not receive any fees from the Fund
pursuant to the Distribution Agreement.
FMC is a registered broker-dealer and is also a wholly-owned subsidiary of
AIM.
The Distribution Agreement became effective October 18, 1993 and will continue
in effect until June 30, 1996, and from year to year only if such continuation
is specifically approved at least annually by (i) the Trust's Board of Trustees
or the vote of a "majority of the outstanding securities" of the Fund (as
defined in the 1940 Act) and (ii) the affirmative vote of a majority of the
Non-Interested Directors by votes cast in person at a meeting called for such
purpose. The Fund or FMC may terminate the Distribution Agreement on sixty (60)
days' written notice without penalty. The Distribution Agreement will terminate
in the event of its "assignment," as defined in the 1940 Act.
SUSPENSION OF REDEMPTION RIGHTS
The right of redemption may be suspended or the date of payment upon
redemption may be postponed when (a) trading on the NYSE is restricted, as
determined by applicable rules and regulations of the SEC, (b) the NYSE is
closed for other than customary weekend or holiday closings, (c) the SEC has by
order permitted such suspension, or (d) an emergency, as determined by the SEC,
exists making disposition of portfolio securities or the valuation of the net
assets of the Fund not reasonably practicable.
INVESTMENT PROGRAM AND RESTRICTIONS
INVESTMENT PROGRAM
Information concerning the Fund's investment objective and fundamental and
operating policies is set forth in the Prospectus. The principal features of the
Fund's investment program and the primary risks associated with that investment
program are also discussed in the Prospectus. There can be no assurance that the
Fund will achieve its objective. The values of the securities in which the Fund
invests fluctuate based upon interest rates and market factors.
Repurchase Agreements. The Fund's investment policies permit the Fund to
invest in repurchase agreements with banks and broker-dealers pertaining to U.S.
Treasury obligations. However, in order to maximize the Fund's dividends which
are exempt from state taxation, as a matter of operating policy, the Fund does
not currently invest in repurchase agreements. A repurchase agreement involves
the purchase by the Fund of an investment contract from a financial institution,
such as a bank or broker-dealer, which contract is secured by U.S. Treasury
obligations of the type described above whose value is equal to or greater than
the value of the repurchase agreement, including the agreed-upon interest. The
agreement provides that the seller will repurchase the underlying securities at
an agreed-upon time and price. The total amount received on repurchase will
exceed the price paid by the Fund, reflecting the agreed-upon rate of interest
for the period from the date of the repurchase agreement to the settlement date.
This rate of return is not related to the interest rate on the underlying
securities. The difference between the total amount received upon the repurchase
of the securities and the price paid by the Fund upon their acquisition is
accrued daily as interest. Investments in repurchase agreements may involve
risks not associated with investments in the underlying securities. If the
seller defaulted on its repurchase obligation, the Fund would incur a loss to
the extent that the proceeds from a sale of the underlying securities were less
than the repurchase price under the agreement. The Fund will limit repurchase
agreements to transactions with sellers believed by AIM to present minimal
credit risk. Securities subject to repurchase agreements will be held by the
Fund's custodian or in the custodian's account with the Federal Reserve Treasury
Book-Entry System. Although the securities subject to repurchase agreements
might bear maturities in excess of one year, the Fund will not enter into a
repurchase agreement with an agreed-upon repurchase date in excess of seven
calendar days from the date of acquisition by the Fund, unless the Fund has the
right to require the selling institution to repurchase the underlying securities
within seven days of the date of acquisition.
10
<PAGE> 100
INVESTMENT RESTRICTIONS
The most significant investment restrictions applicable to the Fund's
investment program are set forth in the Prospectus under "Investment
Program -- Restrictions." Additionally, as a matter of fundamental policy which
may not be changed without a vote of the holders of a majority of the
outstanding shares of beneficial interest of all classes of the Fund, the Fund
will not:
(1) mortgage, pledge or hypothecate any assets except to secure
permitted borrowings of money from banks for temporary or emergency
purposes and then only in amounts not in excess of 33 1/3% of the value of
its total assets at the time of such borrowing;
(2) underwrite securities issued by any other person, except to the
extent that the purchase of securities and the later disposition of such
securities in accordance with the Fund's investment program may be deemed
an underwriting;
(3) invest in real estate or other interests in real estate;
(4) purchase or sell commodities or commodity futures contracts,
engage in arbitrage transactions, purchase securities on margin, make short
sales or invest in puts or calls;
(5) invest in any obligation not payable as to principal and interest
in United States currency;
(6) invest 25% or more of the value of its total assets in securities
of issuers engaged in any one industry (excluding securities which are a
direct obligation of the U.S. Treasury or are repurchase agreements with
respect to a direct obligation of the U.S. Treasury); or
(7) acquire for value the securities of any other investment company,
except in connection with a merger, consolidation, reorganization or
acquisition of assets.
In addition to those policies discussed in the Prospectus and above, the Fund
generally will not invest in any company for the purpose of exercising control
or management, or purchase securities of an issuer if the officers and trustees
of the Trust and the officers and directors of the Fund's investment advisor
collectively own beneficially over 5% of the outstanding voting securities of
such issuer, in each case excluding holdings of any officer, trustee or director
of less than 1/2 of 1% of the outstanding voting securities of such issuer.
These restrictions are not matters of fundamental policy and may be changed at
any time by the trustees without the approval of shareholders.
The percentage limitations set forth in the restrictions noted above are
calculated by giving effect to the purchase in question and are based upon
values at the time of purchase. The Fund may, however, retain any security
purchased in accordance with such restrictions irrespective of changes in the
values of the Fund's assets occurring subsequent to the time of purchase.
The Trust has obtained an opinion of Dechert Price & Rhoads, special counsel
to the Trust, that shares of the Fund are eligible for investment by a federal
credit union. In order to ensure that shares of the Fund meet the requirements
for eligibility for investment by federal credit unions, the Fund has adopted
the following policies:
(1) The Fund will enter into repurchase agreements only with: (a)
banks insured by the Federal Deposit Insurance Corporation (FDIC); (b)
savings and loan associations insured by the FDIC; or (c) registered
broker-dealers. The Fund will only enter into repurchase transactions
pursuant to a master repurchase agreement in writing with the Fund's
counterparty. Under the terms of a written agreement with its custodian,
the Fund receives on a daily basis written confirmation of each purchase of
a security subject to a repurchase agreement and a receipt from the Fund's
custodian evidencing each transaction. In addition, securities subject to a
repurchase agreement may be recorded in the Federal Reserve Book -- Entry
System on behalf of the Fund by its custodian. The Fund purchases
securities subject to a repurchase agreement only when the purchase price
of the security acquired is equal to or less than its market price at the
time of the purchase.
(2) The Fund will only enter into reverse repurchase agreements and
purchase additional securities with the proceeds when such proceeds are
used to purchase other securities that either mature on a date simultaneous
with or prior to the expiration date of the reverse repurchase agreement,
or are subject to an agreement to resell such securities within that same
time period.
(3) The Fund will only enter into securities lending transactions that
comply with the same counterparty, safekeeping, maturity and borrowing
restrictions that the Fund observes when participating in repurchase and
reverse repurchase transactions.
(4) The Fund will enter into when-issued and delayed delivery
transactions only when the time period between trade date and settlement
date does not exceed 120 days, and only when settlement is on a cash basis.
When the delivery of securities purchased in such manner is to occur within
30 days of the trade date, the Fund will purchase the securities only at
their market price as of the trade date.
11
<PAGE> 101
In addition, in order to comply with regulations governing the liquidity
requirements applicable to federal savings and loan associations, as a matter of
fundamental policy, the Fund will only invest in eligible securities having a
remaining term to maturity of three years or less.
In order to permit the sale of the Fund's shares in certain states, the Fund
may from time to time make commitments more restrictive than the restrictions
described herein. These restrictions are not matters of fundamental policy, and
should the Fund determine that any such commitment is no longer in the best
interests of the Fund and its shareholders, it will revoke the commitment by
terminating sales of its shares in the states involved.
To permit the sale of shares of the Fund in Texas, the Fund will limit its
investment in securities which are not readily marketable to 15% of its net
assets.
PERFORMANCE INFORMATION
YIELD CALCULATIONS
Yields for the Institutional Shares used in advertising are computed as
follows: (a) divide the interest and dividend income of the Institutional Shares
for a given 30 day or one month period, net of expenses, by the average number
of shares entitled to receive dividends during the period; (b) divide the figure
arrived at in step (a) by the net asset value of the Institutional Shares at the
end of the period; and (c) annualize the result (assuming compounding of income)
in order to arrive at an annual percentage rate. For purposes of yield
quotation, income is calculated in accordance with standardized methods
applicable to all stock and bond mutual funds. In general, interest income is
reduced with respect to bonds trading at a premium over their par value by
subtracting a portion of the premium from income on a daily basis, and is
increased with respect to bonds trading at a discount by adding a portion of the
discount to daily income. Capital gains and losses are excluded from the
calculation.
Income calculated for the purposes of calculating the yield of the
Institutional Shares differs from income as determined for other accounting
purposes. Because of the different accounting methods used, and because of the
compounding assumed in yield calculations, the yield quoted for the
Institutional Shares may differ from the rate of distributions the Institutional
Shares paid over the same period or the rate of income reported in the financial
statements of the Institutional Shares.
The Fund may also quote the distribution rate for the Institutional Shares,
which expresses the historical amount of income dividends of the Institutional
Shares to its shareholders as a percentage of the net asset value per share of
the Institutional Shares. The distribution rate for the Institutional Shares for
the thirty day period ended July 31, 1995 was 6.22%. This distribution rate was
calculated by dividing dividends declared over the thirty days ended July 31,
1995 by the net asset value per share of the Institutional Shares at the end of
that period and annualizing the result.
TOTAL RETURN CALCULATIONS
Total returns quoted in advertising reflect all aspects of the Institutional
Shares' return, including the effect of reinvesting dividends and capital gain
distributions, and any change in the net asset value per share of the
Institutional Shares over the period. Average annual returns are calculated by
determining the growth or decline in value of a hypothetical investment in the
Institutional Shares over a stated period, and then calculating the annually
compounded percentage rate that would have produced the same result if the rate
of growth or decline in value had been constant over the period. While average
annual returns are a convenient means of comparing investment alternatives,
investors should realize that the performance of the Institutional Shares is not
constant over time, but changes from year to year, and that average annual
returns do not represent the actual year-to-year performance of the
Institutional Shares.
In addition to average annual returns, the Fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an investment
over a stated period. Average annual and cumulative total returns may be quoted
as a percentage or as a dollar amount, and may be calculated for a single
investment, a series of investments, and/or a series of redemptions, over any
time period. Total returns may be broken down into their components of income
and capital (including capital gains and changes in share price) in order to
illustrate the relationship of these factors and their contributions to total
return. Total returns, yields, and other performance information may be quoted
numerically or in a table, graph, or similar illustration.
12
<PAGE> 102
HISTORICAL PORTFOLIO RESULTS
The following chart shows the total returns for the Institutional Shares for
the twelve months and five year periods ended July 31, 1995, and the period
beginning July 13, 1987 (the date operations commenced) through July 31, 1995.
<TABLE>
<CAPTION>
AVERAGE
ANNUAL CUMULATIVE
RETURN RETURN
------ ------
<S> <C> <C>
Twelve months ended 7/31/95.................................. 6.61% 6.61%
Five years ended 7/31/95..................................... 6.69% 38.20%
7/13/87 - 7/31/95............................................ 6.95% 71.88%
</TABLE>
The 30 day yield of the Institutional Shares as of July 31, 1995 was 5.55%.
A hypothetical investment of $1,000 in the Institutional Shares made during
the twelve months ended July 31, 1995 would have been worth $1,066.08. During
the five-year period ended July 31, 1995, a hypothetical $1,000 investment in
the Institutional Shares at the beginning of such period would have been worth
$1,382.30. A hypothetical investment of $1,000 made on July 13, 1987 (the date
operations commenced) through July 31, 1995, would have been worth $1,718.83,
assuming in each case that all distributions were reinvested.
The performance of the Institutional Shares may be compared in advertising to
the performance of other mutual funds in general or of particular types of
mutual funds, especially those with similar objectives. Such performance data
may be prepared by Lipper Analytical Services, Inc. and other independent
services which monitor the performance of mutual funds. The Institutional Shares
may also advertise mutual fund performance rankings which have been assigned to
the Institutional Shares by such monitoring services.
PORTFOLIO TRANSACTIONS
AIM is responsible for decisions to buy and sell securities for the Fund,
broker-dealer selection and negotiation of commission rates. Since purchases and
sales of portfolio securities by the Fund are usually principal transactions,
the Fund incurs little or no brokerage commissions. Portfolio securities are
normally purchased directly from the issuer or from a market maker for the
securities. The purchase price paid to dealers serving as market makers may
include a spread between the bid and asked prices. The Fund may also purchase
securities from underwriters at prices which include a commission paid by the
issuer to the underwriter.
AIM's primary consideration in effecting a security transaction is to obtain
the best net price and the most favorable execution of the order. To the extent
that the execution and prices offered by more than one dealer are comparable,
AIM may, in its discretion, effect transactions with dealers that furnish
statistical, research or other information or services which are deemed by AIM
to be beneficial to the Fund's investment program. Certain research services
furnished by dealers may be useful to AIM with clients other than the Fund.
Similarly, any research services received by AIM through placement of portfolio
transactions of other clients may be of value to AIM in fulfilling its
obligations to the Fund. AIM is of the opinion that the material received is
beneficial in supplementing AIM's research and analysis; and therefore, it may
benefit the Fund by improving the quality of AIM's investment advice. The
advisory fees paid by the Fund are not reduced because AIM receives such
services.
AIM and its affiliates manage several other investment companies (the "AIM
Funds"), some of which may have objectives similar to those of the Fund. It is
possible that, at times, identical securities will be appropriate for investment
by the Fund and by one or more of the AIM Funds. The position of each account,
however, in the securities of the same issue, may vary and the length of time
that each account may choose to hold its investment in the securities of the
same issue may likewise vary. The timing and amount of purchase by each account
will also be determined by its cash position. If the purchase or sale of
securities consistent with the investment policies of the Fund and one or more
of the AIM Funds is considered at or about the same time, transactions in such
securities will be allocated among the Fund and the AIM Funds in a manner deemed
equitable by AIM. AIM may combine such transactions, in accordance with
applicable laws and regulations, in order to obtain the best net price and most
favorable execution. Simultaneous transactions could, however, adversely affect
the ability of the Fund to obtain or dispose of the full amount of a security
which it seeks to purchase or sell.
Under the 1940 Act, persons affiliated with the Fund are prohibited from
dealing with the Fund as principal in any purchase or sale of securities unless
an exemptive order allowing such transactions is obtained from the SEC. The
Board of Trustees has adopted procedures pursuant to Rule 17a-7 under the 1940
Act relating to portfolio transactions between the Fund and the AIM Funds and
the Fund may from time to time enter into transactions in accordance with such
Rule and procedures.
13
<PAGE> 103
From time to time, an identical security may be sold by an AIM Fund or another
investment account advised by AIM or AIM Capital and simultaneously purchased by
another investment account advised by AIM or AIM Capital, when such transactions
comply with applicable rules and regulations and are deemed consistent with the
investment objective(s) and policies of the investment accounts advised by AIM
or AIM Capital. Procedures pursuant to Rule 17a-7 under the 1940 Act regarding
transactions between investment accounts advised by AIM or AIM Capital have been
adopted by the Boards of Directors/Trustees of the various AIM Funds, including
the Fund. Although such transactions may result in custodian, tax or other
related expenses, no brokerage commissions or other direct transaction costs are
generated by transactions among the investment accounts advised by AIM or AIM
Capital.
Changes in the portfolio holdings of the Fund are made without regard to
whether a sale would result in a profit or loss. The portfolio turnover rate of
the Fund for the year ended July 31, 1995, the eleven month period ended July
31, 1994 and fiscal year ended August 31, 1993, were 120.01%, 120.40% and
122.99%. High portfolio turnover involves correspondingly greater transaction
costs which are borne directly by the Fund, and may increase capital gains which
are taxable as ordinary income when distributed to shareholders.
Provisions of the 1940 Act and the rules and regulations thereunder have been
construed to prohibit the Fund from purchasing securities or instruments from,
or selling securities or instruments to, any holder of 5% or more of the voting
securities of any investment company managed or advised by AIM. The Fund has
obtained an order of exemption from the SEC which permits the Fund to engage in
certain transactions with such 5% holder if the Fund complies with conditions
and procedures designed to ensure that such transactions are executed at fair
market value and present no conflicts of interest.
At the present time, the Fund does not intend to engage in any transactions
with such 5% holders other than repurchase agreement transactions.
TAXES
The following is only a summary of certain additional tax considerations
generally affecting the Fund and its shareholders that are not described in the
Prospectus. No attempt is made to present a detailed explanation of the tax
treatment of the Fund or its shareholders, and the discussion here and in the
Prospectus is not intended as a substitute for careful tax planning.
QUALIFICATION AS A REGULATED INVESTMENT COMPANY
The Fund intends to qualify as a regulated investment company under Subchapter
M of the Internal Revenue Code of 1986, as amended (the "Code"). As a regulated
investment company, the Fund is not subject to federal income tax on the portion
of its net investment income (i.e., its taxable interest, dividends and other
taxable ordinary income, net of expenses) and realized capital gain net income
(i.e., the excess of capital gains over capital losses) that it distributes to
shareholders, provided that it distributes at least 90% of its investment
company taxable income (i.e., net investment income and the excess of net
short-term capital gain over net long-term capital loss) for the taxable year
(the "Distribution Requirement"), and satisfies certain other requirements of
the Code that are described below. Distributions by the Fund made during the
taxable year or, under specified circumstances, within 12 months after the close
of the taxable year, will be considered distributions of income and gains of the
taxable year and can therefore satisfy the Distribution Requirement.
In addition to satisfying the Distribution Requirement, the Fund must (1)
derive at least 90% of its gross income from dividends, interest, certain
payments with respect to securities loans, gains from the sale or other
disposition of stock or securities or foreign currencies (to the extent such
currency gains are ancillary to the Fund's principal business of investing in
stock or securities) and other income (including but not limited to gains from
options, futures or forward contracts) derived with respect to its business of
investing in such stock, securities or currencies (the "Income Requirement");
and (2) derive less than 30% of its gross income (exclusive of certain gains on
designated hedging transactions that are offset by realized or unrealized losses
on offsetting positions) from the sale or other disposition of stock, securities
or foreign currencies (or options, futures or forward contracts thereon) held
for less than three months (the "Short-Short Gain Test"). However, foreign
currency gains, including those derived from options, futures and forward
contracts, will not be characterized as Short-Short Gain if they are directly
related to the Fund's principal business of investing in stock or securities (or
options or futures thereon). Because of the Short-Short Gain Test, the Fund may
have to limit the sale of appreciated securities that it has held for less than
three months. However, the Short-Short Gain Test will not prevent the Fund from
disposing of investments at a loss, since the recognition of a loss before the
expiration of the three-month holding period is disregarded. Interest (including
original issue discount) received by the Fund at maturity or upon the
disposition of a security held for less than three months will not be treated as
gross income derived from the sale or other disposition of such security within
the meaning of the Short-Short Gain Test. However, income that is attributable
to realized market appreciation will be treated as gross income from the sale or
other disposition of securities for this purpose.
14
<PAGE> 104
EXCISE TAX ON REGULATED INVESTMENT COMPANIES
A 4% non-deductible excise tax is imposed on regulated investment companies
that fail to distribute in each calendar year an amount equal to 98% of ordinary
taxable income for the calendar year and 98% of capital gain net income and
foreign currency gain or loss 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.
The Fund intends to make sufficient distributions or deemed distributions of
their ordinary taxable income and capital gain net income prior to the end of
each calendar year to avoid liability for the excise tax. However, investors
should note that the Fund may in certain circumstances be required to liquidate
portfolio investments to make sufficient distributions to avoid excise tax
liability.
FUND DISTRIBUTIONS
The Fund anticipates distributing substantially all of its investment company
taxable income and short-term capital gains for each taxable year. Such
distributions will be taxable to shareholders as ordinary income and treated as
dividends for federal income tax purposes, but they will not qualify for the 70%
dividends received deduction for corporations.
Distributions by the Fund will be treated in the manner described above
regardless of whether such distributions are paid in cash. Shareholders
receiving a distribution in the form of additional shares will be treated as
receiving a distribution in an amount equal to the fair market value of the
shares received, determined as of the reinvestment date. In addition, if the net
asset value at the time a shareholder purchases shares of the Fund reflects
undistributed net investment income or recognized capital gain net income, or
unrealized appreciation in the value of the assets of the Fund, distributions of
such amounts will be taxable to the shareholder in the manner described above,
although such distributions economically constitute a return of capital to the
shareholder.
Ordinarily, shareholders are required to take distributions by the Fund into
account in the year in which the distributions are made. However, dividends
declared in October, November or December of any year and payable to
shareholders of record on a specified date in such a month will be deemed to
have been received by the shareholders (and made by the Fund) on December 31 of
such calendar year if such dividends are actually paid in January of the
following year. Shareholders will be advised annually as to the U.S. federal
income tax consequences of distributions made (or deemed made in certain cases)
during the year.
The Fund is required in certain cases to withhold and remit to the U.S.
Treasury 31% of ordinary income dividends and capital gain dividends, and the
proceeds of redemption of shares, paid to any shareholder (1) who has provided
either an incorrect tax identification number or no number at all, (2) who is
subject to backup withholding by the Internal Revenue Service for failure to
report the receipt of interest or dividend income properly, or (3) who has
failed to certify to the Fund that it is not subject to backup withholding or
that it is a corporation or other "exempt recipient."
EFFECT OF FUTURE LEGISLATION; LOCAL TAX CONSIDERATIONS
The foregoing general discussion of U.S. federal income tax consequences is
based on the Code and regulations issued thereunder as in effect on the date of
this Statement of Additional Information. Future legislative or administrative
changes or court decisions may significantly change the conclusions expressed
herein, and any such changes or decisions may have a retroactive effect with
respect to the transactions contemplated herein.
Rules of state and local taxation of ordinary income dividends and capital
gain dividends from regulated investment companies often differ from the rules
for U.S. federal income taxation described above. The tax treatment of foreign
investors may also differ from the treatment for U.S. investors described above.
Shareholders are urged to consult their tax advisors as to the consequences of
these and other state and local tax rules affecting investments in the Fund.
15
<PAGE> 105
o INDEPENDENT The Board of Trustees and Shareholders of
AUDITORS' AIM Investment Securities Funds
REPORT
We have audited the accompanying statement of assets
and liabilities of the Limited Maturity Treasury
Portfolio (a series of AIM Investment Securities
Funds), including the schedule of investments, as of
July 31, 1995, and the related statement of operations
for the year then ended, the statements of changes in
net assets for the year then ended and the eleven
months ended July 31, 1994 and the financial highlights
for the year then ended, the eleven months ended July
31, 1994, each of the years in the six-year period
ended August 31, 1993 and the period July 13, 1987
(date operations commenced) through August 31, 1987.
These financial statements and financial highlights are
the responsibility of the Fund's management. Our
responsibility is to express an opinion on these
financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and
financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of
securities owned as of July 31, 1995, by correspondence
with the custodian. An audit also includes assessing
the accounting principles used and significant
estimates made by management, as well as evaluating the
overall financial statement presentation. We believe
that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of the
Limited Maturity Treasury Portfolio as of July 31,
1995, the results of its operations for the year then
ended, the changes in its net assets for the year then
ended and the eleven months ended July 31, 1994, and
the financial highlights for the year then ended, the
eleven months ended July 31, 1994, each of the years in
the six-year period ended August 31, 1993 and the
period July 13, 1987 (date operations commenced)
through August 31, 1987 in conformity with generally
accepted accounting principles.
/s/ KPMG PEAT MARWICK LLP
KPMG Peat Marwick LLP
September 1, 1995
Houston, Texas
F-1
<PAGE> 106
SCHEDULE OF INVESTMENTS
July 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
MATURITY (000S) VALUE
<S> <C> <C> <C>
U. S. TREASURY SECURITIES
U. S. TREASURY NOTES-98.55%
6.25% 08/31/96 $ 33,760 $ 33,922,723
- ------------------------------------------------------------------------------------------
6.50% 09/30/96 32,480 32,749,259
- ------------------------------------------------------------------------------------------
6.875% 10/31/96 32,800 33,227,384
- ------------------------------------------------------------------------------------------
7.25% 11/30/96 32,635 33,225,041
- ------------------------------------------------------------------------------------------
7.50% 12/31/96 32,725 33,472,439
- ------------------------------------------------------------------------------------------
7.50% 01/31/97 33,000 33,786,720
- ------------------------------------------------------------------------------------------
6.875% 02/28/97 32,590 33,100,034
- ------------------------------------------------------------------------------------------
6.625% 03/31/97 33,185 33,593,507
- ------------------------------------------------------------------------------------------
6.50% 04/30/97 32,780 33,124,846
- ------------------------------------------------------------------------------------------
6.125% 05/31/97 32,700 32,832,762
- ------------------------------------------------------------------------------------------
5.625% 06/30/97 32,725 32,590,500
- ------------------------------------------------------------------------------------------
5.875% 07/31/97 32,500 32,511,700
- ------------------------------------------------------------------------------------------
Total U.S. Treasury Securities 398,136,915
- ------------------------------------------------------------------------------------------
TOTAL INVESTMENTS-98.55% 398,136,915
- ------------------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-1.45% 5,873,459
- ------------------------------------------------------------------------------------------
NET ASSETS-100.00% $404,010,374
==========================================================================================
</TABLE>
See Notes to Financial Statements.
F-2
<PAGE> 107
STATEMENT OF ASSETS AND LIABILITIES
July 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost $394,125,287) $398,136,915
- -------------------------------------------------------------------------------------------
Cash 18,054
- -------------------------------------------------------------------------------------------
Receivables for:
Fund shares sold 2,041,751
- -------------------------------------------------------------------------------------------
Interest 5,497,050
- -------------------------------------------------------------------------------------------
Investment in deferred compensation plan 7,430
- -------------------------------------------------------------------------------------------
Other assets 195,658
- -------------------------------------------------------------------------------------------
Total assets 405,896,858
- -------------------------------------------------------------------------------------------
LIABILITIES:
Payables for:
Fund shares reacquired 786,696
- -------------------------------------------------------------------------------------------
Dividends 947,839
- -------------------------------------------------------------------------------------------
Deferred compensation 7,430
- -------------------------------------------------------------------------------------------
Accrued advisory fees 67,358
- -------------------------------------------------------------------------------------------
Accrued distribution fees 34,365
- -------------------------------------------------------------------------------------------
Accrued transfer agent fees 19,330
- -------------------------------------------------------------------------------------------
Accrued operating expenses 23,466
- -------------------------------------------------------------------------------------------
Total liabilities 1,886,484
- -------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $404,010,374
===========================================================================================
</TABLE>
<TABLE>
<CAPTION>
INSTITUTIONAL AIM
SHARES SHARES FUND
<S> <C> <C> <C>
NET ASSETS: $129,530,358 $274,480,016 $404,010,374
==============================================================================================
Shares outstanding, $0.01 par value
per share 12,915,909 27,369,326 40,285,235
==============================================================================================
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE $ 10.03
==============================================================================================
OFFERING PRICE PER SHARE:
(Net asset value of $10.03 / 99.00%) $ 10.13
==============================================================================================
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE> 108
STATEMENT OF OPERATIONS
For the year ended July 31, 1995
<TABLE>
<CAPTION>
INSTITUTIONAL AIM
SHARES SHARES FUND
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 7,406,926 $ 16,714,505 $ 24,121,431
- ------------------------------------------------------------------------------------------------------
EXPENSES:
Advisory fees 247,821 561,628 809,449
- ------------------------------------------------------------------------------------------------------
Administrative service fees 20,670 61,529 82,199
- ------------------------------------------------------------------------------------------------------
Custodian fees 7,205 9,215 16,420
- ------------------------------------------------------------------------------------------------------
Transfer agent fees 2,064 196,628 198,692
- ------------------------------------------------------------------------------------------------------
Trustees' fees and expenses 2,380 5,774 8,154
- ------------------------------------------------------------------------------------------------------
Distribution fees -- 421,183 421,183
- ------------------------------------------------------------------------------------------------------
Other 60,872 170,765 231,637
- ------------------------------------------------------------------------------------------------------
Total expenses 341,012 1,426,722 1,767,734
- ------------------------------------------------------------------------------------------------------
Net investment income $ 7,065,914 $ 15,287,783 22,353,697
- ------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) on sales of investment securities (7,239,070)
- ------------------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 9,384,912
- ------------------------------------------------------------------------------------------------------
Net gain on investment securities 2,145,842
- ------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 24,499,539
======================================================================================================
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE> 109
STATEMENT OF CHANGES IN NET ASSETS
For the year ended July 31, 1995 and
the eleven months ended July 31, 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
OPERATIONS:
Net investment income $ 22,353,697 $ 18,105,773
- --------------------------------------------------------------------------------------------------
Net realized gain (loss) on sales of investment securities (7,239,070) (2,745,439)
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investment securities 9,384,912 (8,181,235)
- --------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 24,499,539 7,179,099
- --------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT
INCOME:
Institutional Shares (7,065,914) (6,248,089)
- --------------------------------------------------------------------------------------------------
AIM Shares (15,287,783) (11,857,684)
- --------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAINS
ON INVESTMENT SECURITIES -- (4,076,018)
- --------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS-NET:
Institutional Shares (6,229,532) 9,581,280
- --------------------------------------------------------------------------------------------------
AIM Shares (56,819,839) (9,292,096)
- --------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (60,903,529) (14,713,508)
- --------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 464,913,903 479,627,411
- --------------------------------------------------------------------------------------------------
End of period $404,010,374 $464,913,903
==================================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $410,024,906 $473,074,277
- --------------------------------------------------------------------------------------------------
Undistributed realized gain (loss) on sales of
investment
securities (10,026,160) (2,787,090)
- --------------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities 4,011,628 (5,373,284)
- --------------------------------------------------------------------------------------------------
$404,010,374 $464,913,903
==================================================================================================
</TABLE>
See Notes to Financial Statements.
F-5
<PAGE> 110
NOTES TO FINANCIAL STATEMENTS
July 31, 1995
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Investment Securities Funds (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company. The Trust is organized as a Delaware business
trust consisting of one portfolio, the Limited Maturity Treasury Portfolio (the
"Fund"). The Fund currently offers two different classes of shares: the AIM
Limited Maturity Treasury Shares (the "AIM Shares") and the Institutional
Shares. Matters affecting each class are voted on exclusively by such
shareholders.
The following is a summary of the significant accounting policies followed by
the Fund in the preparation of its financial statements.
A. Security Valuations--Debt obligations that are issued or guaranteed by the
U.S. Treasury are valued on the basis of prices provided by an independent
pricing service. Prices provided by the pricing service may be determined
without exclusive reliance on quoted prices, and may reflect appropriate
factors such as yield, type of issue, coupon rate and maturity date.
Securities for which market prices are not provided by the pricing service
are valued at the mean between last bid and asked prices based upon quotes
furnished by independent sources. Securities for which market quotations are
not readily available are valued at fair value as determined in good faith by
or under the supervision of the Trust's officers in a manner specifically
authorized by the Board of Trustees. Securities with a remaining maturity of
60 days or less are valued at amortized cost which approximates market value.
B. Securities Transactions and Investment Income--Securities transactions are
accounted for on a trade date basis. Interest income, adjusted for
amortization of discounts on investments, is earned from settlement date and
is recorded on the accrual basis. It is the policy of the Fund not to
amortize bond premiums for financial reporting purposes. Interest income is
allocated to each class daily, based upon each class' pro-rata share of the
total shares of the Fund outstanding. Realized gains and losses from
securities transactions are recorded on the identified cost basis.
C. Dividends and Distributions to Shareholders--It is the policy of the Fund to
declare daily dividends from net investment income. Such dividends are paid
monthly. Net realized short-term capital gains, if any, are distributed
quarterly. Net realized long-term capital gains, if any, are distributed
annually.
D. Federal Income Taxes--The Fund intends to comply with the requirements of the
Internal Revenue Code necessary to qualify as a regulated investment company
and, as such, will not be subject to federal income taxes on otherwise
taxable income (including net realized capital gains) which is distributed to
shareholders. Therefore, no provision for federal income taxes is recorded in
the financial statements. The Fund has a capital loss carryforward (which may
be carried forward to offset future taxable capital gains, if any) of
$5,819,679, which expires, if not previously utilized, in the year 2003.
E. Expenses--Operating expenses directly attributable to a class of shares are
charged to that class' operations. Expenses which are applicable to more than
one class, e.g., advisory fees, are allocated between them.
F-6
<PAGE> 111
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM") with respect to the Fund. Under the terms of the master
investment advisory agreement, the Fund pays AIM an advisory fee at the annual
rate of 0.20% of the first $500 million of the Fund's average daily net assets
plus 0.175% of the Fund's average daily net assets in excess of $500 million.
This agreement requires AIM to reduce its fee or, if necessary, make payments to
the extent required to satisfy any expense limitations imposed by the securities
laws or regulations thereunder of any state in which the Fund shares are
qualified for sale.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain costs incurred in providing accounting
services to the Fund. During the year ended July 31, 1995, the Fund reimbursed
AIM $58,818 for such services.
During the year ended July 31, 1995, the Fund paid A I M Institutional Fund
Services, Inc. ("AIFS") $3,349 for shareholder and transfer agency services.
Effective July 1, 1995, AIFS became the exclusive transfer agent of the
Institutional Shares of the Fund. Effective November 1, 1994, A I M Fund
Services, Inc. ("AFS") became the transfer agent for the AIM Shares and was paid
$91,753 for such services for the nine months ended July 31, 1995.
The Trust has entered into a master distribution agreement with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the AIM
Shares and a master distribution agreement with Fund Management Company ("FMC")
to serve as the distributor for the Institutional Shares. The Trust has adopted
a Plan pursuant to Rule 12b-1 under the 1940 Act (the "Plan") with respect to
the AIM Shares. The Fund pays AIM Distributors compensation at an annual rate of
0.15% of the average net assets attributable to the AIM Shares. The Plan is
designed to compensate AIM Distributors for certain promotional and other sales
related costs, and to implement a program which provides periodic payments to
selected dealers and financial institutions who furnish continuing personal
shareholder services to their customers who purchase and own AIM Shares of the
Fund. Any amounts not paid as a service fee under such Plan would constitute an
asset-based sales charge. The Plan also imposes a cap on the total amount of
sales charges, including asset-based sales charges, that may be paid by the
Fund. During the year ended July 31, 1995, the AIM Shares paid AIM Distributors
$421,183 as compensation under the Plan.
AIM Distributors received commissions of $89,885 during the year ended July
31, 1995 from sales of AIM Shares. Such commissions are not an expense of the
Fund. They are deducted from, and are not included in, proceeds from sales of
AIM shares. Certain officers and trustees of the Trust are officers and
directors of AIM, AIM Distributors, FMC, AFS and AIFS.
The Fund paid legal fees of $2,245 for services rendered by Reid & Priest as
counsel to the Board of Trustees. In September 1994, the firm Kramer, Levin,
Naftalis, Nessen, Kamin & Frankel was appointed as counsel to the Board of
Trustees. The Fund paid legal fees of $1,044 for services rendered by that firm
as counsel. A member of that firm is a trustee of the Trust and, prior to
September 1994, was a member of Reid & Priest.
F-7
<PAGE> 112
NOTE 3-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended July 31, 1995 was
$488,664,643 and $599,080,810, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
on a tax basis as of July 31, 1995 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities $ 4,010,459
- -----------------------------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (94,232)
- -----------------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities $ 3,916,227
=====================================================================================================
</TABLE>
Cost of investments for tax purposes is $394,220,688.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is not
an "interested person" of AIM. The Trust may invest trustees' fees, if so
elected by a trustee, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 5-SHARE INFORMATION
Changes in the Institutional Shares outstanding during the year ended July 31,
1995 and the eleven months ended July 31, 1994 were as follows:
<TABLE>
<CAPTION>
July 31, 1995 July 31, 1994
---------------------------- ----------------------------
Shares Amount Shares Amount
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Sold 1,443,720 $ 14,412,733 19,308,147 $ 196,223,146
- -------------------------------------------------------------------------------- ----------------------------
Issued as reinvestment of dividends 113,174 1,124,015 66,081 664,163
- -------------------------------------------------------------------------------- ----------------------------
Reacquired (2,194,873) (21,776,280) (18,584,169) (187,306,029)
- -------------------------------------------------------------------------------- ----------------------------
(637,979) $ (6,229,532) 790,059 $ 9,581,280
================================================================================ ============================
</TABLE>
F-8
<PAGE> 113
NOTE 6-FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share of Institutional
Shares outstanding during the year ended July 31, 1995, the eleven months ended
July 31, 1994, each of the years in the six-year period ended August 31, 1993
and the period July 13, 1987 (date operations commenced) through August 31,
1987.
<TABLE>
<CAPTION>
JULY 31, AUGUST 31,
---------------------- ---------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987
--------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period $ 9.96 $ 10.24 $ 10.21 $ 10.01 $ 9.79 $ 9.78 $ 9.80 $ 9.92 $ 10.00
- -------------------- -------- -------- --------- --------- --------- --------- --------- --------- ---------
Income from
investment
operations:
Net investment
income 0.57 0.37 0.44 0.60 0.73 0.79 0.85 0.73 0.09
- -------------------- -------- -------- --------- --------- --------- --------- --------- --------- ---------
Net gains (losses)
on securities
(both realized
and unrealized) 0.07 (0.20) 0.05 0.29 0.22 0.01 (0.02) (0.12) (0.08)
- -------------------- -------- -------- --------- --------- --------- --------- --------- --------- ---------
Total from
investment
operations 0.64 0.17 0.49 0.89 0.95 0.80 0.83 0.61 0.01
- -------------------- -------- -------- --------- --------- --------- --------- --------- --------- ---------
Less distributions:
Dividends from net
investment income (0.57) (0.37) (0.44) (0.60) (0.73) (0.79) (0.85) (0.83) (0.09)
- -------------------- -------- -------- --------- --------- --------- --------- --------- --------- ---------
Distributions from
net realized
capital gains -- (0.08) (0.02) (0.09) -- -- -- -- --
- -------------------- -------- -------- --------- --------- --------- --------- --------- --------- ---------
Total
distributions (0.57) (0.45) (0.46) (0.69) (0.73) (0.79) (0.85) (0.73) (0.09)
- -------------------- -------- -------- --------- --------- --------- --------- --------- --------- ---------
Net asset value, end
of period $ 10.03 $ 9.96 $ 10.24 $ 10.21 $ 10.01 $ 9.79 $ 9.78 $ 9.80 $ 9.92
==================== ======= ======== ========= ========= ========= ========= ========= ========= =========
Total return(a) 6.61% 1.72% 4.88% 9.14% 10.08% 8.52% 8.87% 6.34% 0.14%
==================== ======= ======== ========= ========= ========= ========= ========= ========= =========
Ratios/supplemental
data:
Net assets, end of
period (000s
omitted) $129,530 $134,971 $130,690 $ 89,352 $ 25,528 $ 10,378 $ 16,065 $ 35,310 $ 4,202
==================== ======== ======== ========= ========= ========= ========= ========= ========= ========
Ratio of expenses to
average net assets 0.28%(b) 0.25%(c) 0.24% 0.28% 0.41%(d) 0.31%(e) 0.31%(f) 0.31%(f) 0.25%(c)(f)
==================== ======= ======== ========= ========= ========= ========= ========= ========= =======
Ratio of net
investment income
to average
net assets 5.70%(b) 3.98%(c) 4.30% 5.76% 7.36%(d) 8.12%(e) 8.69%(f) 7.46%(f) 6.98%(c)(f)
==================== ======= ======= ========= ========= ========= ========= ========== ========= ========
Portfolio turnover
rate 120.01% 120.40% 122.99% 119.62% 214.74% 192.46% 219.53% 140.83% 28.29%
==================== ======= ======== ========= ========= ========= ========= ========= ========= ========
Borrowings for the
period:
Amount of debt
outstanding at
end of period
(000s omitted) -- -- -- -- -- -- $ 2,257 $ 10,892 --
- -------------------- -------- -------- --------- --------- --------- ---------- --------- --------- --------
Average amount of
debt outstanding
during the period
(000s omitted)(g) -- -- -- -- -- $ 834 $ 3,562 $ 3,754 --
- -------------------- -------- -------- --------- --------- --------- --------- --------- --------- --------
Average number of
shares outstanding
during the period
(000s omitted)(g) 12,540 16,864 9,785 6,097 1,477 1,208 1,817 2,118 390
- -------------------- -------- -------- --------- --------- --------- --------- --------- --------- --------
Average amount of
debt per share
during the period -- -- -- -- -- $ 0.69 $ 1.96 $ 1.69 --
- -------------------- -------- -------- --------- --------- --------- --------- --------- --------- ---------
</TABLE>
(a) For periods less than one year, the total return is not annualized.
(b) Ratios are based on average net assets of $123,910,861.
(c) Annualized.
(d) After expense reimbursements.
(e) After waiver of advisory fees and expense reimbursements.
(f) After waiver of advisory fees.
(g) Averages computed on a daily basis.
F-9
<PAGE> 114
PART C
OTHER INFORMATION
<TABLE>
<S> <C> <C>
Item 24. (a) Financial Statements:
(1) AIM Limited Maturity Treasury Shares of the Limited Maturity Treasury Portfolio
In Part A: Financial Highlights
In Part B: (1) Independent Auditors' Report
(2) Schedule of Investments as of July 31, 1995
(3) Statement of Assets and Liabilities as of July 31, 1995
(4) Statement of Operations for the Period ended July 31, 1995
(5) Statements of Changes in Net Assets for the period ended
July 31, 1995 and the eleven month period ended July 31, 1994
(2) Institutional Shares of the Limited Maturity Treasury Portfolio
In Part A: Financial Highlights
In Part B: (1) Independent Auditors' Report
(2) Schedule of Investments as of July 31, 1995
(3) Statement of Assets and Liabilities as of July 31, 1995
(4) Statement of Operations for the Period ended July 31, 1995
(5) Statements of Changes in Net Assets for the period ended
July 31, 1995 and the eleven month period ended July 31, 1994
(b) Exhibits:
</TABLE>
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ ---------------------------------------------
<S> <C> <C> <C>
(1) (a) - Agreement and Declaration of Trust of the Registrant was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 3 on August 16, 1993, is hereby incorporated by
reference, and is filed electronically herewith.
(b) - First Amendment to Agreement and Declaration of Trust of Registrant was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 4 on October 15, 1993, is hereby incorporated
by reference, and is filed electronically herewith.
(c) - Form of Second Amendment to Agreement and Declaration of Trust of Registrant is filed
electronically herewith.
(2) (a) - By-Laws of the Registrant were filed as an Exhibit to Registrant's Post-Effective Amendment
No. 3 on August 16, 1993, and are hereby incorporated by reference.
</TABLE>
<PAGE> 115
<TABLE>
<S> <C> <C> <C>
(b) - Amendment to By-Laws of Registrant was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 5 on November 30, 1994, and is hereby incorporated by reference.
(c) - Second Amendment to By-Laws of Registrant was filed as an Exhibit to Registrant's Post-
Effective Amendment No. 5 on November 30, 1994, and is hereby incorporated by reference.
(3) - Voting Trust Agreement - None.
(4) (a) - Specimen share certificate for Registrant's Limited Maturity Treasury Portfolio -AIM
Limited Maturity Treasury Shares was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 5 on November 30, 1994, and is hereby incorporated by reference.
(b) - Specimen share certificate for Institutional Shares was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 3 on August 16, 1993, and is hereby incorporated by reference.
(5) (a) - Investment Advisory Agreement between Registrant (on behalf of its AIM Adjustable Rate
Government Fund) and A I M Advisors, Inc. was filed as an Exhibit to Registrant's Post-
Effective Amendment No. 1 on June 15, 1992.
(b) - Master Investment Advisory Agreement, dated as of August 6, 1993, between Registrant and
A I M Advisors, Inc. was filed as an Exhibit to Registrant's Post-Effective Amendment No. 4
on October 15, 1993.
(c) - Master Investment Advisory Agreement, dated October 18, 1993, between Registrant and
A I M Advisors, Inc. was filed as an Exhibit to Registrant's Post-Effective Amendment No. 5
on November 30, 1994, is hereby incorporated by reference, and is filed electronically
herewith.
(c)(i) - Notice of Termination dated November 18, 1994 to Master Investment Advisory Agreement,
dated October 18, 1993, between Registrant and A I M Advisors, Inc. is filed electronically
herewith.
(6) (a) - (1) Distribution Agreement between Registrant (on behalf of its AIM Adjustable Rate
Government Fund) and A I M Distributors, Inc. was filed as an Exhibit to Registrant's Post-
Effective Amendment No. 1 on June 15, 1992.
(2) Master Distribution Agreement, dated August 6, 1993, between Registrant (on behalf of
its AIM Adjustable Rate Government Fund and Limited Maturity Treasury Portfolio - AIM
Limited Maturity Treasury Shares) and A I M Distributors, Inc. was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 4 on October 15, 1993.
(3) Distribution Agreement, dated August 6, 1993, between Registrant (on behalf of its
Limited Maturity Treasury Portfolio - Institutional Shares) and Fund Management Company was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 4 on October 15, 1993.
(4)(i) Master Distribution Agreement, dated October 18, 1993, between Registrant (on behalf
of its Limited Maturity Treasury Portfolio - AIM Limited
</TABLE>
C-2
<PAGE> 116
<TABLE>
<S> <C> <C> <C>
Maturity Treasury Shares) and A I M Distributors, Inc. was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 5 on November 30, 1994, is hereby incorporated by
reference, and is filed electronically herewith.
(4)(ii) Amendment No. 1 dated November 18, 1994, to Master Distribution Agreement, dated
October 18, 1993, between Registrant (on behalf of its Limited Maturity Treasury Portfolio
- AIM Limited Maturity Treasury Shares) and A I M Distributors, Inc. is filed
electronically herewith.
(5) Distribution Agreement, dated October 18, 1993, between Registrant (on behalf of its
Limited Maturity Treasury Portfolio - Institutional Shares) and Fund Management Company was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 5 on November 30, 1994,
and is hereby incorporated by reference.
(b) - Form of Selected Dealer Agreement between A I M Distributors, Inc. and selected dealers is
filed electronically herewith.
(c) - Form of Bank Selling Group Agreement between A I M Distributors, Inc. and banks is filed
electronically herewith.
(d) - Form of Service Agreement for Certain Retirement Plans between Fund Management Company and
Plan Providers is filed electronically herewith.
(7) (a) - Retirement Plan for Registrant's Non-Affiliated Trustees was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 5 on November 30, 1994, and is hereby
incorporated by reference.
(b) - Form of Deferred Compensation Agreement for Registrant's Non-Affiliated Trustees was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 5 on November 30, 1994, and is
hereby incorporated by reference.
(8) (a)(i) - Custody Agreement between Registrant and State Street Bank and Trust Company was filed as
an Exhibit to Registrant's Post-Effective Amendment No. 1 on June 15, 1992, and is hereby
incorporated by reference.
(a)(ii) - Second Amended and Restated Custody Agreement between Short-Term Investments Co. (on behalf
of its Limited Maturity Treasury Portfolio) and The Bank of New York was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 5 on November 30, 1994, and is hereby
incorporated by reference.
(a)(iii) - Amendment to Second Amended and Restated Custody Agreement between Short-Term Investments
Co. (on behalf of its Limited Maturity Treasury Portfolio) and The Bank of New York was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 5 on November 30, 1994,
and is hereby incorporated by reference.
(a)(iv) - Assignment and Acceptance of Assignment of Custody Agreement between Registrant (on behalf
of its Limited Maturity Treasury Portfolio) and Short-Term Investments Co. (on behalf of
its Limited Maturity Treasury Portfolio) was filed as an Exhibit to Registrant's Post-
Effective Amendment No. 5 on November 30, 1994, and is hereby incorporated by reference.
</TABLE>
C-3
<PAGE> 117
<TABLE>
<S> <C> <C> <C>
(9) (a) - (1) Administrative Services Agreement between Registrant and A I M Advisors, Inc. was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 1 on June 15, 1992, and is
hereby incorporated by reference.
(2) Master Administrative Services Agreement, dated as of August 6, 1993, between
Registrant and A I M Advisors, Inc. was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 4 on October 15, 1993.
(3)(i) Master Administrative Services Agreement, dated October 18, 1993, between Registrant
and A I M Advisors, Inc. was filed as an Exhibit to Registrant's Post-Effective Amendment
No. 5 on November 30, 1994, is hereby incorporated by reference, and is filed
electronically herewith.
(3)(ii) Amendment No. 1 dated November 18, 1994 to Master Administrative Services
Agreement, dated October 18, 1993, between Registrant and A I M Advisors, Inc. is filed
electronically herewith.
(4)(i) Administrative Services Agreement, dated as of October 18, 1993, between
A I M Advisors, Inc., on behalf of Registrant's portfolios and classes, and A I M Fund
Services, Inc. was filed as an Exhibit to Registrant's Post-Effective Amendment No. 5 on
November 30,1994, is hereby incorporated by reference, and is filed electronically
herewith.
(4)(ii) Amendment No. 1 dated May 11, 1994, to Administrative Services Agreement, dated
October 18, 1993, between A I M Advisors, Inc., on behalf of Registrant's portfolios and
classes, and A I M Fund Services, Inc. was filed as an Exhibit to Registrant's Post-
Effective Amendment No. 5 on November 30, 1994, is hereby incorporated by reference, and is
filed electronically herewith.
(4)(iii) Amendment No. 2 dated July 1, 1994, to Administrative Services Agreement, dated
October 18, 1993, between A I M Advisors, Inc., on behalf of Registrant's portfolios and
classes, and A I M Fund Services, Inc. was filed as an Exhibit to Registrant's Post-
Effective Amendment No. 5 on November 30, 1994, is hereby incorporated by reference, and is
filed electronically herewith.
(4)(iv) Amendment No. 3 dated September 16, 1994, to Administrative Services Agreement,
dated October 18, 1993, between A I M Advisors, Inc., on behalf of Registrant's portfolios
and classes, and A I M Fund Services, Inc. was filed as an Exhibit to Registrant's Post-
Effective Amendment No. 5 on November 30, 1994, is hereby incorporated by reference, and is
filed electronically herewith.
(4)(v) Amendment No. 4 dated November 1, 1994, to Administrative Services Agreement, dated
October 18, 1993, between A I M Advisors, Inc., on behalf of Registrant's portfolios and
classes, and A I M Fund Services, Inc. is filed electronically herewith.
(b) - (1)(i) Transfer Agency Agreement between Registrant and The Shareholder Services Group,
Inc. was filed as an Exhibit to Registrant's Post-Effective Amendment No. 2 on November 27,
1992.
(1)(ii) Amendment to Transfer Agency Agreement between Registrant and The Shareholder
Services Group, Inc. was filed as an Exhibit to Registrant's Post-Effective Amendment No. 2
on November 27, 1992.
</TABLE>
C-4
<PAGE> 118
<TABLE>
<S> <C> <C> <C>
(1)(iii) Remote Access and Related Services Agreement, dated December 23, 1994, between
Registrant and The Shareholder Services Group, Inc. is filed electronically herewith.
(1)(iv) Amendment No. 1 Remote Access and Related Services Agreement, dated October 4,
1995, between Registrant and The Shareholder Services Group, Inc. is filed electronically
herewith.
(1)(v) Addendum No. 2 to Remote Access and Related Services Agreement, dated October 12,
1995, between Registrant and The Shareholder Services Group, Inc. is filed electronically
herewith.
(1)(vi) Assignment and Acceptance of Assignment of Transfer Agency Agreement among
Registrant (on behalf of its Limited Maturity Treasury Portfolio - Institutional Shares),
Short-Term Investments Co. and State Street Bank and Trust Company was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 5 on November 30, 1994.
(2) Form of Transfer Agency Agreement between Registrant (on behalf of its Limited Maturity
Treasury Portfolio - AIM Limited Maturity Treasury Shares) and A I M Fund Services, Inc.
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 5 on November 30,
1994.
(3) Transfer Agency and Service Agreement between Registrant (on behalf of its Limited
Maturity Treasury Portfolio - AIM Limited Maturity Treasury Shares) and A I M Fund
Services, Inc. is filed electronically herewith.
(4) Transfer Agency and Service Agreement between Registrant (on behalf of its Limited
Maturity Treasury Portfolio - Institutional Shares) and A I M Institutional Fund Services,
Inc. is filed electronically herewith.
(10) (a) - Opinion of Ballard Spahr Andrews & Ingersoll was filed as an Exhibit to the Registrant's
24f-2 Notice for the fiscal year July 31, 1995.
(11) (a) - Consent of Ballard Spahr Andrews & Ingersoll is filed electronically herewith.
(b) - Consent of Dechert Price & Rhoads is filed electronically herewith.
(c) - Consent of KPMG Peat Marwick LLP is filed electronically herewith.
(d) - Opinion of Dechert Price & Rhoads was filed as an Exhibit to Registrant's Post-
Effective Amendment No. 5 on November 30, 1994.
(12) - Financial Statements - None.
(13) - Agreements concerning Initial Capitalization - None.
(14) (a) - Form of the Registrant's IRA documents was filed as an Exhibit to the Registrant's Post-
Effective Amendment No. 3 on August 16, 1993, and is hereby incorporated by reference.
(b) - Form of the Registrant's Simplified Employee Pension - Individual Retirement Accounts
Contribution Agreement was filed as an Exhibit to the Registrant's
</TABLE>
C-5
<PAGE> 119
<TABLE>
<S> <C> <C> <C>
Post-Effective Amendment No. 3 on August 16, 1993, and is hereby incorporated by reference.
(c) - Form of the Registrant's Combination Profit Sharing-Money Purchase Plan and Trust was filed
as an Exhibit to the Registrant's Post-Effective Amendment No. 3 on August 16, 1993, and is
hereby incorporated by reference.
(d) - Form of the Registrant's 403(b) Plan was filed as an Exhibit to the Registrant's Post-
Effective Amendment No. 3 on August 16, 1993, and is hereby incorporated by reference.
(15) (a) - Distribution Plan for Registrant (on behalf of its Limited Maturity Treasury Portfolio -
AIM Limited Maturity Treasury Shares), and related forms of agreements, are filed
electronically herewith.
(16) - Schedule of Performance Quotations was filed as an Exhibit to the Registrant's Registration
Statements on August 16, 1993 and on October 15, 1993, and is hereby incorporated by
reference.
(18) - Copy of Rule 18f-3 Plan - None.
(27) - Financial Data Schedule is filed electronically herewith.
</TABLE>
Item 25. Persons Controlled by or Under Common Control With Registrant
Furnish a list or diagram of all persons directly or indirectly controlled
by or under common control with the Registrant and as to each such person
indicate (1) if a company, the state or other sovereign power under the laws of
which it is organized, and (2) the percentage of voting securities owned or
other basis of control by the person, if any, immediately controlling it.
None.
Item 26. Number of Holders of Securities
State in substantially the tabular form indicated, as of a specified date
within 90 days prior to the date of filing, the number of record holders of
each class of securities of the Registrant.
<TABLE>
<CAPTION>
Number of Record Holders
Title of Class as of November 1, 1995
-------------- ----------------------
<S> <C>
Limited Maturity Treasury Portfolio
AIM Limited Maturity Treasury Shares 7406
Institutional Shares 13
</TABLE>
Item 27. Indemnification
State the general effect of any contract, arrangement or statute under
which any director, officer, underwriter or affiliated person of the Registrant
is insured or indemnified in any manner against any liability which may be
incurred in such capacity, other than insurance provided by any director,
officer, affiliated person or underwriter for their own protection.
C-6
<PAGE> 120
Delaware law provides that subject to such standards or restrictions, if
any, as are set forth in the governing instrument of a business trust, a
business trust shall have the power to indemnify and hold harmless any
trustee or beneficial owner or other person from and against any and all
claims and demands whatsoever. The Registrant's Agreement and Declaration
of Trust provides that every person who is or has been a trustee or
officer of the Registrant shall be indemnified by the Registrant to the
fullest extent permitted by Delaware law, the Registrant's bylaws and
other applicable law. The Registrant's bylaws provide that a trustee,
when acting in such capacity, shall not be liable for any act or omission
or any conduct whatsoever in his capacity as trustee, provided that
nothing contained in the bylaws or the Delaware Business Trust Act shall
protect any trustee against any liability to the Trust or its shareholders
to which he would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard involved in the conduct
of his office.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the United States
Securities and Exchange Commission such indemnification is against public
policy and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such trustee, officer or
controlling person in connection with the securities being registered
hereby, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it
is against public policy and will be governed by the final adjudication of
such issue.
The Registrant has obtained insurance coverage for its officers and
trustees under a joint Mutual Fund and Investment Advisory Professional
Directors and Officers Liability Policy, issued by ICI Mutual Insurance
Company, with a $15,000,000 limit of liability.
Item 28. Business and Other Connections of Investment Advisor
Describe any other business, profession, vocation or employment of a
substantial nature in which each investment advisor of the Registrant, and each
director, officer or partner of any such investment advisor, is or has been, at
and time during the past two fiscal years, engaged for his own account or in
the capacity of director, officer, employee, partner or trustee.
The only employment of a substantial nature of the officers and directors
of A I M Advisors, Inc. (the "Advisor"), the Registrant's investment
advisor, is with the Advisor and its affiliated companies. For additional
information regarding the Advisor and its officers and directors, see
"Management" in the Prospectus and the Statement of Additional Information
for the Retail Class and "Management of the Trust" and "General
Information About the Fund" in the Prospectus and the Statement of
Additional Information, respectively, for the Institutional Class.
Item 29. Principal Underwriters
(a)(1) A I M Distributors, Inc., the Registrant's principal underwriter
for AIM Limited Maturity Treasury Shares, also acts as a principal
underwriter to the following investment companies:
AIM Equity Funds, Inc. (Retail Classes)
AIM Funds Group
AIM International Funds, Inc.
AIM Summit Fund, Inc.
C-7
<PAGE> 121
AIM Tax-Exempt Funds, Inc.
AIM Variable Insurance Funds, Inc.
(a)(2) Fund Management Company, the Registrant's principal underwriter
for Institutional Shares, also acts as a principal underwriter to
the following investment companies:
AIM Equity Funds, Inc. (Institutional Classes)
Short-Term Investments Co.
Short-Term Investments Trust
Tax-Free Investments Co.
(b) The following table sets forth information with respect to each
director and officer of:
(1) A I M Distributors, Inc.
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Principal Underwriter with Registrant
- ---------------- -------------------------- --------------------
<S> <C> <C>
Charles T. Bauer Chairman of the Board of Directors Chairman and Trustee
Michael J. Cemo Director and President None
Gary T. Crum Director Senior Vice President
Robert H. Graham Director and Senior Vice President Trustee and President
W. Gary Littlepage Director and Senior Vice President None
James L. Salners Director and Senior Vice President None
John Caldwell Senior Vice President None
Gordon J. Sprague Senior Vice President None
Michael C. Vessels Senior Vice President None
Lawrence E. Manierre First Vice President None
James E. Stueve First Vice President None
Carol F. Relihan Vice President and Secretary Vice President and
Secretary
John J. Arthur Vice President and Treasurer Senior Vice President
and Treasurer
Ofelia M. Mayo General Counsel, Vice President Assistant Secretary
and Assistant Secretary
</TABLE>
__________________________________
* 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173
C-8
<PAGE> 122
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Principal Underwriter with Registrant
- ---------------- -------------------------- --------------------
<S> <C> <C>
Charles R. Dewey Vice President None
Sidney M. Dilgren Vice President None
William H. Kleh Vice President None
Frank V. Serebrin Vice President None
B. J. Thompson Vice President None
Robert D. Van Sant Vice President None
Melville B. Cox Assistant Vice President Vice President
Mary E. Gentempo Assistant Vice President None
David E. Hessel Assistant Vice President, Assistant None
Treasurer and Controller
Jeffrey L. Horne Assistant Vice President None
Kim T. Lankford Assistant Vice President None
David L. Kite Assistant General Counsel and Assistant Secretary
Assistant Secretary
Nancy L. Martin Assistant General Counsel Assistant Secretary
and Assistant Secretary
Samuel D. Sirko Assistant General Counsel Assistant Secretary
and Assistant Secretary
Kathleen J. Pflueger Secretary Assistant Secretary
Stephen I. Winer Assistant Secretary Assistant Secretary
</TABLE>
__________________________________
* 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173
C-9
<PAGE> 123
(2) Fund Management Company
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Principal Underwriter with Registrant
- ---------------- -------------------------- --------------------
<S> <C> <C>
Charles T. Bauer Chairman of the Board of Directors Chairman and Trustee
J. Abbott Sprague Director and President None
Robert H. Graham Director and Senior Vice President President
William H. Kleh Director None
John J. Arthur Vice President and Treasurer Senior Vice President and
Treasurer
Mark E. McMeans Vice President None
Carol F. Relihan Vice President, General Counsel Vice President and
and Secretary Secretary
David E. Hessel Assistant Vice President, None
Assistant Treasurer and
Controller
Dana R. Sutton Assistant Vice President Vice President
and Assistant Treasurer and Assistant Treasurer
Stephen I. Winer Assistant Vice President, Assistant Assistant Secretary
General Counsel and Assistant Secretary
Melville B. Cox Assistant Vice President Vice President
Jeffrey L. Horne Assistant Vice President None
David L. Kite Assistant General Counsel and Assistant Secretary
Assistant Secretary
Nancy L. Martin Assistant General Counsel and Assistant Secretary
Assistant Secretary
Ofelia M. Mayo Assistant General Counsel Assistant Secretary
and Assistant Secretary
Samuel D. Sirko Assistant General Counsel and Assistant Secretary
Assistant Secretary
Kathleen J. Pflueger Secretary Assistant Secretary
</TABLE>
__________________________________
* 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173
C-10
<PAGE> 124
(c) Not Applicable
Item 30. Location of Accounts and Records
With respect to each account, book or other document required to be
maintained by Section 31(a) of the 1940 Act and the Rules (17 CFR 270.31a-1 to
31a-3) promulgated thereunder, furnish the name and address of each person
maintaining physical possession of each such account, book or other document.
A I M Advisors, Inc., 11 Greenway Plaza, Suite 1919, Houston, Texas 77046,
will maintain physical possession of each such account, book or other
document of the Registrant at its principal executive offices, except for
those relating to certain transactions in portfolio securities that are
maintained by the Registrant's Custodian, The Bank of New York, 110
Washington Street, 8th Floor, New York, New York 10286, and Registrant's
Transfer Agents and Dividend Paying Agents, A I M Fund Services, Inc. (on
behalf of Registrant's Limited Maturity Treasury Portfolio - AIM Limited
Maturity Treasury Shares), P.O. Box 4739, Houston, Texas 77210-4739; and A
I M Institutional Fund Services, Inc., (on behalf of its Limited Maturity
Treasury Portfolio - Institutional Shares) 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046-1173.
Item 31. Management Services
Furnish a summary of the substantive provisions of any management-related
service contract not discussed in Part A and Part B of this Form (because the
contract was not believed to be of interest to a purchaser of securities of the
Registrant) under which services are provided to the Registrant, indicating the
parties to the contract, the total dollars paid and by whom, for the last three
fiscal years.
None.
Item 32. Undertakings
The Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of the applicable Fund's latest annual report to
shareholders, upon request and without charge.
C-11
<PAGE> 125
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this Amendment
to its Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the city of Houston, Texas on the 17nd day of
November, 1995.
REGISTRANT: AIM INVESTMENT SECURITIES FUNDS
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 & Trustee November 17, 1995
----------------------------------
(Charles T. Bauer)
/s/ Robert H. Graham Trustee & President November 17, 1995
---------------------------------- (Principal Executive Officer)
(Robert H. Graham)
/s/ Bruce L. Crockett Trustee November 17, 1995
----------------------------------
(Bruce L. Crockett)
/s/ Owen Daly II Trustee November 17, 1995
----------------------------------
(Owen Daly II)
/s/ Carl Frischling Trustee November 17, 1995
----------------------------------
(Carl Frischling)
/s/ John F. Kroeger Trustee November 17, 1995
----------------------------------
(John F. Kroeger)
/s/ Lewis F. Pennock Trustee November 17, 1995
----------------------------------
(Lewis F. Pennock)
/s/ Ian W. Robinson Trustee November 17, 1995
----------------------------------
(Ian W. Robinson)
/s/ Louis S. Sklar Trustee November 17, 1995
----------------------------------
(Louis S. Sklar)
/s/ John J. Arthur Senior Vice President & November 17, 1995
---------------------------------- Treasurer (Principal Financial
(John J. Arthur) and Accounting Officer)
</TABLE>
<PAGE> 126
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No.
- -------
<S> <C>
1(a) Agreement and Declaration of Trust of the Registrant.
1(b) First Amendment to Agreement and Declaration of Trust of Registrant.
1(c) Form of Second Amendment to Agreement and Declaration of Trust of
Registrant.
5(c) Master Investment Advisory Agreement, dated October 18, 1993,
between Registrant and A I M Advisors, Inc.
5(c)(i) Notice of Termination dated November 18, 1994 to Master Investment
Advisory Agreement, dated October 18, 1993, between Registrant and
A I M Advisors, Inc.
6(a)(4)(i) Master Distribution Agreement, dated October 18, 1993, between
Registrant (on behalf of its Limited Maturity Treasury Portfolio - AIM
Limited Maturity Treasury Shares) and A I M Distributors, Inc.
6(a)(4)(ii) Amendment No. 1 dated November 18, 1994 to Master Distribution
Agreement, dated October 18, 1993, between Registrant (on behalf of
its Limited Maturity Treasury Portfolio - AIM Limited Maturity Treasury
Shares) and A I M Distributors, Inc.
6(b) Form of Selected Dealer Agreement between A I M Distributors, Inc.
and selected dealers.
6(c) Form of Bank Selling Group Agreement between A I M Distributors,
Inc. and banks.
6(d) Form of Service Agreement for Certain Retirement Plans between
Fund Management Company and Plan Providers.
9(a)(3)(i) Master Administrative Services Agreement, dated October 18, 1993,
between Registrant and A I M Advisors, Inc.
9(a)(3)(ii) Amendment No. 1 dated November 18, 1994 to the Master
Administrative Services Agreement, dated October 18, 1993,
between Registrant and A I M Advisors, Inc.
9(a)(4)(i) Administrative Services Agreement, dated as of October 18, 1993,
between A I M Advisors, Inc., on behalf of Registrant's portfolios and
classes, and A I M Fund Services, Inc.
9(a)(4)(ii) Amendment No. 1 dated May 11, 1994 to Administrative Services
Agreement, dated as of October 18, 1993, between A I M Advisors,
</TABLE>
<PAGE> 127
<TABLE>
<S> <C>
Inc., on behalf of Registrant's portfolios and classes, and A I M Fund
Services, Inc.
9(a)(4)(iii) Amendment No. 2 dated July 1, 1994 to Administrative Services
Agreement, dated as of October 18, 1993, between A I M Advisors,
Inc., on behalf of Registrant's portfolios and classes, and A I M Fund
Services, Inc.
9(a)(4)(iv) Amendment No. 3 dated September 16, 1994 to Administrative
Services Agreement, dated as of October 18, 1993, between A I M
Advisors, Inc., on behalf of Registrant's portfolios and classes, and
A I M Fund Services, Inc.
9(a)(4)(v) Amendment No. 4 dated November 1, 1994 to Administrative Services
Agreement, dated October 18, 1993, between A I M Advisors Inc., on
behalf of Registrant's portfolio and classes, and A I M Fund Services,
Inc.
9(b)(1)(iii) Remote Access and Related Services Agreement, dated December 23,
1994, between Registrant and The Shareholder Services Group, Inc.
9(b)(1)(iv) Amendment No. 1 to Remote Access and Related Services Agreement,
dated October 4, 1995, between Registrant and The Shareholder
Services Group, Inc.
9(b)(1)(v) Addendum No. 2 to Remote Access and Related Services Agreement,
dated October 12, 1995, between Registrant and The Shareholder
Services Group, Inc.
9(b)(3) Transfer Agency and Service Agreement between Registrant (on behalf
of its Limited Maturity Treasury Portfolio - AIM Limited Maturity
Treasury Shares) and A I M Fund Services, Inc.
9(b)(4) Transfer Agency and Service Agreement between Registrant (on behalf
of its Limited Maturity Treasury Portfolio - Institutional Shares) and
A I M Institutional Fund Services, Inc.
11(a) Consent of Ballard Spahr Andrews & Ingersoll.
11(b) Consent of Dechert Price & Rhoads.
11(c) Consent of KPMG Peat Marwick LLP.
15 Distribution Plan for Registrant (on behalf of its Limited Maturity
Treasury Portfolio - AIM Limited Maturity Treasury Shares), with
Related forms of agreement.
27 Financial Data Schedule.
</TABLE>
<PAGE> 1
Exhibit 1(a)
AGREEMENT AND DECLARATION OF TRUST
OF
AIM INVESTMENT SECURITIES FUNDS
WHEREAS, THIS AGREEMENT AND DECLARATION OF TRUST is made and
entered into as of May 5, 1993, among William H. Kleh, Charles T. Bauer and
Robert H. Graham, as trustees, and each person who becomes a shareholder (as
hereinafter defined) in accordance with the terms hereinafter set forth.
WHEREAS, the parties hereto desire to create a business trust
pursuant to the Delaware Act (as hereinafter defined) for the investment and
reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees hereby direct that a Certificate
of Trust be filed with the Office of the Secretary of State of Delaware and do
hereby declare that all money and property contributed to the trust hereunder
shall be held and managed in trust under this Trust Agreement for the benefit
of the Shareholders (as hereinafter defined) as herein set forth below.
ARTICLE I
---------
NAME, DEFINITIONS, PURPOSE AND CERTIFICATE OF TRUST
---------------------------------------------------
Section 1.1. Name. The name of the business trust created
hereby is "AIM Investment Securities Funds," and the Trustees may transact the
Trust's affairs in that name. The Trust shall constitute a Delaware business
trust in accordance with the Delaware Act, as hereinafter defined.
Section 1.2. Definitions. Wherever used herein, unless
otherwise required by the context or specifically provided:
(a) "Agreement" means this Agreement and Declaration of
Trust, as it may be amended from time to time.
(b) "Bylaws" means the Bylaws referred to in Article IV,
Section 4.1(e) hereof, as from time to time amended;
(c) The term "Class" means a portion of Shares of a
Portfolio of the Trust established in accordance with the provisions of Article
II, Section 2.3 hereof.
(d) The term "Commission" has the meaning given it in the
1940 Act. The terms "affiliated person", "Company", "Person" and "principal
underwriter" shall have the meanings given them in the 1940 Act, as modified by
or interpreted by any applicable order or orders of the Commission or any rules
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<PAGE> 2
or regulations adopted or interpretive releases of the Commission thereunder.
(e) The "Delaware Act" refers to the Delaware Business
Trust Act, 12 Del. C. Section 3801, et seq., as such Act may be amended from
time to time.
(f) "Portfolio" means a series of Shares of the Trust
established in accordance with the provisions of Article II, Section 2.3
hereof;
(g) "Shareholder" means a record owner of Outstanding
Shares of the Trust;
(h) "Shares" means, as to a Portfolio or any Class
thereof, the equal proportionate transferable units of beneficial interest into
which the beneficial interest of such Portfolio of the Trust or such Class
thereof shall be divided and may include fractions of Shares as well as whole
Shares;
(i) The "Trust" means the AIM Investment Securities
Funds, the Delaware business trust established hereby, and reference to the
Trust, when applicable to one or more Portfolios of the Trust, or Classes
thereof, shall refer to any such Portfolio, or Class thereof, as the case may
be;
(j) The "Trustees" means the Persons who have signed this
Agreement and Declaration of Trust as trustees so long as they shall continue
to serve as trustees of the Trust in accordance with the terms hereof, and all
other Persons who may from time to time be duly appointed as Trustee in
accordance with the provisions of Section 3.4 hereof, and reference herein to a
Trustee or to the Trustees shall refer to such Persons in their capacity as
Trustees hereunder;
(k) "Trust Property" means any and all property, real or
personal, tangible or intangible, which is owned or held by or for the account
of one or more of the Trust, any Portfolio, any Class of a Portfolio or the
Trustees on behalf of the Trust, a Portfolio or Class; and
(l) The "1940 Act" refers to the Investment Company Act
of 1940, as amended from time to time.
Section 1.3. Purpose. The purpose of the Trust is to
conduct, operate and carry on the business of a management investment company
registered under the 1940 Act through one or more Portfolios investing
primarily in securities and to carry on such other business as the Trustees may
from time to time determine pursuant to their authority under this Trust
Agreement.
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<PAGE> 3
Section 1.4. Certificate of Trust. Immediately upon the
execution of this Trust Agreement, the Trustees shall file a Certificate of
Trust with respect to the Trust in the Office of the Secretary of State of the
State of Delaware pursuant to the Delaware Act.
ARTICLE II
----------
BENEFICIAL INTEREST
-------------------
Section 2.1. Shares of Beneficial Interest. The beneficial
interest in the Trust shall be divided into an unlimited number of Shares, with
par value of $0.01 per Share. The Trustees may, from time to time, authorize
the division of the Shares into one or more series, each of which constitutes a
Portfolio, and may further authorize the division of said Portfolios into one
or more additional, separate and distinct Classes in accordance with Section
2.3 of this Agreement. All Shares issued hereunder, including without
limitation, Shares issued in connection with a dividend in Shares or a split or
reverse split of Shares, shall be fully paid and nonassessable.
Section 2.2. Issuance of Shares. The Trustees in their
discretion may, from time to time, without vote of the Shareholders, issue
Shares, in addition to the then issued and outstanding Shares and Shares held
in the treasury, to such party or parties and for such amount and type of
consideration, subject to applicable law, including cash or securities, at such
time or times and on such terms as the Trustees may deem appropriate, and may
in such manner acquire other assets (including the acquisition of assets
subject to, and in connection with, the assumption of liabilities) and
businesses. In connection with any issuance of Shares, the Trustees may issue
fractional Shares and Shares held in the treasury. The Trustees may from time
to time divide or combine the Shares into a greater or lesser number without
thereby changing the proportionate beneficial interests in the Trust.
Contributions to the Trust may be accepted for, and Shares shall be redeemed
as, whole Shares and/or 1/1,000th of a Share or integral multiples thereof.
Section 2.3. Establishment of Portfolios and Classes.
The Trust shall initially be divided into two Portfolios, the AIM Adjustable
Rate Government Fund Portfolio and the Limited Maturity Treasury Portfolio.
The AIM Adjustable Rate Government Fund Portfolio shall not have separate
Classes, initially. The Limited Maturity Treasury Portfolio shall contain two
initial Classes, the Institutional Class and the AIM Limited Maturity Treasury
Shares Class. The AIM Adjustable Rate Government Fund Portfolio and the
Limited Maturity Treasury Portfolio and their respective initial Classes as set
forth in this Section 2.3 are collectively referred to as the "Initial
Portfolios". The establishment and designation of any other Portfolio or
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<PAGE> 4
Class thereof, or, subject to Section 6.1 hereof any change to the Initial
Portfolios, shall be effective upon the adoption by a majority of the then
Trustees of a resolution which sets forth such establishment, designation or
change.
Section 2.3.1. Subject to Section 6.1 of this Trust
Agreement, the Trustees shall have full power and authority, in their sole
discretion without obtaining any prior authorization or vote of the
Shareholders of any Portfolio of the Trust, or Class thereof, to establish and
designate and to change in any manner any Portfolio of Shares, or any Class or
Classes thereof, to fix such preferences, voting powers, rights and privileges
of any Portfolio, or Classes thereof, as the Trustees may from time to time
determine, to divide or combine the Shares or any Portfolio, or Classes
thereof, into a greater or lesser number, to classify or reclassify any issued
Shares or any Portfolio, or Classes thereof, into one or more Portfolios or
Classes of Shares of a Portfolio, and to take such other action with respect to
the Shares as the Trustees may deem desirable. A Portfolio and any Class
thereof may issue any number of Shares but need not issue any shares. At any
time that there are no Shares outstanding of any particular Portfolio or Class
previously established and designed, the Trustees may by a majority vote of the
Trustees abolish that Portfolio or Class and the establishment and designation
thereof.
Section 2.3.2. Unless the establishing resolution or any
other resolution adopted pursuant to this Section 2.3 otherwise provides,
Shares of each Portfolio or Class thereof established hereunder shall have the
following relative rights and preferences:
(a) Except as set forth in paragraph (e) of this
Subsection 2.3.2, each Share of a Portfolio, regardless of Class, shall
represent an equal pro rata interest in the assets belonging to such Portfolio
and shall have identical voting, dividend, liquidation and other rights,
preferences, powers, restrictions, limitations, qualifications and designations
and terms and conditions with each other Share of such Portfolio.
(b) Shareholders shall have no preemptive or other right
to subscribe to any additional Shares or other securities issued by the Trust
or the Trustees, whether of the same or other Portfolio (or Class).
(c) All consideration received by the Trust for the issue
or sale of Shares of a particular Portfolio (or Class), together with all
assets in which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds derived from
the sale, exchange or liquidation of such assets, and any funds or
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<PAGE> 5
payments derived from any reinvestment of such proceeds in whatever form the
same may be, shall be held and accounted for separately from the other assets
of the Trust and of every other Portfolio and may be referred to herein as
"assets belonging to" that Portfolio (or Class). The assets belonging to a
particular Portfolio (or Class) shall belong to that Portfolio (or Class) for
all purposes, and to no other Portfolio (or Class), subject only to the rights
of creditors of that Portfolio (or Class). In addition, any assets, income,
earnings, profits or funds, or payments and proceeds with respect thereto,
which are not readily identifiable as belonging to any particular Portfolio (or
Class) shall be allocated by the Trustees between and among one or more of the
Portfolios (or Classes) in such manner as the Trustees, in their sole
discretion, deem fair and equitable. Each such allocation shall be conclusive
and binding upon the Shareholders of all Portfolios or Classes thereof for all
purposes, and such assets, income, earnings, profits, or funds, or payments and
proceeds with respect thereto shall be assets belonging to that Portfolio (or
Class).
(d) The assets belonging to a particular Portfolio (or
Class) shall be charged with the liabilities of that Portfolio (or Class) and
all expenses, costs, charges and reserves attributable to that Portfolio (or
Class). As hereinafter provided, Class Expenses that are directly attributable
to any particular Class shall be borne by such Class. Any general liabilities,
expenses, costs, charges or reserves to the Trust which are not readily
identifiable as belonging to any particular Portfolio or Class shall be
allocated and charged by the Trustees between or among any one or more of the
Portfolios (or Classes) in such manner as the Trustees in their sole discretion
deem fair and equitable. Each such allocation shall be conclusive and binding
upon the Shareholders of all Portfolios (or Classes) for all purposes. Without
limitation of the foregoing provisions of this Subsection 2.3.2, the debts,
liabilities, obligations and expenses incurred, contracted for or otherwise
existing with respect to a particular Portfolio (or Class) shall be enforceable
against the assets of such Portfolio (or Class) only, and not against the
assets of the Trust generally. Notice of this contractual limitation on
inter-Portfolio liabilities shall be set forth in the Certificate of Trust
described in Section 1.4 of this Agreement (whether originally or by
amendment), and upon the giving of such notice in the Certificate of Trust, the
statutory provisions of Section 3804 of the Delaware Act relating to
limitations on inter-Portfolio liabilities (and the statutory effect under
Section 3804 of setting forth such notice in the certificate of trust) shall
become applicable to the Trust and each Portfolio and Class thereof.
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<PAGE> 6
(e) Each Class of Shares of a Portfolio shall have a
different Class designation. Each Class of Shares shall bear expenses ("Class
Expenses") of the Trust's operations that are directly attributable to such
Class. Dividends paid by the Trust with respect to each Class of Shares in a
Portfolio shall be calculated in the same manner and shall be in the same
amount as dividends paid by the Trust with respect to each other Class of
Shares in the same Portfolio, except that Class Expenses shall be borne
exclusively by the affected Classes.
All references to Shares in this Trust Agreement shall be
deemed to be Shares of any or all Portfolios, or Classes thereof, as the
context may require. All provisions herein relating to the Trust shall apply
equally to each Portfolio of the Trust, and each Class thereof, except as the
context otherwise requires.
Section 2.4. Investment in the Trust. Investments may be
accepted by the Trust from such Persons, at such times, on such terms, and for
such consideration, which may consist of cash or tangible or intangible
property or a combination thereof, as the Trustees from time to time may
authorize. At the Trustees' discretion, such investments, subject to
applicable law, may be in the form of cash or securities in which the affected
Portfolio is authorized to invest, valued as provided in applicable law. Each
investment shall be credited to the individual shareholder's account in the
form of full and fractional Shares of the Trust, in such Portfolio (or Class)
as the purchaser shall select.
Section 2.5. Personal Liability of Shareholders. As provided
by applicable law, no Shareholder of the Trust shall be personally liable for
the debts, liabilities, obligations and expenses incurred by, contracted for,
or otherwise existing with respect to, the Trust or any Portfolio (or Class)
thereof. Neither the Trust nor the Trustees, nor any officer, employee or
agent of the Trust shall have any power to bind personally any Shareholder or,
except as provided herein or by applicable law, to call upon any Shareholder
for the payment of any sum of money or assessment whatsoever other than such as
the Shareholder may at any time personally agree to pay by way of subscription
for any Shares or otherwise. The Shareholders shall be entitled, to the
fullest extent permitted by applicable law, to the same limitation on personal
liability as is extended under the Delaware General Corporation Law to
stockholders of private corporations for profit. Every note, bond, contract or
other undertaking issued by or on behalf of the Trust or the Trustees relating
to the Trust or to any Portfolio (or Class) thereof shall include a recitation
limiting the obligation represented thereby to the Trust or to one or more
Portfolios thereof and its or their assets (but the
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<PAGE> 7
omission of such a recitation shall not operate to bind any Shareholder or
Trustee of the Trust).
Section 2.6. Assent to Trust Agreement. Every Shareholder,
by virtue of having purchased a Share, shall be held to have expressly assented
to, and agreed to be bound by, the terms hereof. The death of a Shareholder
during the continuance of the Trust shall not operate to terminate the same nor
entitle the representative of any deceased Shareholder to an accounting or to
take any action in court or elsewhere against the Trust or the Trustees, but
only to rights of said decedent under this Trust.
ARTICLE III
-----------
THE TRUSTEES
------------
Section 3.1 Management of the Trust. The Trustees shall have
exclusive and absolute control over the Trust Property and over the business of
the Trust to the same extent as if the Trustees were the sole owners of the
Trust Property and business in their own right, but with such powers of
delegation as may be permitted by this Trust Agreement. The Trustees shall
have power to conduct the business of the Trust and carry on its operations in
any and all of its branches and maintain offices both within and without the
State of Delaware, in any and all states of the United States of America, in
the District of Columbia, in any and all commonwealths, territories,
dependencies, colonies, or possessions of the United States of America, and in
any foreign jurisdiction and to do all such other things and execute all such
instruments as they deem necessary, proper or desirable in order to promote the
interests of the Trust although such things are not herein specifically
mentioned. Any determination as to what is in the interests of the Trust made
by the Trustees in good faith shall be conclusive. In construing the
provisions of this Trust Agreement, the presumption shall be in favor of a
grant of power to the Trustees.
The enumeration of any specific power in this Trust Agreement
shall not be construed as limiting the aforesaid power. The powers of the
Trustees may be exercised without order of or resort to any court.
Section 3.2. Initial Trustees. The initial Trustees shall be
the persons named herein. On a date fixed by the Trustees, the Shareholders
shall elect at least three (3) but not more than twelve (12) Trustees, as
specified by the Trustees pursuant to Section 3.6 of this Article III.
Section 3.3. Term of Office of Trustees. The Trustees shall
hold office during the lifetime of this Trust, and until its termination as
herein provided; except (a) that
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<PAGE> 8
any Trustee may resign his trusteeship or may retire by written instrument
signed by him and delivered to the other Trustees, which shall take effect upon
such delivery or upon such later date as is specified therein; (b) that any
Trustee may be removed at any time by written instrument, signed by a least
two-thirds of the number of Trustees prior to such removal, specifying the date
when such removal shall become effective; (c) that any Trustee who has died,
become physically or mentally incapacitated by reason of disease or otherwise,
or is otherwise unable to serve, may be retired by written instrument signed by
a majority of the other Trustees, specifying the date of his retirement; and
(d) that a Trustee may be removed at any meeting of the Shareholders of the
Trust.
Section 3.4. Vacancies and Appointment of Trustees. In case
of the declination to serve, death, resignation, retirement or removal of a
Trustee, or a Trustee is otherwise unable to serve, or an increase in the
number of Trustees, a vacancy shall occur. Whenever a vacancy in the Board of
Trustees shall occur, until such vacancy is filled, the other Trustees shall
have all the powers hereunder and the certification of the other Trustees of
such vacancy shall be conclusive. In the case of an existing vacancy, the
remaining Trustees may fill such vacancy by appointing such other person as
they in their discretion shall see fit, or may leave such vacancy unfilled or
may reduce the number of Trustees to not less than three (3) Trustees. Such
appointment shall be evidenced by a written instrument signed by a majority of
the Trustees in office or by resolution of the Trustees, duly adopted, which
shall be recorded in the minutes of a meeting a the Trustees, whereupon the
appointment shall take effect.
An appointment of a Trustee may be made by the Trustees then
in office in anticipation of a vacancy to occur by reason of retirement,
resignation or increase in number of Trustees effective at a later date,
provided that said appointment shall become effective only at or after the
effective date of said retirement, resignation or increase in number of
Trustees. As soon as any Trustee appointed pursuant to this Section 3.4 shall
have accepted this trust, the trust estate shall vest in the new Trustee or
Trustees, together with the continuing Trustees, without any further act or
conveyance, and he shall be deemed a Trustee hereunder.
Section 3.5. Temporary Absence of Trustee. Any Trustee may,
by power of attorney, delegate his power for a period not exceeding six months
at any one time to any other Trustee or Trustees, provided that in no case
shall less than two Trustees personally exercise the other powers hereunder
except as herein otherwise expressly provided.
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<PAGE> 9
Section 3.6. Number of Trustees. The number of Trustees
shall initially be three (3), and thereafter shall be such number as shall be
fixed from time to time by a majority of the Trustees; provided, however, that
the number of Trustees shall in no event be less than three (3) nor more than
twelve (12).
Section 3.7. Effect of Death, Resignation, etc. of a Trustee.
The declination to serve, death, resignation, retirement, removal, incapacity,
or inability of the Trustees, or any one of them, shall not operate to
terminate the Trust or to revoke any existing agency created pursuant to the
terms of this Trust Agreement.
Section 3.8. Ownership of Assets of the Trust. The assets of
the Trust and of each Portfolio thereof shall be held separate and apart from
any assets now or hereafter held in any capacity other than as Trustee
hereunder by the Trustees or any successor Trustees. Legal title in all of the
assets of the Trust and the right to conduct any business shall at all times be
considered as vested in the Trustees on behalf of the Trust, except that the
Trustees may cause legal title to any Trust Property to be held by, or in the
name of the Trust, or in the name of any Person as nominee. No Shareholder
shall be deemed to have a severable ownership in any individual asset of the
Trust or of any Portfolio, or Class thereof, or any right of partition or
possession thereof, but each Shareholder shall have, except as otherwise
provided for herein, a proportionate undivided beneficial interest in the
Trust, Portfolio or Class thereof. The Shares shall be personal property
giving only the rights specifically set forth in this Trust Agreement or the
Delaware Act.
ARTICLE IV
----------
POWERS OF THE TRUSTEES
----------------------
Section 4.1. Powers. The Trustees in all instances shall act
as principals, and are and shall be free from the control of the Shareholders.
The Trustees shall have full power and authority to do any and all acts and to
make and execute any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust.
Without limiting the foregoing and subject to any applicable limitation in this
Trust Agreement or the Bylaws of the Trust, the Trustees shall have power and
authority:
(a) To invest and reinvest cash and other property, and
to hold cash or other property uninvested, without in any event being bound or
limited by any present or future law or custom in regard to investments by
trustees, and to sell,
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<PAGE> 10
exchange, lend, pledge, mortgage, hypothecate, write options on and lease any
or all of the assets of the Trust;
(b) To operate as and carry on the business of an
investment company, and exercise all the powers necessary and appropriate to
the conduct of such operations;
(c) To borrow money and in this connection issue notes
or other evidence of indebtedness; to secure borrowings by mortgaging, pledging
or otherwise subjecting as security the Trust Property; to endorse, guarantee,
or undertake the performance of an obligation or engagement of any other Person
and to lend Trust Property;
(d) To provide for the distribution of interests of the
Trust either through a principal underwriter in the manner hereinafter provided
for or by the Trust itself, or both, or otherwise pursuant to a plan of
distribution of any kind;
(e) To adopt Bylaws not inconsistent with this Trust
Agreement providing for the conduct of the business of the Trust and to amend
and repeal them to the extent that they do not reserve such right to the
Shareholders; such Bylaws shall be deemed incorporated and included in this
Trust Agreement;
(f) To elect and remove such officers and appoint and
terminate such agents as they consider appropriate;
(g) To employ one or more banks, trust companies or
companies that are members of a national securities exchanges or such other
domestic or foreign entities as custodians of any assets of the Trust subject
to any conditions set forth in this Trust Agreement or in the Bylaws;
(h) To retain one or more transfer agents and
shareholder servicing agents, or both;
(i) To set record dates in the manner provided herein or
in the Bylaws;
(j) To delegate such authority as they consider desirable
to any officers of the Trust and to any investment adviser, manager,
administrator, custodian, underwriter or other agent or independent contractor;
(k) To sell or exchange any or all of the assets of the
Trust, subject to the provisions of Article VI, Section 6.1 hereof;
(l) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or property; and to
execute and deliver proxies and powers of
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<PAGE> 11
attorney to such person or persons as the Trustees shall deem proper, granting
to such person or persons such power and discretion with relation to securities
or property as the Trustee shall deem proper;
(m) To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of securities;
(n) To hold any security or property in a form not
indicating any trust, whether in bearer, book entry, unregistered or other
negotiable form; or either in the name of the Trust or of a Portfolio or Class
thereof or in the name of a custodian or a nominee or nominees, subject in
either case to proper safeguards according to the usual practice of Delaware
business trusts or investment companies;
(o) To establish separate and distinct Portfolios with
separately defined investment objectives and policies and distinct investment
purposes in accordance with the provisions of Article II hereof and to
establish Classes of such Portfolios having relative rights, powers and duties
as they may provide consistent with applicable law;
(p) Subject to the provisions of Section 3804 of the
Delaware Act, to allocate assets, liabilities and expenses of the Trust to a
particular Portfolio or to apportion the same between or among two or more
Portfolios, provided that any liabilities or expenses incurred by a particular
Portfolio (or Class) shall be payable solely out of the assets belonging to
that Portfolio (or Class) as provided for in Article II hereof;
(q) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or concern, any
security of which is held in the Trust; to consent to any contract, lease,
mortgage, purchase, or sale of property by such corporation or concern, and to
pay calls or subscriptions with respect to any security held in the Trust;
(r) To compromise, arbitrate, or otherwise adjust claims
in favor of or against the Trust or any matter in controversy including, but
not limited to, claims for taxes;
(s) To declare and pay dividends and make distributions
of income and of capital gains and capital to Shareholders in the manner
hereinafter provided;
(t) To establish, from time to time, a minimum
investment for Shareholders in the Trust or in one or more Portfolio or Class,
and to require the redemption of the Shares of any Shareholders whose
investment is less than such minimum upon giving notice to such Shareholder;
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<PAGE> 12
(u) To establish one or more committees, to delegate any
of the powers of the Trustees to said committees and to adopt a committee
charter providing for such responsibilities, membership (including Trustees,
officers or other agents of the Trust therein) and any other characteristics of
said committees as the Trustees may deem proper. Notwithstanding the
provisions of this Article IV, and in addition to such provisions or any other
provision of this Trust Agreement or of the Bylaws, the Trustees may by
resolution appoint a committee consisting of less than the whole number of
Trustees then in office, which committee may be empowered to act for and bind
the Trustees and the Trust, as if the acts of such committee were the acts of
all the Trustees then in office, with respect to the institution, prosecution,
dismissal, settlement, review or investigation of any action, suit or
proceeding which shall be pending or threatened to be brought before any court,
administrative agency or other adjudicatory body;
(v) To interpret the investment policies, practices or
limitations of any Portfolio;
(w) To establish a registered office and have a
registered agent in the state of Delaware; and
(x) In general to carry on any other business in
connection with or incidental to any of the foregoing powers, to do everything
necessary, suitable or proper for the accomplishment of any purpose or the
attainment of any object or the furtherance of any power hereinbefore set
forth, either alone or in association with others, and to do every other act or
thing incidental or appurtenant to or growing out of or connected with the
aforesaid business or purposes, objects or powers.
The foregoing clauses shall be construed both as objects and
powers, and the foregoing enumeration of specific powers shall not be held to
limit or restrict in any manner the general powers of the Trustees. Any action
by one or more the Trustees in their capacity as such hereunder shall be deemed
an action on behalf of the Trust or the applicable Portfolio, and not an action
in an individual capacity.
The Trustees shall not be limited to investing in obligations
maturing before the possible termination of the Trust.
No one dealing with the Trustees shall be under any obligation
to make any inquiry concerning the authority of the Trustees, or to see to the
application of any payments made or property transferred to the Trustees or
upon their order.
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<PAGE> 13
Section 4.2. Issuance and Repurchase of Shares. The Trustees
shall have the power to issue, sell, repurchase, redeem, retire, cancel,
acquire, hold, resell, reissue, dispose of, and otherwise deal in Shares and,
subject to the provisions set forth in Article II and VII, to apply to any such
repurchase, redemption, retirement, cancellation or acquisition of Shares any
funds or property of the Trust, or the particular Portfolio or Class of the
Trust, with respect to which such Shares are issued.
Section 4.3. Action by the Trustees. The Trustees act by
majority vote at a meeting duly called or by unanimous written consent without
a meeting or by telephone meeting provided a quorum of Trustees participate in
any such telephone meeting. At any meeting of the Trustees, a majority of the
Trustees shall constitute a quorum. Written consents or waivers of the
Trustees may be executed in one or more counterparts. Execution of a written
consent or waiver and delivery thereof to the Trust may be accomplished by
telefax.
Section 4.4. Principal Transactions. The Trustees may, on
behalf of the Trust, buy any securities from or sell any securities to, or lend
any assets of the Trust to, any Trustee or officer of the Trust or any firm of
which any such Trustee or officer is a member acting as principal, or have any
such dealings with any investment adviser, distributor, or transfer agent for
the Trust or with any affiliated person of such Person; and the Trust may
employ any such Person, or firm or company in which such Person is an
affiliated person, as broker, legal counsel, registrar, investment adviser,
distributor, administrator, transfer agent, dividend disbursing agent,
custodian or in any other capacity upon customary terms, subject in all cases
to applicable laws, rules and regulations and orders of regulatory authorities.
Section 4.5. Payment of Expenses by the Trust. The Trustees
are authorized to pay or cause to be paid out of the principal or income of the
Trust or Portfolio (or Class), or partly out of the principal and partly out of
income, and to charge or allocate the same to, between or among such one or
more of the Portfolios (or Classes) that may be established or designated
pursuant to Article II, Section 2.3, as they deem fair, all expenses, fees,
charges, taxes and liabilities incurred or arising in connection with the Trust
or Portfolio (or Class), or in connection with the management thereof,
including, but not limited to, the Trustees' compensation and such expenses and
charges for the services of the Trust's officers, employees, investment adviser
or manager, administrator, principal underwriter, auditors, counsel, custodian,
transfer agent, Shareholder servicing agent, and such other agents or
independent contractors and such other
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<PAGE> 14
expenses and charges as the Trustees may deem necessary or proper to incur.
Section 4.6. Trustee Compensation. The Trustees as such
shall be entitled to reasonable compensation from the Trust; they may fix the
amount of their compensation. Nothing herein shall in any way prevent the
employment of any Trustee for advisory, management, administrative, legal,
accounting, investment banking, underwriting, brokerage, or investment dealer
or other services and the payment for the same by the Trust.
ARTICLE V
---------
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND
---------------------------------------------
TRANSFER AGENT
--------------
Section 5.1. Investment Adviser. The Trustees may in their
discretion, from time to time, enter into an investment advisory or management
contract or contracts with respect to the Trust or any Portfolio whereby the
other party or parties to such contract or contracts shall undertake to furnish
the Trustees with such management, investment advisory, statistical and
research facilities and services and such other facilities and services, if
any, and all upon such terms and conditions, as the Trustees may in their
discretion determine.
The Trustees may authorize the investment advisor to employ,
from time to time, one or more sub-advisors to perform such of the acts and
services of the investment advisor, and upon such terms and conditions, as may
be agreed upon between the investment advisor and sub-advisor. Any reference
in this Trust Agreement to the investment advisor shall be deemed to include
such sub-advisors, unless the context otherwise requires.
Section 5.2 Other Service Contracts. The Trustees may
authorize the engagement of a principal underwriter, transfer agent,
administrator, custodian or similar servicer.
Section 5.3 Parties to Contract. Any contract of the
character described in Sections 5.1 and 5.2 of this Article V may be entered
into with any corporation, firm, partnership, trust or association, although
one or more of the Trustees or officers of the Trust may be an officer,
director, trustee, shareholder, or member of such other party to the contract.
Section 5.4. Miscellaneous. The fact that (i) any of the
Shareholders, Trustees or officers of the Trust is a shareholder, director,
officer, partner, trustee, employee, manager, advisor, principal underwriter or
distributor or agent of or for any Company or of or for any parent or affiliate
of
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<PAGE> 15
any Company, with which an advisory or administration contract, or principal
underwriter's or distributor's contract, or transfer, shareholder servicing,
custodial or other agency contract may have been or may hereafter be made, or
that any such Company, or any parent or affiliate thereof, is a Shareholder or
has an interest in the Trust, or that (ii) any Company with which an advisory
or administration contract or principal underwriter's or distributor's
contract, or transfer, shareholder servicing or other agency contract may have
been or may hereafter be made also has an advisory or administration contract,
or principal underwriter's or distributor's contract, or transfer, shareholder
servicing, custodial or other agency contract with one or more other Companies,
or has other business or interests shall not affect the validity of any such
contract or disqualify any Shareholder, Trustee or officer of the Trust from
voting upon or executing the same or create any liability or accountability to
the Trust or its Shareholders.
ARTICLE VI
----------
SHAREHOLDERS' VOTING POWERS AND MEETINGS
----------------------------------------
Section 6.1 Voting Powers. The Shareholders shall have power
to vote only to: (i) elect Trustees, provided that a meeting of Shareholders
has been called for that purpose; (ii) remove Trustees, provided that a meeting
of Shareholders has been called for that purpose; (iii) terminate the Trust or
any Portfolio or Class, unless, as of the date on which the Trustees have
determined to so terminate the Trust or such Portfolio or Class, there are
fewer than 100 holders of record of the Trust or of such terminating Portfolio
or Class; (iv) approve the sale of all or substantially all the assets of the
Trust or of any Portfolio or Class, unless the primary purpose of such sale is
to change the Trust's domicile or form of organization or form of business
trust; (v) approve the merger or consolidation of the Trust or any Portfolio or
Class with and into another Company, unless (A) the primary purpose of such
merger or consolidation is to change the Trust's domicile or form of
organization or form of business trust, or (B) after giving effect to such
merger or consolidation, based on the number of Shares outstanding as of a date
selected by the Trustees, the Shareholders of the Trust or such Portfolio or
Class will have a majority of the outstanding shares of the surviving Company
or portfolio or class, as the case may be; (vi) approve any amendment to this
Section 6.1; and (vii) approve such additional matters as may be required by
law or as the Trustees, in their sole discretion, shall determine.
Until Shares are issued, the Trustees may exercise all rights
of Shareholders and may take any action required or permitted by law, this
Trust Agreement or any of the Bylaws of the Trust to be taken by Shareholders.
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<PAGE> 16
On any matter submitted to a vote of the Shareholders, all
Shares shall be voted together, except when required by applicable law or when
the Trustees have determined that the matter affects the interests of one or
more Portfolios (or Classes), then only the Shareholders of all such Portfolios
(or Classes) shall be entitled to vote thereon. Each whole Share shall be
entitled to one vote as to any matter on which it is entitled to vote, and each
fractional Share shall be entitled to a proportionate fractional vote. The
vote necessary to approve any such matter shall be set forth in the Bylaws.
ARTICLE VII
-----------
DISTRIBUTIONS AND REDEMPTIONS
-----------------------------
Section 7.1 Distributions. The Trustees may from time to
time declare and pay dividends and make other distributions with respect to any
Portfolio, or Class thereof, which may be from income, capital gains or
capital. The amount of such dividends or distributions and the payment of them
and whether they are in cash or any other Trust Property shall be wholly in the
discretion of the Trustees.
Section 7.2 Redemptions. Any holder of record of Shares of a
particular Portfolio, or Class thereof, shall have the right to require the
Trust to redeem his Shares, or any portion thereof, subject to such terms and
conditions as are set forth in the Bylaws.
Section 7.3 Redemption of Shares By Trustees. Upon the terms
and conditions set forth in the Bylaws, the Trustees may call for the
redemption of the Shares of any Person or may refuse to transfer or issue
Shares to any Person to the extent that the same is necessary to comply with
applicable law or advisable to further the purposes for which the Trust is
formed.
Section 7.4 Redemption of De Minimis Accounts. If, at any
time when a request for transfer or redemption of Shares of any Portfolio is
received by the Trust or its agent, the value of the Shares of such Portfolio
in a Shareholder's account is less than Five Hundred Dollars ($500.00), after
giving effect to such transfer or redemption, the Trust may cause the remaining
Shares of such Portfolio in such Shareholder's account to be redeemed in
accordance with such procedures as are set forth in the Bylaws.
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<PAGE> 17
ARTICLE VIII
------------
LIMITATION OF LIABILITY AND INDEMNIFICATION
-------------------------------------------
Section 8.1 Limitation of Liability. A Trustee, when acting
in such capacity, shall not be personally liable to any person other than the
Trust or a beneficial owner for any act, omission or obligation of the Trust or
any Trustee. A Trustee shall not be liable for any act or omission or any
conduct whatsoever in his capacity as Trustee, provided that nothing contained
herein or in the Delaware Act shall protect any Trustee against any liability
to the Trust or to Shareholders to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Trustee
hereunder.
Section 8.2 Indemnification of Trustees. Every Person who
is, or has been, a Trustee or officer of the Trust shall be indemnified by the
Trust to the fullest extent permitted by the Delaware Act, the Bylaws and other
applicable law.
Section 8.3 Indemnification of Shareholders. In case any
shareholder or former Shareholder of the Trust shall be held to be personally
liable solely by reason of his being or having been a Shareholder of the Trust
or any Portfolio or Class and not because of his acts or omissions or for some
other reason, the Shareholder or former Shareholder (or his heirs, executors,
administrators or other legal representatives, or, in the case of a corporation
or other entity, its corporate or other general successor) shall be entitled
out of the assets belonging to the applicable Portfolio (or Class) to be held
harmless from and indemnified against all loss and expense arising from such
liability in accordance with the Bylaws and applicable law.
ARTICLE IX
----------
MISCELLANEOUS
-------------
Section 9.1 Trust Not a Partnership. It is hereby expressly
declared that a trust and not a partnership is created hereby. No Trustee
hereunder shall have any power to bind personally either the Trust's officers
or any Shareholder. All persons extending credit to, contracting with or
having any claim against the Trust or the Trustees shall look only to the
assets of the appropriate Portfolio or Class or, if the Trustees shall have yet
to have established any separate Portfolio or Class, of the Trust for payment
under such credit, contract or claim; and neither the Shareholders nor the
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<PAGE> 18
Trustee, nor any of their agents, whether past, present or future, shall be
personally liable therefor.
Section 9.2 Trustee's Good Faith Action, Expert Advice, No
Bond or Surety. The exercise by the Trustees of their powers and discretions
hereunder in good faith and with reasonable care under the circumstances then
prevailing shall be binding upon everyone interested. Subject to the
provisions of Article VIII hereof and to Section 9.1 of this Article IX, the
Trustees shall not be liable for errors of judgment or mistakes of fact or law.
The Trustees may take advice of counsel or other experts with respect to the
meaning and operation of this Trust Agreement, and subject to the provisions of
Article VIII hereof and Section 9.1 of this Article IX, shall be under no
liability for any act or omission in accordance with such advice or for failing
to follow such advice. The Trustees shall not be required to give any bond as
such, nor any surety if a bond is obtained.
Section 9.3 Termination of Trust or Portfolio. Unless
terminated as provided herein, the Trust shall continue without limitation of
time. The Trust may be terminated at any time by the Trustees by written
notice to the Shareholders, subject to Section 6.1 of this Trust Agreement.
Any Portfolio or Class may be terminated at any time by the Trustees by written
notice to the Shareholders of that Portfolio or Class, subject to Section 6.1
of this Trust Agreement.
Upon termination of the Trust (or any Portfolio or Class, as
the case may be), after paying or otherwise providing for all charges, taxes,
expenses and liabilities held, severally, with respect to each Portfolio (or
Class) (or the applicable Portfolio (or Class), as the case may be), whether
due or accrued or anticipated as may be determined by the Trustees, the Trust
shall, in accordance with such procedures as the Trustees consider appropriate,
reduce the remaining assets held, severally, with respect to each Portfolio (or
Class) (or the applicable Portfolio (or Class), as the case may be), to
distribute in cash or shares or other securities, or any combination thereof,
and distribute the proceeds held with respect to each Portfolio (or Class) (or
the applicable Portfolio (or Class), as the case may be), to the Shareholders
of that Portfolio (or Class), as a Portfolio (or Class), ratably according to
the number of Shares of that Portfolio (or Class) held by the several
Shareholders on the date of termination.
Section 9.4 Sale of Assets; Merger and Consolidation.
Subject to Section 6.1 of this Trust Agreement, the Trustees may cause (i) the
Trust or one or more of its Portfolios (or Classes) to the extent consistent
with applicable law to sell all or substantially all of its assets,
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<PAGE> 19
or be merged into or consolidated with another Trust or Company, (ii) the
Shares of the Trust or any Portfolio (or Class) to be converted into beneficial
interests in another business trust (or series thereof) created pursuant to
this Section 9.4 of Article IX, or (iii) the Shares to be exchanged under or
pursuant to any state or federal statute to the extent permitted by law. In
all respects not governed by statute or applicable law, the Trustees shall have
power to prescribe the procedure necessary or appropriate to accomplish a sale
of assets, merger or consolidation including the power to create one or more
separate business trusts to which all or any part of the assets, liabilities,
profits or losses of the Trust may be transferred and to provide for the
conversion of Shares of the trust or any Portfolio (or Class) into beneficial
interests in such separate business trust or trusts (or series or class
thereof).
Section 9.5 Filing of Copies, References, Headings. The
original or a copy of this Trust Agreement and each amendment hereof or Trust
Agreement supplemental hereto shall be kept at the office of the Trust where it
may be inspected by any Shareholder. In this Trust Agreement or in any such
amendment or supplemental Trust Agreement, references to this Trust Agreement,
and all expressions like "herein," "hereof" and "hereunder," shall be deemed to
refer to this Trust Agreement as amended or affected by any such supplemental
Trust Agreement. All expressions like "his," "he," and "him," shall be deemed
to include the feminine and neuter, as well as masculine, genders. Headings
are placed herein for convenience of reference only and in case of any
conflict, the text of this Trust Agreement, rather than the headings, shall
control. This Trust Agreement may be executed in any number of counterparts
each of which shall be deemed an original.
Section 9.6. Governing Law. The Trust and this Trust
Agreement, and the rights, obligations and remedies of the Trustees and
Shareholders hereunder, are to be governed by and construed and administered
according to the Delaware Act and the other laws of the State of Delaware;
provided, however, that there shall not be applicable to the Trust, the
Trustees, the Shareholders or this Trust Agreement (a) the provisions of
Section 3540 of Title 12 of the Delaware Code or (b) any provisions of the laws
(statutory or common) of the State of Delaware (other than the Delaware Act)
pertaining to trusts which relate to or regulate (i) the filing with any court
or governmental body or agency of trustee accounts or schedules of trustee fees
and charges, (ii) affirmative requirements to post bonds for trustees,
officers, agents or employees of a trust, (iii) the necessity for obtaining
court or other governmental approval concerning the acquisition, holding or
disposition of real or personal property, (iv) fees or other sums payable to
trustees, officers, agents or employees of a trust, (v) the
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<PAGE> 20
allocation of receipts and expenditures to income or principal, (vi)
restrictions or limitations on the permissible nature, amount or concentration
of trust investments or requirements relating to the titling, storage or other
manner of holding of trust assets, or (vii) the establishment of fiduciary or
other standards or responsibilities or limitations on the indemnification, acts
or powers of trustees or other Persons, which are inconsistent with the
limitations or liabilities or authorities and powers of the Trustees or
officers of the Trust set forth or referenced in this Trust Agreement.
The Trust shall be of the type commonly called a "business
trust," and without limiting the provisions hereof, the Trust may exercise all
powers which are ordinarily exercised by such a trust under Delaware law. The
Trust specifically reserves the right to exercise any of the powers or
privileges afforded to trusts or actions that may be engaged in by trusts under
the Delaware Act, and the absence of a specific reference herein to any such
power, privilege or action shall not imply that the Trust may not exercise such
power or privilege or take such actions; provided, however, that the exercise
of any such power, privilege or action shall not otherwise violate applicable
law.
Section 9.7. Amendments. Except as specifically provided in
Section 6.1, the Trustees may, without Shareholder vote, amend or otherwise
supplement this Trust Agreement by making an amendment, a Trust Agreement
supplemental hereto or an amended and restated trust instrument.
Section 9.8. Provisions in Conflict with Law. The provisions
of this Trust Agreement are severable, and if the Trustees shall determine,
with the advice of counsel, that any of such provisions is in conflict with
applicable law the conflicting provision shall be deemed never to have
constituted a part of this Trust Agreement; provided, however, that such
determination shall not affect any of the remaining provisions of this Trust
Agreement or render invalid or improper any action taken or omitted prior to
such determination. If any provision of this Trust Agreement shall be held
invalid or enforceable in any jurisdiction, such invalidity or unenforceability
shall attach only to such provision in such jurisdiction and shall not in any
manner affect such provisions in any other jurisdiction or any other provision
of this Trust Agreement in any jurisdiction.
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<PAGE> 21
IN WITNESS WHEREOF, the undersigned, being all of the initial
Trustees of the Trust, have executed this instrument this 5th day of May,
1993.
/s/ WILLIAM H. KLEH
-----------------------------------
William H. Kleh,
as Trustee
/s/ CHARLES T. BAUER
-----------------------------------
Charles T. Bauer,
as Trustee
/s/ ROBERT H. GRAHAM
-----------------------------------
Robert H. Graham,
as Trustee
[THIS IS THE SIGNATURE PAGE FOR THE AGREEMENT AND DECLARATION
OF TRUST OF AIM INVESTMENT SECURITIES FUNDS]
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<PAGE> 1
Exhibit 1(b)
FIRST AMENDMENT
TO
AGREEMENT AND DECLARATION OF TRUST
OF
AIM INVESTMENT SECURITIES FUNDS
THIS FIRST AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST OF
AIM INVESTMENT SECURITIES FUNDS (the "Amendment") is entered into the 11th day
of September, 1993, among Charles T. Bauer, Bruce L. Crockett, Owen Daly, III,
Carl Frischling, John F. Kroeger, Lewis F. Pennock, Ian W. Robinson, Louis S.
Sklar, as trustees, and each person who became or becomes a shareholder in
accordance with the terms set forth in that certain Agreement and Declaration
of Trust of AIM Investment Securities Funds entered into as of May 5, 1993 (the
"Agreement").
WHEREAS, Section 9.7 of the Agreement authorizes the Trustees
without Shareholder vote to amend or otherwise supplement the Agreement by
making an amendment; and
WHEREAS, at a meeting duly called and held in Bermuda on the
11th day of September, 1993, the Trustees have resolved to amend the Agreement
as hereinafter set forth with an effective date of August 20, 1993.
NOW, THEREFORE, the Trustees hereby amend the Agreement as
herein set forth below:
1. Capitalized terms not specifically defined in this
Amendment shall have the meanings ascribed to them in the Agreement.
2. Subclause (iii) in the first paragraph of Section 6.1
of the Agreement shall be deleted in its entirety and the following new
subclause (iii) in the first paragraph of Section 6.1 shall be substituted in
lieu therefore:
"iii) approve the termination of the Trust or any Portfolio
or Class, unless, as of the date on which the Trustees have determined to so
terminate the Trust or such Portfolio or Class, there are fewer than 100
holders of record of the Trust or of such terminating Portfolio or Class and
provided, further, that the Trustees have called a meeting of the Shareholders
for the purpose of approving any such termination;"
3. Section 8.1 of the Agreement shall be deleted in its
entirety and the following new Section 8.1 shall be substituted in lieu
therefore:
"Section 8.1 Limitation of Liability. A Trustee, when acting
in such capacity, shall not be personally liable to any person for any act,
omission or obligation of the Trust or
<PAGE> 2
any Trustee; provided, however, that nothing contained herein or in the
Delaware Act shall protect any Trustee against any liability to the Trust or to
Shareholders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee hereunder."
4. The amendments in the preceding paragraphs 2 and 3 of
this Amendment shall be effective as of the 20th day of August, 1993.
5. With the exception of the amendment in the preceding
paragraphs 2 and 3 of this Amendment, the Agreement shall in all other respects
remain in full force and effect.
IN WITNESS WHEREOF, the undersigned, being all of the initial
Trustees of the Trust, have executed this First Amendment to Agreement and
Declaration of Trust of AIM Investment Securities Funds the 11th day of
September, 1993.
/s/ CHARLES T. BAUER /s/ BRUCE L. CROCKETT
- ---------------------------------- ----------------------------------
Charles T. Bauer Bruce L. Crockett
Trustee Trustee
/s/ OWEN DALY /s/ CARL FRISCHLING
- ---------------------------------- ----------------------------------
Owen Daly, III Carl Frischling
Trustee Trustee
/s/ JOHN F. KROEGER /s/ LEWIS F. PENNOCK
- ---------------------------------- ----------------------------------
John F. Kroeger Lewis F. Pennock
Trustee Trustee
/s/ IAN W. ROBINSON /s/ LOUIS S. SKLAR
- ---------------------------------- ----------------------------------
Ian W. Robinson Louis S. Sklar
Trustee Trustee
[THIS IS THE SIGNATURE PAGE FOR
THE FIRST AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST
OF AIM INVESTMENT SECURITIES FUNDS]
- 2 -
<PAGE> 1
Exhibit 1(c)
SECOND AMENDMENT
TO
AGREEMENT AND DECLARATION OF TRUST
OF
AIM INVESTMENT SECURITIES FUNDS
THIS SECOND AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST OF AIM
INVESTMENT SECURITIES FUNDS (the "Amendment") is entered into the 18th day of
November, 1994, among Charles T. Bauer, Bruce L. Crockett, Owen Daly II, Carl
Frischling, John F. Kroeger, Lewis F. Pennock, Ian W. Robinson, Louis S. Sklar,
as Trustees, and each person who became or becomes a shareholder in accordance
with the terms set forth in that certain Agreement and Declaration of Trust of
AIM Investment Securities Funds entered into as of May 5, 1993 (the
"Agreement").
WHEREAS, the Trustees reviewed the merger of one of the Trust's
Portfolios, AIM Adjustable Rate Government Funds ("ARM"), into AIM Government
Securities Fund (now known as AIM Intermediate Government Fund), which is a
portfolio of the AIM Funds Group, a Delaware business trust;
WHEREAS, the shareholders of ARM approved the merger of ARM into AIM
Government Securities Fund on November 15, 1994, as required pursuant to
Section 6.1 of the Agreement;
WHEREAS, as a result of the merger of ARM into AIM Government
Securities Fund, ARM had no remaining assets or liabilities;
WHEREAS, Section 9.7 of the Agreement authorizes the Trustees without
Shareholder vote to amend or otherwise supplement the Agreement by making an
amendment; and
WHEREAS, at a meeting duly called and held in Bermuda on the 10th day
of September, 1994, the Trustees have resolved to amend the Agreement as
hereinafter set forth with an effective date of November 18, 1994.
NOW THEREFORE, the Trustees hereby amend the Agreement as herein set
forth below:
1. Capitalized terms not specifically defined in this Amendment
shall have the meanings ascribed to them in the Agreement.
3. Section 2.3 of the Agreement shall be deleted in its entirety
and the following new Section 2.3 shall be substituted in lieu therefore:
"Section 2.3. Establishment of Portfolios and Classes. The Trust
shall contain one Portfolio, the Limited Maturity Treasury Portfolio. The
Limited Maturity Treasury Portfolio shall contain two initial Classes, the
Institutional Class and the AIM Limited Maturity Treasury Shares Class. The
establishment and designation of any other Portfolio or Class thereof, or,
subject to Section 6.1 hereof, any change to the Portfolio, shall be effective
upon the adoption by a majority of the then Trustees of a resolution which sets
forth such establishment, designation or change."
<PAGE> 2
4. The amendments in the preceding paragraphs 2 and 3 of this
Amendment shall be effective as of the 18th day of November, 1994.
5. With the exception of the amendment in the preceding
paragraphs 2 and 3 of this Amendment, the Agreement shall in all other respects
remain in full force and effect.
IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this Second Amendment to Agreement and Declaration of
Trust of AIM Investment Securities Funds the _____ day of December, 1995.
- ------------------------------- -------------------------------
Charles T. Bauer Bruce L. Crockett
Trustee Trustee
- ------------------------------- -------------------------------
Owen Daly II Carl Frischling
Trustee Trustee
- ------------------------------- -------------------------------
John F. Kroeger Lewis F. Pennock
Trustee Trustee
- ------------------------------- -------------------------------
Ian W. Robinson Louis S. Sklar
Trustee Trustee
[THIS IS THE SIGNATURE PAGE FOR
THE SECOND AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST
OF AIM INVESTMENT SECURITIES FUNDS]
2
<PAGE> 1
Exhibit 5(c)
AIM INVESTMENT SECURITIES FUNDS
MASTER INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 18th day of October, 1993, by and between
AIM Investment Securities Funds, a Delaware business trust (the "Company") and
A I M Advisors, Inc., a Delaware corporation (the "Advisor").
RECITALS
WHEREAS, the Company is registered under the Investment Company Act of
1940, as amended (the "1940 Act") as an open-end, diversified management
investment company, consisting of multiple series of investment portfolios;
WHEREAS, the Advisor is registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), as an investment advisor and engages in
the business of acting as an investment advisor; and
WHEREAS, the Company's Agreement and Declaration of Trust authorizes
the Board of Trustees of the Company to issue an unlimited number of shares of
beneficial interest of the Company and to establish additional series or
classes of shares from time to time and, as of the date of this Agreement, the
Company's Board of Trustees has authorized the issuance of two series of shares
representing interests in two investment portfolios: AIM Adjustable Rate
Government Fund and Limited Maturity Treasury Portfolio (AIM Limited Maturity
Treasury Shares and Institutional Shares) (such portfolios and any other
portfolios hereafter added to the Company being referred to collectively herein
as the "Portfolios");
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
1. Advisory Services. The Advisor shall act as investment advisor
for each Portfolio and shall, in such capacity, supervise all aspects of the
Portfolios' operations, including the investment and reinvestment of the cash,
securities or other properties comprising the Portfolios, subject at all times
to the policies and control of the Company's Board of Trustees. The Advisor
shall give the Company and the Portfolios the benefit of its best judgment,
efforts and facilities in rendering its services as investment advisor.
2. Investment Analysis and Implementation. In carrying out its
obligations under Section 1 hereof, the Advisor shall:
(a) supervise all aspects of the operations of the
Portfolios;
(b) obtain and evaluate pertinent information about
significant developments and economic, statistical and financial data,
domestic, foreign or otherwise, whether affecting the economy generally
or the Company or the Portfolios, and whether concerning the
individual issuers whose securities are included in the Portfolios or
the
-1-
<PAGE> 2
activities in which such issuers engage, or with respect to securities
which the Advisor considers desirable for inclusion in the Portfolios;
(c) determine which issuers and securities shall be
represented in the Portfolios and regularly report thereon to the
Company's Board of Trustees; and
(d) formulate and implement continuing programs for the
purchases and sales of the securities of such issuers, and regularly
report thereon to the Company's Board of Trustees;
and take, on behalf of the Company and the Portfolios, all actions which appear
to the Company and the Portfolios necessary to carry into effect such purchase
and sale programs and supervisory functions as aforesaid, including but not
limited to the placing of orders for the purchase and sale of securities of the
Portfolios.
3. Delegation of Responsibilities. Subject to the approval of the
Board of Trustees and the shareholders of the Portfolios, the Advisor may
delegate to a sub-advisor certain of its duties enumerated in Section 2 hereof,
provided that the Advisor shall continue to supervise the performance of any
such sub-advisor.
4. Control by Board of Trustees. Any investment program
undertaken by the Advisor pursuant to this Agreement, as well as any other
activities undertaken by the Advisor on behalf of the Portfolios, shall at all
times be subject to any directives of the Board of Trustees of the Company.
5. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and the
Advisers Act and any rules and regulations adopted thereunder;
(b) the provisions of the registration statement of the
Company, as the same may be amended from time to time, under the
Securities Act of 1933 and the 1940 Act;
(c) the provisions of the Agreement and Declaration of
Trust of the Company, as the same may be amended from time to time;
(d) the provisions of the by-laws of the Company, as the
same may be amended from time to time; and
(e) any other applicable provisions of state or federal law.
6. Broker-Dealer Relationships. The Advisor is responsible for
decisions to buy and sell securities for the Portfolios, broker-dealer
selection, and negotiation of brokerage commission rates. The Advisor's
primary consideration in effecting a security transaction will be execution at
the most favorable price. In selecting a broker-dealer to execute each
particular transaction, the Advisor will take the following into consideration:
the best net
-2-
<PAGE> 3
price available; the reliability, integrity and financial condition of the
broker-dealer; the size of and difficulty in executing the order; and the value
of the expected contribution of the broker-dealer to the investment performance
of the Portfolios on a continuing basis. Accordingly, the price to the
Portfolios in any transaction may be less favorable than that available from
another broker-dealer if the difference is reasonably justified by other
aspects of the portfolio execution services offered. Subject to such policies
as the Board of Trustees may from time to time determine, the Advisor shall not
be deemed to have acted unlawfully or to have breached any duty created by this
Agreement or otherwise solely by reason of its having caused the Portfolios to
pay a broker or dealer that provides brokerage and research services to the
Advisor an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker or dealer
would have charged for effecting that transaction, if the Advisor determines in
good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such broker or dealer,
viewed in terms of either that particular transaction or the Advisor's overall
responsibilities with respect to the Portfolios, and to other clients of the
Advisor as to which the Advisor exercises investment discretion. The Advisor
is further authorized to allocate the orders placed by it on behalf of the
Portfolios to such brokers and dealers who also provide research or statistical
material, or other services to the Portfolios, to the Advisor, or to any
sub-advisor. Such allocation shall be in such amounts and proportions as the
Advisor shall determine and the Advisor will report on said allocations
regularly to the Board of Trustees of the Company indicating the brokers to
whom such allocations have been made and the basis therefor. In making
decisions regarding broker-dealer relationships, the Advisor may take into
consideration the recommendations of any sub-advisor appointed to provide
investment research or advisory services in connection with the Portfolios, and
may take into consideration any research services provided to such sub-advisor
by broker-dealers.
7. Compensation. The Company shall pay the Advisor as
compensation for services rendered hereunder an annual fee, payable monthly, as
set forth in Appendix A to this Agreement. The Company acknowledges that the
Advisor may from time to time pay a fee to any sub-advisor engage pursuant to
Section 3 of this Agreement, according to a fee schedule set forth in the
applicable sub-advisory agreement.
The average daily net asset value of the Portfolios shall be determined
in the manner set forth in the Agreement and Declaration of Trust and
registration statement relating to the Portfolios, as amended from time to
time.
8. Additional Services. Upon the request of the Company's Board
of Trustees, the Advisor may perform (or arrange for the performance of)
certain accounting, shareholder servicing or other administrative services on
behalf of the Portfolios which are not required by this Agreement. Such
services will be performed on behalf of the Portfolios and the Advisor may
receive from the Portfolios such reimbursement for costs or reasonable
compensation for such services as may be agreed upon between the Advisor and
the Company's Board of Trustees based on a finding by the Board of Trustees
that the provision of such services by the Advisor is in the best interests of
the Portfolios and their shareholders. Payment or assumption by the Advisor of
any Portfolio expense that the Advisor is not otherwise required to pay or
assume under this Agreement shall not relieve the Advisor of any of its
obligations to the Portfolios nor obligate the Advisor to pay
-3-
<PAGE> 4
or assume any similar Portfolio expense on any subsequent occasions. Such
services may include, but are not limited to:
(a) the services of a principal financial officer of the
Company (including applicable office space, facilities and equipment)
whose normal duties consist of maintaining the financial accounts and
books and records of the Company and the Portfolios, including the
review and calculation of daily net asset value and the preparation of
tax returns; the services (including applicable office space,
facilities and equipment) of any of the personnel operating under the
direction of such principal financial officer;
(b) the services of staff to respond to shareholder
inquiries concerning the status of their accounts; providing assistance
to shareholders in exchanges among the mutual funds managed or advised
by the Advisor; changing account designations or changing addresses;
assisting in the purchase or redemption of shares; supervising the
operations of the custodian, transfer agent(s) or dividend disbursing
agent(s) for the Portfolios; or otherwise providing services to
shareholders of the Portfolios; and
(c) such other administrative services as may be furnished
from time to time by the Advisor to the Company or the Portfolios at
the request of the Company's Board of Trustees.
9. Expenses of the Portfolios. All of the ordinary business
expenses incurred in the operations of the Portfolios and the offering of its
shares shall be borne by the Portfolios unless specifically provided otherwise
in this Agreement. These expenses borne by the Portfolios include but are not
limited to brokerage commissions, taxes, legal, [accounting], auditing, or
governmental fees, the cost of preparing share certificates, custodian,
transfer and shareholder service agent costs, expenses of issue, sale,
redemption and repurchase of shares, expenses of registering and qualifying
shares for sale, expenses relating to trustees and shareholder meetings, the
cost of preparing and distributing reports and notices to shareholders, the
fees and other expenses incurred by the Company on behalf of the Portfolios in
connection with membership in investment company organizations and the cost of
printing copies of prospectuses and statements of additional information
distributed to the Portfolios' shareholders.
10. Expense Limitation. If, for any fiscal year, the total of all
ordinary business expenses of the Portfolios, including all investment advisory
fees, but excluding brokerage commissions and fees, taxes, interest and
extraordinary expenses, such as litigation, would exceed the applicable expense
limitations imposed by state securities regulations in any state in which the
Portfolios' shares are qualified for sale, as such limitations may be raised or
lowered from time to time, the aggregate of all such investment advisory fees
shall be reduced by the amount of such excess. The amount of any such
reduction to be borne by the Advisor shall be deducted from the monthly
investment advisory fee otherwise payable to the Advisor during such fiscal
year. If required pursuant to such state securities regulations, the Advisor
will, not later than the last day of the first month of the next succeeding
fiscal year, reimburse the Portfolios for any such annual operating expenses
(after reduction of all investment advisory fees in excess of such limitation).
For the purposes of this Section, the term "fiscal year" shall exclude the
portion of the current fiscal
-4-
<PAGE> 5
year which shall have elapsed prior to the date hereof and shall include the
portion of the then current fiscal year which shall have elapsed at the date of
termination of this Agreement. The application of expense limitations shall be
applied to each Portfolio of the Company separately unless the laws or
regulations of any state shall require that the expense limitations be imposed
with respect to the Company as a whole.
11. Non-Exclusivity. The services of the Advisor to the Company
and the Portfolios are not to be deemed to be exclusive, and the Advisor shall
be free to render investment advisory and administrative or other services to
others (including other investment companies) and to engage in other
activities. It is understood and agreed that officers or directors of the
Advisor may serve as officers or trustees of the Company, and that officers or
trustees of the Company may serve as officers or directors of the Advisor to
the extent permitted by law; and that the officers and directors of the Advisor
are not prohibited from engaging in any other business activity or from
rendering services to any other person, or from serving as partners, officers,
directors or trustees of any other firm or trust, including other investment
advisory companies.
12. Term and Approval. This Agreement shall become effective if
approved by the shareholders of the Portfolios, and if so approved, this
Agreement shall thereafter continue in force and effect until June 30, 1994,
and may be continued from year to year thereafter, provided that the
continuation of the Agreement is specifically approved at least annually:
(a) (i) by the Company's Board of Trustees or (ii) by the
vote of "a majority of the outstanding voting securities" of the
Portfolios (as defined in Section 2(a)(42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the trustees
of the Company who are not parties to this Agreement or "interested
persons" (as defined in the 1940 Act) of a party to this Agreement
(other than as Company trustees), by votes cast in person at a meeting
specifically called for such purpose.
13. Termination. This Agreement may be terminated as to the
Portfolios at any time, without the payment of any penalty, by vote of the
Company's Board of Trustees or by vote of a majority of the Portfolios'
outstanding voting securities, or by the Advisor, on sixty (60) days' written
notice to the other party. The notice provided for herein may be waived by
either party. This Agreement shall automatically terminate in the event of its
"assignment" (as defined in Section 2(a)(4) of the 1940 Act).
14. Liability of Advisor and Indemnification. In the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Advisor or any of its
officers, directors or employees, the Advisor shall not be subject to liability
to the Company or to the Portfolios or to any shareholder of the Portfolios for
any act or omission in the course of, or connected with, rendering services
hereunder or for any losses that may be sustained in the purchase, holding or
sale of any security.
15. Liability of Shareholders. Copies of the Agreement and
Declaration of Trust establishing the Company are on file with the Secretary of
State of the State of Delaware, and notice is hereby given that, as provided by
applicable law, the obligations of or arising
-5-
<PAGE> 6
out of this Agreement are not binding upon any of the shareholders of the
Company individually but are binding only upon the assets and property of the
Company and that the shareholders shall be entitled, to the fullest extent
permitted by applicable law, to the same limitation on personal liability as
stockholders of private corporations for profit.
16. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice.
Until further notice to the other party, it is agreed that the address of the
Company and that of the Advisor shall be Eleven Greenway Plaza, Suite 1919,
Houston, Texas, 77046.
17. Questions of Interpretation. Any question of interpretation of
any term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act or the Advisers Act shall be
resolved by reference to such term or provision of the 1940 Act or the Advisers
Act and to interpretations thereof, if any, by the United States Courts or in
the absence of any controlling decision of any such court, by rules,
regulations or orders of the Securities and Exchange Commission issued pursuant
to said Acts. In addition, where the effect of a requirement of the 1940 Act
or the Advisers Act reflected in any provision of the Agreement is revised by
rule, regulation or order of the Securities and Exchange Commission, such
provision shall be deemed to incorporate the effect of such rule, regulation or
order.
18. License Agreement. The Company shall be entitled to use the
names "AIM Adjustable Rate Government Fund", "Limited Maturity Treasury
Portfolio" and AIM Limited Maturity Treasury Shares" to designate its series
and classes of shares only so long as A I M Advisors, Inc. serves as investment
manager or advisor to the Portfolios.
-6-
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
written above.
AIM INVESTMENT SECURITIES FUNDS
Attest:
/s/ NANCY L. MARTIN By: /s/ CHARLES T. BAUER
- ------------------------------ ------------------------------
[Assistant] Secretary President
(SEAL)
A I M ADVISORS, INC.
Attest:
/s/ NANCY L. MARTIN By: /s/ ROBERT H. GRAHAM
- ------------------------------ ------------------------------
[Assistant] Secretary President
(SEAL)
-7-
<PAGE> 8
APPENDIX A TO MASTER INVESTMENT ADVISORY AGREEMENT
OF
AIM INVESTMENT SECURITIES FUNDS
The Company shall pay the Advisor as full compensation for all services
rendered and all facilities furnished hereunder, a management fee for each
Portfolio by applying the following annual rates to the average daily net
assets of each Portfolio for the calendar year, computed in the manner used for
the determination of the offering price of Shares of the Portfolio.
AIM ADJUSTABLE RATE GOVERNMENT FUND
<TABLE>
<CAPTION>
NET ASSETS RATE
---------- ----
<S> <C>
First $500 million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.50%
Over $500 million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40%
LIMITED MATURITY TREASURY PORTFOLIO
NET ASSETS RATE
---------- ----
First $500 million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.20%
Over $500 million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.175%
</TABLE>
-8-
<PAGE> 1
Exhibit 5(c)(i)
NOTICE OF TERMINATION
This Notice of Termination relates to that certain Master Investment
Advisory Agreement (the "Agreement"), dated October 18, 1993, between AIM
Investment Securities Funds, a Delaware business trust, (the "Fund") with
respect to the AIM Adjustable Rate Government Fund, (the "Portfolio"), and
A I M Advisors, Inc. ("AIM").
Pursuant to Section 13 of the Agreement, the Fund hereby notifies AIM
that the Portfolio will cease to be a Portfolio of the Fund on November 18,
1994 and therefore, effective at the close of business on November 18, 1994,
all references in the Agreement to services provided the Portfolio by AIM shall
be deleted from the Agreement. All services rendered to the Limited Maturity
Treasury Portfolio of the Fund by AIM pursuant to the Agreement are not
affected by this termination.
Dated: November 18, 1994 AIM INVESTMENT SECURITIES FUNDS
By: /s/ ROBERT H. GRAHAM
------------------------------
Title: President
---------------------------
Received and Acknowledged
A I M ADVISORS, INC.
By: /s/ JOHN J. ARTHUR
-------------------------------------
Title: Senior Vice President & Treasurer
----------------------------------
Date: November 18, 1994
-----------------------------------
<PAGE> 1
Exhibit 6(a)(4)(i)
MASTER DISTRIBUTION AGREEMENT
BETWEEN
AIM INVESTMENT SECURITIES FUNDS
AND
A I M DISTRIBUTORS, INC.
THIS AGREEMENT is made this 18th day of October, 1993, by and between
AIM INVESTMENT SECURITIES FUNDS, a Delaware business trust (the "Company"), 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 shares set forth in Appendix A attached hereto
(collectively, the "Funds" and each separately a "Fund"), and any applicable
classes thereof, to the public through investment dealers in the United States
and throughout the world in accordance with the terms of the Company's current
prospectus applicable to the Funds.
SECOND: The Company shall not sell any shares of a Fund 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 of a Fund 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; and
(B) the Company may issue shares of a Fund at their net asset value in
connection with certain classes of transactions or to certain categories of
persons, in accordance with Rule 22d-1 under the Investment Company Act of
1940, as amended (the "1940 Act"), provided that any such category is specified
in the then current prospectus of the Funds.
THIRD: The Distributor hereby accepts appointment as exclusive agent
for the sale of the shares of the Funds 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
each Fund 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; and
(B) the Company may withdraw the offering of the shares of a Fund (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.
-1-
<PAGE> 2
It is mutually understood and agreed that the Distributor does not undertake to
sell any specific amount of the shares of a Fund. The Company shall have the
right to specify minimum amounts for initial and subsequent orders for the
purchase of Fund shares.
FOURTH:
(A) The public offering price of shares of a Fund (the "offering
price") shall be the net asset value per share plus a sales charge, if any.
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
Funds. The sales charge shall be established by the Distributor, may reflect
scheduled variations in, or the elimination of, sales charges on sales of a
Fund's shares either generally to the public, or to any specified class of
investors or in connection with any specified class of transactions, in
accordance with Rule 22d-1 and as set forth in the then current prospectus and
statement of additional information of the Funds. The Distributor shall apply
any scheduled variation in, or elimination of, the selling commission uniformly
to all offerees in the class specified.
(B) The Funds shall allow directly to investment dealers through whom
shares of each Fund are sold such portion of the sales charge as may be payable
to them and specified by the Distributor up to but not exceeding the amount of
the total sales charge. The difference between any commissions so payable to
investment dealers and the total sales charges included in the offering price
shall be paid to the Distributor.
(C) No provision of this Agreement shall be deemed to prohibit any
payments by a Fund to the Distributor or by the Fund or the Distributor to
investment dealers through whom the shares of each Fund are sold where such
payments are made under a distribution plan adopted by the Company on behalf of
each Fund pursuant to Rule 12b-1 under the 1940 Act.
FIFTH: The Distributor shall act as agent of the Company on behalf of
each Fund in connection with the sale and repurchase of shares of a Fund.
Except with respect to such sales and repurchases, the Distributor shall act as
principal in all matters relating to the promotion of the sale of shares of the
Funds and shall enter into all of its own engagements, agreements and contracts
as principal on its own account. The Distributor shall enter into Selected
Dealer Agreements with investment dealers selected by the Distributor,
authorizing such investment dealers to offer and sell shares of each Fund to
the public upon the terms and conditions set forth therein, which shall not be
inconsistent with the provisions of this Agreement. Each Selected Dealer
Agreement shall provide that the investment dealer shall act as a principal,
and not as an agent, of the Company on behalf of the Funds.
SIXTH: The Funds shall bear:
(A) the expenses of qualification of shares of a Fund 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.
-2-
<PAGE> 3
SEVENTH:
(A) The Distributor shall bear the expenses of printing from the final
proof and distributing the Funds' prospectuses and statements of additional
information (including supplements thereto) relating to public offerings made
by the Distributor pursuant to this Agreement (which shall not include those
prospectuses and statements of additional information, and supplements thereto,
to be distributed to shareholders of each Fund), 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.
(B) The Distributor may be reimbursed for all or a portion of such
expenses, or may receive reasonable compensation for distribution related
services, to the extent permitted by a distribution plan adopted by the Company
on behalf of the Funds pursuant to Rule 12b-1 under the 1940 Act.
EIGHTH: The Distributor will accept orders for the purchase of shares
of each Fund 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. It is mutually understood
and agreed that the Company may reject purchase orders where, in the judgment
of the Company, such rejection is in the best interest of the Company.
NINTH: The Company, on behalf of the Funds, and the Distributor shall
each comply with all applicable provisions of the 1940 Act, the Securities Act
of 1933 and of all other federal and state laws, rules and regulations
governing the issuance and sale of shares of each Fund.
TENTH:
(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 on behalf of the Funds agrees to 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
Funds, 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 or Fund in connection therewith by or on behalf of the
Distributor. The Distributor agrees to indemnify the Company and the Funds
against any and all claims, demands, liabilities and expenses which the Company
or the Funds may incur arising out of or based upon any act or deed of the
Distributor or its sales representatives which has not been authorized by the
Company or the Funds in its prospectus or in this Agreement.
(B) The Distributor agrees to indemnify the Company and the Funds
against any and all claims, demands, liabilities and expenses which the Company
or the Funds 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
-3-
<PAGE> 4
prospectus of the Funds, 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 or the Funds 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 Funds' transfer agent(s),
or for any failure of any such transfer agent to perform its duties.
ELEVENTH: 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.
TWELFTH: This Agreement shall become effective at the close of business
on the date hereof, shall continue in force and effect until June 30, 1994, and
shall continue in force and effect from year to year thereafter, provided, that
such continuance is specifically approved at least annually (a)(i) by the Board
of Directors of the Company or (ii) by the vote of a majority of the Funds'
outstanding voting securities (as defined in Section 2(a)(42) of the 1940 Act),
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.
THIRTEENTH:
(A) This Agreement may be terminated at any time, without the payment
of any penalty, by vote of the Board of Directors of the Company or by vote of
a majority of the outstanding voting securities of each Fund, or by the
Distributor, on sixty (60) days' written notice to the other party.
(B) This Agreement shall 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.
FOURTEENTH: 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, it is agreed that the addresses of both the
Company and the Distributor shall be Eleven Greenway Plaza, Suite 1919,
Houston, Texas 77046.
-4-
<PAGE> 5
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate on the day and year first above written.
AIM INVESTMENT SECURITIES FUNDS
By: /s/ CHARLES T. BAUER
------------------------------
President
Attest:
/s/ NANCY L. MARTIN
- ------------------------------
A I M DISTRIBUTORS, INC.
By: /s/ MICHAEL J. CEMO
------------------------------
President
Attest:
/s/ NANCY L. MARTIN
- ------------------------------
-5-
<PAGE> 6
APPENDIX A TO
MASTER DISTRIBUTION AGREEMENT OF
AIM INVESTMENT SECURITIES FUNDS
AIM Adjustable Rate Government Fund
Limited Maturity Treasury Portfolio -
AIM Limited Maturity Treasury Shares
-6-
<PAGE> 1
Exhibit 6(a)(4)(ii)
AMENDMENT NO. 1
MASTER DISTRIBUTION AGREEMENT
The Master Distribution Agreement (the "Agreement"), dated October 18,
1993, by and between AIM Investment Securities Funds, a Delaware business
trust, and A I M Distributors, Inc., a Delaware corporation, is hereby amended
to delete AIM Adjustable Rate Government Fund from the provisions of the
Agreement:
Appendix A of the Agreement is hereby deleted in its entirety and
replaced with the following:
"APPENDIX A TO
MASTER DISTRIBUTION AGREEMENT OF
AIM INVESTMENT SECURITIES FUNDS
Limited Maturity Treasury Portfolio -
AIM Limited Maturity Treasury Shares"
All other terms and provisions of the Agreement not amended herein
shall remain in full force and effect.
Dated: November 18, 1994
AIM INVESTMENT SECURITIES FUNDS
Attest: /s/ STEPHEN I. WINER By: /s/ ROBERT H. GRAHAM
----------------------------- ---------------------------
Assistant Secretary President
(SEAL)
A I M DISTRIBUTORS, INC.
Attest: /s/ STEPHEN I. WINER By: /s/ MICHAEL J. CEMO
----------------------------- --------------------------
Assistant Secretary President
(SEAL)
<PAGE> 1
[LOGO APPEARS HERE]
A I M Distributors, Inc.
Exhibit 6(b)
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 of
the common stock (the "Shares") of the registered investment companies listed
on Schedule A attached hereto 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"), of, 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), as determined in accordance with the then
effective prospectus used in connection with the offer and sale of
Shares (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 of
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 on the
attached Schedule 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. With respect to the
Funds, the Shares of which are indicated on the attached Schedule A as
being sold with a contingent deferred sales charge (the "CDSC Funds"),
you will be paid a commission or concession as disclosed in the CDSC
Fund's then current prospectus. 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 (the "No-Load
Funds"), you may charge a reasonable administrative fee. For the
purposes of this Agreement the terms "Sales Charge" and "Dealer
Commission" apply only to the Load Funds and the CDSC Funds. All
commissions and concessions 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. 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.
<PAGE> 2
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's Concession
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's Concession 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
commissions plus interest thereon.
9. You and we agree to abide by the Rules of Fair Practice 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 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 concession 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.
<PAGE> 3
16. We will supply you with copies of the Prospectuses and Statements of
Additional Information 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 on file with the U.S. Securities
and Exchange Commission.
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.
A I M DISTRIBUTORS, INC.
Date: By: /s/ MICHAEL J. CEMO
---------------------- -----------------------------------
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
Please sign both copies and return one copy
of each to:
A I M Distributors, inc.
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
<PAGE> 4
[LOGO APPEARS HERE]
A I M Distributors, Inc.
SCHEDULE "A" TO
SELECTED DEALER AGREEMENT
<TABLE>
<CAPTION>
Shares Sold Shares Sold
Fund With Sales Charge With CDSC
- --------------------------------------------------------------------------------
<S> <C> <C>
AIM Aggressive Growth Fund Yes No
AIM Balanced Fund Yes Yes
AIM Charter Fund Yes Yes
AIM Constellation Fund Yes No
AIM Global Aggressive Growth Fund Yes Yes
AIM Global Growth Fund Yes Yes
AIM Global Income Fund Yes Yes
AIM Global Utilities Fund Yes Yes
AIM Intermediate Government Fund Yes Yes
AIM Growth Fund Yes Yes
AIM High Yield Fund Yes Yes
AIM Income Fund Yes Yes
AIM International Equity Fund Yes Yes
AIM Limited Maturity Treasury Shares Yes No
AIM Money Market Fund Class A Yes Yes
AIM Money Market Fund Class C No No
AIM Municipal Bond Fund Yes Yes
AIM Tax-Exempt Bond Fund of Connecticut Yes No
AIM Tax-Exempt Cash Fund No No
AIM Tax-Free Intermediate Shares Yes No
AIM Value Fund Yes Yes
AIM Weingarten Fund Yes Yes
</TABLE>
A I M Distributors may from time to time make payments of finders fees or
sponsor other incentive programs as described in the applicable fund prospectus
and statement of additional information, which are incorporated herein by
reference as they may be amended from time to time.
Trades at $1 million and over breakpoint automatically subject to CDSC with
exception of AIM Limited Maturity Treasury Shares, AIM Money Market Fund Class
C, AIM Tax-Exempt Cash Fund and AIM Tax-Free Intermediate Shares.
A I M Distributors, Inc.
11 Green way Plaza, Suite 1919
Houston, Texas 77046-1174
<PAGE> 1
Exhibit 6(c)
[LOGO APPEARS HERE]
A I M Distributors, Inc.
BANK ACTING AS AGENT
FOR ITS CUSTOMERS
AGREEMENT RELATING TO SHARES
OF AIM FAMILY OF MUTUAL FUNDS
(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 listed on Schedule A hereto which may be
amended from time to time by us (the "Funds"). As exclusive agent for the
Funds, we are offering to make available shares of common stock or of
beneficial interest, as the case may be, 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 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 on the
attached Schedule A 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. With respect to the Funds, the Shares of which are
indicated on the attached Schedule A as being sold with a contingent
deferred sales charge (the "CDSC Funds"), you will be paid a
commission or concession as disclosed in the CDSC Fund's then current
prospectus. 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.
<PAGE> 2
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.
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 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.
All communications to us should be sent to A I M Distributors, Inc.,
Eleven Greenway Plaza, Suite 1919, 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: /s/ MICHAEL J. CEMO
---------------------- ----------------------------------------
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 1919
Houston, Texas 77046-1173
<PAGE> 3
[LOGO APPEARS HERE]
A I M Distributors, Inc.
SCHEDULE "A" TO
BANK SELLING GROUP AGREEMENT
<TABLE>
<CAPTION>
Shares Sold Shares Sold
Fund With Sales Charges With CDSC
- --------------------------------------------------------------------------------
<S> <C> <C>
AIM Aggressive Growth Fund Yes No
AIM Balanced Fund Yes Yes
AIM Charter Fund Yes Yes
AIM Constellation Fund Yes No
AIM Global Aggressive Growth Fund Yes Yes
AIM Global Growth Fund Yes Yes
AIM Global Income Fund Yes Yes
AIM Global Utilities Fund Yes Yes
AIM Intermediate Government Fund Yes Yes
AIM Growth Fund Yes Yes
AIM High Yield Fund Yes Yes
AIM Income Fund Yes Yes
AIM International Equity Fund Yes Yes
AIM Limited Maturity Treasury Shares Yes No
AIM Money Market Fund Class A Yes Yes
AIM Money Market Fund Class C No No
AIM Municipal Bond Fund Yes Yes
AIM Tax-Exempt Bond Fund of Connecticut Yes No
AIM Tax-Exempt Cash Fund No No
AIM Tax-Free Intermediate Shares Yes No
AIM Value Fund Yes Yes
AIM Weingarten Fund Yes Yes
</TABLE>
A I M Distributors may from time to time make payments of finders fees or
sponsor other incentive programs as described in the applicable fund prospectus
and statement of additional information, which are incorporated herein by
reference as they may be amended from time to time.
Trades at $1 million and over breakpoint automatically subject to CDSC with
exception of AIM Limited Maturity Treasury Shares, AIM Money Market Fund Class
C, AIM Tax-Exempt Cash Fund and AIM Tax-Free Intermediate Shares.
A I M Distributors, Inc.
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
<PAGE> 1
Exhibit 6(d)
SERVICE AGREEMENT FOR
CERTAIN RETIREMENT PLANS
(AIM INSTITUTIONAL FUNDS(R))
This Agreement is entered into as of the ____ of_____________________,
19_____, between __________________ (the "Plan Provider") and Fund Management
Company (the "Distributor")
RECITAL
-------
Plan Provider acts as [trustee/servicing agents], for defined
contribution plans [or other comparable retirement plans], Plan Provider
invests and reinvests the Plans assets as specified by an investment adviser,
sponsor or administrative committee of the Plan (a "Plan Representative")
generally upon the direction of Plan beneficiaries ("Participants").
Plan Provider and Distributor desire to facilitate the purchase and
redemption of shares (the "Shares") of the funds listed on Exhibit A hereto
(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.
AGREEMENT
---------
1. 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 4:15 p.m. Eastern Time) on the New York 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 [5:00 p.m. - 6:00 p.m.] Central
Time on the same Business Day.
2. Orders and Settlement
---------------------
Plan Provider will calculate order allocations among designated
investment media and transmit to Distributor orders to purchase or
redeem Shares for specified Accounts. Plan Provider agrees that
orders for net purchases or net redemptions of Shares derived from
instructions received in proper form by Plan Provider from Plan
Representatives prior to the Close of Trading on any given Business
Day will be processed that same evening and transmitted to Distributor
or its designee by [9:00 a.m. - 10:00 a.m.] Central Time on the
following Business Day. Plan Provider agrees that payment for net
purchases of Shares attributable to all orders executed for the
Accounts on a given Business Day will be wired by Plan Provider or its
designee no later than [2:00 p.m. - closing of fed. wire] Central Time
to a custodial account designated by Distributor. Distributor agrees
that payment for net redemptions of Shares attributable to all orders
executed for the Accounts on a given
<PAGE> 2
Business Day will be wired by Distributor on the next Business Day
after such redemption orders are transmitted to Distributor or its
designee no later than [the close of business on the next Business
Day] [the close of business on the day after the next Business Day] to
an account designated by Plan Provider.
Subject to Plan Provider's compliance with the foregoing, Plan
Provider will be considered agent for the Funds and the Business Day
on which instructions are received in proper form by Plan Provider
from Participants or Plan Representatives by the Close of Trading will
be the date as of which Shares will be purchased and redeemed as a
result of such instructions. Plan Provider will time and date stamp
instructions received from Participants or Plan Representatives [or
Plan Provider will create and maintain comparable electronic form of
such instructions] and will make such instructions and other records
relating to the Services performed hereunder available for audit by
Distributor's auditors upon request. Instructions received in proper
form by Plan Provider from Participants or Plan Representatives after
the Close of Trading on any given Business Day shall be treated as if
received on the next following Business Day. Dividends and capital
gains distributions will be automatically reinvested on payable date
at net asset value in accordance with each Fund's then current
prospectus.
[3. Price Errors
------------
(a) In the event adjustments are required to correct any error in
the computation of the net asset value of Shares, the
Distributor shall notify the Plan Provider as soon as
practicable after discovering the need for those adjustments
which result in a reimbursement to an Account in accordance
with such Fund's then current policies on reimbursement.
Notification may be made orally or in writing. Such
notification must state for each day for which an error
occurred the incorrect price, the correct price, and, to the
extent communicated to the Fund's shareholders, the reason for
the price change.
(b) If an Account received amounts in excess of the amounts to
which it otherwise would have been entitled prior to an
adjustment for an error, Plan Provider, when requested by the
Distributor, will use reasonable efforts to collect such
excess amounts from the Plan.
(c) If an adjustment is to be made in accordance with subsection
3(a) above to correct an error which has caused an Account to
receive an amount less than that to which it is entitled, the
Distributor or its affiliates shall make all necessary
adjustments (within the parameters specified in subsection
3(a)) to the number of Shares owned in the Account and
distribute to the Plan Provider the amount of such
underpayment for credit to the Plans.]
[4.] Participant Recordkeeping
-------------------------
Recordkeeping and other services to Plan Participants shall be the
responsibility of the recordkeeper for the Plans and shall not be the
responsibility of the Distributor or its transfer agent. Distributor
will recognize each Plan as a single shareholder and as an unallocated
account in the Funds, and will not maintain separate accounts for Plan
participants.
-2-
<PAGE> 3
[5.] Account Information
-------------------
Distributor 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, [monthly] statements
detailing activity in each Account within fifteen Business Days after
the end of each [month], and (c) such other reports as may be
reasonably requested by Plan Provider.
[6.] Maintenance of Records
----------------------
Each party shall maintain and preserve all records as required by law
to be maintained and preserved in connection with providing the
Services and in making Shares available to the Plans. Upon the
request of Distributor, the Plan Provider shall provide copies of all
records relating to the Funds as may reasonably be requested to enable
the Funds or their representatives to comply with any request of a
governmental body or self-regulatory organization.
[7.] Compliance with Laws
--------------------
At all times Plan Provider shall comply with all laws, rules and
regulations applicable to it by virtue of entering into this
Agreement, including but not limited to those applicable to a transfer
agent under the Federal securities laws[, including, without
limitation, all prospectus delivery requirements]. The parties agree
that Plan Provider may satisfy prospectus delivery requirements by
sub-contracting with Plan Representatives. At all times, Distributor
and the Funds shall comply with all laws, rules and regulations
applicable to them by virtue of entering into this Agreement. [The
Plan Provider and Plan Representatives, and not the Distributor shall
take such action as may be necessary so that the transactions
contemplated by this Service 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.]
[8.] Representations with Respect to the Distributor and the Funds
-------------------------------------------------------------
Plan Provider and its agents shall not make representations concerning
a Fund or Shares except 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 Corporation and Morningstar,]
and in current sales literature created by Plan Provider and submitted
to and approved in writing by Distributor prior to its use.
[9.] Expenses
--------
(a) Each party shall bear all expenses incidental to the
performance of its obligations under this Agreement.
(b) Each Fund shall pay the cost of registration of its shares
with the Securities and Exchange Commission and in states
where required. Each Fund shall distribute or cause to be
distributed to Plan Provider its proxy material, periodic Fund
reports to
-3-
<PAGE> 4
shareholders and other material as such Fund may require to be sent to
shareholders. The cost of preparing and printing this material shall
be paid by the applicable Fund or Distributor, and the cost of
distributing such items shall be borne by Plan Provider or the Plan(s)
Representatives.
[10.] Relationship of Parties
-----------------------
Except to the extent provided in Section 2, it is understood and
agreed that all Services performed hereunder by Plan Provider shall be
as an independent contractor and not as an employee or agent of
Distributor or any of the Funds, and none of the parties shall hold
itself out as an agent of any other party with the authority to bind
such party.
[11.] Use of Names
------------
[Except as otherwise expressly provided for in this Agreement, Plan
Provider shall not use, nor shall it allow its employees or agents to
use, the name or logo of Distributor or the Funds, any affiliate of
Distributor, or any products or services sponsored, managed, advised,
administered, or distributed by Distributor or any of its affiliates,
for advertising, trade, or other commercial or noncommercial purposes
without the express prior written consent of Distributor. Except as
otherwise expressly provided for in this Agreement, neither
Distributor nor the Funds shall allow its employees or agents to use
the name or logo of Plan Provider, any affiliate of Plan Provider, or
any products or services sponsored or offered by Plan Provider or any
of its affiliates, for advertising, trade, or other commercial or
noncommercial purposes without the express prior written consent of
Plan Provider.]
[We 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 or their availability at net asset
value. For purposes of this provision, the public does not include
our representatives who are actively engaged in promoting this
product. Any brochure or other communication to the public that
mentions the Funds shall be submitted to the compliance officer of
Distributor, or its affiliates, for his written approval prior to our
use. We shall provide copies to Distributor's or its affiliates'
compliance officer of any of our regulatory filings that include any
reference to A I M Management Group Inc. or its subsidiaries or the
Funds. If we should make unauthorized references or representations,
we agree to indemnify and hold harmless the Funds, A I M Management
Group 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.]
[12.] Termination
-----------
(a) 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
"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 the Fund's distribution agreement
with the Distributor.
-4-
<PAGE> 5
[(b) Either party may terminate this Agreement upon sixty (60)
days' prior written notice to the other party.]
[(c) Each party may terminate this Agreement on 90 days' written
notice to the other party; provided, however, that (i) any
such termination shall not affect a Fund's obligation to
maintain accounts in the names of the Plans which selected
such Fund as an investment option and (ii) after termination
by the Funds, no fee shall be due with respect to any shares
of the Funds that are purchased and held by the Plans after
the date of termination, except that the Funds shall be
obligated to continue to pay Plan Provider fees, if any, as
set forth in Exhibit A to this Agreement as to shares of the
Funds held by the Plans as of the date of termination for so
long as such shares continue to be held by the Plans and Plan
Provider continues to provide services to such Plans as
contemplated by this Agreement. This Agreement shall remain
in effect to the extent necessary for each party to perform
its obligations with respect to shares of the Funds for which
a fee, if any, continues to be due subsequent to such
termination. [It is understood that if a Plan states in
writing that Plan Provider may no longer perform the services
contemplated by this Agreement, then this Agreement shall
terminate with respect to such Plan 60 days after receipt of
such notice by Plan Provider.]]
[13.] Indemnification
---------------
(a) Plan Provider agrees to indemnify and hold harmless the
Distributor, its affiliates, the Funds, the Funds' investment
advisers, 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
-5-
<PAGE> 6
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 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.]
[14.] Notice
------
Each notice required by this Agreement shall be given in writing and
delivered personally or mailed by certified mail or courier service to
the other party at the following address or such other address as each
party may give notice to the other.
If to Plan Provider, to:
[Insert Address]
If to Distributor or any Fund, to:
J. Abbott Sprague, President
Fund Management Company
11 Greenway Plaza, Suite 1919
Houston, Texas 77046
with a copy to the General Counsel of Distributor.
[15.] Governing Law
-------------
-6-
<PAGE> 7
This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Texas [or other applicable state
law] applicable to agreements fully executed and to be performed
therein.
[16.] 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. Plan Provider further represents, warrants, and covenants
that:
(a) 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;
(b) [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 exempt from such registration;]
(c) the arrangements provided for in this Agreement will be
disclosed to the Plan Representatives;
[(d) 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 exempt from such registration.]
[(e) this Agreement, when executed and delivered, shall constitute
the valid, legal and binding obligation of Plan Provider,
enforceable in accordance with its terms;]
Distributor further represents, warrants and covenants, that:
(a) 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;
(b) it is registered as a broker-dealer under the 1934
Act and any applicable state securities laws;
(c) the Funds' advisor(s) are registered as an investment
adviser under the Investment Advisers Act of 1940,
the Funds are registered as investment companies
under the Investment Company Act of 1940 and Fund
Shares are registered under the Securities Act of
1933;
[(d) this Agreement, when executed and delivered, shall
constitute the valid, legal and binding obligation of
Distributor, enforceable in accordance with its
terms;]
-7-
<PAGE> 8
[(e) the Funds conduct business on all days on which the
New York Stock Exchange is open for business;]
[(f) the Plans may place instructions on each and every
Business Day, without regard to the number or market
value of transactions placed in any prior time
periods;]
[(g) the registration statement and prospectus for each
Fund comply in all material respects with federal and
state securities laws;]
[(h) in the event a Fund or Funds is selected by a Plan as
an investment option for such Plan's assets,
Distributor shall cooperate with such Plan and with
Plan provider to establish in a timely and orderly
manner such investment relationship.]
[17.] Complete Agreement
------------------
This Agreement contains the full and complete understanding of the
parties and supersedes all prior representations, promises,
statements, arrangements, agreements, warranties and understandings
between the parties with respect to the subject matter hereof, whether
oral or written, express or implied.
[18.] Modification
------------
This Agreement may be modified or amended, and the terms of this
Agreement may be waived, only by a writing signed by each of the
parties.
[19.] Counterparts
------------
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same Agreement.
[20.] 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.
[21.] Survival
--------
The provisions of Sections [6, 11, and 13] shall survive termination
of this Agreement.
-8-
<PAGE> 9
[22.] Non-Exclusivity
---------------
Each of the parties acknowledges and agrees that this Agreement and
the arrangement described herein are intended to be non-exclusive and
that each of the parties is free to enter into similar agreements and
arrangements with other entities.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by
their duly authorized officers as of this _____ day of ______________________,
19_____.
[PLAN PROVIDER]
By:
---------------------------------------
Print Name:
-------------------------------
Title:
------------------------------------
FUND MANAGEMENT COMPANY
By:
---------------------------------------
Print Name:
-------------------------------
Title:
------------------------------------
-9-
<PAGE> 10
EXHIBIT A
[List Applicable Funds]
[Distributor or its affiliates will, on behalf of the Fund(s), pay a
sub-transfer agency fee to Plan Provider in the amount of [$.01 - $10.00] per
subaccount per year, payable within 30 days following the end of each calendar
quarter. Plan Provider will provide to Distributor the number of subaccounts
subject to the sub-transfer agency fee within [5 - 10] business days after the
end of each calendar quarter.]
<PAGE> 1
Exhibit 9(a)(3)(i)
MASTER ADMINISTRATIVE SERVICES AGREEMENT
This MASTER ADMINISTRATIVE SERVICES AGREEMENT (the "Agreement")is made
this 18th day of October, 1993 by and between A I M ADVISORS, INC., a
Delaware corporation (the "Administrator"), and AIM INVESTMENT SECURITIES
FUNDS, a Delaware business trust (the "Company"), with respect to the series
set forth in Appendix A to this Agreement (the "Portfolios").
W I T N E S S E T H:
--------------------
WHEREAS, the Company is an open-end investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Company, on behalf of the Portfolios, has retained the
Administrator to provide investment advisory services pursuant to a Master
Investment Advisory Agreement which provides that the Administrator may perform
(or arrange for the performance of) accounting, shareholder servicing and other
administrative services as well as investment advisory services to the
Portfolios, and that the Administrator may receive reasonable compensation or
may be reimbursed for its costs in providing such additional services, upon the
request of the Board of Trustees and upon a finding by the Board of Trustees
that the provision of such services is in the best interest of the Portfolios
and their shareholders; and
WHEREAS, the Board of Trustees has found that the provision of such
administrative services is in the best interest of the Portfolios and their
shareholders, and has requested that the Administrator perform such services;
NOW, THEREFORE, the parties hereby agree as follows:
1. The Administrator hereby agrees to provide, or arrange for the
provision of, any or all of the following services by the Administrator or its
affiliates:
(a) the services of a principal financial officer of the Company
(including related office space, facilities and equipment) whose
normal duties consist of maintaining the financial accounts and books
and records of the Company and the Portfolios, including the review of
daily net asset value calculations and the preparation of tax returns;
and the services (including related office space, facilities and
equipment) of any of the personnel operating under the direction of
such principal financial officer;
(b) the services of staff to respond to shareholder inquiries
concerning the status of their accounts; providing assistance to
shareholders in exchanges among the mutual funds managed or advised by
the Administrator; changing account designations or changing
addresses; assisting in the purchase or redemption of shares of the
Portfolios; supervising the operations of the custodian, transfer
agent(s) or dividend agent(s) for the Portfolios; or otherwise
providing services to shareholders of the Portfolios; and
-1-
<PAGE> 2
(c) such other administrative services as may be furnished from time
to time by the Administrator to the Company or the Portfolios at the
request of the Company's Board of Trustees.
2. The services provided hereunder shall at all times be subject
to the direction and supervision of the Company's Board of Trustees.
3. As full compensation for the services performed and the
facilities furnished by or at the direction of the Administrator, the
Portfolios shall reimburse the Administrator for expenses incurred by them or
their affiliates in accordance with the methodologies established from time to
time by the Company's Board of Trustees. Such amounts shall be paid to the
Administrator on a quarterly basis.
4. The Administrator shall not be liable for any error of
judgment or for any loss suffered by the Company or the Portfolios in
connection with any matter to which this Agreement relates, except a loss
resulting from the Administrator's willful misfeasance, bad faith or gross
negligence in the performance of its duties or from reckless disregard of its
obligations and duties under this Agreement.
5. The Company and the Administrator each hereby represent and
warrant, but only as to themselves, that each has all requisite authority to
enter into, execute, deliver and perform its obligations under this Agreement
and that this Agreement is legal, valid and binding, and enforceable in
accordance with its terms.
6. Nothing in this Agreement shall limit or restrict the rights
of any trustee, officer or employee of the Administrator who may also be a
trustee, officer or employee of the Company to engage in any other business or
to devote his time and attention in part to the management or other aspects of
any business, whether of a similar or a dissimilar nature, nor limit or
restrict the right of the Administrator to engage in any other business or to
render services of any kind to any other corporation, firm, individual or
association.
7. This Agreement shall continue in effect until June 30, 1994,
and shall continue in effect from year to year thereafter; provided that such
continuance is specifically approved at least annually:
(a) (i) by the Company's Board of Trustees or (ii) by the vote
of a majority of the outstanding voting securities of the Company (as
defined in Section 2(a)(42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the Company's
trustees who are not parties to this Agreement or interested persons
of a party to this Agreement, by votes cast in person at a meeting
specifically called for such purpose.
This Agreement shall terminate automatically in the event of its
assignment (as defined in Section 2(a) (4) of the 1940 Act) or, with respect to
one or more Portfolios in the event of termination of the Master Investment
Advisory Agreement relating to such Portfolio(s) between the Company and the
Administrator.
-2-
<PAGE> 3
8. This Agreement may be amended or modified with respect to one
or more Portfolios, but only by a written instrument signed by both the Company
and the Administrator.
9. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (a) to the Administrator at Eleven Greenway
Plaza, Suite 1919, Houston, Texas 77046, Attention: President, with a copy to
the General Counsel, or (b) to the Company at Eleven Greenway Plaza, Suite
1919, Houston, Texas 77046, Attention: President, with a copy to the General
Counsel.
10. This Agreement contains the entire agreement between the
parties hereto and supersedes all prior agreements, understandings and
arrangements with respect to the subject matter hereof.
11. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
A I M ADVISORS, INC.
Attest: /s/ NANCY L. MARTIN By: /s/ ROBERT H. GRAHAM
---------------------------- -----------------------------------
[Assistant] Secretary President
(SEAL)
AIM INVESTMENT SECURITIES FUNDS
Attest: /s/ NANCY L. MARTIN By: /s/ CHARLES T. BAUER
---------------------------- -------------------------------------
[Assistant] Secretary President
(SEAL)
-3-
<PAGE> 4
AIM INVESTMENT SECURITIES FUNDS
APPENDIX A TO MASTER ADMINISTRATIVE SERVICES AGREEMENT
October 18, 1993
AIM Adjustable Rate Government Fund
Limited Maturity Treasury Portfolio -
Institutional Class
AIM Limited Maturity Treasury Shares
-4-
<PAGE> 1
Exhibit 9(a)(3)(ii)
AMENDMENT NO. 1
TO
MASTER ADMINISTRATIVE SERVICES AGREEMENT
The Master Administrative Services Agreement (the "Agreement"), dated
October 18, 1993, by and between A I M ADVISORS, INC., a Delaware corporation
and AIM INVESTMENT SECURITIES FUNDS, a Delaware business trust (the "Trust"),
is hereby amended to delete AIM Adjustable Rate Government Fund from the
provisions of the Agreement.
Appendix A of the Agreement is hereby deleted in its entirety and
replaced with the following:
"AIM INVESTMENT SECURITIES FUNDS
APPENDIX A TO MASTER ADMINISTRATIVE SERVICES AGREEMENT
Limited Maturity Treasury Portfolio -
Institutional Class
AIM Limited Maturity Treasury Shares"
All other terms and provisions of the Agreement not amended herein
shall remain in full force and effect.
Dated: November 18, 1994
A I M ADVISORS, INC.
Attest: /s/ STEPHEN I. WINER By: /s/ JOHN J. ARTHUR
----------------------------- ---------------------------------
Assistant Secretary Senior Vice President & Treasurer
AIM INVESTMENT SECURITIES FUNDS
Attest: /s/ STEPHEN I. WINER By: /s/ ROBERT H. GRAHAM
----------------------------- ---------------------------------
Assistant Secretary President
<PAGE> 1
Exhibit 9(a)(4)(i)
ADMINISTRATIVE SERVICES AGREEMENT
ADMINISTRATIVE SERVICES AGREEMENT (the "Agreement"), dated as of the
18th day of October, 1993, by and between A I M ADVISORS, INC., a Delaware
corporation (the "Advisor"), and A I M Fund Services, Inc. (the "Administrator)
on behalf of the Portfolios and Classes of shares of the Funds set forth in
Appendix A to this agreement (the "Portfolios").
W I T N E S S E T H:
--------------------
WHEREAS, each of the Funds listed in Appendix A hereto is an open-end
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, each of the Funds, on behalf of the Portfolios, has retained
the Advisor to provide investment advisory services pursuant to a Master
Investment Advisory Agreement which provides that the Advisor may perform (or
arrange for the performance of) accounting, shareholder servicing and other
administrative services as well as investment advisory services to the
Portfolios, and that the Advisor may receive reasonable compensation or may be
reimbursed for its costs in providing such additional services, upon the
request of the Board of Directors/Trustees and upon a finding by the Board of
Directors/Trustees that the provision of such services is in the best interests
of each Portfolio and its shareholders; and
WHEREAS, the Board of Directors/Trustees has found that the provision
of such administrative services is in the best interests of the Portfolios and
their shareholders, and has requested that the Administrator perform certain of
such services;
NOW, THEREFORE, the parties hereby agree as follows:
1. The Administrator hereby agrees to provide the services of staff
to respond to shareholder inquiries concerning the status of their accounts;
providing assistance to shareholders in exchanges among the mutual funds
managed or advised by the Advisor; changing account designations or changing
addresses; assisting in the purchase or redemption of the Portfolios' shares;
supervising the operations of the custodian(s), transfer agent(s) or dividend
agent(s) for the Portfolios; or otherwise providing services to shareholders of
the Portfolios.
2. The services provided hereunder shall at all times be subject to
the direction and supervision of the Funds' Boards of Directors/Trustees.
3. As full compensation for the services performed and the
facilities furnished by or at the direction of the Administrator, the Advisor
shall reimburse the Administrator for
-1-
<PAGE> 2
expenses incurred by it or its affiliates in accordance with the methodologies
established from time to time by the Funds' Boards of Directors/Trustees with
respect to the Portfolios. Such amounts shall be paid to the Administrator on
a quarterly basis.
4. The Administrator shall not be liable for any error of judgment
or for any loss suffered by the Funds or a Portfolio in connection with any
matter to which this Agreement relates, except a loss resulting from the
Administrator's willful misfeasance, bad faith or gross negligence in the
performance of its duties or from reckless disregard of its obligations and
duties under this Agreement.
5. The Advisor and the Administrator each hereby represent and
warrant, but only as to themselves, that each has all requisite authority to
enter into, execute, deliver and perform its obligations under this Agreement
and that this Agreement is legal, valid and binding, and enforceable in
accordance with its terms.
6. Nothing in this Agreement shall limit or restrict the rights of
any director, officer or employee of the Administrator who may also be a
trustee, officer or employee of the Funds to engage in any other business or to
devote his or her time and attention in part to the management or other aspects
of any business, whether of a similar or a dissimilar nature, nor limit or
restrict the right of the Administrator to engage in any other business or to
render services of any kind to any other corporation, firm, individual or
association.
7. This Agreement shall continue in effect for a period of one (1)
year from the date hereof, and shall continue in effect from year to year
thereafter; provided that such continuance is specifically approved at least
annually:
(a) (i) by each Fund's Board of Directors/Trustees or (ii) by
the vote of a majority of the outstanding voting securities of the
applicable Portfolio (as defined in Section 2(a)(42) of the 1940 Act);
and
(b) by the affirmative vote of a majority of each Fund's
directors/trustees who are not parties to this Agreement or interested
persons of a party to this Agreement, by votes cast in person at a
meeting specifically called for such purpose.
This Agreement shall terminate automatically as to a Portfolio in the
event of its assignment (as defined in Section 2(a) (4) of the 1940 Act) or in
the event of termination of the Master Investment Advisory Agreement relating
to such Portfolio between a Fund and the Advisor.
8. This Agreement may be amended or modified, but only by a written
instrument signed by both the Advisor and the Administrator.
-2-
<PAGE> 3
9. Any notice or other communication required to be given pursuant
to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (a) to the Administrator at 11 Greenway
Plaza, Suite 1919, Houston, Texas 77046, Attention: President, with a copy to
the General Counsel, or (b) to the Advisor at 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046, Attention: President, with a copy to the General Counsel.
10. This Agreement contains the entire agreement between the parties
hereto and supersedes all prior agreements, understandings and arrangements
with respect to the subject matter hereof.
11. This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas.
-3-
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
A I M ADVISORS, INC.
Attest: /s/ NANCY L. MARTIN By: /s/ ROBERT H. GRAHAM
--------------------------------- --------------------------------
[Assistant] Secretary Robert H. Graham
President
(SEAL)
A I M FUND SERVICES, INC.
Attest: /s/ NANCY L. MARTIN By: /s/ JOHN CALDWELL
--------------------------------- --------------------------------
[Assistant] Secretary John Caldwell
President
(SEAL)
-4-
<PAGE> 5
APPENDIX A
AIM EQUITY FUNDS, INC.
AIM Aggressive Growth Fund
AIM Charter Fund (Retail Class)
AIM Constellation Fund (Retail Class)
AIM Weingarten Fund (Retail Class)
AIM FUNDS GROUP (All Classes)
AIM Balanced Fund
AIM Government Securities Fund
AIM Growth Fund
AIM High Yield Fund
AIM Income Fund
AIM Municipal Bond Fund
AIM Money Market Fund
AIM Utilities Fund
AIM Value Fund
AIM INTERNATIONAL FUNDS, INC.
AIM International Equity Fund
AIM INVESTMENT SECURITIES FUNDS
AIM Adjustable Rate Government Fund
Limited Maturity Treasury Portfolio (AIM Limited Maturity Treasury
Shares)
AIM SUMMIT FUND, INC.
AIM TAX-EXEMPT FUNDS, INC.
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut
Intermediate Portfolio (AIM Tax-Free Intermediate Shares)
-5-
<PAGE> 1
Exhibit 9(a)(4)(ii)
AMENDMENT NO. 1
ADMINISTRATIVE SERVICES AGREEMENT
The Administrative Services Agreement (the "Agreement"), dated October
18, 1993, by and between A I M Advisors, Inc., a Delaware corporation and A I M
Fund Services, Inc. on behalf of the Portfolios and Classes of shares of the
Funds set forth in appendix A thereto shall hereby be amended as follows:
Appendix A of the Agreement is hereby deleted in its entirety and
replaced with the following:
"APPENDIX A
AIM EQUITY FUNDS, INC.
AIM Aggressive Growth Fund
AIM Charter Fund (Retail Class)
AIM Constellation Fund (Retail Class)
AIM Weingarten Fund (Retail Class)
AIM FUNDS GROUP (All Classes)
AIM Balanced Fund
AIM Government Securities Fund
AIM Growth Fund
AIM High Yield Fund
AIM Income Fund
AIM Municipal Bond Fund
AIM Money Market Fund
AIM Utilities Fund
AIM Value Fund
AIM INTERNATIONAL FUNDS, INC.
AIM International Equity Fund
AIM INVESTMENT SECURITIES FUNDS
AIM Adjustable Rate Government Fund
Limited Maturity Treasury Portfolio (AIM Limited Maturity Treasury
Shares)
AIM SUMMIT FUND, INC.
AIM TAX-EXEMPT FUNDS, INC.
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut
Intermediate Portfolio (AIM Tax-Free Intermediate Shares)
<PAGE> 2
SHORT-TERM INVESTMENTS CO.
Prime Portfolio (All Classes)
Liquid Assets Portfolio
SHORT-TERM INVESTMENTS TRUST
Treasury Portfolio (All Classes)
Treasury TaxAdvantage Portfolio"
All other terms and provisions of the Agreement not amended herein
shall remain in full force and effect.
Dated: May 11, 1994
A I M ADVISORS, INC.
Attest: /s/ NANCY L. MARTIN By: /s/ ROBERT H. GRAHAM
-------------------------------- ------------------------------
Assistant Secretary Robert H. Graham
President
(SEAL)
A I M FUND SERVICES, INC.
Attest: /s/ NANCY L. MARTIN By: /s/ JOHN CALDWELL
-------------------------------- ------------------------------
Assistant Secretary John Caldwell
President
(SEAL)
<PAGE> 1
Exhibit 9(a)(4)(iii)
AMENDMENT NO. 2
ADMINISTRATIVE SERVICES AGREEMENT
The Administrative Services Agreement (the "Agreement"), dated October
18, 1993, by and between A I M Advisors, Inc., a Delaware corporation and A I M
Fund Services, Inc. on behalf of the Portfolios and Classes of shares of the
Funds set forth in appendix A thereto shall hereby be amended as follows:
Appendix A of the Agreement is hereby deleted in its entirety and
replaced with the following:
APPENDIX A
AIM EQUITY FUNDS, INC.
AIM Aggressive Growth Fund
AIM Charter Fund (Retail Class)
AIM Constellation Fund (Retail Class)
AIM Weingarten Fund (Retail Class)
AIM FUNDS GROUP (All Classes)
AIM Balanced Fund
AIM Government Securities Fund
AIM Growth Fund
AIM High Yield Fund
AIM Income Fund
AIM Municipal Bond Fund
AIM Money Market Fund
AIM Utilities Fund
AIM Value Fund
AIM INTERNATIONAL FUNDS, INC. (All Classes)
AIM International Equity Fund
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Global Income Fund
AIM INVESTMENT SECURITIES FUNDS
AIM Adjustable Rate Government Fund
Limited Maturity Treasury Portfolio (AIM Limited Maturity Treasury
Shares)
AIM SUMMIT FUND, INC.
<PAGE> 2
AIM TAX-EXEMPT FUNDS, INC.
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut
Intermediate Portfolio (AIM Tax-Free Intermediate Shares)
SHORT-TERM INVESTMENTS CO.
Prime Portfolio (All Classes)
Liquid Assets Portfolio
SHORT-TERM INVESTMENTS TRUST
Treasury Portfolio (All Classes)
Treasury TaxAdvantage Portfolio
All other terms and provisions of the Agreement not amended herein shall remain
in full force and effect.
Dated: July 1 , 1994
--------------------
A I M ADVISORS, INC.
Attest: /s/ NANCY L. MARTIN By: /s/ ROBERT H. GRAHAM
------------------------------ ------------------------------
Assistant Secretary Robert H. Graham
President
(SEAL)
A I M FUND SERVICES, INC.
Attest: /s/ NANCY L. MARTIN By: /s/ J. ABBOTT SPRAGUE
------------------------------ ------------------------------
Assistant Secretary J. Abbott Sprague
Senior Vice President
(SEAL)
<PAGE> 1
Exhibit 9(a)(4)(iv)
AMENDMENT NO. 3
ADMINISTRATIVE SERVICES AGREEMENT
The Administrative Services Agreement (the "Agreement"), dated October
18, 1993, by and between A I M Advisors, Inc., a Delaware corporation and A I M
Fund Services, Inc. on behalf of the Portfolios and Classes of shares of the
Funds set forth in appendix A thereto is hereby amended as follows:
Appendix A of the Agreement is hereby deleted in its entirety and
replaced with the following:
APPENDIX A
AIM EQUITY FUNDS, INC.
AIM Aggressive Growth Fund
AIM Charter Fund (Retail Class)
AIM Constellation Fund (Retail Class)
AIM Weingarten Fund (Retail Class)
AIM FUNDS GROUP (All Classes)
AIM Balanced Fund
AIM Government Securities Fund
AIM Growth Fund
AIM High Yield Fund
AIM Income Fund
AIM Money Market Fund
AIM Municipal Bond Fund
AIM Utilities Fund
AIM Value Fund
AIM INTERNATIONAL FUNDS, INC. (All Classes)
AIM International Equity Fund
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Global Income Fund
AIM INVESTMENT SECURITIES FUNDS
AIM Adjustable Rate Government Fund
Limited Maturity Treasury Portfolio (AIM Limited Maturity Treasury
Shares)
AIM SUMMIT FUND, INC.
<PAGE> 2
AIM TAX-EXEMPT FUNDS, INC.
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut
Intermediate Portfolio (AIM Tax-Free Intermediate Shares)
All other terms and provisions of the Agreement not amended herein
shall remain in full force and effect.
Dated: September 16 , 1994
--------------------
A I M ADVISORS, INC.
Attest: /s/ STEPHEN I. WINER By: /s/ ROBERT H. GRAHAM
------------------------------ ------------------------------
Assistant Secretary Robert H. Graham
President
(SEAL)
A I M FUND SERVICES, INC.
Attest: /s/ STEPHEN I. WINER By: /s/ JOHN CALDWELL
------------------------------ ------------------------------
Assistant Secretary John Caldwell
President
(SEAL)
<PAGE> 1
Exhibit 9(a)(4)(v)
AMENDMENT NO. 4
ADMINISTRATIVE SERVICES AGREEMENT
The Administrative Services Agreement (the "Agreement"), dated October
18, 1993, as amended, by and between A I M Advisors, Inc., a Delaware
corporation and A I M Fund Services, Inc., a Delaware corporation, on behalf of
the Portfolios and Classes of shares of the Funds set forth in Appendix A
thereto is hereby amended as follows:
Appendix A of the Agreement is hereby deleted in its entirety and
replaced with the following:
"APPENDIX A
AIM SUMMIT FUND, INC."
All other terms and provisions of the Agreement not amended herein
shall remain in full force and effect.
Dated: November 1, 1994
A I M ADVISORS, INC.
Attest: /s/ STEPHEN I. WINER By: /s/ ROBERT H. GRAHAM
------------------------------ ------------------------------
Assistant Secretary Robert H. Graham
President
(SEAL)
A I M FUND SERVICES, INC.
Attest: /s/ STEPHEN I. WINER By: /s/ JOHN CALDWELL
------------------------------ ------------------------------
Assistant Secretary John Caldwell
President
(SEAL)
<PAGE> 1
EXHIBIT 9(b)(1)(iii)
REMOTE ACCESS
-------------
AND
---
RELATED SERVICES AGREEMENT
--------------------------
AGREEMENT dated December 23, 1994, between each registered
investment company listed on the signature pages hereof, either for itself or,
with respect to each such company that is a series investment company, on
behalf of each of the series or class named on the signature pages hereof (the
"Fund") and THE SHAREHOLDER SERVICES GROUP, INC. ("TSSG"), a Massachusetts
corporation with principal offices at One Exchange Place, Boston, Massachusetts
02109.
WITNESSETH
----------
That for and in consideration of the mutual promises hereinafter set
forth, the Fund and TSSG agree as follows:
1. Appointment of TSSG. The Fund appoints TSSG as servicing agent to
provide and support remote terminal access through dedicated
transmission lines to its computerized data processing record keeping
system for Fund shareholder accounting more fully described on the
attached Schedule A (the "TSSG System) installed on TSSG computer
hardware and using TSSG software ("TSSG Facilities") to provide and
support remote terminal access to the TSSG System and the TSSG
Facilities for the maintenance of Fund shareholder records, processing
of information and generation of information with respect thereto.
TSSG hereby accepts such appointment for the compensation described
below.
2. Oral and Written Instructions. "Written Instructions" shall mean a
written communication signed by a person reasonably believed by TSSG
to be a person named on the list of authorized persons as it may be
amended by amendment provided by the Fund to TSSG from time to time
("Schedule B"). "Oral Instructions" shall mean instructions, other
than Written Instructions, actually received by TSSG from a person
reasonably believed by TSSG to be an Authorized Person listed on
Schedule B. Written communication shall include manually executed
originals and authorized electronic transmissions, including
telefacsimile of a manually executed original or other process.
3. Compensation.
-------------
(a) The Fund will compensate TSSG for the performance of its
obligations hereunder in accordance with the Fee Schedule
attached hereto as Schedule C. Such fees may be adjusted from
time to time by attaching to or substituting for Schedule C a
revised Fee Schedule, dated and signed by an authorized
officer of each party hereto.
<PAGE> 2
(b) In addition to the fees payable pursuant to Schedule C, the
Fund will pay all out-of-pocket expenses incurred by TSSG in
performing its duties hereunder. Out-of-pocket expenses shall
include the items specified in the written schedule of
out-of-pocket charges attached hereto as Schedule D. Upon
written approval of the Fund, Schedule D may be modified by
TSSG. The Fund agrees to approve all reasonable changes in
Schedule D. Unscheduled out-of-pocket expenses shall be
limited to those out-of-pocket expenses directly related to
TSSG's performance of its obligations hereunder.
(c) TSSG will provide an invoice as soon as practicable after the
end of each calendar month detailed in accordance with
Schedule C and Schedule D. The Fund will pay to TSSG the
amount so billed within fifteen (15) days after the Fund's
receipt of the invoice.
4. Duties of TSSG.
---------------
(a) Subject to the provisions of this Agreement, the Fund hereby
agrees to use or employ the TSSG System and the TSSG
Facilities to maintain certain Fund shareholder records and
generate output with respect to the Fund's shareholders, and
subject to the provisions of this Agreement, TSSG will provide
the use of the TSSG System and the TSSG Facilities to maintain
Fund shareholder records and generate such output with respect
to the Fund's shareholders.
(b) TSSG agrees to provide to the Fund at its facility located
at Eleven Greenway Plaza, Suite 1919, Houston, Texas 77046 or
at such other location as may be mutually agreed upon in
writing by TSSG and the Fund (the "Fund Facility") remote
access to the use of information processing capabilities of
the TSSG System as it may be modified from time to time by
TSSG.
5. Changes and Modifications.
--------------------------
(a) During the term of this Agreement, TSSG will make available
for Fund use, without additional costs, all modifications and
improvements to the TSSG System (excluding those modifications
and improvements TSSG views as additional products and/or
those developed exclusively for other TSSG clients) made in
the ordinary course of business. In addition, TSSG will use
its best efforts to make reasonable changes to the TSSG System
requested by the Fund, subject to payment of additional fees
as mutually agreed upon in writing and as reflected in
Schedule C.
(b) TSSG shall have the right, at any time, and from time to time,
to alter and modify any systems, programs, procedures or
facilities used or employed in performing its duties and
obligations hereunder (a "System Modification"), provided that
no
2
<PAGE> 3
System Modification shall, without the consent of the Fund,
materially adversely change or affect the operations and
procedures of the Fund in using or employing the TSSG System
or the TSSG Facilities hereunder. TSSG will use its best
efforts to notify the Fund in writing at least five business
days prior to implementing any System Modification which
impacts or effects AFS' day to day operations, and in any
event by 8 a.m. CST the following business day.
(c) TSSG agrees to make any System Modifications necessary to meet
federal, state or local government or self-regulatory
organization requirements ("Regulatory Adherence
Enhancements") in a timely fashion. TSSG agrees to advise the
Fund promptly upon notification of any change in or receipt of
any information or advice concerning any change in the
requirements of any federal, state, local or self-regulatory
organization which might require such System Modifications.
The Fund shall obtain any additional software required to
comply with such changes in federal, state, and local
government or self regulatory organization requirements.
Regulatory Adherence Enhancements shall be limited to
technically and commercially practical System modifications
which are within the scope of the functions, capabilities and
any database of the TSSG System. TSSG will provide Regulatory
Adherence Enhancements only after final specification, agreed
upon by TSSG, the Fund and affected third parties, have been
established and delivered to TSSG.
(d) During the term of this Agreement TSSG shall expend no
less than $1,000,000 (one million dollars) per calendar year
for the enhancement and maintenance of TSSG's
recordkeeping and associated system that are utilized by
TSSG to provide services to the Fund under this
Agreement (or a successor Remote Service Agreement). At
least once each calendar year, TSSG shall provide the Fund
with a schedule of the enhancements planned by the TSSG for
the succeeding 12 month period.
6. Duties of the Fund.
-------------------
(a) The Fund will transmit all information and data required by
TSSG hereunder to the TSSG Facilities in the format and form
specified by TSSG, so that the output produced by the Fund
shall be complete and accurate when it is generated by the
TSSG System and the TSSG Facilities. The Fund shall be
responsible and liable for the costs and expenses of
regenerating any output if the Fund provides nonconforming or
erroneous data or shall have failed to transmit any such data
or information or verify any such data and information when it
is generated by the TSSG System and the TSSG Facilities.
(b) In the event the Fund shall erroneously transmit information
or shall transmit incorrect information or data to the TSSG
System or the TSSG Facilities, the Fund
3
<PAGE> 4
shall correct such information and data and retransmit the
same to the TSSG System or to the TSSG Facilities. Upon
consent of the Fund, which shall not be unreasonably withheld,
TSSG shall take the necessary steps at Fund expense to correct
any files affected by the original incorrect transmission.
(c) In the event the TSSG System malfunctions or a TSSG
programming error (other than programming changes made
pursuant to paragraph 5(a) above), causes an error or mistake
in any of the output generated by the TSSG System under the
terms of this Agreement, TSSG will, at its expense, correct
and retransmit such output so long as the Fund has notified
TSSG of such error or mistake within five (5) business days of
its discovery and the data used to generate such output is
available as set forth in Schedule E attached hereto.
If such data is available as set forth in Schedule E, the Fund
shall take reasonable necessary steps to manually correct any
records due to a TSSG system malfunction or programming error
that TSSG is unable to correct systematically and the parties
shall mutually agree upon the allocation of expenses related
to such manual processing.
7. System Access and Training.
---------------------------
(a) TSSG shall provide the Fund on-line access as provided for and
set forth in the attached Schedule F, and agrees to meet the
performance standards set forth therein. Additional access to
the TSSG System may be arranged by mutual agreement of the
parties.
(b) The Fund will reimburse TSSG for any reasonable costs and
expenses incurred for training hereunder. All travel and
other out-of-pocket expenses incurred by Fund personnel in
connection with and during the training periods shall be borne
by the Fund.
8. Indemnification. TSSG shall not be responsible for and the Fund shall
indemnify and hold TSSG harmless from and against any and all claims,
costs, expenses (including reasonable attorneys' fees), losses,
damages, charges, payments and liabilities of any sort or kind which
may be asserted against TSSG or for which TSSG may be held to be
liable (a "Claim") arising out of or attributable to any of the
following:
(a) Any actions of TSSG required to be taken pursuant to this
Agreement unless such Claim resulted from a negligent act or
omission to act or bad faith by TSSG in the performance of its
duties hereunder.
(b) The Fund's failure to use and employ the TSSG System and the
TSSG Facilities in accordance with the procedures set forth in
any on-line documentation made
4
<PAGE> 5
available to the Fund, the Fund's failure to utilize the
control procedures set forth and described in the on-line user
documentation, or the Fund's failure to verify promptly
reports or output received through use of the TSSG System and
the TSSG Facilities.
(c) The Fund's errors and mistakes in the use of the TSSG System,
TSSG Facilities and control procedures.
(d) TSSG's reasonable reliance on, or reasonable use of
information, data, records and documents received by TSSG from
the Fund in the performance of TSSG's duties and obligations
hereunder.
(e) The reliance on, or the implementation of, any Written or Oral
Instructions or any other instructions or requests of the
Fund.
(f) The Fund's refusal or failure to comply with the terms of this
Agreement, or any Claim which arises out of the Fund's
negligence or misconduct or the breach of any representation
or warranty of the Fund made herein.
(g) Unavailability of communications or utilities facilities or
other equipment failures provided TSSG has maintained such
equipment appropriately, Acts of God, acts of the public
enemy, governmentally-mandated priorities in allocating its
services, labor disputes, fires, floods, strikes, riots or war
or other causes beyond its control.
9. Standard of Care.
-----------------
(a) TSSG shall at all times act in good faith and agrees to use
its best efforts within commercially reasonable standards to
insure the accuracy of all services performed under this
Agreement, but assumes no responsibility and shall not be
liable for loss or damage due to errors unless said errors are
caused by its negligence, bad faith, or willful misconduct or
that of its employees.
(b) Notwithstanding the foregoing Section 9(a) or anything else
contained in this Agreement to the contrary, TSSG's liability
hereunder shall, in no event exceed four million dollars
($4,000,000.00).
The parties agree to review the limitation of liability
provision set forth in this Section 9(b) on an annual basis.
10. Instructions. TSSG may apply at any time to a person listed as an
Authorized Person identified on Schedule B for instructions with
respect to any matter arising in connection with this Agreement. TSSG
may also consult with legal counsel for the Fund or, at
5
<PAGE> 6
TSSG's expense, its own legal counsel with respect to actions to be
taken hereunder. TSSG shall not be liable for, and shall be
indemnified by the Fund against, any Claim arising from any action
taken or omitted to be taken by TSSG in good faith in reliance upon
such instruction from the Fund or upon the advice of such legal
counsel.
11. Consequential Damages. In no event and under no circumstances shall
either party under this Agreement be liable to the other party for
consequential or indirect loss of profits, reputation or business or
any other special damages under any provision of this Agreement or for
any act or failure to act hereunder.
12. Covenants of TSSG.
------------------
(a) TSSG shall maintain the appropriate computer files of all
required information and data transmitted to the TSSG
Facilities by the Fund, provided, however, that TSSG shall not
be responsible or liable for any damage, alterations,
modifications thereto or failure to maintain the same if the
Fund made, or TSSG made at the Fund's request, such changes,
alterations or modifications or if the Fund causes the
failure. It is expressly understood that all such shareholder
records transmitted by the Fund and maintained by TSSG remain
the exclusive property of the Fund.
(b) All information furnished by the Fund to TSSG is confidential
and TSSG agrees that it shall not disclose such information to
any third party except pursuant to Written or Oral
Instructions received from the Fund or to the extent that TSSG
is required by law to make such disclosure.
13. Covenants of the Fund. The Fund shall utilize and employ all
reasonable control procedures available under the TSSG System of which
the Fund may be advised. The Fund will promptly advise TSSG of any
errors or mistakes in the data or information transmitted to the TSSG
Facilities or in the records maintained by TSSG or output generated
hereunder. The Fund will verify the accuracy of all output it receives
consistent with industry custom and practice by utilizing proper
auditing procedures.
All information furnished to or obtained by the Fund pertaining to the
TSSG Facilities, the TSSG System, or TSSG procedures, data bases and
programs is confidential and proprietary to TSSG. The Fund shall not
disclose such information to any third party except to the extent that
the Fund is required by law to make such disclosures.
14. Term and Termination.
---------------------
(a) This Agreement shall become effective on the date first set
forth above and shall continue in effect through December 31,
1997 ("Initial Term").
6
<PAGE> 7
(b) Unless it is the intention of either party for this Agreement
to terminate upon the expiration of the Initial Term, within
six (6) months prior to the end of the Initial Term but no
later than such date, AIM and TSSG will negotiate diligently
and in good faith and either (i) enter into an agreement
extending the term of this Agreement; or (ii) enter into a new
agreement for TSSG to provide remote services substantially
similar to those contemplated hereunder.
(c) Notwithstanding the foregoing, if a party hereto is guilty of
a material failure to perform its duties and obligations
hereunder (a "Defaulting Party") the other party (the
"Non-Defaulting Party") may give written notice thereof to the
Defaulting Party, and if such material breach shall not have
been remedied within thirty (30) days after such written
notice is given, then the Non-Defaulting Party may terminate
this Agreement by giving thirty (30) days written notice of
such termination to the Defaulting Party. If TSSG is the
Non-Defaulting Party, its termination of this Agreement shall
not constitute a waiver of any other rights or remedies of
TSSG with respect to services performed prior to such
termination or rights of TSSG to be reimbursed for
out-of-pocket expenses. In all cases, termination by the
Non-Defaulting Party shall not constitute a waiver by the
Non-Defaulting Party of any other rights it might have under
this Agreement or otherwise against the Defaulting Party.
15. Post-Termination Procedures. Upon termination for any reason by either
party to this Agreement TSSG shall promptly, at the Fund's expense,
provide immediate and full access to the Fund data files on magnetic
tape in machine readable form and shall cooperate with the Fund in its
efforts to transfer all such data files to another person chosen by
the Fund. In addition, TSSG agrees to return, at the expense of the
terminating party, all backup tapes and other storage media upon which
Fund data is then stored.
16. Amendment. This Agreement may only be amended or modified by written
agreement executed by both parties.
17. Assignment. This Agreement and any interest hereunder shall inure to
the benefit of and be binding upon the Parties and their respective
successors, legal representatives and permitted assigns including the
successor entity in any merger or reorganization of the Funds. Except
as otherwise expressly provided for in this Agreement, neither Party
may assign or delegate this Agreement or any of its rights or
obligations without the other Party's prior approval which shall not
be unreasonably withheld. Upon prior notice to the Fund, TSSG may
assign this Agreement to (i) any person in connection with the merger
or consolidation of TSSG into such person, or the sale of all or
substantially all the assets of TSSG to such person or (ii) any direct
or indirect subsidiary of First Data Corporation in connection with
any corporate reorganization. Any attempt to assign, delegate or
otherwise transfer this Agreement in violation of this Section will be
voidable by the other party.
7
<PAGE> 8
18. Subcontracting. TSSG may subcontract to agents the services required
to be performed pursuant to this Agreement and the Schedules hereto,
if any. The appointment of any such agent shall not relieve TSSG of
its responsibilities hereunder.
19. Use of TSSG's Name. The Fund shall not use TSSG's name in any
Prospectus, Statement of Additional Information, Shareholder's Report,
sales literature or other material relating to the Fund without TSSG's
prior written approval unless such use is required by law or merely
refers in accurate terms to the services rendered hereunder. Any
reference to TSSG shall include a statement to the effect that it is
an indirect, wholly owned subsidiary of First Data Corporation.
20. Use of the Fund's Name. Except as provided herein, TSSG shall not use
the name of the Fund, its Advisor or material relating to any of them
on any documents or forms (other than internal documents) without the
Fund's prior written approval unless such use is required by law or
merely refers in accurate terms to the services rendered hereunder.
21. Security.
---------
(a) TSSG will provide the Fund with a User Identifier (also known
as "User I.D.") and a User Password. TSSG will also assign
the initial Operator Password to each of the Fund's employees
who are authorized to access the TSSG System. The Operator
Passwords may be changed at any time in the discretion of the
Fund without any notice to or knowledge of TSSG by using
procedures set forth in the user manual.
(b) The Fund agrees that it is responsible for selection, use and
protection of the confidentiality of passwords; however, TSSG
may for security reasons at any time and from time to time,
upon seven days written notice to the Fund (or immediately
upon notice by telephone, confirmed in writing, in the event
of an emergency), deny access to the TSSG System until one or
more User I.D.s is changed by the Fund.
(c) TSSG will provide the Fund with online procedures enabling the
Fund to reset passwords, correct Password violations and
add/change/delete User I.D.s within existing security
profiles.
(d) TSSG will use its best efforts to ensure that the Fund's data
files which are input into the TSSG System will remain
confidential and protected from unauthorized access by third
persons. Specifically, TSSG will adhere to its normal
security procedures for protection of computer-stored files or
programs from unauthorized access. It is agreed that such
procedures will be subject to review by the Fund and audit by
its independent accountants and that TSSG will take under
advisement
8
<PAGE> 9
recommendations of such independent accountants concerning
changes to such procedures.
(e) The Fund or duly authorized independent auditors will have the
right upon 5 business days' notice under this Agreement to
perform on-site audits of records and accounts directly
pertaining to Fund shareholder accounts serviced by TSSG
facilities in accordance with reasonable procedures and at
reasonable frequencies.
(f) The parties agree that all tapes, books, user manuals,
instructions, records, information and data pertaining to the
business of the other party, the TSSG System and the Fund
clients serviced by the Fund which are exchanged or received
pursuant to the negotiation of or carrying out of this
Agreement shall remain confidential except to the extent
required by applicable laws, and shall not be voluntarily
disclosed to any other person and that all such tapes, books,
reference manuals, instructions, records, information and data
in the possession of each of the parties hereto shall be
returned to the party from whom it was obtained upon the
termination or expiration of this Agreement.
(g) The Fund acknowledges that TSSG has proprietary rights in and
to the TSSG System and any other TSSG programs, data bases,
supporting documentation or procedures ("TSSG Protected
Information") of which the Fund or its employees or agents
become aware as a result of the Fund's access to the TSSG
System or TSSG Facilities and that the TSSG Protected
Information constitutes confidential material and trade
secrets of TSSG. The Fund agrees to maintain the
confidentiality of the TSSG Protected Information. The Fund
acknowledges that any unauthorized use, misuse, disclosure or
taking of TSSG Protected Information which is confidential or
which is a trade secret, whether residing or existing
internally or externally to a computer, computer system or
computer network, or the knowing and unauthorized accessing or
causing to be accessed of any computer, computer system or
computer network, may be subject to civil liabilities and
criminal penalties under applicable law. The Fund will advise
all of its employees and agents who have access to any TSSG
Protected Information or to any computer equipment capable of
accessing TSSG Facilities of the foregoing.
22. Additional Funds. In the event that additional funds, within the same
family as the Funds, are established ("Additional Funds") and such
Additional Funds desire to avail themselves of the benefits of and
become a party to this Agreement, the Additional Funds shall notify
TSSG in writing, and if TSSG agrees in writing, such Additional Funds
shall become a party to this Agreement.
9
<PAGE> 10
23. Miscellaneous.
(a) Notices. Any notice or other instrument authorized or
required by this Agreement to be given in writing to the Fund
or TSSG shall be sufficiently given if addressed to that party
and received by it at its office set forth below or at such
other place as it may from time to time designate in writing.
To: AIM Family of Funds
c/o John Caldwell, President
AIM Fund Services, Inc.
Eleven Greenway Plaza, Suite 1919
Houston, Texas 77046
Attention: William Kleh, Secretary
with a copy to:
Fund Legal Department at the same address
Attention: Carol Relihan, VP and General Counsel
To: The Shareholder Services Group, Inc.
One Exchange Place
Boston, Massachusetts 02109
Attention: Robert F. Radin, President
with a copy to:
General Counsel at the same address
(b) Successors. This Agreement shall extend to and shall be
binding upon the parties hereto, and their respective
successors upon the parties hereto, and their respective
successors and assigns; provided, however, that this Agreement
may not be assigned without the written consent of the other
party.
(c) Governing Law. This Agreement shall be governed exclusively
by and interpreted in accordance with the internal substantive
laws of the Commonwealth of Massachusetts without reference to
the choice of the law provisions thereof.
(d) Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction
to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
10
<PAGE> 11
(e) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original,
but all of which together will constitute only one instrument.
(f) Captions. The captions of this Agreement are included for
convenience of reference only and in no way define or delimit
any of the provisions hereof or otherwise affect their
construction or effect.
(g) Sole Agreement. This Agreement constitutes the entire
agreement between the parties hereto and supersedes any prior
agreement with respect to the subject matter hereof.
(h) Specific Performance. Each of the parties hereto agrees that
the other party would be irreparably damaged by breaches of
this Agreement relating to confidential or proprietary
information and accordingly each agrees that each of them is
entitled, without bond or other security, to an injunction or
injunctions to prevent breaches of the provisions of this
Agreement relating to such information.
(i) It is understood and agreed that all services performed
hereunder by TSSG shall be as an independent contractor and
not as an employee, joint venturer, or partner of the Fund.
This Agreement is between the Fund and TSSG, and there are no
third party beneficiaries hereto.
(j) Limitation of Shareholder Liability. Notice is hereby given
that the Declaration of Trust of each Fund which is a Delaware
business trust, is on file with the Secretary of State of
Delaware, and this Agreement was executed on behalf of each
such Trust by a duly authorized officer thereof acting as such
and not individually. The obligations of this Agreement are
not binding upon any of the Trustees, officers or Shareholders
of any such Trust individually but are binding only upon the
assets and property of the respective portfolio of each such
Trust for the benefit of which the Trustees have caused this
Agreement to be executed.
11
<PAGE> 12
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.
AIM EQUITY FUNDS, INC.
on behalf of the Retail Classes of its
AIM Charter Fund, AIM Constellation Fund,
AIM Weingarten Fund and AIM Aggressive
Growth Fund Portfolios
By: /s/ ROBERT H. GRAHAM
------------------------------------
Title: President
--------------------------------
AIM FUNDS GROUP,
on behalf of the Class A and Class B
Shares of its AIM Balanced Fund, AIM
Government Securities Fund, AIM Growth
Fund, AIM High Yield Fund, AIM Income
Fund, AIM Municipal Bond Fund, AIM
Utilities Fund and AIM Value Fund
portfolios and on behalf of the Class A,
Class B and Class C Shares of its AIM
Money Market Fund Portfolio
By: /s/ ROBERT H. GRAHAM
------------------------------------
Title: President
--------------------------------
AIM INTERNATIONAL FUNDS, INC.,
on behalf of the Class A and Class B
shares of its AIM International Equity
Fund, AIM Global Aggressive Growth Fund,
AIM Global Growth Fund and AIM Global
Income Fund Portfolios
By: /s/ ROBERT H. GRAHAM
------------------------------------
Title: President
--------------------------------
12
<PAGE> 13
AIM INVESTMENT SECURITIES FUNDS,
on behalf of its AIM Adjustable Rate
Government Fund portfolio and the AIM
Limited Maturity Treasury Shares class
of its Limited Maturity Treasury
Portfolio
By: /s/ ROBERT H. GRAHAM
------------------------------------
Title: President
--------------------------------
AIM TAX-EXEMPT FUNDS, INC.,
on behalf of its AIM Tax-Exempt Cash Fund
and AIM Tax-Exempt Bond Fund of
Connecticut portfolios and the
AIM Tax-Free Intermediate Shares class
of its Intermediate Portfolio
By: /s/ ROBERT H. GRAHAM
------------------------------------
Title: President
--------------------------------
THE SHAREHOLDER SERVICES GROUP, INC.
By: /s/ JACK P. KUTNER
------------------------------------
Title: EVP COO
--------------------------------
13
<PAGE> 14
SCHEDULE A
SYSTEM FEATURES AND CAPABILITIES
The FSR System consists of computer hardware, operating system software and
application software which contains functions as defined below. The operating
environment configuration consists of IBM-compatible mainframe computers running
on an MVS operating system. The configuration includes controllers, direct
access storage devices, tape drives, security access software and other
operating system hardware and software that enable TSSG to meet the contractual
commitments herein.
The Transfer Agent Application includes Job Control Language (JCL), Catalog
Procedures (PROCS) and program modules written primarily in COBOL.
The FSR Transfer Agency System supports the following subsystems and third
party systems:
NSCC (National Securities Clearing Corporation) support:
o FundSERV
o Networking
o Commissions
o Exchanges
o ACATS (Automated Customer Account Transfer System)
o TNET
Cost basis accounting
UNISYS Interface
Sales file download
Price Waterhouse Blue Sky download
File downloads to support DDA (Demand Deposit Account) Reconciliation
<PAGE> 15
Year-End Statements and Tax Reporting:
o 1099D
o 1099R
o 1042S
o 5498
o 1099B
Transmission send/receive functionality for broker/dealers and other third
parties
Electronic Funds Transfer processing to move in and out of funds using
automated clearing house facilities
KMS Microfilm Interface
Third part interfaces with:
Applied Mailing Systems for print/mail support
Microdata for checkbook production
Mellon and Texas Commerce for banking services
Other third party software packages i.e. ACE/DISC
<PAGE> 16
SCHEDULE B
AIM FAMILY OF FUNDS - LIST OF AUTHORIZED PERSONS
/s/ ROBERT H. GRAHAM
-----------------------------------------------------------
Robert Graham
President, A I M Management Group Inc.
/s/ JOHN CALDWELL (JACK)
-----------------------------------------------------------
Jack Caldwell
President, A I M Fund Services, Inc.
/s/ CAROL RELIHAN
-----------------------------------------------------------
Carol Relihan
Secretary and General Counsel,
A I M Management Group Inc.
/s/ NANCY MARTIN
-----------------------------------------------------------
Nancy Martin
Counsel, A I M Management Group Inc.
<PAGE> 17
SCHEDULE C
FEE SCHEDULE
I. SHAREHOLDER ACCOUNT FEES. The Fund shall pay the following fees
("Shareholder Account Fees"):
For the period beginning on the date of this Agreement, and continuing through
December 31, 1997, the Fund shall pay TSSG an annualized fee of $3.60 per
shareholder account that is open during any monthly period ("Open Account
Fee"). The Fund also shall pay TSSG an annualized fee of $1.80 per shareholder
account that is closed during any monthly period ("Closed Account Fee") (The
Open Account Fees and the Closed Account Fees hereafter collectively referred
to as "Shareholder Account Fees"). The Shareholder Account Fees hall be billed
by TSSG monthly in arrears on a prorated basis of 1/12 of the annualized fee
for all such accounts.
In addition, beginning on the one year anniversary date of this Agreement, and
on each yearly anniversary date thereafter, the Shareholder Account fees may be
increased by TSSG 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 TSSG to the Fund for the preceding twelve (12) month period.
II. FEES FOR DEDICATED PROGRAMMING SUPPORT
TSSG and the Fund will jointly determine the level of dedicated system
resources required to meet the Fund's enhancement priorities. At the Fund's
expense, TSSG agrees to use reasonable efforts to make dedicated programming
support available for all projects required by the Fund. The amount of the
resources required and the projects to be worked on shall be determined jointly
based upon joint periodic review of project requirements; however, the Fund
will decide the priorities which will be assigned to each project and will
determine what projects the dedicated resources are to work on. Such resources
will be charged to the Fund at the rates set forth below. All enhancements,
improvements, modifications or new features added to the TSSG System shall be,
and shall remain, the confidential, exclusive property of, and proprietary to,
TSSG. Request for software changes may be initiated by those representatives
of the Fund identified in Exhibit 1 of this Schedule C. The Fund will use its
best efforts to notify TSSG in writing of requests for software changes within
72 hours of an initial verbal request. TSSG reserves the right to stop work on
a request for which written specifications have not been received.
1
<PAGE> 18
a. SUPPORT TO BE PROVIDED TO THE FUND FREE OF CHARGE. TSSG
will provide the following support at no additional cost to the
fund:
1. Coding to correct deficiencies in the system, unless such
deficiencies are included in item (II) (b) (9) below in which
event the Fund will be charged for such services. A system
deficiency is defined as a system process which does not
operate according to the design of the computer application or
system specifications. To correct system deficiencies, TSSG will,
at its own expense, expend whatever resources are necessary to
analyze the deficiency and apply an appropriate remedy, in the
form of corrected application code as expeditiously as possible.
An alternate process, in the form of a functional work around,
may be a suitable substitute for the actual system fix, if the
level of effort to develop the system fix is deemed to be
impractical or the elapsed time to develop and apply the fix
extends beyond the reasonable time needed. For deficiencies
identified by the Fund, the use of a functional work around as an
alternate process shall be mutually agreed upon by the parties.
TSSG will evaluate all reported referrals, to validate deficiency
status or reclassify as a system enhancement, based on the above
definition.
2. Simple Maintenance determined to be core processing.
3. TSSG generated (i.e., internal) requests to extend system
functionality and ensure industry competitiveness.
4. Enhancements required to comply with regulatory changes;
provided, however, TSSG will only make such changes to the extent
that they are technically and commercially practical and are
within the scope of the software functions, capabilities and
database.
b. SUPPORT TO BE PROVIDED TO THE FUND, BUT WHICH WILL BE BILLED
AS "DEDICATED PROGRAMMING SUPPORT": The following activities are
examples of "dedicated programming support" which will be billed
to the Fund:
1. Customized form output (i.e., statements, confirmation
statements, commission statements).
2. Customized reports.
3. Addition of new features (enhancements) requested by the Fund.
4. Addition of existing features not used by the Fund.
5. Addition of new funds to the fund group.
6. Customized year-end processing.
7. Conversions from other systems to FSR subsequent to initial
funds being live.
(continued on next page)
2
<PAGE> 19
8. Clean-up/Recovery project resulting from Fund error or causes
beyond the reasonable control of either party.
9. System "fixes" - coding to correct errors attributable to code
developed, and currently maintained by the dedicated teams.
10. Customization of existing functions specific to the Fund.
11. Program documentation as requested by the Fund.
Software Exclusivity. The Fund may choose to have exclusive use of
enhancement software developed by its dedicated programming staff. Such
exclusivity would extend for a period of nine (9) months from the date
the enhancement is placed into the production libraries. Software
exclusivity would be waived if the Fund accepts either of the following
conditions:
a). If prior to implementation, TSSG or other TSSG
clients agree to share in the expense of the
enhancements.
b). At any time during the 9 months following
implementation, TSSG or other TSSG clients agree to
share the expense for the enhancements.
Access and Capability The Funds' dedicated programmers will have
access and capability to update any part of the System. However,
depending on the skill set of the programmers, as well as the scope of
the requested enhancement, it may be in the best interest of both the
Fund and TSSG to utilize non-dedicated programmers to address certain
enhancements. In addition, because many programs are shared by
multiple clients, some enhancements may require approval from those
clients. These enhancements should be handled on an item by item
basis.
c. FEES FOR DEDICATED PERSONNEL WHICH WILL BE BILLED TO
THE FUND. TSSG will bill the Fund monthly in arrears
on a prorated basis of 1/12 of the following
annualized charges for each person dedicated to the
following positions:
<TABLE>
<S> <C>
Manager $100,000
Programmer $ 90,000
Business System Analyst/Tester $ 85,000
Non-dedicated programmer-hourly charge $ 100 per hour
</TABLE>
TSSG may adjust these salaries on the anniversary date of this
agreement to reflect salary increases, provided that they do not
exceed seven percent (7%) of the fees charged to the Fund for the
identical positions during the immediately preceding twelve (12) month
period.
3
<PAGE> 20
SCHEDULE C
EXHIBIT 1
AIM FAMILY OF FUNDS
AUTHORIZED PERSONS REQUESTING
SYSTEM MODIFICATIONS
/s/ JOHN CALDWELL
-----------------------------------------------------------
John Caldwell
/s/ RICHARD SNYDER
-----------------------------------------------------------
Richard Snyder
/s/ JOSEPH CHARPENTIER
-----------------------------------------------------------
Joseph Charpentier
/s/ MARC VARGAS
-----------------------------------------------------------
Marc Vargas
4
<PAGE> 21
SCHEDULE D
OUT-OF-POCKET EXPENSES
The Fund shall reimburse TSSG monthly for applicable out-of-pocket expenses,
including, but not limited to the following items:
o Microfiche/microfilm production
o Magnetic media tapes and freight
o Telephone and telecommunication costs, including all lease, maintenance
and line costs
o NSCC transaction charges at $.15/per financial transaction
o Shipping, Certified and Overnight mail and insurance
o Year-End form production and mailings
o Terminals, communication lines, printers and other equipment and any
expenses incurred in connection with such terminals and lines
o Duplicating services, as pre-approved by the Fund Courier services
o Due Diligence Mailings
o Rendering fees as billed
o Overtime, as pre-approved by the Fund
o Temporary staff, as pre-approved by the Fund
o Travel and entertainment, as pre-approved by the Fund
o Record retention, retrieval and destruction costs, including, but not
limited to exit fees charged by third party record keeping vendors
o Third party audit review
o All conversion costs: including System start up costs, but excluding costs
associated with conversations between TSSG systems.
o Such other miscellaneous expenses reasonably incurred by TSSG in
performing its duties and responsibilities under this Agreement.
o Such expenses incurred with consent of the Fund, not to be unreasonably
withheld.
o The costs associated with the Year-End Support Services set forth on the
attached Exhibit 1 of this Schedule D.
o The costs associated with the Broker Dealer Support Services set forth on
the attached Exhibit 2 of this Schedule D.
<PAGE> 22
EXHIBIT 1 OF SCHEDULE D
Year-End Support Services: Flat rate of $.12/per shareholder account open as of
December 31, 1994.
The services listed below will be performed by TSSG for the Fund in support of
reporting for tax year 1994 and compliance mailings for calendar year 1994.
TSSG assumes responsibility for performing the services in compliance with
current IRS rules and regulations.
(a) Up-front year-end planning and communication of year-end related
system modifications.
(b) Production of IRS required tax forms and amended/corrected tax forms
as requested by the Fund.
(c) Production of IRS required 1099 magnetic tape filings.
(d) Production of tax forms on microfiche.
(e) Maintenance of year-end data files and the handling of transaction
code updates to those files.
(f) Submission of year-end jobs.
(g) B-notice processing as follows:
o receipt of B-notice listing from IRS or AFS
o upload of data entry of all accounts to B-Notice subsystem
o execution and generation of B-Notice defense reports
o analysis of B-Notice Defense Reports to ensure accurate
coding
o coordination of mailings with vendor, including generation of
vendor tapes
o notification to Client Services of anticipated and actual
mailing dates, including volume, sample letters and
confirmation of the date backup withholding will be
imposed if no response is received
o systematic upload of W-9 responses as volumes warrant
(h) Correction processing resulting from the monthly review of the
year-end files-"balancing."
(i) Production of cost basis information on 1099B forms.
(j) All required state filings as requested by the Fund.
(k) All IRS required mailings requested by the Fund: B-Notice, Safe
Harbor, W-9, TEFRA election, IRS Penalty Notice, and TIN solicitation.
<PAGE> 23
EXHIBIT 1 OF SCHEDULE D (CONT'D)
(l) C-Notice processing as follows:
o receipt of C-Notice; imposition and release letters as
received from Fund or IRS
o performance of search function to identify all accounts
associated with the notice
o provide written instructions to Fund for proper account coding
(m) Initialization of Fund File in support of balancing tax reporting data
<PAGE> 24
EXHIBIT 2 OF SCHEDULE D
Broker/Dealer Support: Annualized fee of $.03/per shareholder account open
during any monthly period.
(a) NSCC Testing
(b) Back-up for NSCC redemption release
(c) Research and Problem Resolution
(d) Compliance and Support
<PAGE> 25
SCHEDULE E
DATA RETENTION AND RECOVERY STANDARDS
Data files included in the System are backed up according to a defined
retention schedule. This ensures availability of data for processing and
application recovery as well as compliance with regulatory requirements.
Critical files that are included in the retention process:
Shareholder Master
Shareholder History
Fund File
Dealer File
Global File
Certificate File
Broker/Client Cross Reference File
Additional Address File
Maintenance History File
Blue Sky Master
Price File
Rate File
Order Clearance File
These files are backed up as follows: daily and retained for six generations;
weekly and retained for 5 generations. The Shareholder Master, Shareholder
History and Fund Files are also backed up annually and retained for 7
generations.
In addition, the Acceptance File containing post-processing daily activity, and
the Daily File containing pre-processing transaction input, are backed up daily
and retained for six generations.
<PAGE> 26
SCHEDULE F
SYSTEM AVAILABILITY STANDARDS
These systems standards shall apply on business days.
o On-line systems availability between 7:00 a.m. and 7:00 p.m.
CST - 95% measured monthly.
o Average response time (7:00 a.m. to 7:00 p.m. CST) of 3 seconds
or less, in response to the system employed by A I M Fund
Services, Inc. as of September 1, 1994 - 95% measured monthly.
o Daily report bundles in queue for transmission no later than
7:00 a.m. CST each business day - 95% measured monthly each
bundle measured separately.
o Daily job PFSRXOED containing the Acceptance File download in
queue for transmission no later than 4:00 a.m. CST each
business day - 95% measured monthly.
o Daily job PFSRXCAD containing the Cap Stock File download in
queue for transmission no later than 6:30 a.m. CST each
business day - 95% measured monthly.
o Weekly job PFSXOHW containing the Dealer File download in
queue for transmission no later than 9:00 am. CST each
Saturday - 95% measured quarterly.
<PAGE> 1
Exhibit 9(b)(1)(iv)
AMENDMENT NUMBER 1 TO THE REMOTE
ACCESS AND RELATED SERVICES AGREEMENT
This Amendment Number 1 effective October 4, 1995 is made to the
Remote Access and Related Services Agreement dated December 23, 1994 (the
"Remote Agreement") by and between each registered investment company listed
on the signature pages hereof, either for itself or, with respect to each such
company that is a series investment company, on behalf of each of the series
or class named on the signature pages hereof (the "Fund") and THE SHAREHOLDER
SERVICES GROUP, INC. ("TSSG"), a Massachusetts corporation with principal
offices at One Exchange Place, Boston, Massachusetts 02109.
WHEREAS , the Fund desires to incorporate any changes or deletions to
those registered investment companies listed on the signature page of the
Remote Agreement as set forth on the signature page hereof;
WHEREAS, the Fund in connection with its access to the TSSG System,
desires to access and use TSSG's proprietary software known as the Structured
Query Language Application Programming Interface Product Release 5.0 (the
"SQL/API Product"); and
WHEREAS, TSSG desires to provide such access to the Fund solely in
conjunction with the Fund's use of the TSSG System;
In consideration of their mutual promises contained herein, the Fund
and TSSG agree to modify the Remote Access and Related Services Agreement (the
"Remote Agreement") as follows:
1. TSSG grants to the Fund a non-transferable and non-exclusive license
to access and use TSSG's SQL/API Product, maintained on the TSSG
System at the TSSG Facility, solely to process data with respect to
the Fund's internal business. The Fund is authorized to use the
SQL/API Product only in connection with the Fund's remote use of the
TSSG System. The Fund shall be prohibited from the further sale,
lease, transfer, license or sub-license, assignment or marketing in
any manner of the SQL/API Product, or any other proprietary software
used in conjunction with the TSSG System. The Fund shall also be
prohibited from the sale, lease, transfer, license, sub-license,
assignment, or marketing in any manner of any software product
developed in conjunction with the SQL/API Product.
2. It is acknowledged that the Fund acquires only the right to use the
SQL/API Product while the Remote Agreement is in effect between the
parties and such right and said license shall terminate upon
termination of the Remote Agreement. The Fund acknowledges that it
does not acquire any rights of ownership in the SQL/API Product.
This Agreement and the license granted pursuant hereto may not be
assigned, sublicensed or transferred.
<PAGE> 2
3. The Fund shall not have the right to use the SQL/API Product other
than in connection with the use of the TSSG System in compliance with
the Remote Agreement. The Fund may use the SQL/API Product to access
the TSSG System using only Proprietary Software or software developed
internally by the Fund.
4. EXCEPT AS EXPRESSLY PROVIDED FOR IN THIS AMENDMENT, TSSG MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, TO THE FUND OR ANY
OTHER PERSON, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES REGARDING
QUALITY, SUITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR OTHERWISE (IRRESPECTIVE OF ANY COURSE OF DEALING, CUSTOM OR
USAGE OF TRADE) OR ANY SERVICES PROVIDED UNDER THIS AGREEMENT.
5. Infringement Indemnity TSSG shall defend, at its expense, any action
brought against the Fund to the extent that is based on a claim that
the SQL/API Product infringes a United States copyright or duly issued
patent, or misappropriates the trade secrets of a third party. TSSG
shall indemnify and hold harmless the Fund against damages and costs
(including penalties, interest and reasonable attorney's fees) finally
awarded against the Fund directly attributable to such claim provided
that the Fund gives TSSG prompt written notice of such claim,
reasonable assistance and sole authority to defend or settle such
claim. If the SQL/API Product becomes, or in TSSG's opinion is likely
to become, the subject of such a claim then TSSG may, at its option:
(a) procure for the Fund the right to use the SQL/API Product free of
any liability for infringement or (b) replace or modify the SQL/API
Product to make it noninfringing. If TSSG is unable or determines
that it is commercially impracticable to undertake clause (a) or (b)
of this Section 5, the Fund will cease to use the directly affected
portion of the SQL/API Product, and if such SQL/API Product is in the
Fund's control, the Fund shall return or destroy it, and (c) TSSG will
grant to the Fund a pro-rata credit for the annual maintenance fee
that the Fund paid computed by dividing such fee by the total number
of months in the then current term of the license for the SQL/API
Product and multiplying the result by the number of months left in the
unexpired license term for the SQL/API Product.
TSSG shall have no obligation under this Section 5 if the alleged
infringement or violation is based upon the use of the SQL/API Product
in combination with other equipment or other software not furnished by
TSSG or if such claim arises from TSSG's compliance with the Fund's
designs, specifications or instructions or from the Fund's
modification of the SQL/API Product.
THIS SECTION STATES THE ENTIRE LIABILITY OF TSSG CONCERNING PATENT,
COPYRIGHT, TRADE SECRET OR OTHER PROPRIETARY RIGHTS INFRINGEMENT.
<PAGE> 3
6. Notwithstanding anything in this Amendment to the contrary, the Fund's
license to use the SQL/API Product will automatically terminate upon
termination of the Remote Agreement. This Amendment will terminate
automatically in the event of a breach of the sublicense.
7. TSSG shall take reasonable measures to enforce appropriate compliance
with the foregoing restrictions, up to and including the institution
and diligent prosecution of proper legal proceedings.
8. The Fund will agree to compensate TSSG for all fees as referenced on
the attached Schedule # 1 to this Amendment, and such other schedules
as may be agreed upon between the parties from time to time.
The Agreement as modified 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 promise not expressly contained
herein with respect to the subject matter hereof.
<PAGE> 4
The parties to this Amendment have caused it to be executed by their
duly authorized officers as of the date and year referenced above.
<TABLE>
<S> <C>
AIM EQUITY FUNDS, INC. AIM INVESTMENT SECURITIES
on behalf of the Class A and B Shares of FUNDS,
the Retail Classes of its AIM Charter Fund on behalf of its AIM Limited Maturity
and AIM Weingarten Fund, and on behalf Treasury Shares
of the Class A Shares of the Retail Classes
of AIM Constellation Fund and AIM By: /s/ ROBERT H. GRAHAM
Aggressive Growth Fund Portfolios ----------------------------------
Title: President
By: /s/ ROBERT H. GRAHAM --------------------------------
-----------------------------------
Title: President
--------------------------------
AIM TAX-EXEMPT FUNDS, INC.,
on behalf of its AIM Tax-Exempt
Cash Fund and AIM Tax-Exempt
Bond Fund of Connecticut
Portfolios and the AIM Tax-Free
AIM FUNDS GROUP, Intermediate Shares of its Intermediate
on behalf of the Class A and Class B Portfolio
Shares of its AIM Balanced Fund, AIM Inter-
mediate Government Fund, AIM Growth Fund, By: /s/ ROBERT H. GRAHAM
AIM High Yield Fund, AIM Income Fund, -----------------------------------
AIM Municipal Bond Fund, AIM Title: President
Global Utilities Fund and AIM Value Fund --------------------------------
Portfolios and on behalf of the Class A,
Class B and Class C Shares of its AIM Money
Market Fund Portfolio THE SHAREHOLDER SERVICES
GROUP, INC.
By: /s/ ROBERT H. GRAHAM
----------------------------------- By: /s/ JACK P. KUTNER
Title: President -----------------------------------
--------------------------------- Title: EVP COO
-------------------------------
AIM INTERNATIONAL FUNDS, INC.,
on behalf of the Class A and Class B
Shares of its AIM International Equity
Fund, AIM Global Aggressive Growth Fund,
AIM Global Growth Fund and AIM Global
Income Fund Portfolios
By: /s/ ROBERT H. GRAHAM
-----------------------------------
Title: President
--------------------------------
</TABLE>
<PAGE> 5
SCHEDULE # 1 TO AMENDMENT NUMBER 1
SQL/API FEES
Listed below are TSSG's License Fees for the SQL/API Product
<TABLE>
<S> <C> <C>
o One Time License Fee $30,000
o Annual Maintenance Fee(1) $15,000
billed quarterly in advance beginning
the first month of the Agreement
o On-Going Development Cost(2) $ 125 per hour
o Out of Pocket Expenses Per the existing
Remote Agreement
dated 12/23/94.
</TABLE>
The Fund and TSSG intend to implement initially Release 5.0 of the SQL/API
Product on 150 Workstations. For additional workstations beyond the 150
licensed, the Fund shall pay TSSG the then-current license, usage and support
fees for each additional Workstation
__________________________________
(1) The increase in the maintenance fee after the first year will be equal
to the lesser of (i) the previous year's 12 month average increase in the
Consumer Price Index (CPI) or (ii) seven percent (7%) of the maintenance fee
charged by TSSG for the preceding twelve month period.
(2) Development work includes product installation, customization and
enhancements requested by the Fund.
<PAGE> 1
Exhibit 9(b)(1)(v)
ADDENDUM NUMBER 2 TO THE REMOTE
ACCESS AND RELATED SERVICES AGREEMENT
This Amendment Number 2 effective October 12, 1995 is made to the
Remote Access and Related Services Agreement dated December 23, 1994 (the
"Remote Agreement") by and between each registered investment company listed on
the signature pages hereof, either for itself or, with respect to each such
company that is a series investment company, on behalf of each of the series or
class named on the signature pages hereof (the "Fund") and THE SHAREHOLDER
SERVICES GROUP, INC. ("TSSG"), a Massachusetts corporation with principal
offices at One Exchange Place, Boston, Massachusetts 02109.
WHEREAS, the Fund desires to incorporate any changes or deletions to
those registered investment companies listed on the signature page of the
Remote Agreement as set forth on the signature page hereof;
WHEREAS the Fund desires to use an additional product to the TSSG
System known as the Price Rate Capture System (the "PRAT Application"); and
WHEREAS, TSSG desires to provide the PRAT Application to the Fund
solely in conjunction with the Fund's use of the TSSG System;
In consideration of their mutual promises contained herein, the Fund
and TSSG agree to modify the Remote Access and Related Services Agreement (the
"Remote Agreement") as follows:
1. Modify Schedule D to include the attached Exhibit 3 to Schedule D
The Agreement as modified by this Addendum ("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 promise not expressly
contained herein with respect to the subject matter hereof.
The parties to this Addendum have caused it to be executed by their
duly authorized officers as of the date and year referenced above.
<TABLE>
<S> <C>
AIM EQUITY FUNDS, INC. AIM FUNDS GROUP,
on behalf of the Class A and B Shares of the Retail on behalf of the Class A and Class B Shares of its
Classes of its AIM Charter Fund and AIM AIM Balanced Fund, AIM Intermediate Government
Weingarten Fund, and on behalf of the Class A Fund, AIM Growth Fund, AIM High Yield Fund,
Shares of the Retail Classes of AIM Constellation AIM Income Fund, AIM Municipal Bond Fund,
Fund and AIM Aggressive Growth Fund Portfolios AIM Global Utilities Fund and AIM Value Fund
Portfolios and on behalf of the Class A, Class B and
By: /s/ ROBERT H. GRAHAM Class C Shares of its AIM Money Market Fund
----------------------------------- Portfolio
Title: President
-------------------------------- By: /s/ ROBERT H. GRAHAM
-----------------------------------
Title: President
--------------------------------
AIM INTERNATIONAL FUNDS, INC.,
on behalf of the Class A and Class B Shares of its
AIM International Equity Fund, AIM Global
Aggressive Growth Fund, AIM Global Growth Fund
And AIM Global Income Fund Portfolios
By: /s/ ROBERT H. GRAHAM
-----------------------------------
Title: President
--------------------------------
</TABLE>
<PAGE> 2
AIM INVESTMENT SECURITIES FUNDS,
on behalf of its AIM Limited Maturity Treasury
Shares
By: /s/ ROBERT H. GRAHAM
-----------------------------------
Title: President
--------------------------------
AIM TAX-EXEMPT FUNDS, INC.,
on behalf of its AIM Tax-Exempt Cash Fund and
AIM Tax-Exempt Bond Fund of Connecticut
Portfolios and the AIM Tax-Free Intermediate Shares
of its Intermediate Portfolio
By: /s/ ROBERT H. GRAHAM
-----------------------------------
Title: President
--------------------------------
THE SHAREHOLDER SERVICES GROUP,
INC.
By: /s/ JACK P. KUTNER
-----------------------------------
Title: COO-EVP
--------------------------------
<PAGE> 3
SCHEDULE D
OUT-OF-POCKET EXPENSES
The Fund shall reimburse TSSG monthly for applicable out-of-pocket expenses,
including, but not limited to the following items:
o Microfiche/microfilm production
o Magnetic media tapes and freight
o Telephone and telecommunication costs, including all lease,
maintenance and line costs
o NSCC transaction charges at $.15/per financial transaction
o Shipping, Certified and Overnight mail and insurance
o Year-End form production and mailings
o Terminals, communication lines, printers and other equipment
and any expenses incurred in connection with such terminals
and lines
o Duplicating services, as pre-approved by the Fund
o Courier services
o Due Diligence Mailings
o Rendering fees as billed
o Overtime, as pre-approved by the Fund
o Temporary staff, as pre-approved by the Fund
o Travel and entertainment, as pre-approved by the Fund
o Record retention, retrieval and destruction costs, including,
but not limited to exit fees charged by third party record
keeping vendors
o Third party audit review
o All conversion costs: including System start up costs, but
excluding costs associated with conversations between TSSG
systems.
o Such other miscellaneous expenses reasonably incurred by TSSG
in performing its duties and responsibilities under this
Agreement. Such expenses incurred with consent of the Fund,
not to be unreasonably withheld.
o The costs associated with the Year-End Support Services set
forth on the attached Exhibit 1 of this Schedule D.
o The costs associated with the Broker Dealer Support Services
set forth on the attached Exhibit 2 of this Schedule D.
o The costs associated with the Price Rate Transmission
Services set forth on the attached Exhibit 3 of this
Schedule D.
<PAGE> 4
EXHIBIT 3 TO SCHEDULE D
Price Rate Capture System Services (PRAT)
- -----------------------------------------
The PRAT Application will accept prices and dividend rates from the Fund
Accounting Department of A I M Advisors, Inc. electronically and post them to
the TSSG Pricing System. The PRAT Application will run interconnected via
Local Area Network hardware and software.
The fees for the PRAT Service shall be as follows:
o One Time Set Up Fee $5,000.
o Annual Fee* $7,500.
* The annual fee provides system and personnel resources required to support a
maximum average of 50 transmissions per month. A charge of $30.00 per
transmission will be assessed for all transmissions incurred in excess of the
average 2 per day per month.
<PAGE> 1
Exhibit 9(b)(3)
TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
AIM INVESTMENT SECURITIES FUNDS
AND
A I M FUND SERVICES, INC.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE 1 TERMS OF APPOINTMENT; DUTIES OF THE TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2 FEES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 5 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 6 COVENANTS OF THE FUND AND THE TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 7 TERMINATION OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 8 ADDITIONAL FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 9 ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 10 AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 11 TEXAS LAW TO APPLY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 12 MERGER OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 13 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 14 NO PERSONAL LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
</TABLE>
<PAGE> 3
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 1st day of November, 1994, by and between AIM
INVESTMENT SECURITIES FUNDS, a Delaware business trust, having its principal
office and place of business at 11 Greenway Plaza, Suite 1919, Houston, Texas
77046 (the "Fund"), and A I M Fund Services, Inc., a Delaware corporation
having its principal office and place of business at 11 Greenway Plaza, Suite
1919, Houston, Texas 77046 (the "Transfer Agent").
WHEREAS, the Transfer Agent is registered as such with the Securities
and Exchange Commission (the "SEC"); and
WHEREAS, the Fund is authorized to issue shares in separate series and
classes, with each such series representing interests in a separate portfolio
of securities and other assets and each such class having different
distribution arrangements; and
WHEREAS, the Fund on behalf of the Retail Class of each of the
Portfolios thereof (the "Portfolios") desires to appoint the Transfer Agent as
its transfer agent, and agent in connection with certain other activities, with
respect to the Portfolios, and the Transfer Agent desires to accept such
appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE 1
TERMS OF APPOINTMENT; DUTIES OF THE TRANSFER AGENT
1.01 Subject to the terms and conditions set forth in this
Agreement, the Fund hereby employs and appoints the Transfer Agent to act as,
and the Transfer Agent agrees to act as, its transfer agent for the authorized
and issued shares of beneficial interest of the Fund representing interests in
the Retail Class of each of the respective Portfolios ("Shares"), dividend
disbursing agent, and agent in connection with any accumulation or similar
plans provided to shareholders of each of the Portfolios (the "Shareholders"),
including without limitation any periodic investment plan or periodic
withdrawal program, as provided in the currently effective prospectus and
statement of additional information (the "Prospectus") of the Fund on behalf of
the Portfolios.
1.02 The Transfer Agent agrees that it will perform the following
services:
(a) The Transfer Agent shall, in accordance with procedures
established from time to time by agreement between the Fund on behalf of each
of the Portfolios, as applicable, and the Transfer Agent:
(i) receive for acceptance, orders for the purchase of
Shares, and promptly deliver payment and appropriate
documentation thereof to the Custodian of the Fund
authorized pursuant to the Agreement and Declaration
of Trust and By-Laws of the Fund (the "Custodian");
(ii) pursuant to purchase orders, issue the appropriate
number of Shares and hold such Shares in the
appropriate Shareholder account;
1
<PAGE> 4
(iii) receive for acceptance redemption requests and
redemption directions and deliver the appropriate
documentation thereof to the Custodian;
(iv) at the appropriate time as and when it receives
monies paid to it by the Custodian with respect to
any redemption, pay over or cause to be paid over in
the appropriate manner such monies as instructed by
the Fund;
(v) effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions;
(vi) prepare and transmit payments for dividends and
distributions declared by the Fund on behalf of the
Shares;
(vii) maintain records of account for and advise the Fund
and its Shareholders as to the foregoing; and
(viii) record the issuance of Shares of the Fund and
maintain pursuant to SEC Rule 17Ad-1O(e) a record of
the total number of Shares which are authorized,
based upon data provided to it by the Fund, and
issued and outstanding.
The Transfer Agent shall also provide the Fund on a regular basis with
the total number of Shares which are authorized and issued and outstanding and
shall have no obligation, when recording the issuance of Shares, to monitor the
issuance of such Shares or to take cognizance of any laws relating to the issue
or sale of such Shares, which function shall be the sole responsibility of the
Fund.
(b) In addition to the services set forth in the above paragraph
(a), the Transfer Agent shall: (i) perform the customary services of a transfer
agent, including but not limited to: maintaining all Shareholder accounts,
mailing Shareholder reports and prospectuses to current Shareholders, preparing
and mailing confirmation forms and statements of accounts to Shareholders for
all purchases and redemptions of Shares and other confirmable transactions in
Shareholder accounts, preparing and mailing activity statements for
Shareholders, and providing Shareholder account information.
(c) Procedures as to who shall provide certain of these services
in Article 1 may be established from time to time by agreement between the Fund
on behalf of each Portfolio and the Transfer Agent. The Transfer Agent may at
times perform only a portion of these services and the Fund or its agent may
perform these services on the Fund's behalf.
ARTICLE 2
FEES AND EXPENSES
2.01 For performance by the Transfer Agent pursuant to this
Agreement, the Fund agrees on behalf of each of the Portfolios to pay the
Transfer Agent fees as set out in the initial fee schedule attached hereto.
Such fees and out-of-pocket expenses and advances identified under Section 2.02
below may be changed from time to time subject to mutual written agreement
between the Fund and the Transfer Agent.
2
<PAGE> 5
2.02 In addition to the fee paid under Section 2.01 above, the Fund
agrees to reimburse the Transfer Agent for out-of-pocket expenses or advances
incurred by the Transfer Agent for the items set out in the fee schedule
attached hereto. In addition, any other expenses incurred by the Transfer
Agent at the request or with the consent of the Fund, will be reimbursed by the
Fund on behalf of the applicable Shares.
2.03 The Fund agrees on behalf of each of the Portfolios to pay all
fees and reimbursable expenses following the mailing of the respective billing
notice. Postage for mailing of dividends, proxies, Fund reports and other
mailings to all Shareholder accounts shall be advanced to the Transfer Agent by
the Fund at least seven (7) days prior to the mailing date of such materials.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT
The Transfer Agent represents and warrants to the Fund that:
3.01 It is a corporation duly organized and existing and in good
standing under the laws of the state of Delaware.
3.02 It is duly qualified to carry on its business in Delaware and
in Texas.
3.03 It is empowered under applicable laws and by its Charter and
By-Laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
3.06 It is registered as a Transfer Agent as required by the
federal securities laws.
3.07 This Agreement is a legal, valid and binding obligation to it.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund represents and warrants to the Transfer Agent that:
4.01 It is a business trust duly organized and existing and in good
standing under the laws of Delaware.
4.02 It is empowered under applicable laws and by its Agreement and
Declaration of Trust and By-Laws to enter into and perform this Agreement.
4.03 All proceedings required by said Agreement and Declaration of
Trust and By-Laws have been taken to authorize it to enter into and perform
this Agreement.
3
<PAGE> 6
4.04 It is an open-end, diversified management investment company
registered under the Investment Company Act of 1940, as amended.
4.05 A registration statement under the Securities Act of 1933, as
amended on behalf of each of the Portfolios is currently effective and will
remain effective, with respect to all Shares of the Fund being offered for
sale.
ARTICLE 5
INDEMNIFICATION
5.01 The Transfer Agent shall not be responsible for, and the Fund
shall on behalf of the applicable Portfolio, indemnify and hold the Transfer
Agent harmless from and against, any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liability arising out of or attributable
to:
(a) all actions of the Transfer Agent or its agents or
subcontractors required to be taken pursuant to this Agreement, provided that
such actions are taken in good faith and without negligence or willful
misconduct;
(b) the Fund's lack of good faith, negligence or willful
misconduct which arise out of the breach of any representation or warranty of
the Fund hereunder;
(c) the reliance on or use by the Transfer Agent or its agents or
subcontractors of information, records and documents or services which (i) are
received or relied upon by the Transfer Agent or its agents or subcontractors
and/or furnished to it or performed by on behalf of the Fund, and (ii) have
been prepared, maintained and/or performed by the Fund or any other person or
firm on behalf of the Fund; provided such actions are taken in good faith and
without negligence or willful misconduct;
(d) the reliance on, or the carrying out by the Transfer Agent or
its agents or subcontractors of any instructions or requests of the Fund on
behalf of the applicable Portfolio; provided such actions are taken in good
faith and without negligence or willful misconduct; or
(e) the offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such state or in
violation of any stop order or other determination or ruling by any federal
agency or any state with respect to the offer or sale of such Shares in such
state.
5.02 The Transfer Agent shall indemnify and hold the Fund harmless
from and against any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liability arising out of or attributable to any action
or failure or omission to act by the Transfer Agent as result of the Transfer
Agent's lack of good faith, negligence or willful misconduct.
5.03 At any time the Transfer Agent may apply to any officer of the
Fund for instructions, and may consult with legal counsel with respect to any
matter arising in connection with the services to be performed by the Transfer
Agent under this Agreement, and the Transfer Agent and its agents or
subcontractors shall not be liable to and shall be indemnified by the Fund on
behalf of the applicable Portfolio for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. The
Transfer Agent shall be protected and
4
<PAGE> 7
indemnified in acting upon any paper or document furnished by or on behalf of
the Fund, reasonably believed to be genuine and to have been signed by the
proper person or persons, or upon any instruction, information, data, records or
documents provided to the Transfer Agent or its agents or subcontractors by
machine readable input, telex, CRT data entry or other similar means authorized
by the Fund, and shall not be held to have notice of any change of authority of
any person, until receipt of written notice thereof from the Fund.
5.04 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to
the other for any damages resulting from such failure to perform or otherwise
from such causes.
5.05 Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this Agreement or for
any consequential damages arising out of any act or failure to act hereunder.
5.06 In order that the indemnification provisions contained in this
Article 5 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The
party who may be required to indemnify shall have the option to participate
with the party seeking indemnification in the defense of such claim. The party
seeking indemnification shall in no case confess any claim or make any
compromise in any case in which the other party may be required to indemnify it
except with the other party's prior written consent.
ARTICLE 6
COVENANTS OF THE FUND AND THE TRANSFER AGENT
6.01 The Fund shall, upon request, on behalf of each of the
Portfolios promptly furnish to the Transfer Agent the following:
(a) a certified copy of the resolution of the Board of Trustees of
the Fund authorizing the appointment of the Transfer Agent and the execution
and delivery of this Agreement; and
(b) a copy of the Agreement and Declaration of Trust and By-Laws
of the Fund and all amendments thereto.
6.02 The Transfer Agent shall keep records relating to the services
to be performed hereunder, in the form and manner as it may deem advisable. To
the extent required by Section 31 of the Investment Company Act of 1940, as
amended, and the Rules thereunder, the Transfer Agent agrees that all such
records prepared or maintained by the Transfer Agent relating to the services
to be performed by the Transfer Agent hereunder are the property of the Fund
and will be preserved, maintained and made available in accordance with such
Section and Rules, and will be surrendered promptly to the Fund on and in
accordance with its request.
6.03 The Transfer Agent and the Fund agree that all books, records,
information and data pertaining to the business of the other party which are
exchanged or received pursuant to
5
<PAGE> 8
the negotiation or the carrying out of this Agreement shall remain confidential,
and shall not be voluntarily disclosed to any other person, except as may be
required by law.
6.04 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, the Transfer Agent will endeavor to notify the
Fund and to secure instructions from an authorized officer of the Fund as to
such inspection. The Transfer Agent reserves the right, however, to exhibit
the Shareholder records to any person whenever it is advised by its counsel
that it may be held liable for the failure to exhibit the Shareholder records
to such person.
ARTICLE 7
TERMINATION OF AGREEMENT
7.01 This Agreement may be terminated by either party upon sixty
(60) days written notice to the other.
7.02 Should the Fund exercise its right to terminate this
Agreement, all out-of-pocket expenses associated with the movement of records
and material will be borne by the Fund on behalf of the applicable Portfolios.
Additionally, the Transfer Agent reserves the right to charge for any other
reasonable expenses associated with such termination and/or a charge equivalent
to the average of three (3) months' fees.
ARTICLE 8
ADDITIONAL FUNDS
8.01 In the event that the Fund establishes one or more series of
Shares in addition to the Portfolios with respect to which it desires to have
the Transfer Agent render services as transfer agent under the terms hereof, it
shall so notify the Transfer Agent in writing, and if the Transfer Agent agrees
in writing to provide such services, such series of Shares shall become a
Portfolio hereunder.
ARTICLE 9
ASSIGNMENT
9.01 Except as provided in Section 9.03 below, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party.
9.02 This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and assigns.
9.03 The Transfer Agent may, without further consent on the part of
the Fund, subcontract for the performance hereof with any entity which is duly
registered as a transfer agent pursuant to Section 17A(c)(1) of the Securities
Exchange Act of 1934 as amended ("Section 17A(c)(1)"); provided, however, that
the Transfer Agent shall be as fully responsible to the Fund for the acts and
omissions of any subcontractor as it is for its own acts and omissions.
6
<PAGE> 9
ARTICLE 10
AMENDMENT
10.01 This Agreement may be amended or modified by a written
agreement executed by both parties and authorized or approved by a resolution
of the Board of Trustees of the Fund.
ARTICLE 11
TEXAS LAW TO APPLY
11.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Texas.
ARTICLE 12
MERGER OF AGREEMENT
12.01 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
ARTICLE 13
COUNTERPARTS
13.01 This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
ARTICLE 14
NO PERSONAL LIABILITY
14.01 Notice is hereby given that this Agreement is executed on
behalf of the Fund, by officers of the Fund as officers and not individually
and that the obligations of or arising out of this Agreement are not binding
upon any of the trustees, officers, shareholders, employees or agents of the
Fund individually but are binding only upon the assets and property of the
Fund.
7
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf by and through their duly
authorized officers, as of the day and year first above written.
A I M INVESTMENT SECURITIES FUNDS
By: /s/ ROBERT H. GRAHAM
------------------------------
President
ATTEST:
/s/ NANCY L. MARTIN
- ------------------------------
Assistant Secretary
A I M FUND SERVICES, INC.
By: /s/ JOHN CALDWELL
------------------------------
President
ATTEST:
/s/ NANCY L. MARTIN
- ------------------------------
Assistant Secretary
8
<PAGE> 11
FEE SCHEDULE
1. For performance by the Transfer Agent pursuant to this Agreement, the Fund
agrees on behalf of each of the Portfolios to pay the Transfer Agent an
annualized fee for shareholder accounts that are open during any monthly
period as set forth below, and an annualized fee of $.70 per shareholder
account that is closed during any monthly period. Both fees shall be
billed by the Transfer Agent monthly in arrears on a prorated basis of
1/12 of the annualized fee for all such accounts.
<TABLE>
<CAPTION>
Per Account Fee
Fund Type Annualized
--------- ----------
<S> <C>
Class A Annual/Semi-Annual Dividends $15.15
Class A Quarterly & Monthly Dividend 17.15
Class A Daily Accrual 19.65
Class B 19.65
</TABLE>
2. The Transfer Agent shall provide the AIM Funds with an annualized credit
to the monthly billings of (a) $1.50 for each open account in excess of
100,000 open AIM Funds Accounts up to and including 125,000 open AIM Funds
Accounts; (b) $1.75 for each open account in excess of 125,000 open AIM
Funds Accounts up to and including 150,000 open AIM Funds Accounts; (c)
$2.00 for each open AIM Funds Account in excess of 150,000 open AIM Funds
Accounts up to and including 200,000 open AIM Funds Accounts; (d) $2.25
for each open AIM Funds Account in excess of 200,000 open AIM Funds
Accounts up to and including 500,000 open AIM Funds Accounts; (e) $2.50
for each open AIM Funds Account in excess of 500,000 open AIM Funds
Accounts up to and including 1,000,000 open AIM Funds Accounts; and (f)
$3.00 for each open AIM Funds Account in excess of 1,000,000 open AIM
Funds Accounts.
3. In addition, beginning on the anniversary date of the execution of the
Remote Services Agreement with The Shareholder Services Group, Inc., and
on each subsequent anniversary date, the per account fees shall each be
increased by a percentage amount equal to the percentage increase in the
then current Consumer Price Index (all urban consumers) or its successor
index, though in no event shall such increase be greater than a 7%
increase over the previous fees.
4. Other Fees
IRA Annual Maintenance Fee $10 per IRA account per year (paid by
investor per tax I.D. number).
Balance Credit The total fees due to the Transfer Agent
from all funds affiliated with the Fund
shall be reduced by an amount equal to one
half of investment income earned by the
Transfer Agent on the DDA balances of the
disbursement accounts for those funds.
Remote Services Fee $3.60 per open account per year, payable
monthly and $1.80 per closed account per
year, payable monthly.
9
<PAGE> 12
5. OUT-OF-POCKET EXPENSES
The Fund shall reimburse the Transfer Agent monthly for applicable
out-of-pocket expenses, including, but not limited to the following items:
o Microfiche/microfilm production & equipment
o Magnetic media tapes and freight
o Printing costs, including, without limitation, certificates,
envelopes, checks, stationery, confirmations and statements
o Postage (bulk, pre-sort, ZIP+4, barcoding, first class) direct
pass through to the Fund
o Due diligence mailings
o Telephone and telecommunication costs, including all lease,
maintenance and line costs
o Ad hoc reports
o Proxy solicitations, mailings and tabulations
o Daily & Distribution advice mailings
o Shipping, Certified and Overnight mail and insurance
o Year-end form production and mailings
o Terminals, communication lines, printers and other equipment and
any expenses incurred in connection with such terminals and lines
o Duplicating services
o Courier services
o Banking charges, including without limitation incoming and
outgoing wire charges @ $8.00 per wire
o Rendering fees as billed
o Federal Reserve charges for check clearance
o Record retention, retrieval and destruction costs, including, but
not limited to exit fees charged by third party record keeping
vendors
o Third party audit reviews
o All client specific Systems enhancements will be at the Funds'
cost.
o Certificate Insurance
o Such other miscellaneous expenses reasonably incurred by the
Transfer Agent in performing its duties and responsibilities
under this Agreement
o Checkwriting fee of $.75 per check redemption.
The Fund agrees that postage and mailing expenses will be paid on the day
of or prior to mailing. In addition, the Fund will promptly reimburse the
Transfer Agent for any other unscheduled expenses incurred by the Transfer
Agent whenever the Fund and the Transfer Agent mutually agree that such
expenses are not otherwise properly borne by the Transfer Agent as part of
its duties and obligations under the Agreement.
10
<PAGE> 1
Exhibit 9(b)(4)
TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
AIM INVESTMENT SECURITIES FUNDS
AND
A I M INSTITUTIONAL FUND SERVICES, INC.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE 1 TERMS OF APPOINTMENT; DUTIES OF THE TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2 FEES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 5 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 6 COVENANTS OF THE FUND AND THE TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 7 TERMINATION OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 8 ADDITIONAL FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 9 ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 10 AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 11 TEXAS LAW TO APPLY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 12 MERGER OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 13 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 14 NO PERSONAL LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
</TABLE>
<PAGE> 3
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 1st day of July, 1995, by and between AIM
INVESTMENT SECURITIES FUNDS, a Delaware business trust having its principal
office and place of business at 11 Greenway Plaza, Suite 1919, Houston, Texas
77046 (the "Fund"), and A I M Institutional Fund Services, Inc., a Delaware
corporation having its principal office and place of business at 11 Greenway
Plaza, Suite 1919, Houston, Texas 77046 (the "Transfer Agent").
WHEREAS, the Transfer Agent is registered as such with the Securities
and Exchange Commission (the "SEC"); and
WHEREAS, the Fund is authorized to issue shares in separate series and
classes, with each such series representing interests in a separate portfolio
of securities and other assets and each such class having different
distribution arrangements; and
WHEREAS, the Fund on behalf of the Institutional Class of each of the
portfolios thereof (the "Portfolios") desires to appoint the Transfer Agent as
its transfer agent, and agent in connection with certain other activities, with
respect to the Portfolios, and the Transfer Agent desires to accept such
appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I
TERMS OF APPOINTMENT; DUTIES OF THE TRANSFER AGENT
1.01 Subject to the terms and conditions set forth in this
Agreement, the Fund hereby employs and appoints the Transfer Agent to act as,
and the Transfer Agent agrees to act as, its transfer agent for the authorized
and issued shares of beneficial interest of the Fund representing interests in
the Institutional Class of each of the respective Portfolios ("Shares"),
dividend disbursing agent, and agent in connection with any accumulation or
similar plans provided to shareholders of each of the Portfolios (the
"Shareholders"), including without limitation any periodic investment plan or
periodic withdrawal program, as provided in the currently effective prospectus
and statement of additional information (the "Prospectus") of the Fund on
behalf of the Portfolios.
1.02 The Transfer Agent agrees that it will perform the following
services:
(a) The Transfer Agent shall, in accordance with procedures
established from time to time by agreement between the Fund on behalf of each
of the Portfolios, as applicable, and the Transfer Agent:
(i) receive for acceptance, orders for the purchase of
Shares, and promptly deliver payment and appropriate
documentation thereof to the Custodian of the Fund
authorized pursuant to the Agreement and Declaration
of Trust and By-Laws of the Fund (the "Custodian");
(ii) pursuant to purchase orders, issue the appropriate
number of Shares and hold such Shares in the
appropriate Shareholder account;
1
<PAGE> 4
(iii) receive for acceptance redemption requests and
redemption directions and deliver the appropriate
documentation thereof to the Custodian;
(iv) at the appropriate time as and when it receives
monies paid to it by the Custodian with respect to
any redemption, pay over or cause to be paid over in
the appropriate manner such monies as instructed by
the Fund;
(v) effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions;
(vi) prepare and transmit payments for dividends and
distributions declared by the Fund on behalf of the
Shares;
(vii) maintain records of account for and advise the Fund
and its Shareholders as to the foregoing; and
(viii) record the issuance of Shares of the Fund and
maintain pursuant to SEC Rule 17Ad-1O(e) a record of
the total number of Shares which are authorized,
based upon data provided to it by the Fund, and
issued and outstanding.
The Transfer Agent shall also provide the Fund on a regular basis with
the total number of Shares which are authorized and issued and outstanding but
shall have no obligation, when recording the issuance of Shares, to monitor the
issuance of such Shares or to take cognizance of any laws relating to the issue
or sale of such Shares, which function shall be the sole responsibility of the
Fund.
(b) In addition to the services set forth in the above paragraph
(a), the Transfer Agent shall: (i) perform the customary services of a transfer
agent, including but not limited to: maintaining all Shareholder accounts,
mailing Shareholder reports and prospectuses to current Shareholders, preparing
and mailing confirmation forms and statements of accounts to Shareholders for
all purchases and redemptions of Shares and other confirmable transactions in
Shareholder accounts, preparing and mailing activity statements for
Shareholders, and providing Shareholder account information.
(c) Procedures as to who shall provide certain of these services
in Article 1 may be established from time to time by agreement between the Fund
on behalf of each Portfolio and the Transfer Agent. The Transfer Agent may at
times perform only a portion of these services and the Fund or its agent may
perform these services on the Fund's behalf.
ARTICLE 2
FEES AND EXPENSES
2.01 For performance by the Transfer Agent pursuant to this
Agreement, the Fund agrees on behalf of each of the Portfolios to pay the
Transfer Agent an annual fee in the amount of .007% of average daily net
assets, payable monthly. Such fee may be changed from time to time subject to
mutual written agreements between the Fund and the Transfer Agent.
2
<PAGE> 5
2.02 The Fund agrees on behalf of each of the Portfolios to pay all
fees following the mailing of a billing notice.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT
The Transfer Agent represents and warrants to the Fund that:
3.01 It is a corporation duly organized and existing and in good
standing under the laws of the state of Delaware.
3.02 It is duly qualified to carry on its business in Delaware and
in Texas.
3.03 It is empowered under applicable laws and by its Charter and
By-Laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
3.06 It is registered as a Transfer Agent as required by the
federal securities laws.
3.07 This Agreement is a legal, valid and binding obligation to it.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund represents and warrants to the Transfer Agent that:
4.01 It is a business trust duly organized and existing and in good
standing under the laws of Delaware.
4.02 It is empowered under applicable laws and by its Agreement and
Declaration of Trust and By-Laws to enter into and perform this Agreement.
4.03 All proceedings required by said Agreement and Declaration of
Trust and By-Laws have been taken to authorize it to enter into and perform
this Agreement.
4.04 It is an open-end, management investment company registered
under the Investment Company Act of 1940, as amended.
4.05 A registration statement under the Securities Act of 1933, as
amended, on behalf of each of the Portfolios is currently effective and will
remain effective, with respect to all Shares of the Fund being offered for
sale.
3
<PAGE> 6
ARTICLE 5
INDEMNIFICATION
5.01 The Transfer Agent shall not be responsible for, and the Fund
shall on behalf of the applicable Portfolio, indemnify and hold the Transfer
Agent harmless from and against, any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liability arising out of or attributable
to:
(a) all actions of the Transfer Agent or its agents or
subcontractors required to be taken pursuant to this Agreement, provided that
such actions are taken in good faith and without negligence or willful
misconduct;
(b) the Fund's lack of good faith, negligence or willful
misconduct which arise out of the breach of any representation or warranty of
the Fund hereunder;
(c) the reliance on or use by the Transfer Agent or its agents or
subcontractors of information, records and documents or services which (i) are
received or relied upon by the Transfer Agent or its agents or subcontractors
and/or furnished to it or performed by on behalf of the Fund, and (ii) have
been prepared, maintained and/or performed by the Fund or any other person or
firm on behalf of the Fund; provided such actions are taken in good faith and
without negligence or willful misconduct;
(d) the reliance on, or the carrying out by the Transfer Agent or
its agents or subcontractors of any instructions or requests of the Fund on
behalf of the applicable Portfolio; provided such actions are taken in good
faith and without negligence or willful misconduct; or
(e) the offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such state or in
violation of any stop order or other determination or ruling by any federal
agency or any state with respect to the offer or sale of such Shares in such
state.
5.02 The Transfer Agent shall indemnify and hold the Fund harmless
from and against any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liability arising out of or attributable to any action
or failure or omission to act by the Transfer Agent as result of the Transfer
Agent's lack of good faith, negligence or willful misconduct.
5.03 At any time the Transfer Agent may apply to any officer of the
Fund for instructions, and may consult with legal counsel with respect to any
matter arising in connection with the services to be performed by the Transfer
Agent under this Agreement, and the Transfer Agent and its agents or
subcontractors shall not be liable to and shall be indemnified by the Fund on
behalf of the applicable Portfolio for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. The
Transfer Agent shall be protected and indemnified in acting upon any paper or
document furnished by or on behalf of the Fund, reasonably believed to be
genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided to the Transfer
Agent or its agents or subcontractors by machine readable input, telex, CRT data
entry or other similar means authorized by the Fund, and shall not be held to
have notice of any change of authority of any person, until receipt of written
notice thereof from the Fund.
4
<PAGE> 7
5.04 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to
the other for any damages resulting from such failure to perform or otherwise
from such causes.
5.05 Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this Agreement or for
any consequential damages arising out of any act or failure to act hereunder.
5.06 In order that the indemnification provisions contained in this
Article 5 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The
party who may be required to indemnify shall have the option to participate
with the party seeking indemnification in the defense of such claim. The party
seeking indemnification shall in no case confess any claim or make any
compromise in any case in which the other party may be required to indemnify it
except with the other party's prior written consent.
ARTICLE 6
COVENANTS OF THE FUND AND THE TRANSFER AGENT
6.01 The Fund shall, upon request, on behalf of each of the
Portfolios promptly furnish to the Transfer Agent the following:
(a) a certified copy of the resolution of the Board of Trustees of
the Fund authorizing the appointment of the Transfer Agent and the execution
and delivery of this Agreement; and
(b) a copy of the Agreement and Declaration of Trust and By-Laws
of the Fund and all amendments thereto.
6.02 The Transfer Agent shall keep records relating to the services
to be performed hereunder, in the form and manner as it may deem advisable. To
the extent required by Section 31 of the Investment Company Act of 1940, as
amended, and the Rules thereunder, the Transfer Agent agrees that all such
records prepared or maintained by the Transfer Agent relating to the services
to be performed by the Transfer Agent hereunder are the property of the Fund
and will be preserved, maintained and made available in accordance with such
Section and Rules, and will be surrendered promptly to the Fund on and in
accordance with its request.
6.03 The Transfer Agent and the Fund agree that all books, records,
information and data pertaining to the business of the other party which are
exchanged or received pursuant to the negotiation or the carrying out of this
Agreement shall remain confidential, and shall not be voluntarily disclosed to
any other person, except as may be required by law.
6.04 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, the Transfer Agent will endeavor to notify the
Fund and to secure instructions from an authorized officer of the Fund as to
such inspection. The Transfer Agent reserves the right, however, to exhibit
the Shareholder records to any person whenever it is advised by its counsel
that it may be held liable for the failure to exhibit the Shareholder records
to such person.
5
<PAGE> 8
ARTICLE 7
TERMINATION OF AGREEMENT
7.01 This Agreement may be terminated by either party upon sixty
(60) days written notice to the other.
7.02 Should the Fund exercise its right to terminate this
Agreement, all out-of-pocket expenses associated with the movement of records
and material will be borne by the Fund on behalf of the applicable
Portfolio(s). Additionally, the Transfer Agent reserves the right to charge
for any other reasonable expenses associated with such termination and/or a
charge equivalent to the average of three (3) months' fees.
ARTICLE 8
ADDITIONAL FUNDS
8.01 In the event that the Fund establishes one or more series of
Shares in addition to the Portfolios with respect to which it desires to have
the Transfer Agent render services as transfer agent under the terms hereof, it
shall so notify the Transfer Agent in writing, and if the Transfer Agent agrees
in writing to provide such services, such series of Shares shall become a
Portfolio hereunder.
ARTICLE 9
ASSIGNMENT
9.01 Except as provided in Section 9.03 below, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party.
9.02 This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and assigns.
9.03 The Transfer Agent may, without further consent on the part of
the Fund, subcontract for the performance hereof with any entity which is duly
registered as a transfer agent pursuant to Section 17A(c)(1) of the Securities
Exchange Act of 1934 as amended ("Section 17A(c)(1)"); provided, however, that
the Transfer Agent shall be as fully responsible to the Fund for the acts and
omissions of any subcontractor as it is for its own acts and omissions.
ARTICLE 10
AMENDMENT
10.01 This Agreement may be amended or modified by a written
agreement executed by both parties and authorized or approved by a resolution
of the Board of Trustees of the Fund.
ARTICLE 11
TEXAS LAW TO APPLY
11.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Texas.
6
<PAGE> 9
ARTICLE 12
MERGER OF AGREEMENT
12.01 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
ARTICLE 13
COUNTERPARTS
13.01 This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
ARTICLE 14
NO PERSONAL LIABILITY
14.01 Notice is hereby given that this Agreement is executed on
behalf of the Fund, by officers of the Fund as officers and not individually
and that the obligations of or arising out of this Agreement are not binding
upon any of the trustees, officers, shareholders, employees or agents of the
Fund individually but are binding only upon the assets and property of the
Fund.
7
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf by and through their duly
authorized officers, as of the day and year first above written.
A I M INVESTMENT SECURITIES FUNDS
By: /s/ ROBERT H. GRAHAM
------------------------------
President
ATTEST:
/s/ STEPHEN I. WINER
- ------------------------------
Assistant Secretary
A I M INSTITUTIONAL FUND SERVICES, INC.
By: /s/ J. ABBOTT SPRAGUE
------------------------------
President
ATTEST:
/s/ STEPHEN I. WINER
- ------------------------------
Assistant Secretary
8
<PAGE> 1
Exhibit 11(a)
CONSENT OF COUNSEL
AIM INVESTMENT SECURITIES FUNDS
-------------------------------
We hereby consent to the use of our name and to the references to our
firm under the caption "General Information -- Legal Counsel" in the
Prospectuses for each of AIM Limited Maturity Treasury Shares and Limited
Maturity Treasury Portfolio Institutional Shares, each a class of the Limited
Maturity Treasury Portfolio, and under the caption "Miscellaneous Information
- -- Legal Matters" in the Statement of Additional Information for AIM Limited
Maturity Treasury Shares, all of which form a part of Post-Effective Amendment
No. 6 to the Registration Statement of AIM Investment Securities Funds on Form
N-1A under the Securities Act of 1933 (Reg. No. 33-39519).
/s/ BALLARD SPAHR ANDREWS & INGERSOLL
-------------------------------------
Ballard Spahr Andrews & Ingersoll
Philadelphia, Pennsylvania
October 31, 1995
<PAGE> 1
Exhibit 11(b)
October 26, 1995
Board of Trustees
AIM Investment Securities Funds
Suite 1919
11 Greenway Plaza
Houston, Texas 77046
Gentlemen:
We hereby consent to the reference to our name appearing under the
caption "Investment restrictions" in the Statement of Additional Information
for the AIM Limited Maturity Treasury Shares, a class of the Limited Maturity
Treasury Portfolio, to be filed with the Securities and Exchange Commission in
post-effective amendment No.6 to the registration statement under the
Securities Act of 1933 of AIM Investment Securities Funds, on Form N-1A.
We further consent to the reference to our name appearing under the
caption "Investment Program and restrictions -- Investment Restrictions" in the
Statement of Additional Information for the Institutional Shares, a class of
the Limited Maturity Treasury Portfolio, to be filed with the Securities and
Exchange Commission in post-effective amendment No. 6 to the registration
statement under the Securities Act of 1933 of AIM Investment Securities Funds,
on Form N-1A.
Very truly yours,
/s/ DECHERT PRICE & RHOADS
<PAGE> 1
Exhibit 11(c)
INDEPENDENT AUDITORS' CONSENT
The Board of Trustees
AIM Investment Securities Funds
We consent to the use of our report on the Limited Maturity Treasury Portfolio
(a portfolio of AIM Investment Securities Funds) dated September 1, 1995
included herein and to the references to our firm under the headings "Financial
Highlights" in the Prospectuses, and "Audit Reports" in the AIM Limited
Maturity Treasury Shares Statement of Additional Information and "Reports" in
the Limited Maturity Treasury Portfolio Institutional Shares Statement of
Additional Information.
/s/ KPMG PEAT MARWICK LLP
-----------------------------
KPMG Peat Marwick LLP
Houston, Texas
October 26, 1995
<PAGE> 1
Exhibit 15
AMENDED
MASTER DISTRIBUTION PLAN
OF
AIM INVESTMENT SECURITIES FUNDS
(Retail Classes)
Section 1. AIM Investment Securities Funds (the "Fund") on behalf of
the series of beneficial interest set forth in Appendix A attached hereto (the
"Portfolios") may act as a distributor of securities of such Portfolios (the
"Shares") of which the Fund is the issuer, 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. Amounts set forth in Appendix A 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, advertising programs, 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, overhead, supplemental payments to dealers and
other institutions as asset-based sales charges or as payments of service fees
under a shareholder service arrangement to be established by A I M
Distributors, Inc. ("Distributors") as the Fund's distributor in accordance
with Section 3, and the costs of administering the Plan. To the extent that
amounts paid hereunder are not used specifically to reimburse Distributors for
any such expense, such amounts may be treated as compensation for Distributors'
distribution-related services. All amounts expended pursuant to the Plan shall
be paid to Distributors and are the legal obligation of the Fund and not of
Distributors. That portion of the amounts paid under the Plan that is not paid
or advanced by Distributors to dealers or other institutions that provide
personal continuing shareholder services as a service fee pursuant to Section 3
shall be deemed an asset-based sales charge.
Section 3. (a) Amounts expended by the Fund under the Plan shall be
used in part for the implementation by Distributors of shareholder service
arrangements with respect to the Shares. The maximum service fee paid to any
service provider shall be twenty-five one-hundredths of one percent (0.25%), or
such lower rate for the Portfolio as is specified on Appendix A, per annum of
the average daily net assets of the Fund attributable to the Shares owned by
the customers of such service provider.
(b) Pursuant to this program Distributors 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 Distributors for the provision of distribution-related personal
shareholder services in connection with the sale of Shares to the Dealers'
clients and customers ("Customers") to Customers who may from time to time
directly or beneficially own Shares. The distribution-related personal
continuing shareholder services to be rendered by Dealers under the Service
Agreements may include, but shall not be limited to, the following: distributing
sales literature; answering routine Customer inquiries concerning the Fund and
the Shares; assisting Customers in changing dividend options, account
<PAGE> 2
AIM INVESTMENT SECURITIES FUNDS DISTRIBUTION PLAN
PAGE 2
designations and addresses, and in enrolling into any of several retirement
plans offered in connection with the purchase of 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
information and services as the Fund or the Customer may reasonably request.
(c) Distributors may also enter into Bank Shareholder
Service Agreements substantially in the form attached hereto as Exhibit B
("Bank Agreements") with selected banks acting in an agency capacity for their
customers ("Banks"). Banks acting in such capacity will provide shareholder
services to their customers as set forth in the Bank Agreements from time to
time.
(d) Distributors may also enter into Shareholder Service
Agreements substantially in the form attached hereto as Exhibit C ("401(k)
Service Agreements") with selected providers of 401(k) plans. Such plan
providers will provide services to their customers as set forth in the 401(k)
Service Agreements from time to time.
(e) Distributors may also enter into Shareholder Service
Agreements substantially in the form attached hereto as Exhibit D ("Bank Trust
Department Agreements") with selected bank trust departments. Such bank trust
departments will provide shareholder services to their customers as set forth
in the Bank Trust Department Agreements.
Section 4. This Plan shall not take effect with respect to any
Portfolio until it has been approved by a vote of at least a "majority of the
outstanding voting securities" (as defined in the 1940 Act) of the applicable
Shares.
Section 5. This Plan shall not take effect until it has been
approved, together with any related agreements, by votes of the majority of
both (a) the Board of Trustees of the Fund and (b) those trustees 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 Trustees"), cast in person at
a meeting called for the purpose of voting on this Plan or such agreements.
Section 6. Unless sooner terminated pursuant to Section 8, this Plan
shall continue in effect for a period of one year from the date it takes effect
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.
Section 7. Distributors shall provide to the Fund's Board of Trustees
and the Board of Trustees shall review, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
<PAGE> 3
AIM INVESTMENT SECURITIES FUNDS DISTRIBUTION PLAN
PAGE 3
Section 8. This Plan may be terminated with respect to any Portfolio
at any time by vote of a majority of the Dis-interested Trustees, or by vote of
a majority of the outstanding voting securities of the applicable Shares. If
this Plan is terminated, the obligation of the Fund to make payments pursuant
to this Plan will also cease and the Fund will not be required to make any
payments beyond the termination date even with respect to expenses incurred
prior to the termination date.
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
any Portfolio at any time, without payment of any penalty, by vote of a
majority of the Dis-interested Trustees or by a vote of the outstanding voting
securities of the Fund attributable to the applicable Shares, 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.
Section 10. This Plan may not be amended with respect to any Portfolio
to increase materially the amount of distribution expenses provided for in
Section 2 hereof unless such amendment is approved in the manner provided in
Section 4 hereof, and no material amendment to the Plan shall be made unless
approved in the manner provided for in Section 5 hereof.
AIM INVESTMENT SECURITIES FUNDS
Attest: /s/ STEPHEN I. WINER By: /s/ ROBERT H. GRAHAM
------------------------------ ------------------------------
Assistant Secretary President
Effective Date as of August 6, 1993, as amended as of March 8, 1994, as amended
as of September 10, 1994 and as amended as of November 18, 1994.
<PAGE> 4
APPENDIX A TO
MASTER DISTRIBUTION PLAN
OF
AIM INVESTMENT SECURITIES FUNDS
DISTRIBUTION FEE
The Fund shall pay the Distributor as full compensation for all
services rendered and all facilities furnished under the Distribution Plan for
each Portfolio or Class as designated below, a Distribution Fee* determined by
applying the annual rate set forth below as to each Portfolio/Class to the
average daily net assets of the Portfolio/Class for the plan year, computed in
a manner used for the determination of the offering price of shares of the
Portfolio/Class.
<TABLE>
<CAPTION>
PORTFOLIO/CLASS ANNUAL RATE
------------------------- ---------------
<S> <C>
AIM Limited Maturity Treasury Shares 0.15%
</TABLE>
__________________________________
* The Distribution Fee is payable apart from the sales charge, if any, as
stated in the current prospectus for the applicable Class and the
applicable Portfolio. The amount of the Distribution Fee is subject to
any applicable limitations imposed from time to time by applicable
Rules of the National Association of Securities Dealers, Inc.
<PAGE> 5
Exhiibit 15
EXHIBIT A
[LOGO APPEARS HERE]
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 (the "1940 Act") by each
of the AIM-managed mutual funds (or designated classes of such funds) listed on
Schedule A to this Agreement (the "Funds"), under a Distribution Plan (the
"Plan") adopted pursuant to said Rule. This Agreement, being made between
A I M Distributors, Inc. ("Distributors"), solely as agent for the 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. The Plan has also been
approved by a vote of at least a majority of each of such Funds' (or applicable
class of such Funds) outstanding securities, as defined in the 1940 Act.
1. To the extent that you provide distribution-related 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, accounting designation 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 case 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.
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 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.
<PAGE> 6
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 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 and Schedule A 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 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.
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 Disinterested 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 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: /s/ MICHAEL J. CEMO
--------------- -----------------------------------
The undersigned agrees to abide by the foregoing terms and conditions.
Date: By:
--------------- -----------------------------------
Signature
-----------------------------------
Print 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 1919
Houston, Texas 77046-1173
<PAGE> 7
[LOGO APPEARS HERE]
A I M Distributors, Inc.
SCHEDULE "A"
SHAREHOLDER SERVICE AGREEMENT
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
- ----------------------------------------------------------------------------------------
<S> <C> <C>
AIM Aggressive Growth Fund 0.25 July 1, 1992
AIM Balanced Fund A Shares 0.25 October 18,1993
AIM Balanced Fund B Shares 0.25 October 18, 1993
AIM Charter Fund A Shares 0.25 November 18, 1986
AIM Charter Fund B Shares 0.25 June 15, 1995
AIM Constellation Fund 0.25 September 9, 1986
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 Growth Fund A Shares 0.50 September 15, 1994
Aim Global Growth Fund B Shares 0.25 September 15, 1994
AIM Global Income Fund A Shares 0.50 September 15, 1994
AIM Global Income Fund B Shares 0.25 September 15, 1994
AIM Intermediate Government Fund A Shares 0.25 July 1, 1992
AIM Intermediate Government Fund B Shares 0.25 September 1, 1993
AIM Growth Fund A Shares 0.25 July 1,1992
AIM Growth Fund B Shares 0.25 September 1, 1993
AIM High Yield Fund A Shares 0.25 July 1, 1992
AIM High Yield Fund B Shares 0.25 September 1, 1993
AIM Income Fund A Shares 0.25 July 1, 1992
AIM Income Fund B Shares 0.25 September 1, 1993
AIM International Equity Fund A Shares 0.25 May 21, 1992
AIM International Equity Fund B Shares 0.25 September 15, 1994
AIM Limited Maturity Treasury Shares 0.15 December 2, 1987
AIM Money Market Fund A Shares 0.25 October 18, 1993
AIM Money Market Fund B Shares 0.25 October 18, 1993
AIM Money Market Fund C 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 Tax-Exempt Bond Fund of Connecticut 0.25 July 1, 1992
AIM Tax-Exempt Cash Fund 0.10 July 1, 1992
AIM Global Utilities Fund A Shares 0.25 July 1, 1992
AIM Global Utilities Fund B Shares 0.25 September 1, 1993
AIM Value Fund A Shares 0.25 July 1, 1992
AIM Value Fund B Shares 0.25 October 18, 1993
AIM Weingarten Fund A Shares 0.25 September 9, 1986
AIM Weingarten Fund B Shares 0.25 June 15, 1995
</TABLE>
* Frequency of Payments: Quarterly, B share payments begin after an initial 12
month holding period.
Minimum Payments: $50 (with respect to all funds in the aggregate.)
<PAGE> 8
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.
<PAGE> 9
Exhibit 15
Exhibit B
[LOGO APPEARS HERE]
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 five (5) 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 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.
<PAGE> 10
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. 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 us 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.
11. All communications to the Company shall be sent to it at Eleven
Greenway Plaza, Suite 1919, 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: /s/ MICHAEL J. CEMO
--------------- -----------------------------------
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 1919
Houston, Texas 77046-1173
<PAGE> 11
[LOGO APPEARS HERE]
A I M Distributors, Inc.
SCHEDULE "A" TO BANK
SHAREHOLDER SERVICE AGREEMENT
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
- ------------------------------------------------------------------------------------
<S> <C> <C>
AIM Aggressive Growth Fund 0.25 July 1, 1992
AIM Balanced Fund A Shares 0.25 October 18, 1993
AIM Balanced Fund B Shares 0.25 October 18, 1993
AIM Charter Fund A Shares 0.25 November 18, 1986
AIM Charter Fund B Shares 0.25 June 15, 1995
AIM Constellation Fund 0.25 September 9, 1986
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 Growth Fund A Shares 0.50 September 15, 1994
AIM Global Growth Fund B Shares 0.25 September 15, 1994
AIM Global Income Fund A Shares 0.50 September 15, 1994
AIM Global Income Fund B Shares 0.25 September 15, 1994
AIM Intermediate Government Fund A Shares 0.25 July 1, 1992
AIM Intermediate Government Fund B Shares 0.25 September 1, 1993
AIM Growth Fund A Shares 0.25 July 1, 1992
AIM Growth Fund B Shares 0.25 September 1,1993
AIM High Yield Fund A Shares 0.25 July 1, 1992
AIM High Yield Fund B Shares 0.25 September 1, 1993
AIM Income Fund A Shares 0.25 July 1, 1992
AIM Income Fund B Shares 0.25 September 1, 1993
AIM International Equity Fund A Shares 0.25 May 21, 1992
AIM International Equity Fund B Shares 0.25 September 15, 1994
AIM Limited Maturity Treasury Shares 0.15 December 2, 1987
AIM Money Market Fund A Shares 0.25 October 18, 1993
AIM Money Market Fund B Shares 0.25 October 18, 1993
AIM Money Market Fund C 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 Tax-Exempt Bond Fund of Connecticut 0.25 July 1, 1992
AIM Tax-Exempt Cash Fund 0.10 July 1, 1992
AIM Global Utilities Fund A Shares 0.25 July 1, 1992
AIM Global Utilities Fund B Shares 0.25 September 1, 1993
AIM Value Fund A Shares 0.25 July 1, 1992
AIM Value Fund B Shares 0.25 October 18, 1993
AIM Weingarten Fund A Shares 0.25 September 9, 1986
AIM Weingarten Fund B Shares 0.25 June 15, 1995
</TABLE>
* Frequency of Payments: Quarterly, B share payments begin after an initial 12
month holding period.
Minimum Payments: $50 (with respect to all funds in the aggregate.)
<PAGE> 12
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.
<PAGE> 13
Exhibit 15
Exhibit C
SERVICE AGREEMENT FOR
CERTAIN RETIREMENT PLANS
(THE AIM FAMILY OF FUNDS(R))
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 [trustee/servicing agents], for defined
contribution plans [or other comparable retirement plans], Plan Provider
invests and reinvests the Plans' assets as specified by an investment adviser,
sponsor or administrative committee of the Plan (a "Plan Representative")
generally upon the direction of Plan beneficiaries ("Participants").
Plan Provider and Distributor desire to facilitate the purchase and
redemption of shares (the "Shares") of the funds listed on Exhibit A hereto
(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. 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 4:15 p.m. Eastern Time) on the New York 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 [5:00 p.m. - 6:00 p.m.] Central
Time on the same Business Day.
2. Orders and Settlement
---------------------
Plan Provider will calculate order allocations among designated
investment media and transmit to Distributor orders to purchase or
redeem Shares for specified Accounts. Plan Provider agrees that
orders for net purchases or net redemptions of Shares derived from
instructions received in proper form by Plan Provider from Plan
Representatives prior to the Close of Trading on any given Business
Day will be processed that same evening and transmitted to Distributor
or its designee by [9:00 a.m. - 10:00 a.m.] Central Time on the
following Business Day. Plan Provider agrees that payment for net
purchases of Shares attributable to all orders executed for the
Accounts on a given Business Day will be wired by Plan Provider
or its designee no later than [2:00 p.m. - closing of fed. wire]
Central Time to a custodial account designated by Distributor.
Distributor agrees that payment for net redemptions of Shares
attributable to all orders executed for the Accounts on a
<PAGE> 14
given Business Day will be wired by Distributor on the next Business
Day after such redemption orders are transmitted to Distributor or its
designee no later than [the close of business on the next Business Day]
[the close of business on the day after the next Business Day] to an
account designated by Plan Provider.
Subject to Plan Provider's compliance with the foregoing, Plan
Provider will be considered agent for the Funds and the Business Day
on which instructions are received in proper form by Plan Provider
from Participants or Plan Representatives by the Close of Trading will
be the date as of which Shares will be purchased and redeemed as a
result of such instructions. Plan Provider will time and date stamp
instructions received from Participants or Plan Representatives [or
Plan Provider will create and maintain comparable electronic form of
such instructions] and will make such instructions and other records
relating to the services performed hereunder (the "Services")
available for audit by Distributor's auditors upon request.
Instructions received in proper form by Plan Provider from
Participants or Plan Representatives after the Close of Trading on any
given Business Day shall be treated as if received on the next
following Business Day. Dividends and capital gains distributions
will be automatically reinvested on payable date at net asset value in
accordance with each Fund's then current prospectus.
[3. Price Errors
------------
(a) In the event adjustments are required to correct any error in
the computation of the net asset value of Shares, the
Distributor shall notify the Plan Provider as soon as
practicable after discovering the need for those adjustments
which result in a reimbursement to an Account in accordance
with such Fund's then current policies on reimbursement.
Notification may be made orally or in writing. Such
notification must state for each day for which an error
occurred the incorrect price, the correct price, and, to the
extent communicated to the Fund's shareholders, the reason for
the price change.
(b) If an Account received amounts in excess of the amounts to
which it otherwise would have been entitled prior to an
adjustment for an error, Plan Provider, when requested by the
Distributor, will use reasonable efforts to collect such
excess amounts from the Plan.
(c) If an adjustment is to be made in accordance with subsection
3(a) above to correct an error which has caused an Account to
receive an amount less than that to which it is entitled, the
Distributor or its affiliates shall make all necessary
adjustments (within the parameters specified in subsection
3(a)) to the number of Shares owned in the Account and
distribute to the Plan Provider the amount of such
underpayment for credit to the Plans.]
[4.] Participant Recordkeeping
-------------------------
Recordkeeping and other services to Plan Participants shall be the
responsibility of the recordkeeper for the Plans and shall not be the
responsibility of the Distributor or its transfer agent. Distributor
will recognize each Plan as a single shareholder and as an unallocated
account in the Funds, and will not maintain separate accounts for Plan
participants.
-2-
<PAGE> 15
[5.] Account Information
-------------------
Distributor 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.
[6.] Maintenance of Records
----------------------
Each party shall maintain and preserve all records as required by law
to be maintained and preserved in connection with providing the
Services and in making Shares available to the Plans. Upon the
request of Distributor, the Plan Provider shall provide copies of all
records relating to the Funds as may reasonably be requested to enable
the Funds or their representatives to comply with any request of a
governmental body or self-regulatory organization.
[7.] Compliance with Laws
--------------------
At all times Plan Provider shall comply with all laws, rules and
regulations applicable to it by virtue of entering into this
Agreement, including but not limited to those applicable to a transfer
agent under the Federal securities laws[, including, without
limitation, all prospectus delivery requirements]. The parties agree
that Plan Provider may satisfy prospectus delivery requirements by
sub-contracting with Plan Representatives. At all times, Distributor
and the Funds shall comply with all laws, rules and regulations
applicable to them by virtue of entering into this Agreement. [The
Plan Provider and Plan Representatives, and not the Distributor shall
take such action as may be necessary so that the transactions
contemplated by this Service 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.]
[8.] Representations with Respect to the Distributor and the Funds
-------------------------------------------------------------
Plan Provider and its agents shall not make representations concerning
a Fund or Shares except 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 Corporation and Morningstar,]
and in current sales literature created by Plan Provider and submitted
to and approved in writing by Distributor prior to its use.
[9.] Expenses
--------
(a) Each party shall bear all expenses incidental to the
performance of its obligations under this Agreement.
(b) Each Fund shall pay the cost of registration of its shares
with the Securities and Exchange Commission and in states
where required. Each Fund shall distribute or cause to be
distributed to Plan Provider its proxy material, periodic Fund
reports to shareholders and other material as such Fund may
require to be sent to
-3-
<PAGE> 16
shareholders. The cost of preparing and printing this material
shall be paid by the applicable Fund or Distributor, and the
cost of distributing such items shall be borne by Plan Provider
or the Plan(s) Representatives.
[10.] Relationship of Parties
-----------------------
Except to the extent provided in Section 2, it is understood and
agreed that all Services performed hereunder by Plan Provider shall be
as an independent contractor and not as an employee or agent of
Distributor or any of the Funds, and none of the parties shall hold
itself out as an agent of any other party with the authority to bind
such party.
[11.] Use of Names
------------
[Except as otherwise expressly provided for in this Agreement, Plan
Provider shall not use, nor shall it allow its employees or agents to
use, the name or logo of Distributor or the Funds, any affiliate of
Distributor, or any products or services sponsored, managed, advised,
administered, or distributed by Distributor or any of its affiliates,
for advertising, trade, or other commercial or noncommercial purposes
without the express prior written consent of Distributor. Except as
otherwise expressly provided for in this Agreement, neither
Distributor nor the Funds shall allow its employees or agents to use
the name or logo of Plan Provider, any affiliate of Plan Provider, or
any products or services sponsored or offered by Plan Provider or any
of its affiliates, for advertising, trade, or other commercial or
noncommercial purposes without the express prior written consent of
Plan Provider.]
[We 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 or their availability at net asset
value. For purposes of this provision, the public does not include
our representatives who are actively engaged in promoting this
product. Any brochure or other communication to the public that
mentions the Funds shall be submitted to the compliance officer of
Distributor, or its affiliates, for his written approval prior to our
use. We shall provide copies to Distributor's or its affiliates'
compliance officer of any of our regulatory filings that include any
reference to A I M Management Group Inc. or its subsidiaries or the
Funds. If we should make unauthorized references or representations,
we agree to indemnify and hold harmless the Funds, A I M Management
Group 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.]
[12.] Termination
-----------
(a) 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 "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 agreement with the
Distributor, 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.
-4-
<PAGE> 17
[(b) Either party may terminate this Agreement upon sixty (60)
days' prior written notice to the other party.]
[(c) Each party may terminate this Agreement on 90 days' written
notice to the other party; provided, however, that (i) any
such termination shall not affect a Fund's obligation to
maintain accounts in the names of the Plans which selected
such Fund as an investment option and (ii) after termination
by the Funds, no fee shall be due with respect to any shares
of the Funds that are purchased and held by the Plans after
the date of termination, except that the Funds shall be
obligated to continue to pay Plan Provider fees, if any, as
set forth in Exhibit A to this Agreement as to shares of the
Funds held by the Plans as of the date of termination for so
long as such shares continue to be held by the Plans and Plan
Provider continues to provide services to such Plans as
contemplated by this Agreement. This Agreement shall remain
in effect to the extent necessary for each party to perform
its obligations with respect to shares of the Funds for which
a fee, if any, continues to be due subsequent to such
termination. [It is understood that if a Plan states in
writing that Plan Provider may no longer perform the services
contemplated by this Agreement, then this Agreement shall
terminate with respect to such Plan 60 days after receipt of
such notice by Plan Provider.]]
[13.] Indemnification
---------------
(a) Plan Provider agrees to indemnify and hold harmless the
Distributor, its affiliates, the Funds, the Funds' investment
advisers, 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
-5-
<PAGE> 18
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 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.]
[14.] Notice
------
Each notice required by this Agreement shall be given in writing and
delivered personally or mailed by certified mail or courier service to
the other party at the following address or such other address as each
party may give notice to the other.
If to Plan Provider, to:
[Insert Address]
If to Distributor or any Fund, to:
Michael J. Cemo, President
A I M Distributors, Inc.
11 Greenway Plaza, Suite 1919
Houston, Texas 77046
[and
J. Abbott Sprague, President
Fund Management Company
11 Greenway Plaza, Suite 1919
Houston, Texas 77046]
with a copy to the General Counsel of Distributor.
-6-
<PAGE> 19
[15.] Governing Law
-------------
This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Texas [or other applicable state
law] applicable to agreements fully executed and to be performed
therein.
[16.] 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. Plan Provider further represents, warrants, and covenants
that:
(a) 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;
(b) [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 exempt from such registration;]
(c) the arrangements provided for in this Agreement will be
disclosed to the Plan Representatives;
[(d) 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 exempt from such registration.]
[(e) this Agreement, when executed and delivered, shall constitute
the valid, legal and binding obligation of Plan Provider,
enforceable in accordance with its terms;]
Distributor further represents, warrants and covenants, that:
(a) 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;
(b) it is registered as a broker-dealer under the 1934
Act and any applicable state securities laws;
(c) the Funds' advisor(s) are registered as an investment
adviser under the Investment Advisers Act of 1940,
the Funds are registered as investment companies
under the Investment Company Act of 1940 and Fund
Shares are registered under the Securities Act of
1933;
-7-
<PAGE> 20
[(d) this Agreement, when executed and delivered, shall
constitute the valid, legal and binding obligation of
Distributor, enforceable in accordance with its
terms;]
[(e) the Funds conduct business on all days on which the
New York Stock Exchange is open for business;]
[(f) the Plans may place instructions on each and every
Business Day, without regard to the number or market
value of transactions placed in any prior time
periods;]
[(g) the registration statement and prospectus for each
Fund comply in all material respects with federal and
state securities laws;]
[(h) in the event a Fund or Funds is selected by a Plan as
an investment option for such Plan's assets,
Distributor shall cooperate with such Plan and with
Plan provider to establish in a timely and orderly
manner such investment relationship.]
[17.] Complete Agreement
------------------
This Agreement contains the full and complete understanding of the
parties and supersedes all prior representations, promises,
statements, arrangements, agreements, warranties and understandings
between the parties with respect to the subject matter hereof, whether
oral or written, express or implied.
[18.] Modification
------------
This Agreement may be modified or amended, and the terms of this
Agreement may be waived, only by a writing signed by each of the
parties.
[19.] Counterparts
------------
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same Agreement.
[20.] Assignment
----------
Subject to the provisions of Paragraph [12] herein, 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.
[21.] Survival
--------
The provisions of Sections [6, 11, and 13] shall survive termination
of this Agreement.
-8-
<PAGE> 21
[22.] Non-Exclusivity
---------------
Each of the parties acknowledges and agrees that this Agreement and
the arrangement described herein are intended to be non-exclusive and
that each of the parties is free to enter into similar agreements and
arrangements with other entities.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by
their duly authorized officers as of this _____ day of ______________________,
19_____.
[PLAN PROVIDER]
By:
-----------------------------------
Print Name:
---------------------------
Title:
--------------------------------
A I M DISTRIBUTORS, INC.
By:
-----------------------------------
Print Name:
---------------------------
Title:
--------------------------------
-9-
<PAGE> 22
EXHIBIT A
[List Applicable Funds and Fees Payable]
(Note: No Class B shares or Class C shares may be offered pursuant to this
Agreement.)
[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. 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.]
[Distributor or its affiliates, on behalf of the Fund(s), will pay a
sub-transfer agency fee to Plan Provider in the amount of [$.01 - $10.00] per
subaccount per year, payable within 30 days following the end of each calendar
quarter. Plan Provider will provide to Distributor the number of subaccounts
subject to the sub-transfer agency fee within [5 - 10] business days after the
end of each calendar quarter.]
<PAGE> 23
[LOGO APPEARS HERE]
A I M Distributors, Inc.
Exhibit 15
Exhibit D
A I M DISTRIBUTORS, INC.
SHAREHOLDER SERVICE AGREEMENT
(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 (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
<PAGE> 24
Shareholder Service Agreement Page 2
(Bank Trust Departments)
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 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 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.
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
<PAGE> 25
Shareholder Service Agreement Page 3
(Bank Trust Departments)
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 a Fund's
Distribution Agreement with AIM Distributors, the Agreement for Purchase
of Shares of The AIM Family of Funds(R) 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(R) 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> 26
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 1919
Houston, Texas 77046-1173
<PAGE> 27
Shareholder Service Agreement Page 5
(Bank Trust Departments)
SCHEDULE A
Funds Fees
----- ----
AIM Equity Funds, Inc.
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 Government Securities Fund
AIM Growth Fund
AIM High Yield Fund
AIM Income Fund
AIM Money Market Fund
AIM Municipal Bond Fund
AIM Global Utilities Fund
AIM Value Fund
AIM International Funds, Inc.
AIM International Equity Fund
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Global Income Fund
AIM Investment Securities Funds
Limited Maturity Treasury Portfolio
AIM Tax-Exempt Funds, Inc.
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut
Intermediate Portfolio
__________________________________
* Shares of AIM Aggressive Growth Fund may only be sold to current
shareholders who maintain open accounts in AIM Aggressive Growth Fund.
<PAGE> 28
[LOGO APPEARS HERE]
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 (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
<PAGE> 29
Shareholder Service Agreement Page 2
(Brokers for Bank Trust Departments)
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> 30
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 a Fund's
Distribution Agreement with AIM Distributors, 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> 31
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> 32
Shareholder Service Agreement Page 5
(Brokers for Bank Trust Departments)
SCHEDULE A
Funds Fees
----- ----
AIM Equity Funds, Inc.
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 Government Securities Fund
AIM Growth Fund
AIM High Yield Fund
AIM Income Fund
AIM Money Market Fund
AIM Municipal Bond Fund
AIM Global Utilities Fund
AIM Value Fund
AIM International Funds, Inc.
AIM International Equity Fund
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Global Income Fund
AIM Investment Securities Funds
Limited Maturity Treasury Portfolio
AIM Tax-Exempt Funds, Inc.
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut
Intermediate Portfolio
__________________________________
* Shares of AIM Aggressive Growth Fund may only be sold to current
shareholders who maintain open accounts in AIM Aggressive Growth Fund.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> AIM Adjustable Rate Mortgage Fund
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JUL-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 0
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 899,683
<OTHER-INCOME> 0
<EXPENSES-NET> (97,653)
<NET-INVESTMENT-INCOME> 802,030
<REALIZED-GAINS-CURRENT> (867,478)
<APPREC-INCREASE-CURRENT> 695,586
<NET-CHANGE-FROM-OPS> 630,138
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (830,110)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 259,920
<NUMBER-OF-SHARES-REDEEMED> (1,407,327)
<SHARES-REINVESTED> 61,771
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (1,800,173)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 321,283
<AVERAGE-NET-ASSETS> 54,689,520
<PER-SHARE-NAV-BEGIN> 9.63
<PER-SHARE-NII> 0.137
<PER-SHARE-GAIN-APPREC> (0.131)
<PER-SHARE-DIVIDEND> (0.146)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 9.49
<EXPENSE-RATIO> 0.59
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> AIM Limited Maturity Treasury Portfolio - Institutional
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JUL-31-1995
<INVESTMENTS-AT-COST> 394,125,287
<INVESTMENTS-AT-VALUE> 398,136,915
<RECEIVABLES> 7,538,801
<ASSETS-OTHER> 221,142
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 405,896,858
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,886,484
<TOTAL-LIABILITIES> 1,886,484
<SENIOR-EQUITY> 0
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<TABLE> <S> <C>
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<NAME> AIM Limited Maturity Treasury - Retail Shares
<S> <C>
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