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AIM TAX-EXEMPT CASH FUND
AIM TAX-FREE INTERMEDIATE SHARES
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
(SERIES PORTFOLIOS OF AIM TAX-EXEMPT FUNDS, INC.)
Supplement dated November 17, 1995 to the
Prospectus dated July 31, 1995 as supplemented October 19, 1995
This Supplement replaces in its entirety the "Supplement dated October 19,
1995 to the Prospects dated July 31, 1995."
Effective October 19, 1995, The Bank of New York became the custodian for AIM
Tax-Exempt Funds, Inc. The address of The Bank of New York is 110 Washington
Street, New York, New York 10286.
The seventh and last paragraph on page A-3 is revised to read in its entirety
as follows:
"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."
The sections under the captions "Table of Fees and Expenses" (page 3) and
"Sales Charges and Dealer Concessions - Group I" and "- Group II," (page A-2),
are revised to reflect that there is no initial sales charge on purchases
of $1 million or more, but that such purchases are subject to a 1% contingent
deferred sales charge if shares are redeemed prior to 18 months from
the date of purchase.
The fifth sentence of the second paragraph under the caption "How to Purchase
Shares - How to Open an Account" on page A-1 of the Prospectus is revised to
read in its entirety as follows:
"The minimum initial investment for an IRA account is $250."
The third sentence of the paragraph under the caption "Special Plans -
Automatic Dividend Investment Plan" on page A-7 of the Prospectus is revised
to read in its entirety as follows:
"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 another AIM
Fund."
The fifth sentence of the paragraph under the caption "Special Plans -
Automatic Dividend Investment Plan" on page A-8 of the Prospectus is revised
to read in its entirety as follows:
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"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."
The first sentence of the paragraph under the caption "Special Plans - Dollar
Cost Averaging" on page A-8 of the Prospectus is revised to read in its
entirety as follows:
"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 meets the requirements
described under the caption "Exchange Privilege - Terms and Conditions of
Exchanges."
The fifth sentence of the first paragraph and the accompanying
cross-reference under the caption "Exchange Privilege - Terms and Conditions
of Exchanges" (page A-8) are deleted in their entirety.
The first sentence of the second paragraph under the caption "Exchange
Privilege - Terms and Conditions of Exchanges" on page A-9 of the Prospectus
is revised to read in its entirety as follows:
"Shares of any AIM Fund may be exchanged for shares of any other AIM
Fund, except that (i) Load Fund share purchases of $1 million 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 Fund share purchases of $1
million or more and No Load Fund purchases may be exchanged for
Load Fund shares in amounts of $1 million 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 initially purchased prior to November 20, 1995,
these exchange conditions will apply effective January 16, 1996."
The first paragraph under the caption "How to Redeem Shares--Contingent
Deferred Sales Charge Program for Large Purchases" (page A-10) is revised to
read in its entirety as follows:
"Except for purchases of shares of the No Load Funds and Lower Load
Funds, a contingent deferred sales charge of 1% applies to purchases of
$1 million 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:"
